U.S.
        Securities and Exchange Commission
 
 Washington,
        D.C. 20549
 
 **FORM
        10-KSB**
 
 (Mark
        One)
 [
                  X]
              ANNUAL
                  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                  OF
                  1934
 
 For
        the
        fiscal year ended April 30, 2006
 
 [
                   ]
              TRANSITION
                  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                  OF
                  1934
 
 For
        the
        transition period from ___________________ to ______________
 
 Commission
        file number: 333-90618
 
 **INFOTEC
        BUSINESS SYSTEMS, INC.**
 (Name
        of
        small business issuer in its charter)
 
 **NEVADA**
              **98-0358149**(State
                  or other jurisdiction of
              (I.R.S.
                  Employer Identification No.)incorporation or organization)
 
 
 **#150
                  - 1152 Mainland Street, Vancouver, B.C.**
              **V6B
                  4X2**(Address
                  of principal executive offices)
              (Zip
                  Code)
 
 Issuer’s
        Telephone Number **(604)
        484-4966**
 
 Securities
        registered under Section 12(b) of the Exchange Act: None
 
 Securities
        registered under Section 12(g) of the Exchange Act: None
 
 Check
        whether the issuer (1) filed all reports required to be filed by Section
        13 or
        15(d) of the Exchange Act during the past 12 months (or for such shorter
        period
        that the registrant was required to file such reports), and (2) has been
        subject
        to such filing requirements for the past 90 days.
 
 YES
        [ X ]
   NO [   ]
 
 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 registrant's knowledge, in definitive proxy or information
        state-ments incorporated by reference in Part III of this Form 10-KSB or
        any
        amendment to this Form 10-KSB.  [ X ]
 (The
        registrant is not a Section 12(g) filing issuer)
  1
  State
        issuer's revenues for its most recent fiscal year:  $187,448.
 
 State
        the
        aggregate market value of the voting stock held by non-affiliates computed
        by
        reference to the price at which the stock was sold, or the average bid and
        asked
        prices of such stock, as of a specified date within the past 60
        days.
 
 The
        aggregate market value of the common stock held by non-affiliates of the
        registrant as of the close of business on June 30, 2006 (an aggregate 44,585,625 shares
        out of a total of 121,500,000 shares outstanding at that time) was approximately
        $10,935,000 computed by reference to the average closing bid and ask price
        on
        that date.
  (APPLICABLE
        ONLY TO CORPORATE ISSUERS)
 
 State
        the
        number of shares outstanding of each of the issuer’s classes of common equity,
        as of the latest practicable date:  121,500,000 shares of Common Stock as
        of June 30, 2006.
 
 This
        report contains a total of 35 pages.
 
 DOCUMENTS
        INCORPORATED BY REFERENCE
 
 Not
        Applicable
 
 
 Transitional
        Small Business Disclosure Format (check one): Yes  ;
         No X
 
 **PART
        I**
 
 The
        terms
        "Infotec", "us", "we", "the company" and "our", refer to Infotec Business
        Systems, Inc. or our wholly owned subsidiaries Galaxy Networks Inc., Stream
        Horizon Studios Ltd. (formerly, Infotec Business Strategies Inc.), Galaxy
        US
        Networks Inc. (formerly, Eventec Inc.) and ebahn Television Networks Inc.,
        unless the context otherwise implies.
 
 Forward
        Looking Statements
 
 This
        annual report on Form 10-KSB contains forward-looking statements that involve
        substantial risks and uncertainties. You can identify these statements by
        forward-looking words such as "may", "will", "expect", "intend", "anticipate",
        "believe", "estimate", "continue" and other similar words.  You should read
        statements that contain these words carefully because they discuss our future
        expectations, mak-ing projections of our future results of operations or
        our
        financial condition or state other "forward-looking" information.
 Forward-looking statements involve known and unknown risks and
        uncertainties which may cause the actual results, performance or achievements
        of
        our company to be materially different from those which may be expressed
        or
        implied by such statements.  The factors listed in the subsection under the
        caption "Additional Risk Factors" which is included in the section of this
        report titled "Management's Discussion and Analysis or Plan of Operation",
        as
        well as any other cautionary language in this report, provide examples of
        risks,
        uncertainties and events which may cause our actual results to differ materially
        from the expectations we described in our forward-looking statements.  We
        do not undertake any obligation to publicly update forward-looking statements
        to
        reflect events or circumstances after the date on which the statement is
        made or
        to reflect the occur-rence of unanticipated events.
  2
  **ITEM
        1. DESCRIPTION OF THE BUSINESS** .
 
 Organization
 We
        were
        incorporated under the laws of the State of Nevada on August 30, 2001. Effective
        October 3, 2001, we entered into an agreement to acquire the prior development,
        designs and pilot implementation of a virtual office system from Danby
        Technologies Corporation in consideration for a purchase price of $60,000
        and a
        royalty on our net revenues from the system or products or services which
        use
        the system.
 
 In
        February 2003, we filed a Form of Certificate Change to amend our Certificate
        of
        Incorpora-tion, to increase our authorized and issued capital stock through
        a 1
        to 6 forward split to 450,000,000 shares of capital stock authorized for
        issuance, consisting of 300,000,000 shares of common stock and 150,000,000
        shares of preferred stock.
 
 As
        of
        November 11, 2004, the Company made and entered into an agreement which provides
        for the reorganization of Galaxy Networks Inc., a British Columbia company,
        with
        and into Infotec Business Systems, Inc., a Nevada company, resulting in Galaxy
        Networks Inc. becoming a wholly-owned subsidiary of Infotec Business Systems,
        Inc. (Infotec). The agreement was for the exchange of 100% of the out-standing
        common stock of Galaxy Networks Inc., for 20,000,000 (50,000,000 post-split)
        shares of Infotec’s common stock.
 
 The
        former shareholders of Galaxy Networks Inc. acquired control of the Company
        upon
        the closing of the share exchange transaction. The exchange was accounted
        for as
        a reverse acquisition. Accordingly, for financial statement purposes, Galaxy
        Networks Inc. was considered the accounting acquirer and the related business
        combination was considered a recapitalization of Galaxy Networks Inc. rather
        than an acquisition by the Company. The historical financial statements prior
        to
        the agreement are those of Galaxy Networks Inc. and the name of the consolidated
        Company going forward is Infotec Business Systems, Inc. These financial
        statements include the financial position of Infotec Business Systems, Inc.,
        Galaxy Networks Inc., Stream Horizon Studios Ltd. (formerly “Infotec Business
        Strategies, Inc.”) and Galaxy US Networks Inc. (formerly “Eventec Inc.”), at
        April 30, 2006, and their results of operations from December 13, 2002 to
        April
        30, 2006.
 
 Concurrent
        with the reorganization the Company issued 500,000 (1,250,000 post-split)
        shares
        of Infotec Business Systems, Inc. common stock for services for value of
        $90,000.
 On
        September 30, 2005, the Company entered into an acquisition agreement with
        the
        sole proprietor of Stream Horizon Media (Stream Horizon), a British Columbia
        sole pro-prietorship which provided for the acquisition by Infotec Business
        Strategies, Inc., a wholly-owned subsidiary of the Company, of 100% interest
        in
        the business and assets of Stream Horizon, in exchange for the issuance of
        5,000,000 (12,500,000 post-split) common shares of the Company. The aggregate
        purchase price and the value of the common shares issued in consideration
        was
        determined to be $750,000 based on the market price of the Company ’ s
        common
        shares on the September 12, 2005, the date of substantive agreement between
        the
        parties.
  3
  The
        acquisition included the assets, business operations and assumption of lease
        liability of Stream Horizon exclusive of working capital items and any
        indebtedness or other obligations. The acquisition has been accounted using
        the
        purchase method. The results of Stream Horizon have been included in the
        consolidated financial statements since October 1, 2005.
 
 On
        September 30, 2005, the Company entered into a definitive acquisition agreement
        with the stockholder of ebahn Television Network Corp., a Nevada company,
        which
        formalized their agreement of September 12, 2005 to acquire a 100% interest
        in
        ebahn and the stockholders’ debt payable by ebahn, in exchange for the issuance
        of 1,100,000 (2,750,000 post-split) common shares of the Company.
 
 On
        October 18, 2005 the Company effected a forward split of its capital stock
        on a
        2.5:1 basis so that the 450,000,000 shares authorized (300,000,000 common
        shares
        and 150,000,000 preferred shares) and 48,600,000 shares of common stock issued,
        were increased to 1,125,000,000 shares authorized (750,000,000 common shares
        and
        375,000,000 preferred shares) and 121,500,000 shares of common stock issued.
        Par
        value of the preferred and common stock remained unchanged at $0.001. All
        figures in these financial statements, including comparative information
        have
        been updated to give effect to the forward 2.5:1 split.
 
 The
        acquisition has been accounted using the purchase method. The acquisition
        was
        reflected at the fair value of the consideration paid to the vendor of $165,000
        based on the September 12, 2005 agreement date. The amount of the consideration
        in excess of the value of assets acquired of $165,000 has been expensed in
        the
        statements of operations as impairment of goodwill.
 
 Business
        of Issuer
 
 Filming
        and Editing Studio
 Stream
        Horizon provides the following services:
 
 -   Video
        Editing and Encoding services.
 -   Studio
        rental.
 -   Casting,
        Directing, and Video / Audio production services.
 -   Remote
        site video services.
 
 Stream
        Horizon provides studio services from its location at #350 - 1152 Mainland
        Street, Vancouver, British Columbia, Canada, as well as on site or location
        shoots.
 
 Stream
        Horizon operates the only studio we are aware of of its kind in the Vancouver
        area. Stream Horizon currently films and edits television programs and web
        based
        videos for a variety of customers at its facilities. Stream Horizon films
        and
        produces DVDs for several sports academies around the lower mainland of British
        Columbia.
  4
  Galaxy
        Hosting and Network Systems
 Galaxy's
        products and services incorporate 3rd Generation streaming video technology
        and
        proprietary software to provide video streaming capabilities that allow a
        TV
        quality signal to be sent over the Internet or stored locally. Using a mix
        of
        the latest leading vendor software and proprietary coding, the Galaxy Encoder
        allows for push streaming of real time broadcasts and does not require a
        stream
        be uploaded to a server and then pulled, or accessed, by viewers. The Galaxy
        Encoder provides the facilities our customers require for capture, edit and
        content delivery of digital media. The Galaxy Encoder has been developed
        as a
        series of products which are differentiated by encoding rates.
 
 The
        Galaxy Media Services Platform is the foundation of the Galaxy Broadcast
        Network
        and represents the solution for the next generation of asset management
        operations. The Platform is principally composed of computer servers, storage
        devices and network routing and transmission equipment. The delivery of
        streaming video through Galaxy's network has been optimized to provide a
        smoother, clearer and more enjoyable viewing experience, even when viewed
        in
        full screen mode.
 
 The
        Galaxy Media Server system allows both content distribution via the Internet
        and
        the application of digital rights management technologies for securing such
        content. The Galaxy Media Server incorporates a storage, management, and
        distribution system and proprietary software to control the hardware platform
        with Galaxy's encoder soft-ware. Together the system can manage large volumes
        of
        entertainment programming and has content archive, search, access, serve
        and
        track capability. Software selects and assembles various pieces of stored
        content as separate digital files into a single continuous seamless programming
        block for playback or broadcast. Galaxy's software and management systems
        have
        been designed with ease of use in mind, allowing anyone with a broadband
        connection to broadcast their message to thousands of viewers worldwide.
        The
        Encoder was designed and developed to replace an entire room of traditional
        equipment that would otherwise be needed to drive a broadcasting
        operation.
 
 Galaxy
        has developed technology that makes streaming of digital video easy, fast
        and
        cost effective and includes tracking software that lets customers know who
        views
        their video communications, the length of time they view it and, in the case
        of
        archived video, how many times they view it. This information is available
        for
        utilization by specific billing and action tracking applications.
 
 We
        are
        currently marketing and selling our software, systems and solutions as a
        network
        solution for media services which we refer to as the “Galaxy Broadcast Network”.
        We provide a hosted and managed streaming video delivery system to enable
        customers to stream content to their specific audiences. Galaxy provides
        full
        service capabilities enabling it to receive client produced video and to
        encode
        it for webcasting visual media including, events, situations of interest,
        meetings, news, entertainment, shows or video for any other
        purpose.
 
 ebahn.tv
 We
        also
        offer a complete Internet television experience via ebahn.tv, our Internet
        video
        broadcast portal/web site at http://www.ebahn.tv. Recently launched, ebahn.tv
        provides TV quality program viewing via the Internet. ebahn.tv is undergoing
        constant upgrade and development as we build on our product plan. We are
        currently offering viewers with a free Internet broadcast experience featuring
        a
        mix of live streamed content and ‘video on demand' content which demonstrate our
        encoding and broadcast capabilities. ebahn.tv can deliver content both for
        mass
        delivery at low bandwidth, and in high bandwidth for viewing in HTDV with
        surround sound. We plan to offer ebahn.tv in four formats:
 
 -
              Pay
                  to Broadcast - for content providers that wish to offer their content
                  via
                  the Internet to their viewers. Pay to Broadcast content providers
                  pay for
                  hosting and bandwidth use;-
              Advertising
                  Supported Programming - we will deliver free programming to viewers
                  supported by advertising;-
              Pay
                  TV - we will offer premium content by a Pay for View model where
                  we will
                  pay a portion of our revenues to the content provider.-
              Set-Top-Box
                  - using a ‘set top box’s, viewers can watch on demand Internet TV
                  broadcasts on their television. We provide to telcom and Internet
                  resellers, the ability to aggregate and encode content and to deliver
                  that
                  content via the Internet or ‘set top boxes’s to the telcom or Internet
                  resellers customers.
  5
  Markets
        and Competition
 Markets
        for the Galaxy Broadcast Network and our related products and services are
        those
        business and other organizations in a variety of industries who have digital
        media which they desire other parties to view.
 
 We
        have
        identified more specifically the following markets due to their growth
        characteristics and our experience with customers in these markets:
  -
              content
                  providers;-
              Internet
                  Broadcast Networks (Internet TV);-
              live
                  media and archival feed services;-
              digital
                  video production and editing;-
              advertising
                  and marketing; and-
              resellers
                  and agents.
 
 We
        plan
        to market our streaming video and Internet TV services directly to selected
        resellers and distributors and to content creators or program development
        companies or organizations. We are developing programs and plans for revenue
        generation by ebahn which we expect to launch next quarter.
 
 Our
        business opportunity is driven by the expected growth in the volume of media
        broadcasting over the Internet. Media broadcasting platforms and services
        have
        proven to be difficult to manage and deploy and the results for companies
        are
        often less than planned. Media streaming and other media broadcasting is
        seeing
        significant growth, driven by among other things, the growth of Internet
        Broadcasting or Internet TV and the use of streaming media in advertising.
 
 We
        believe we are well positioned to support the growth in media broadcasting
        and
        viewing and provide a foundation for the growth of Streaming Internet
        Broadcasting. We believe we have a proven system and technology that provides
        an
        easy to use, next generation platform solution for worldwide, almost unlimited
        ability to deliver streaming media and other encoded broadcasts over the
        Internet or other wired or wireless networks.
 
 The
        market for streaming media services and for related services is broad and
        encompasses many different types of companies, organizations and technologies.
        We will compete with numerous providers of streaming media technology and
        services, many of which have far greater financial and other resources than
        we
        do. Many of these companies have established histories and relationships
        in
        providing such systems and services that enable them to attract staff and
        customers. Many of the firms within this industry are large and have
        significantly more resources for sales, marketing and research and development
        than we do.
 
 We
        plan
        to compete within this industry by focusing on providing high value ser-vices
        within the framework of the Galaxy Broadcast Network, by continuing to develop
        our technology to maintain a technical advantage and by exploiting the market
        opportunities as outlined above. We believe it is an important competitive
        edge
        to have a fully enabled network in place and to market our system to early
        adopters, giving us an opportunity to gain an early lead and volume in the
        market and to further solidify our competitive positioning. We also plan
        to
        compete by providing our customers with fully capable, easy to use systems
        for
        delivery and to assisting our customers to grow their streaming needs.
  6
  
 Operation
        Development and Plan
 With
        the
        acquisition of Stream Horizon Media and our Los Angeles facility, our plan
        is to
        capitalize on the market opportunity we believe is developing and to develop
        early market entry advantages with growing customers.
 
 With
        adequate funding, we expect to undertaking the following in connection with
        our
        plan:
  1.  Continue
        to
        hire staff for office administration and customer service and
        support.
  2.  Market
        our
        products and services.
 
 Our
        budget and plan is based on our current assessment of costs and application
        to
        our plan. The ultimate amounts expended under this plan will be determined
        based
        on customer acceptance and the rate of adoption of the Galaxy Broadcast Network
        platform. Management reserves the right to reallocate as necessary, any amounts
        in any budget set out above, as circumstances warrant without notice or
        correction.
 
 Marketing
 Subject
        to adequate financial support, we have budgeted $155,000 for the development
        of
        marketing materials, including: (i) the updating of our web sites at
        www.yourgalaxy.com and www.infotecbusinesssystems.com, (ii) the production
        of
        marketing and advertising materials, product support and training resources,
        and
        (iii) marketing of our products and services. We have engaged sales personnel
        for our marketing efforts, but will continue to rely on relationships and
        advertising through our customers under the slogan “Powered by Galaxy”. Given
        adequate funding, we expect to be able to engage additional marketing
        consultants and sales agents as required. We currently lack the financial
        resources to broaden our marketing efforts and fulfill this portion of our
        plan.
        A lack of financial resources will inhibit our plan and our marketing activities
        and may cause harm to our business and to the successful execution of our
        plan.
 
 Sales
        & Technical Support
 Galaxy
        provides professional levels of sales and technical support including regular
        product demonstrations through meetings and on the web via the Galaxy Broadcast
        Network.  Galaxy’s tech-nical support is available 24 hours a day, seven
        days a week.
 
 Delivery
        and Distribution
 Our
        systems and online services are established and maintained in our own and
        other
        co-location facilities and are accessible by our customers, 24 hours a day,
        7
        days a week via the Internet.
 
 Development
 Our
        development staff are responsible for our system operation and maintenance
        and
        for providing customer service to our existing customer base. Our development
        activities are currently focused on ongoing product improvement, system
        maintenance and upgrades, content encoding and development of the ebahn web
        portal. We have set out our assessment of the costs for development below
        under
        the subheadings “Property and Plant” and “Employment”. Our existing
        infrastructure is adequate to meet our customers current and short term needs,
        however, our growth is ultimately dependent on increasing our delivery
        capabilities and our ability to support and service our customer’s
        needs.
  7
  Property
        or Plant
 With
        completion of our recent acquisitions and the opening of our server co-location
        facility or “POP” in Los Angles, we do expect to make additional capital
        purchases in the near term. Over the next twelve month period, based on our
        expected growth in operations, however, we have budgeted approximately $240,000
        in relation to the purchase of additional equipment and software for our
        Los
        Angeles facility and the establishment and running of one additional server
        co-location facility. Additional POP sites may be required by the Galaxy
        Broadcast Network to provide regional proximity to customers, for load balancing
        and to provide redundancy in the event one POP site is disabled or is off-line.
        We will evaluate the success of the Los Angeles POP site before proceeding
        with
        the establishment of additional sites. During the execution of this plan
        and the
        growth of the Galaxy Broadcast Network, we will evaluate additional POP sites
        based on customer proximity and bandwidth costs. We do not currently have
        funds
        available to undertake additional property and plant expansion.
  Employment
 In
        addition to our president, we engage one full time technical manager and
        one
        part time VP of Finance, two full time staff in our filming division, one
        full
        time and one part time contractor for network administration and technical
        development, one full time Media Designer, one full time receptionist and
        one
        full time sales person. With additional funding, our plan is to increase
        our
        staff levels over the next twelve month period to include a part-time Vice
        President, Controller, and Business Development persons we also plan to include
        a full time person in office and administration and additional full time
        staff
        member for customer support. We would also upgrade our part time network
        administrator to full time. We have budgeted the amount of $263,000 over
        the
        next twelve month period for such staff. As prospects and circumstances warrant,
        additional full-time and part-time employees, as well as consultants will
        be
        engaged to perform required services. We do not currently have funding available
        to engage additional staff as set out above.
 
 **ITEM
        2. DESCRIPTION OF PROPERTY.**
 
 We
        currently lease property at #150 and #350 - 1152 Mainland Street, Vancouver,
        B.C. V6B 4X2 for our principal executive offices and our subsidiary’s
        development facilities.
 
 **ITEM
        3. LEGAL PROCEEDINGS.**
 
 We
        are
        not currently a party to any material litigation, nor to the knowledge of
        management, is there any material litigation threatened or contemplated against
        us.
 
 **ITEM
        4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.**
 
 No
        matter
        was submitted during the fourth quarter of our fiscal year to a vote of security
        holders through the solicitation of proxies or otherwise.
  8
  **PART
        II**
 
 **ITEM
        5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
        MAT-TERS.**
 
 Our
        common stock is traded over-the-counter on the OTC Electronic Bulletin Board
        under the symbol "IFTC".  The following table sets forth the high and the
        low bid quotations quarterly for our shares of common stock during the last
        two
        fiscal years ended April 30, 2006.  The closing bid on June 30, 2006 is
        also shown.  These quotations reflect inter-dealer prices, without retail
        mark-up, mark-down or commissions and may not represent actual
        transactions.
 
 Period
              
              High
              
              Low***2006***4th
                  QuarterFebruary
                  1, 2006 - April 30, 2006
              
              $
              0.21
              
              $
              0.083rd
                  QuarterNovember
                  1, 2005 - January 31, 2006
              
              $
              0.24
              
              $
              0.062nd
                  QuarterAugust
                  1, 2005 - October 31, 2005
              
              $
              0.45
              
              $
              0.0521st
                  QuarterMay
                  1, 2005 - July 31, 2005
              
              $
              0.068
              
              $
              0.008***2005***4th
                  QuarterFebruary
                  1, 2005 - April 30, 2005
              
              $
              0.07
              
              $
              0.053rd
                  QuarterNovember
                  1, 2004 - January 31, 2005
              
              $
              0.35
              
              $
              0.052nd
                  QuarterAugust
                  1, 2004 - October 31, 2004
              
              $
              0.40
              
              $
              0.081st
                  QuarterMay
                  1, 2004 - July 31, 2004
              
              $
              0.53
              
              $
              0.06
 
 On
        June
        30, 2006, the closing bid price for the common stock was $0.090.
 
 There
        are
        approximately 150 holders of record of our common stock.
 
 Dividends
 There
        are
        no restrictions in our articles of incorporation or bylaws that prevent us
        from
        declaring dividends.  The Nevada Revised Statutes, however, do prohibit us
        from declaring dividends where, after giving effect to the distribution of
        the
        dividend:
 
 1.
        We
        would not be able to pay our debts as they become due in the usual course
        of
        business; or
  9
  
 2.
        Our
        total assets would be less than the sum of our total liabilities plus the
        amount
        that would be needed to satisfy the rights of stockholders who have preferential
        rights superior to those receiving the distribution.
  We
        have
        not declared any dividends, and we do not plan to declare any dividends in
        the
        foresee-able future.
  Penny
        Stock Rules
 The
        SEC
        has adopted regulations which generally define a "penny stock" to be any
        equity
        secu-rity that has a market price of less than $5.00 per share, subject to
        certain exceptions.  Depending on market fluctuations, our common stock may
        be considered a "penny stock".  As a result, it may be subject to rules
        that impose additional sales practice requirements on broker/dealers who
        sell
        these securities to persons other than established customers and accredited
        investors.  For transactions cov-ered by these rules, the broker-dealer
        must make a special suitability determination for the purchase of our
        securities.  In addition the broker-dealer must receive the purchaser's
        written consent to the trans-action prior to the purchase.  The
        broker-dealer must also provide certain written disclosures to the purchaser.
         Consequently, the "penny stock" rules may restrict the ability of
        broker/dealers to sell our securities, and may negatively affect the ability
        of
        holders of our shares to resell them.
 
 **ITEM 6. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF
        OPERATION.**
 
 The
        matters and items discussed in this annual report on Form 10-KSB are forward
        -looking statements that involve risks and uncertainties, other than historical
        and factual statements. Actual results of the company may differ materially
        from
        the results discussed in the forward-looking statements. Certain factors
        that
        could contribute to such differences are discussed with the forward-looking
        statements throughout this annual report.
 
 The
        following discussion should be read together with the information contained
        in
        the consolidated financial statements and related notes included elsewhere
        in
        this annual report.
 
 General
 The
        company’s discussion and analysis of our financial condition and results of
        operations are based upon our consolidated financial statements, which have
        been
        prepared in accordance with accounting principles generally accepted in the
        United States. The preparation of these financial statements requires us
        to make
        estimates and judgments that affect the reported amounts of assets, liabilities,
        revenues and expenses and related disclosure of disclosure of contingent
        assets
        and liabilities. On an on going basis, we evaluate these estimates, including
        those related to software development expenses, financing operations and
        contingencies and litigation. We base these estimates on historical experience
        and on various other assumptions that are believed to be reasonable under
        the
        circumstance, the results of which form the basis for the making judgments
        about
        the carrying values of assets and liabilities that are not readily apparent
        from
        other sources. Actual results may differ from these estimates under different
        assumptions or conditions.
  10
  We
        believe that the following critical accounting policies affect our more
        significant judgments’ and estimates used in the preparation of our consolidated
        financial statements.
 
 We
        recognize revenues in accordance with Securities and Exchange Commission
        Staff
        Accounting Bulletin No. 101. “Revenue recognition in Financial Statements”.
        Revenue is recognized only when the price is fixed or determinable, persuasive
        evidence of an arrangement exists, the service is performed, and collectibles
        is
        reasonably assured.
  Operation
        Development and Plan
 We
        are an
        emerging development company. Infotec has developed an Internet Content Delivery
        Network system to distribute extremely high quality video over existing networks
        for business and conventional home viewers. This is a unique development
        taking
        advantage of the latest technology. The company is focused on the following
        markets:
  -Enable
        live content to be broadcast from any location to 100’s of thousands of
        viewers.
 -Our
        integrated solution is from industry experts-we are an Application Service
        Provider (ASP)
 -Corporate
        communication to employees. (Multi-level marketing - narrowcasting)
 -Enable
        e-learning (e.g. coaching videos-sports)
 
 We
        offer
        fully integrated communications and learning solutions for modular suite
        of
        products including hardware, software, media creation and management, corporate
        communications and content delivery. Other strategic partnerships will be
        exploited in other key areas, especially content.
 
 Our
        core
        product offerings are:
 
 -ISP
        Service
 -Encoder
        sales
 -Internet
        cable broadcaster
 -Video
        Studio and post production facilities
 
 Our
        Vision is to deploy our encoder’s world wide enabling us to aggregate content
        which we will ultimately host on our Broadcast portal. The content will
        initially consist of a wildlife reality channel, (online Zoo). Several TV
        Channels, in multiple languages, and our own independent music artist’s video
        channel. In time we will add sports, as well as international TV channels.
        Each
        of our channels will have multiple revenue streams to create basic advertising
        support to pay per view to subscriber fees. We will continue to create content
        for our customers but also utilize our studio to generate content for our
        own
        audience.
 
 This
        model has been tested using our Eagle cam. We have gained experience in selling
        advertising, bandwidth requirements, exact costing, end user satisfaction
        and an
        accurate stream per daily viewer ratio. Our Eagle Cam has experienced a peak
        of
        14,000,000 page loads per day, with up to 15,000 simultaneous broadband streams,
        as well as an impressive 500,000 unique visitors per day.
 
 Our
        strengths and advantages:
 
 There
        are
        many reasons why the Infotec solution is setting the industry
        standard.
  11
 
 -We
        have
        many years of experience, with our existing customer base.
 -The
        Infotec network is designed with Streaming media in mind, the focus of our
        content delivery system, is Streaming media servers, and traffic
        throughput.
 -The
        ease
        of use of the Galaxy Encoder product, which has already enabled a variety
        of
        live experiences including; live casting sessions, wildlife experiences,
        conference streaming, live TV streams and the list goes weekly.
 
 Results
        of Operations
 Our
        April
        30, 2006 audited consolidated financial statements have been prepared on
        the
        basis of the accounts and operations of Galaxy Networks Inc. from incorporation,
        December 13, 2002 to April 30, 2006 and incorporate the accounts and operations
        for Infotec Business Systems, Inc., Galaxy Networks Inc., Stream Horizon
        Studios
        Ltd. (formerly “Infotec Business Strate-gies, Inc.”) and Galaxy US Networks Inc.
        (formerly “Eventec Inc.”) from December 13, 2002 to April 30, 2006.
 
 For
        the
        year ended April 30, 2006, we incurred a loss from operations of $1,612,267.
        Revenues, net of costs of goods sold were $119,037 in the period.  Our
        principal areas of expenditure during the period were for Accounting and
        Legal
        fees of $80,980, management fees of $220,940, administration of $990,879,
        rent
        of $52,826, subcontractor fees of $61,756, wages & benefits of $50,907 and
        depreciation charges of $70,649. Accounting and Legal fees, administration
        and
        management fees reflect costs incurred for initial regulatory filings and
        executive staffing respectively. Costs incurred in the year ended April 30,
        2006
        increased over the comparative period due to the completion of our earlier
        development, program and the reor-ganization of Galaxy, Stream Horizon and
        Infotec.
 
 Liquidity
        and Capital Resources
 As of April 30, 2006, we had an accumulated
        deficit of $2,010,253 and a bank overdraft of $7,008.  Our working capital
        deficit at April 30, 2006 was $1,439,657.  The accumulated deficit and our
        working capital deficit was funded by proceeds from the issuance of common
        shares, advances from related parties and accounts payable to
        suppliers.
 
 Our working capital is currently insufficient to
        sustain our current operations.  Our operations are currently dependent on
        our supplier’s willingness and ability to continue to provide services without
        some assurance of payment.  Our plan is to seek additional funding and
        business relationships.
  12
  While management believes that sales
        revenues can be grown and that ultimately profitable operations can be attained
        in the future, there is no assurance that sales revenues will be maintained
        or
        grown or that they will ultimately be of a level required to generate profitable
        operations or provide positive cash flow.  We are unable to predict at this
        time the exact amount of any additional working capital we will require to
        fund
        the implementation of our business plan and achieve cash flow suffi-cient
        to
        sustain operations and achieve profitability.  To fund our operations and
        more fully implement our business plan, we may seek additional capital in
        the
        private and/or public equity markets through the sale of equity or debt
        securities.  If we receive additional funds through the issuance of equity
        securities, however, our existing stockholders may experience significant
        dilution.  If we issue new securities, they may contain certain rights,
        preferences or privileges that are senior to those of our common stock.
        Moreover, we may not be successful in obtaining additional financing when
        needed
        or on terms favorable to our stockholders.  As we have no commitments from
        any third parties to provide additional equity or debt funding, we cannot
        provide any assurance that we will be successful in attaining such additional
        funding.
 
 We currently market a range of products and
        services, however, we have limited revenues and limited operating history
        from
        which to assess our operations.  Due to our lack of revenue-production
        history and our lack of contractual commitments to generate profits, there
        is no
        basis at this time for investors to make an informed determination as to
        the
        prospects for our future success.  For this reason and, as we have not
        achieved profitable operations and require additional capital to achieve
        our
        objec-tives, our auditors have included in their report covering our financial
        statements for the period from incorporation to April 30, 2006, that there
        is
        substantial doubt about our ability to continue as a going concern.
 
 Additional
        Risk Factors
 As noted throughout this annual report,
        Infotec Business Systems, Inc., is an emerging devel-opment stage company
        and
        accordingly, there are many risks that affect our operations and our ultimate
        viability.  It is not possible, however, to foresee all risks which may
        affect us.  Moreover, we cannot predict the magnitude of each risk nor can
        we predict whether we will successfully effectuate our current business plan.
         Each prospective investor is encouraged to carefully analyze the risks and
        merits of an investment in our securities and to take into consideration
        when
        making such analysis, among others, the financial risks discussed under the
        subheading "Liquidity and Capital Resources" above and the additional risk
        factors we have set out below.
 
 Operating
        History - We are
        presently in the process of marketing products and services which we have
        developed or acquired.  We have only a limited operating history from which
        investors can evaluate our future business prospects or management’s
        performance.  As a result, you have no reli-able means to determine whether
        you should make an investment in this company.
 
 Marketable
        Products - In
        order to sell our products and services, we must demonstrate to poten-tial
        customers that we have systems and services that are functional, supported,
        cost
        effective and address their needs.  We haves developed products and
        services which we have introduced and from which we are receiving sales
        revenues.  At present however, we have only limited history in offering and
        supporting these product offerings. If products and services we offer do
        not
        meet customer needs and if customers are not convinced we can maintain, support
        and upgrade our offerings in future, or if our products contain product flaws
        or
        bugs, we will not be able to successfully market our products and services
        or
        earn revenues.
  13
  Staff
        Availability - In
        addition to our president, we engage one full time technical manager and
        one
        part time VP of Finance, two full time staff in our filming division, one
        full
        time and one part time contractor for network administration and technical
        development, one full time Media Designer, one full time receptionist and
        one
        full time sales person. We
        currently have employment agreements with the directors, officers and employees
        we depend on for the successful implementation of our plan.
 
 Competition - We
        face competition from a wide range of firms in the streaming media and host-ing
        services industry.  These companies include large, well established and
        financially stronger companies.  We do not currently have resources to
        compete and may never have sufficient funds to be able to refine our offerings
        and successfully market our offerings so that we may become a factor in the
        industry.  These competitive disadvantages represent another factor which
        may cause investors in our securities to lose the value of their
        investment.
 
 Management
        Control -
        Current management owns or controls approximately 36.86% of the
        out-standing shares of our common stock.  Accordingly, they have almost
        complete influence in determining the outcome of all corporate transactions
        and
        business decisions.  The interests of man-agement may differ from the
        interests of the other stockholders, and since they have the ability to control
        most decisions through their control of our common stock, investors will
        have
        limited ability to affect decisions made by management.
 
 
 **ITEM 7. FINANCIAL
        STATEMENTS.**
 
 Annual Audited
                Financial Statements
              PageReport
                  of Independent Registered Public Accounting Firm
              F-1Consolidated
                  Financial StatementsConsolidated
                  Balance Sheets
              F-2Consolidated
                  Statements of Operations
              F-3Consolidated
                  Statement of Stockholders’ Equity (Deficit)
              F-4Consolidated
                  Statements of Cash Flows
              F-5Notes
                  to Consolidated Financial Statements
              F-6
                  - F-10
  14
  **REPORT
        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
 
 To
        the
        Board of Directors of Infotec Business Systems, Inc. and
        Subsidiaries
 
 We
        have
        audited the accompanying consolidated balance sheet of Infotec Business Systems,
        Inc. and Subsidiaries (a development stage company) (the Company) as of April
        30, 2006 and 2005 and the related consolidated statements of operations,
        stockholders’ equity (deficit) and cash flows for the years then ended and for
        the period from inception (December 13, 2002) through April 30, 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 in accordance with the standards of the Public Company
        Accounting Oversight Board (United States).  Those standards require that
        we plan and perform the audit to obtain reasonable assurance about whether
        the
        financial statements are free of material misstatement. The Company is not
        required to have, nor were we engaged to perform, an audit of its internal
        control over financial reporting. Our audit includes consideration of internal
        controls over financial reporting as basis for designing audit procedures
        that
        are appropriate in the circumstances, but not for the purpose of expressing
        an
        opinion on the effectiveness of the Company’s internal control over financial
        reporting. Accordingly, we express no such opinion.  An audit includes
        examining, on a test basis, evidence supporting the amounts and disclosures
        in
        the financial statements.  An audit also includes assessing the accounting
        principles used and significant estimates made by management, as well as
        evaluating the overall financial statement presentation.  We believe that
        our audits provide a reasonable basis for our opinion.
 
 In
        our
        opinion, the consolidated financial statements referred to above present
        fairly,
        in all material respects, the financial position of Infotec Business Systems,
        Inc. and Subsidiaries as of April 30, 2006 and 2005, and the results of its
        operations and cash flows for the years then ended and for the period from
        inception (December 13, 2002) through April 30, 2006, in conformity with
        accounting principles generally accepted in the United States of
        America.
 
 The
        accompanying consolidated financial statements have been prepared assuming
        the
        Company will continue as a going concern. As discussed further in Note 3,
        the
        Company has been in the development stage since its inception (December 13,
        2002) and continues to incur significant losses. The Company’s viability is
        dependent upon its ability to obtain future financing and the success of
        its
        future operations. These factors raise substantial doubt about the Company’s
        ability to continue as a going concern. Management’s plan in regard to these
        matters is also described in Note 3. The consolidated financial statements
        do
        not include any adjustments that might result from the outcome of this
        uncertainty.
 
 **Mendoza
        Berger & Company, LLP**
 
 /s/
        Mendoza Berger & Company, LLP
 
 July
        10,
        2006
 Irvine,
        California
  F-1
  **Infotec
                  Business Systems, Inc. and Subsidiaries***(A
                  Development Stage Company)**Consolidated
                  Balance Sheets*April
                  302006
              
              2005*Assets*Current
                  AssetsCash
              
              $
              -
              
              $
              3,544Accounts
                  receivable
              
              
              101,735
              
              
              1,731Accounts
                  receivable - related party
              
              
              13,741
              
              
              1,957Prepaid
                  expenses
              
              
              4,789
              
              
              1,589Total
                  Current Assets
              
              
              120,265
              
              
              8,821Property
                  and Equipment (Note 4(d) and 9)
              
              
              244,912
              
              
              28,378Accumulated
                  Depreciation (Note 4(e))
              
              
              (86,277
              )
              
              (11,747
              )Net
                  Property and Equipment
              
              
              158,635
              
              
              16,631Intangible
                  Assets (Note 4)
              
              
              3,512
              
              
              -Accumulated Amortization
              
              
              (447
              )
              
              -Net
                  Intangible Assets
              
              
              3,065
              
              
              -Goodwill
                  (Note 5)
              
              
              687,369
              
              
              -Total
                  Assets
              
              $
              969,334
              
              $
              25,452**Liabilities
                  and Stockholders’ Equity (Deficit)**Current
                  LiabilitiesBank
                  overdraft
              
              $
              7,008
              
              $
              0Accounts
                  payable
              
              
              126,483
              
              
              32,298Accounts
                  payable - related party (Note 11(c))
              
              
              133,302
              
              
              129,141Deferred
                  Revenue
              
              
              4,000
              
              
              -Loans
                  Payable to Stockholders (Note 6)
              
              
              177,563
              
              
              -Due
                  to related party (Note 10)
              
              
              145,337
              
              
              18,500Compensation
                  Payable (Note 7)
              
              
              966,229
              
              
              -Total
                  Current Liabilities
              
              
              1,559,922
              
              
              179,939Stockholders’
                  Equity (Deficit)Preferred
                  stock, voting; $0.001 par value; 375,000,000 shares
                  authorized;no
                  shares issued and outstanding at April 30, 2006 and 2005,
                  respectively
              
              
              -
              
              
              -Common
                  stock, voting; $0.001 par value; 750,000,000 shares
                  authorized;121,500,000
                  and 101,250,000 shares issued and outstanding atApril
                  30 2006 and 2005, respectively
              
              
              121,500
              
              
              101,250Additional
                  paid in capital
              
              
              1,284,050
              
              
              139,300Accumulated
                  other comprehensive income
              
              
              14,114
              
              
              2,948Deficit
                  accumulated during the development stage
              
              
              (2,010,252
              )
              
              (397,985
              )Total
                  Stockholders’ Equity (Deficit)
              
              
              (590,588
              )
              
              (154,487
              )Total
                  Liabilities and Stockholders’ Equity
              
              $
              969,334
              
              $
              25,452
 
 (The
        accompanying notes are an integral part of these financial
        statements)
  F-2
 
 **Infotec
                  Business Systems, Inc. and Subsidiaries***(A
                  Development Stage Company)**Consolidated
                  Statements of Operations*Cumulativeamountfrom
                  inception(December
                  13,2002For
                  the year ended
              
              throughApril
                  30, 2006
              
              April
                  30,2005
              
              April
                  30, 2006Revenues
              
              $
              187,448
              
              $
              17,267
              
              $
              218,393Revenues
                  from related parties (Note 11(b))
              
              
              -
              
              
              1,676
              
              
              1,676Cost
                  of goods sold
              
              
              (68,411
              )
              
              (10,319
              )
              
              (79,735
              )Gross
                  Profit
              
              
              119,037
              
              
              8,624
              
              
              140,334ExpensesAccounting
                  and
                  Legal
              
              
              80,980
              
              
              27,199
              
              
              108,636Administration
                  Fees
              
              
              990,879
              
              
              -
              
              
              990,879Acquisition
                  fees
              
              
              -
              
              
              90,000
              
              
              90,000Depreciation
              
              
              70,649
              
              
              4,995
              
              
              81,150Management
                  Fees
                  (Note 11(a))
              
              
              220,940
              
              
              15,141
              
              
              264,097Office
                  and telephone
              
              
              19,740
              
              
              4,791
              
              
              25,922Rent
                  and Insurance
              
              
              52,826
              
              
              -
              
              
              52,826Subcontracts
              
              
              61,756
              
              
              -
              
              
              61,756Travel
              
              
              17,627
              
              
              -
              
              
              17,627Wages
                  and Benefits
              
              
              50,907
              
              
              -
              
              
              50,907Total
                  Expenses
              
              
              1,566,304
              
              
              142,126
              
              
              1,743,800Operating
                  Loss
              
              
              (1,447,267
              )
              
              (133,502
              )
              
              (1,603,466
              )Other
                  income and ExpensesImpairment
                  of
                  Goodwill
              
              
              (165,000
              )
              
              -
              
              
              (165,000
              )Net
                  loss before taxes
              
              
              (1,612,267
              )
              
              (133,502
              )
              
              (1,768,466
              )Provision
                  for income taxes (Note 8)
              
              
              -
              
              
              -
              
              
              -Net
                  Loss
              
              
              ($1,612,267
              )
              
              ($133,502
              )
              
              (1,768,466
              )Net
                  Loss Per Share  (Basic and Diluted)
              
              $
              (0.01
              )
              $
              (0.00
              )Weighted
                  Average Shares Outstanding
                (Basic
                  and Diluted)
              
              
              113,203,425
              
              
              29,480,738
 
 (The accompanying notes are an integral part of these financial
        statements)
  F-3
 **Infotec
                    Business Systems, Inc. and Subsidiaries***(A
                    Development Stage Company)**Consolidated
                  Statements of Stockholders’ Equity
                  (Deficit)*Preferred
                    Stock
                
                
                Common
                    Stock
                
                
                
                
                
                
                
                
                Deficit
                  accumulated
                
                
                TotalNumber
                    of
                    shares
                
                
                Amount
                
                
                Number
                    of
                    shares
                
                
                Amount
                
                
                Paid-in
                    capital
                
                
                Compre-
                      hensive
                      Income
                
                
                during
                            the
                          development
                          stage
                
                
                stockholders'
                        equity
                        (deficit)Balance
                    at inception - December 13, 2002
                
                
                -
                
                $
                -
                
                
                -
                
                $
                -
                
                $
                -
                
                $
                -
                
                $
                -
                
                $
                -Stock
                    issued for:Cash
                
                
                -
                
                
                -
                
                
                15,000,000
                
                
                15,000
                
                
                (14,838
                )
                
                -
                
                
                -
                
                
                162Equipment
                
                
                -
                
                
                -
                
                
                20,000,000
                
                
                20,000
                
                
                (3,449
                )
                
                -
                
                
                -
                
                
                16,551Stock
                    issued for cash:December
                    14, 2002
                
                
                -
                
                
                -
                
                
                15,000,000
                
                
                15,000
                
                
                (2,035
                )
                
                -
                
                
                -
                
                
                12,965Net
                    (loss) for the period
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (12,172
                )
                
                (12,172
                )Adjustment
                    forForeign
                    currency translation adjustment
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                742
                
                
                -
                
                
                742Comprehensive
                    (loss)
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (11,430Balance
                    - April 30, 2003
                
                
                -
                
                
                -
                
                
                50,000,000
                
                
                50,000
                
                
                (20,322
                )
                
                742
                
                
                (12,172
                )
                
                18,248Net
                    (loss) for the period
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (10,525
                )
                
                (10,525
                )Adjustment
                    forForeign
                    currency translation adjustment
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (165
                )
                
                -
                
                
                (165
                )Comprehensive
                    (loss)
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (10,690
                )Balance
                    - April 30, 2004
                
                
                -
                
                
                -
                
                
                50,000,000
                
                
                50,000
                
                
                (20,322
                )
                
                577
                
                
                (22,697
                )
                
                7,558Stock
                    issued for:Acquisition
                
                
                -
                
                
                -
                
                
                45,875,000
                
                
                45,875
                
                
                (37,203
                )
                
                -
                
                
                (241,786
                )
                
                (233,114
                )Services
                
                
                -
                
                
                -
                
                
                1,250,000
                
                
                1,250
                
                
                88,750
                
                
                -
                
                
                -
                
                
                90,000Stock
                    issued for settlement ofConsulting
                    fees
                
                
                -
                
                
                -
                
                
                4,125,000
                
                
                4,125
                
                
                108,075
                
                
                -
                
                
                -
                
                
                112,200Net
                    (loss) for the period
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (133,502
                )
                
                (133,502
                )Adjustment
                    forForeign
                    currency translation adjustment
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                2,371
                
                
                -
                
                
                2,371Comprehensive
                    (loss)
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (131,131
                )Balance
                    - April 30, 2005
                
                
                -
                
                
                -
                
                
                101,250,000
                
                
                101,250
                
                
                139,300
                
                
                2,948
                
                
                (397,985
                )
                
                (154,487
                )Stock
                      issued for:Private
                    placement for cash (Note 7)
                
                
                -
                
                
                -
                
                
                5,000,000
                
                
                5,000
                
                
                245,000
                
                
                -
                
                
                -
                
                
                250,000Business
                    acquisition (Note 10)
                
                
                -
                
                
                -
                
                
                12,500,000
                
                
                12,500
                
                
                737,500
                
                
                -
                
                
                -
                
                
                750,000Share
                    purchase agreement (Note 10)
                
                
                -
                
                
                -
                
                
                2,750,000
                
                
                2,750
                
                
                162,250
                
                
                -
                
                
                -
                
                
                165,000Net
                    (loss) for the period
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (1,573,291
                )
                
                (1,573,291
                )Adjustment
                    forForeign
                    currency translation adjustment
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                12,969
                
                
                -
                
                
                12,969Comprehensive
                    (loss)
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (1,560,322
                )Balance
                    - April 30, 2006
                
                
                -
                
                $
                -
                
                
                121,500,000
                
                $
                121,500
                
                $
                1,284,050
                
                $
                15,917
                
                $
                (1,971,276
                )
                $
                (549,809
                )
 (The
          accompanying notes are an integral part of these financial
          statements)
 F-4
 **Infotec
                  Business Systems, Inc. and Subsidiaries***(A
                  Development Stage Company)**Consolidated
                  Statements of Cash Flows*Cumulativeamount
                  frominceptionFor
                    the year endedApril
                  30,
              
              (December
                  13,
                2002
                  to April 30,2006
              
              2005
              
              2006)Cash
                  Flows From Operating ActivitiesNet
                  Loss
              
              
              ($1,612,267
              )
              
              ($133,502
              )
              
              ($1,729,490
              )Adjustments
                  to reconcile net loss to cashDepreciation
              
              
              70,649
              
              
              4,995
              
              
              47,174Acquisition
                  fees
              
              
              -
              
              
              90,000
              
              
              90,000Impairment of goodwill
              
              
              165,000
              
              
              -
              
              
              165,000Changes
                  in working capital itemsIncrease
                  (decrease)  in bank overdraft
              
              
              7,008
              
              
              -
              
              
              7,008Increase
                  (decrease)  in accounts payable
              
              
              94,185
              
              
              (93,495
              )
              
              (3,292
              )Increase
                  (decrease) in accounts payable- related party
              
              
              4,161
              
              
              124,318
              
              
              133,302Increase
                  in unearned revenue
              
              
              4,000
              
              
              -
              
              
              4,000Increase
                  in due to related parties
              
              
              126,837
              
              
              18,500
              
              
              145,337Increase
                  in compensation payable
              
              
              966,229
              
              
              -
              
              
              966,229(Increase)
                  decrease in accounts receivable
              
              
              (100,004
              )
              
              (1,560
              )
              
              (101,564
              )(Increase)
                  decrease in accounts receivable- related party
              
              
              (11,784
              )
              
              (1,957
              )
              
              (13,741
              )Decrease
                    in prepaid expenses
              
              
              (3,200
              )
              
              748
              
              
              (2,452
              )Net
                  Cash Provided By (Used in)Operating
                   Activities
              
              
              (289,186
              )
              
              8,047
              
              
              (292,489
              )Cash
                  Flows to Investing ActivitiesAcquisition
                  of property and equipment
              
              
              (139,892
              )
              
              (5,868
              )
              
              (147,877
              )Acquisition of intangible assets
              
              
              (3,512
              )
              
              -
              
              
              (3,512
              )Net
                  Cash Used in Investing  Activities
              
              $
              (143,404
              )
              
              (5,868
              )
              $
              (151,389
              )Cash
                  Flows from Financing  ActivitiesIncrease
                  in loans payable to stockholders
              
              
              177,563
              
              
              -
              
              
              177,563Cash
                  received in recapitalization
              
              
              -
              
              
              1,353
              
              
              1,353Proceeds
                  from issuance of common stock
              
              
              250,000
              
              
              -
              
              
              263,127Net
                  Cash provided by Financing Activities
              
              
              427,563
              
              
              1,353
              
              
              442,043Increase
                  (Decrease) in Cash in the Period
              
              
              (5,027
              )
              
              3,532
              
              
              (1,835
              )Comprehensive
                  gain (loss) on translation
              
              
              1,483
              
              
              (225
              )
              
              1,835Cash
                  - Beginning of Period
              
              
              3,544
              
              
              237
              
              
              -Cash
                  - End of Period
              
              $
              -
              
              $
              3,544
              
              $
              -**Non-Cash
                  Financing Activities**Common
                  shares issued for equipment
              
              $
              76,642
              
              $
              -
              
              $
              93,193**Supplementary
                  Disclosure of Non-Cash Items**Net
                  liabilities assumed in recapitalization
              
              $
              -
              
              
              ($234,467
              )
              
              ($234,467
              )Issuance
                  of common stock for purchase goodwill
              
              $
              838,358
              
              $
              -
              
              $
              838,358Issuance
                  of common stock for services
              
              $
              -
              
              $
              -
              
              $
              -Issuance
                  of common stock for consulting
              
              $
              -
              
              $
              112,200
              
              $
              112,200
 
 (The
        accompanying notes are an integral part of these financial
        statements)
 F-5
  **Infotec
        Business Systems, Inc. and Subsidiaries**
 *(A
        Development Stage Company)*
 *Notes
        to Consolidated Financial Statements*
 
 
 **1.**  **Development
        Stage Company**
 
 Infotec
        Business Systems, Inc. a Nevada corporation, incorporated October 1, 2001
        and
        its wholly owned subsidiaries  Galaxy Networks Inc., a British Columbia
        corporation incorporated December 13, 2002, Stream Horizon Studios Ltd.
        (formerly “Infotec Business Strategies, Inc.”), a British Columbia corporation
        incorporated August 30, 2001 and Galaxy US Networks Inc, (formerly “Eventec
        Inc.”), a Nevada corporation incorporated April 25, 2003, (herein collectively
        referred to as “Infotec” or as the “Company”) is a development stage company
        engaged in the business of commercializing digital media encoder technology
        through the development of strategic alliances with major video
        producers.
 
 The
        Company is engaged in the development of third generation Internet Services.
         The development is currently focused on Streaming Video.
 
 **2.**  **Reorganization**
 
 As
        of
        November 11, 2004, the Company entered into an agreement which provided for
        the
        reorganization of Galaxy Networks Inc., with and into Infotec Business Systems,
        Inc., becoming a wholly owned subsidiary of Infotec Business Systems, Inc.
         The agreement is for the exchange of 100% of the outstanding Common Stock
        (Class A Common Stock) of Galaxy Networks Inc., for 20,000,000 (50,000,000
        post-split) shares of Infotec Business Systems, Inc.’s $0.001 par value Common
        Stock.
 
 The
        former shareholders of Galaxy Networks Inc. acquired control of the Company
        upon
        the closing of the share exchange transaction.  The exchange was accounted
        for as a reverse acquisition.  Accordingly, for financial statement
        purposes, Galaxy Networks Inc. was considered the accounting acquirer and
        the
        related business combination was considered a recapitalization of Galaxy
        Networks Inc. rather than an acquisition by the Company.  The historical
        financial statements prior to the agreement will be those of Galaxy Networks
        Inc. and the name of the consolidated company going forward is Infotec Business
        Systems, Inc.
 
 Concurrent
        with the reorganization the Company issued 500,000 (12,500,000
        post-split) shares
        of Common Stock for services valued at $90,000.
 
 On
        September 30, 2005, the Company entered into an acquisition agreement with
        the
        proprietor of Stream Horizon Media (Stream Horizon), a British Columbia sole
        proprietorship which provided for the acquisition by Infotec Business
        Strategies, Inc., a wholly-owned subsidiary of the Company, of 100% interest
        in
        the business and assets of Stream Horizon, in exchange for the issuance of
        5,000,000 (12,500,000 post-split) common shares of the Company. The aggregate
        purchase price and the value of the common shares issued in consideration
        was
        determined to be $750,000 based on the market price of the Company ’ s
        common
        shares on the September 12, 2005, the date of substantive agreement between
        the
        parties.
 
 The
        acquisition included the assets, business operations and assumption of lease
        liability of Stream Horizon exclusive of working capital items and any
        indebtedness or other obligations. The acquisition has been accounted using
        the
        purchase method. The results of Stream Horizon have been included in the
        consolidated financial statements since October 1, 2005.
 
 On
        September 30, 2005, the Company entered into a definitive acquisition agreement
        with the stockholder of ebahn Television Network Corp., a Nevada company,
        which
        formalized their agreement of September 12, 2005 to acquire a 100% interest
        in
        ebahn and the stockholders’ debt payable by ebahn, in exchange for the issuance
        of 1,100,000 (2,750,000 post-split) common shares of the Company.
 
 The
        acquisition has been accounted using the purchase method. The acquisition
        was
        reflected at the fair value of the consideration paid to the vendor of $165,000
        based on the September 12, 2005 agreement date. The amount of the consideration
        in excess of the value of assets acquired of $165,000 has been expensed in
        the
        statements of operations as impairment of goodwill.
  F-6
 **Infotec
        Business Systems, Inc. and Subsidiaries**
 *(A
        Development Stage Company)*
 *Notes
        to Consolidated Financial Statements*
  **3.**  **Going
        Concern**
 
 In
        a
        development stage company, management devotes most of its activities to
        establishing a new business primarily, the development of a detailed business
        plan, marketing strategy and the raising of funds required to develop and
        operate the business successfully.  Planned principal activities have not
        yet produced material revenues and the Company has suffered recurring operating
        losses as is normal in development stage companies.  These factors raise
        doubt about the Company’s ability to continue as a going concern.
 
 The
        ability of the Company to emerge from the development stage with respect
        to its
        planned principal business activity is dependent upon its successful efforts
        to
        raise additional equity financing, receive funding from affiliates and
        controlling shareholders, and develop a market for its products.
 
 In
        order
        to meet expenses over the next twelve months the Company is actively searching
        for additional equity financing.  See Note 2 regarding the Company’s
        reorganization.
 
 **4.**  **Summary
        of Significant Accounting Policies**
 
 (a)
        Principals of Consolidation
 These
        consolidated financial statements include the accounts of the Company and
        its
        wholly owned subsidiaries since the Company’s inception on December 13, 2002.
 All significant intercompany accounts and transactions have been
        eliminated.
 
 (b)
        Development Stage Company
 The
        Company is a development stage company as defined in the Statements of Financial
        Accounting Standards No. 7.  The Company is devoting substantially all of
        its present efforts to establish a new business and has only recently commenced
        its planned principal operations.  All losses accumulated since inception
        have been considered as part of the Company’s development stage
        activities.
 
 (c)
        Software Development Costs
 Software
        development costs are charged to expense as incurred unless the development
        project meets the criteria under United States generally accepted accounting
        principles for capitalization.  Capitalization of software development
        costs begins upon the establishment of technological feasibility and ceases
        when
        the product is available for general release.  The Company has no
        capitalized software development costs at April 30, 2006 and 2005
        respectively.
 
 (d)
        Property and Equipment
 Computer
        equipment, office equipment and demonstration equipment are stated at cost
        and
        depreciated over the estimated useful lives of the related assets using the
        straight-line method. The estimated useful lives for computer equipment and
        office equipment are five years and for demonstration equipment, three
        years.
  Office
                  equipment - computers
              3
                  yearsOffice
                  equipment - other
              5
                  yearsDemonstration
                  equipment
              3
                  yearsServer
                  systems
              5
                  yearsSoftware
              1
                  yearsStudio
                  equipment
              5
                  yearsLeasehold
                  Improvements
              Over
                  the term of the lease
 
 (e)Goodwill
        and Other Intangible Assets
 Goodwill
        and other Intangible Assets are accounted for in accordance with the Statements
        of Financial Accounting Standards No. 142, “Goodwill and Other Intangible
        Assets”. Intangible assets are recorded at cost and where appropriate, amortized
        over the estimated lives of the related intangible assets using the straight
        line method. The estimated life of IP addresses has been determined to be
        three
        years from the date of the Company’s acquisition. Goodwill is recorded at cost.
        Management reviews the carrying cost of goodwill during the Company’s fiscal
        year, at such times as changes in the underlying assumptions as to the future
        value of goodwill arise. During the year ended April 30,2006, the Company
        purchased a block of IP addresses for $3,512. This asset is being amortized
        over
        8 years.
  F-7
 **Infotec
        Business Systems, Inc. and Subsidiaries**
 *(A
        Development Stage Company)*
 *Notes
        to Consolidated Financial Statements*
 
 **4.**  **Summary
        of Significant Accounting Policies (continued)**
 
 (f)
        Impairment of Long Lived Assets
 Long-lived
        assets, such as property, plant, and equipment, and purchased intangibles
        subject to amortization, are reviewed for impairment whenever events or changes
        in circumstances indicate that the carrying amount of an asset may not be
        recoverable. Such events or circumstances include, but are not limited to,
        a
        significant decrease in the fair value of the underlying business, a significant
        decrease in the benefits realized from an acquired business, difficulties
        or
        delays in integrating the business or a significant change in the operations
        of
        an acquired business. Recoverability of assets to be held and used is measured
        by a comparison of the carrying amount of an asset to estimated undiscounted
        future cash flows expected to result from its use and eventual disposition.
        If
        the carrying amount of an asset exceeds its estimated future cash flows,
        an
        impairment charge is recognized for the amount by which the carrying value
        of
        the assets exceeds its fair value. If a readily determinable market price
        does
        not exist, fair value is estimated using discounted expected cash flows
        attributable to the assets. Assets to be disposed of are separately presented
        on
        the balance sheet and reported at the lower of their carrying amount or fair
        value less costs to sell, and are no longer depreciated.
 
 (g)
        Basic
        and Diluted Net Income (Loss) per Share
 The
        Company computes net income (loss) per share in accordance with SFAS No.
        128,
“Earnings per Share” (SFAS 128). SFAS 128 requires presentation of both basic
        and diluted earnings per shares (EPS) on the face of the income statement.
         Basic EPS is computed by dividing net income (loss) available to common
        shareholders (numerator) by the weighted average number of common shares
        outstanding (denominator) during the period.  Diluted EPS gives effect to
        all dilutive potential common shares outstanding during the period including
        stock options, using the treasury stock method, and convertible preferred
        stock,
        using the if-converted method. In computing Diluted EPS, the average stock
        price
        for the period is used in determining the number of shares assumed to be
        purchased from the exercise of stock options or warrants.  Diluted EPS
        excludes all dilutive potential common shares if their effect is antidilutive.
        The Company has no stock equivalents which would dilute earnings per share.
 
 (h)
        Foreign Currency Transactions/Balances
 The
        operations of the Company are located in British Columbia, Canada and its
        functional currency is the Canadian dollar.  These financial statements
        where applicable have been translated using the current method whereby monetary
        assets and liabilities are translated at the year end exchange rate, capital
        accounts are at historic exchange rates and revenues and expenses at the
        average
        exchange rate for the period.
 
 (i)
        Financial Instruments
 The
        Company’s financial instruments consist of cash, accounts receivable, and
        accounts payable.  The estimated fair value of these financial instruments
        approximate their carrying values, unless otherwise noted.
 
 (j)
        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 periods.  Actual
        results could differ from those estimates.
 
 (k)
        Revenue Recognition
 The
        Company recognizes revenue in accordance with Securities and Exchange Commission
        Staff Accounting Bulletin No. 101 (“SAB 101”), “Revenue Recognition in Financial
        Statements”. Revenue is recognized only when the price is fixed or determinable,
        persuasive evidence of an arrangement exists, the service is performed, and
        collectibility is reasonably assured.
  F-8
 **Infotec
        Business Systems, Inc. and Subsidiaries**
 *(A
        Development Stage Company)*
 *Notes
        to Consolidated Financial Statements*
  **4.**  **Summary
        of Significant Accounting Policies (continued)**
 
 (l)Software
        Development Costs
 Software
        development costs are charged to expense as incurred unless the development
        project meets the criteria under United States generally accepted accounting
        principles for capitalization. Capitalization of software development costs
        begins upon the establishment of technological feasibility and ceases when
        the
        product is available for general release. The Company has no capitalized
        software development costs at April 30, 2006 and April 30, 2005
        respectively.
 
 (m)
        Income Taxes
 Deferred
        income taxes are reported using the liability method. Deferred tax assets
        are
        recognized for deductible temporary differences and deferred tax liabilities
        are
        recognized for taxable temporary differences. Temporary differences are the
        differences between the reported amounts of assets and liabilities and their
        tax
        bases. Deferred tax assets are reduced by a valuation allowance when, in
        the
        opinion of management, it is more likely than not that some portion or all
        of
        the deferred tax assets will not be realized. Deferred tax assets and
        liabilities are adjusted for the effects of changes in tax laws and rates
        on the
        date of enactment.
 
 (n)
        Recent Pronouncements
 All
        recent accounting pronouncements have been applied as appropriate.  The
        Company has taken into account all other recent pronouncements and has
        determined that they have no effect on the Company's consolidated financial
        statements.
 
 **5.
        Goodwill**
 
 The
        changes in the carrying amount of goodwill for the year ended April 30, 2006
        are
        as follows:
 
 Balance
                  as at April 30, 2005
              
              $
              -Goodwill
                  acquired in the periodebahn
                  Television Network Corp.
              
              
              165,000Stream
                  Horizon Media
              
              
              673,358Currency
                  translation adjustment
              
              
              14,011Impairment
                  losses
              
              
              (165,000
              )Balance
                  as at April 30, 2006
              
              $
              687,369
  **6.
        Loans Payable to Stockholders**
 
 Loans
        to
        the Company by stockholders are non-interest bearing and have no fixed date
        for
        repayment. The total amount advanced at April 30, 2006 and April 30, 2005
        was
        $177,563 and $0 respectively.
 
 **7.
        Compensation payable**
 
 The
        total
        amount of compensations payable at April 30, 2006 and April 30, 2005 was
        $966,229 and $0 respectively. $960,000 will be paid upon the issuance of
        stock,
        and $6,229 is an accrual for vacation pay, sick pay and car allowance for
        the
        Company’s president, these will be paid upon use or on February 8, 2007 if not
        used.
  F-9
 **Infotec
        Business Systems, Inc. and Subsidiaries**
 *(A
        Development Stage Company)*
 *Notes
        to Consolidated Financial Statements*
  **8.**  **Income
        Taxes**
 
 The
        components of the deferred tax assets are as follows at April 30:
 
 2006
              
              2005Deferred
                  tax assets:Net
                  non-capital loss carry-forward
              
              $
              99,000
              
              $
              41,000Net
                  operating loss carry-forward
              
              
              686,000
              
              
              248,000Depreciation/Amortization
                  allowance
              
              
              47,000
              
              
              -Valuation
                  allowance
              
              
              (832,000
              )
              
              (289,000
              )Net
                  deferred tax assets
              
              $
              -
              
              $
              -
 
 The
        Company had available approximately $2,017,000 of unused net operating loss
        carry-forwards at April 30, 2006 that may be applied against future United
        States taxable income. These net operating loss carry-forwards expire for
        Federal purposes through 2025. There is no assurance that the Company will
        realize the benefit of the net operating loss carry-forwards.
 
 The
        Company had available approximately $288,000 unused non-capital loss
        carry-forwards at April 30, 2006, that may be applied against future Canadian
        taxable income. These non-capital loss carry- forwards expire through 2015.
        There is no assurance that the Company will realize the benefit of the
        net-capital loss carry-forwards.
 
 Change
        in
        ownership provisions may limit the benefits from net operating losses and
        non-capital losses carried for both United States and Canadian tax purposes.
         The impact of any limitations that may be imposed have not been
        determined.
 
 SFAS
        No.
        109 requires a valuation allowance to be recorded when it is more likely
        than
        not that some or all of the deferred tax assets will not be realized. At
        April
        2006 and 2005, valuation allowances for the full amount of the net deferred
        tax
        assets were established due to the uncertainties as to the amount of the
        taxable
        income that would be generated in future years.
 
 Reconciliation
        of the difference between statutory tax rate and the effective income tax
        rate
        is as follows:
 
 2006
              
              2005Statutory
                  Canadian tax (benefit) rate
              
              
              (34.5
              )%
              
              (34.5
              )%United
                  States (benefit) rate
              
              
              (34.0
              )%
              
              (34.0
              )%Valuation
                  allowance
              
              
              68.5
              %
              
              68.5
              %Effective
                  income tax rate
              
              
              0.0
              %
              
              0.0
              %
 
 **9.
        Property and Equipment**
 
 Property
                  and equipment comprise:
              
              April
                  30,2006
              
              2005Computer
                  equipment and software
              
              $
              157,354
              
              $
              25,387Demonstration
                  equipment
              
              
              2,635
              
              
              2,341Studio
                  Equipment
              
              
              79,708
              
              
              -Office
                  equipment
              
              
              5,215
              
              
              650244,912
              
              
              28,378Less
                  accumulated depreciation
              
              
              86,277
              
              
              11,747$
              158,635
              
              $
              16,631
  Depreciation
        expense at April 30, 2006 and April 30, 2005 was $70,649 and $4,995
        respectively.
  F-10
 **Infotec
        Business Systems, Inc. and Subsidiaries**
 *(A
        Development Stage Company)*
 *Notes
        to Consolidated Financial Statements*
 
 **10.
        Due to Related Party**
  Advances
        made by a director to the Company are non-interest bearing and have no fixed
        date for repayment.  The total amount advanced at April 30, 2006 and 2005
        was $145,337 and $18,500 respectively.
 
 
 **11.
        Related Party Transactions**
  During
        the years ended April 30, 2006 and 2005, the Company entered into transactions
        (recorded at exchange values) with related parties as follows:
 
 (a)
  Management
                  Fees
              
              April
                  30, 2006
              
              April
                  30,2005Secretary
                  Treasurer
              
              $
              10,000
              
              $
              8,149President
                  of
                  the Company
              
              
              94,280
              
              
              3,492Chief
                  Technical Officer
              
              
              106,160
              
              
              -Chief
                  Financial Officer
              
              
              10,500
              
              
              -Finance
                  administrator
              
              
              -
              
              
              3,500$
              220,940
              
              $
              15,141
 
 (b)Revenues
        include $0 and $1,676 received or receivable from companies with directors
        in
        common for the years ended April 30, 2006 and 2005 respectively.
 (c)Accounts
        payable at April 30, 2006 and 2005, include the amount of $133,302 and $129,141
        respectively, due to a shareholder and former officer of the Company and
        to
        companies related to a stockholder and former officer of the
        Company.
 
  **12.
        Capital Stock**
 
 (a)
              On
                  September 16, 2005, the Company completed a private placement of
                  2,000,000
                  (5,000,000 post-split) shares of common stock at a price of $0.125
                  per
                  share for cash proceeds of $250,000.(b)
              On
                  September 30, 2005, the Company issued 5,000,000 (12,500,000 post-split)
                  common shares in exchange for the business and assets of Stream
                  Horizon
                  Media at a price of $0.06 per share for a cash proceeds of
                  $750,000(c)
              On
                  September 30, 2005 the Company issued 1,100,000 (2,750,000 post-split)
                  common shares in exchange for the prior development and assets
                  of ebahn
                  Television Network Corp., for an aggregated consideration of
                  $165,000.(d)
              On
                  October 18, 2005 the Company effected a forward split of its capital
                  stock
                  on a 2.5:1 basis so that the 450,000,000 shares authorized (300,000,000
                  common shares and 150,000,000 preferred shares) and 48,600,000
                  shares of
                  common stock issued, were increased to 1,125,000,000 shares authorized
                  (750,000,000 common shares and 375,000,000 preferred shares) and
                  121,500,000 shares of common stock issued. Par value of the preferred
                  and
                  common stock remained unchanged at $0.001. All figures in these
                  financial
                  statements, including comparative information have been updated
                  to give
                  effect to the forward 2.5:1 split.
 F-11
 **ITEM 8. CHANGES IN AND
        DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
        DISCLOSURE.**
 
 None.
 
 **ITEM 8A. CONTROLS AND
        PROCEDURES.**
 
 Our
        Chief
        Executive Officer and VP of Finance (collectively, the "Certifying Officers")
        are responsible for establishing and maintaining disclosure controls and
        procedures for us. Based upon such officers' evaluation of these controls
        and
        procedures as of a date within 90 days of the filing of this annual report,
        and
        subject to the limitations noted hereinafter, the Certifying Officers have
        concluded that our disclosure controls and procedures are effective to ensure
        that information required to be disclosed by us in this annual report is
        accumulated and communicated to management, including our principal executive
        officers as appropriate, to allow timely decisions regarding required
        disclosure.
 
 The Certifying Officers have also indicated
        that there were no significant changes in our internal controls or other
        factors
        that could significantly affect such controls subsequent to the date of their
        evaluation, and there were no corrective actions with regard to significant
        deficiencies and material weaknesses.
 
 Our management, including each of the Certifying
        Officers, does not expect that our disclosure controls or our internal controls
        will prevent all error and fraud.  A control system, no matter how well
        conceived and operated, can provide only reasonable, not absolute, assurance
        that the objectives of the control system are met.  In addition, the design
        of a control system must reflect the fact that there are resource constraints,
        and the benefits of controls must be considered relative to their costs.
         Because of the inherent limitations in all control systems, no evaluation
        of controls can provide absolute assurance that all control issues and instances
        of fraud, if any, within a company have been detected.  These inherent
        limitations include the realities that judgments in decision-making can be
        faulty, and that breakdowns can occur because of simple error or mistake.
         Additionally, controls can be circumvented by the individual acts of some
        persons, by collusion of two or more people or by management override of
        the
        control.
 
 The
        design of any systems of controls also is based in part upon certain assumptions
        about the likelihood of future events, and there can be no assurance that
        any
        design will succeed in achieving its stated goals under all potential future
        conditions.  Over time, control may become inad-equate because of changes
        in conditions, or the degree of compliance with the policies or procedures
        may
        deteriorate.  Because of these inherent limitations in a cost-effective
        control system, misstatements due to error or fraud may occur and not be
        detected.
 
 **ITEM 8B. OTHER
        INFORMATION.**
 
 None.
  15
  **PART
        III**
 
 **ITEM 9. DIRECTORS, EXECUTIVE
        OFFICERS, PROMOTERS AND CONTROL PER-SONS; COMPLIANCE WITH SECTION 16(a) OF
        THE
        EXCHANGE ACT.**
 
 The
        following table sets forth the names, positions and the ages of our directors
        and executive officers.  Directors are elected at our annual meeting of
        stockholders and serve for a one year term or until removed from office in
        accordance with our bylaws or their successors are elected and qualify.
 Officers are appointed by the board of directors and their terms of office
        are, except to the extent gov-erned by employment contract, at the direction
        of
        the board of directors.  Directors do not currently receive any
        compensation for their services in acting as directors.
 
 Director
              
              Name
              
              Age
              
              Position
              
              SinceArthur
                  Griffiths
              
              
              49
              
              
              Chief
                  Executive Officer President
                  and Director
              
              
              2006Carol
                  Shaw
              
              
              41
              
              
              Secretary,
                  Treasurer and Director
              
              
              2004
 
 Arthur
        Griffiths served as a director and as our President, Chief Executive Officer
        since February 10, 2006 Arthur
        Griffiths has an extensive background in broadcasting, having served as Director
        of Western International Communications (WIC) from 1990 through 1995. WIC
        was
        Canada's largest broadcaster prior to its eventual sale in 1999. Arthur owned
        and operated the National Hockey League's Vancouver Canucks for a number
        of
        years, while spearheading the successful development of General Motors Place
        in
        1994. In 1995, GM Place opened its doors to the public as the first privately
        financed arena in Canada in over 60 years, becoming the home of the Canucks
        and
        the NBA's newly created Vancouver Grizzlies franchise. By 1998, a group led
        by
        Arthur developed the 2010 Olympic Bid proposal, including venue development
        designs that eventually won Vancouver and Whistler's right to compete as
        Canada's national candidate for the 2010 Olympic Winter Games. In achieving
        this
        goal, the Bid Team was able to successfully prove to the Canadian Olympic
        Association that Vancouver and Whistler could develop the appropriate venues
        for
        such a vast undertaking. Concurrently, Arthur worked for the Rapid Transit
        Project Office, serving as Chair of Public Consultation and Chief Negotiator
        in
        the development of the new Millennium Skytrain Line. His primary
        responsibilities on the project were to meet and negotiate with municipalities
        and vehicle manufacturers; attend public forums to hear the concerns of the
        public and environmental groups and facilitate the formation of station
        development and design. Throughout his business career, Arthur has excelled
        in a
        variety of development projects requiring use of his experience and personal
        relationships relating to environmental and aboriginal issues. For the last
        five
        years he has developed real estate projects in Vancouver and Victoria and
        hosted
        a radio program focused on the business of sport. A truly valuable asset
        to the
        company, Arthur now devotes his efforts to Infotec on a full-time
        basis.
 
 Carol Shaw, served as a director and as our
        President, Chief Executive Officer from November 11, 2004 to March 31, 2006.
        She
        served as a director and as our Secretary and Treasurer since April 1, 2006
         Ms. Shaw was a cofounder of Galaxy Networks Inc. Ms. Shaw has an extensive
        and successful financial management history, with a background on Tax and
        small
        business account-ing.  Ms. Shaw has managed the financial operations of a
        real estate company, a local long distance carrier and several technology
        companies.  Ms. Shaw has extensive training in marketing and has produced
        marketing material including comprehensive training manuals, brochures, and
        advertising materials.  Ms. Shaw has also designed and implemented a long
        distance billing and accounting soft-ware package, allowing automated invoicing,
        statement and account management and has been involved in the coordination
        of
        network deployment, and system resource management for several Internet
        companies including Galaxy Networks Inc.
  16
  Audit
        Committee. The
        board of directors has not yet established an audit committee, and the functions
        of the audit committee are currently performed by the entire board of directors.
        We are under no legal obligation to establish an audit committee and have
        elected not to do so at this time so as to avoid the time and expense of
        identifying independent directors willing to serve on the audit committee
        and
        obtaining directors and officers’ liability insurance.  We may establish an
        audit committee in the future if the board determines it to be advisable
        or we
        are otherwise required to do so by applicable law, rule or
        regulation.
 
 Board of Directors Independence. Our
        board of directors consists of two members.  One of our directors is
        considered "independent" within the meaning of definitions established by
        the
        Securities and Exchange Commission or any self-regulatory organization.  We
        are not currently subject to any law, rule or regulation requiring that all
        or
        any portion of our board of directors include "independent"
        directors.
 
 Audit
        Committee Financial Expert. We
        do not yet have an audit committee and, therefore, we have no "audit committee
        financial expert" within the meaning of Item 401(e) of Regulation S-B.  In
        general, an "audit committee financial expert", is an individual member of
        an
        audit committee who (a) understands generally accepted accounting principals
        and
        financial statements, (b) is able to assess the general application of such
        principals in connection with accounting for estimates, accruals and reserves,
        (c) has experience preparing, auditing, analyzing or evaluating financial
        statements compa-rable to the breadth and complexity of the company’s financial
        Statements, (d) understands internal controls over financial reporting and
        (e)
        understands audit committee functions.
 
 Code
        of Ethics. We
        have not yet adopted a Code of Ethics applicable to our Chief Executive Officer,
        principal financial and accounting officers and persons performing similar
        functions.  A Code of Ethics, is a written standard designed to deter
        wrongdoing and to promote (a) honest and ethical conduct, (b) full, fair,
        accurate, timely and understandable disclosure in regulatory filings and
        public
        statements, (c) compliance with applicable laws, rules and regulations, (d)
        the
        prompt reporting of violations of the Code, and (e) accountability for adherence
        to the Code.  We have not yet adopted a Code of Ethics, and while we are
        not under any legal obligation to do so, we expect to adopt a Code of Ethics
        soon.  If and to the extent we adopt a Code of Ethics, we will file a copy
        of the Code of Ethics with the Securities and Exchange Commission, and will
        provide a copy, without charge, to any person desiring a copy of the Code
        of
        Ethics, by written request to the Company at its principal offices.  We
        currently maintain a corporate web site at www.infotecbusinesssystems.com .
 
 **Compliance
        with Section 16(a) of the Exchange Act**
 
 Not
        Applicable.
 
 **ITEM
        10. EXECUTIVE COMPENSATION.**
 
 Summary
        Compensation Table
 
 The
        following table sets forth information relating to all compensation awarded
        to,
        earned by or paid by us during the period from December 13, 2002 (inception)
        through April 30, 2006 to: (a) all individuals, serving as our Chief Executive
        Officer in the fiscal year ended April 30, 2006; and (b) each of our executive
        officers who earned more than $100,000 during the fiscal year ended April
        30,
        2006:
  17
  Other
        Securities Annual Underlying All
 Name
                  and
              
              Fiscal
              
              
              
              
              
              Compen-
              
              Options/LTIP
              
              OtherPrincipal
                  Position
              
              Year
              
              Salary
              
              Bonus
              
              sation
              
              SARs
                  (#)
              
              Payouts
              
              CompensationCarol
                  Shaw
              
              
              2006
              
              $
              58,551
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -President,
                  CEO
              
              
              2005
              
              $
              3,492
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -Arthur
                  Griffiths
              
              
              2006
              
              $
              29,500
              
              
              -
              
              $
              6,229
              
              
              -
              
              
              -
              
              
              -President,
                  CEO
              
              
              2005
              
              $
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -Ed
                  Clunn
              
              
              2006
              
              $
              106,160
              
              
              
              
              
              -
              
              
              -
              
              
              -
              
              
              -CTO
              
              
              2005
              
              $
              -
              
              
              
              
              
              -
              
              
              -
              
              
              -
              
              
              -Carol
                  Shaw
              
              
              2006
              
              $
              10,000
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -Secretary/Admin
              
              
              2005
              
              $
              3,500
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -Bob
                  Danvers
              
              
              2006
              
              $
              10,500
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -CFO/Secretary
              
              
              2005
              
              $
              8,149
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
 
 
 Option/SAR
        Grants
 We
        did
        not grant any stock options to the executive officers during our most recent
        fiscal year
        ended April 30, 2006.
 
 Compensation
        of Directors
 There
        are
        no standard arrangements pursuant to which directors are compensated for
        any
        ser-vices provided
        as director.  No additional amounts are payable to directors for committee
        participation or special
        assignments performed for and on our behalf through to April 30,
        2006.
 
 **ITEM
        11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MAN-AGEMENT AND RELATED
        STOCKHOLDER MATTERS.**
 
 The
        following table sets forth certain information regarding our common stock
        beneficially owned as of June 30, 2006 by:
 
 (i)
              each
                  stockholder known by us to be the beneficial owner of five (5%)
                  percent or
                  more of our outstanding common stock;(ii)
              each
                  of our directors; and(iii)
              all
                  executive officers and directors as a
                  group.
 
 As
        at
        June 30, 2006, there were 121,500,000 shares of our common stock issued and
        outstanding.
 
 Name
                  and Address of
              
              Amount
                  and Nature ofBeneficial
                  Owner (1)
              
              Beneficial
                  Owner  (2)
              
              Percentof ClassCarol
                  Shaw (3)
              
              
              8,125,000
              
              
              6.69
              %Edward
                  Clunn (4)
              
              
              36,660,000
              
              
              30.17
              %Robert
                  Danvers
              
              
              11,720,000
              
              
              9.60
              %Bram
                  Solloway
              
              
              10,503,125
              
              
              8.60
              %
 
 All
                  Executive Officersand
                  Directors as a group (2 persons)
              
              
              44,725,000
              
              
              36.86
              %
 _____________________
  18
 
 (1)
        Unless otherwise indicated the address of each of the listed beneficial owners
        identified is #150 - 1152 Mainland Street, Vancouver, BC V6B 4X2.
 (2)
        Under
        securities law, a person is considered a "beneficial owner" of a security
        if
        that person has or shares power to vote or direct the voting of such security
        or
        the power to dispose of such security.  A person is also considered to be a
        beneficial owner of any securities of which the person has a right to acquire
        beneficial ownership within 60 days.
 (3)
        Includes 36,660,000 common shares held in the name of Edward Clunn.  Carol
        Shaw is the spouse of Edward Clunn.  Each disclaims beneficial ownership of
        the shares beneficially owned by the other.
 (4)
        Includes 8,125,000 common shares held in the name of Carol Shaw.  Edward
        Clunn is the spouse of Carol Shaw.  Each disclaims beneficial ownership of
        the shares beneficially owned by the other.
 
 Securities
        Authorized for Issuance Under Equity Compensation Plans
 
 We
        do not
        have any equity compensation plans nor are there any securities authorized
        for
        issu-ance under an equity compensation plan or program.
 
 **ITEM
        12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.**
 
 Except
        as
        set forth below, in the last two fiscal years ended April 30, 2006, there
        have
        been no material transactions, series of similar transactions, currently
        proposed transactions, or series of simi-lar transactions, to which we are
        or
        will be a party, in which the amount involved exceeded $60,000 and in which
        any
        of our directors or executive officers, any security holder who is known
        by us
        to own of record or beneficially more than five percent of our common stock,
        any
        promoter, or any member of the immediate family of any of the foregoing persons,
        had a material interest.
 
 During
        the period from May 1, 2003, through April 30, 2005:
 
 Effective
        May 2003, the company approved a fee of $5,000 per month to Danby Financial
        Management Corp., a company controlled by our President at that time, for
        services rendered by Mr. Danvers.
 
 In
        May
        2003 we entered into a licensing agreement with CTEC Security Solutions Inc.,
        a
        com-pany with a director in common, to enable us to incorporate public key
        infrastructure security into our online systems.  In September 2003, the
        license agreement was amended to expand our selling territory.
 
 On
        November 11, 2004, Infotec Business Systems, Inc. and Galaxy Networks Inc.,
        a
        British Columbia corporation, and the stockholders of Galaxy entered into
        a
        Stock Purchase Agreement whereby we agreed to acquire 100 common shares of
        Galaxy representing 100% of the issued shares of Galaxy, in exchange for
        the
        issuance of 20,000,000 shares of our restricted common stock.
 
 At
        this
        time we have not formulated any corporate policies for entering into
        transactions with affiliated parties.
  19
  As
        disclosed heretofore, our president and most but not all the members are
        employed by us on a full-time basis.  If a specific business opportunity
        becomes available, such part time employees may face a conflict in selecting
        between our business and their other business interests.  We have a policy
        for the resolution of such conflicts.  We currently have agreements with
        members of our management team.
 
 **ITEM
        13. EXHIBITS.**
 
 **A.
        Exhibits**
 
 **Number**
              
              **Description
                  of exhibit**3.1
              
              Articles
                  of Incorporation (1)3.1a
              
              Form
                  of Certificate Change (2)3.2
              
              Bylaws
                  (1)10.1
              
              Stock
                  Purchase Agreement between Infotec Business Systems, Inc. and Galaxy
                  Networks Inc., of November 11, 2004 (3)21
              
              Subsidiaries
                  of the Issuer31.1
              
              Certification
                  of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
                  Act of 200231.2
              
              Certification
                  of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
                  Act of 200232
              
              Certification
                  of Chief Executive Officer and Chief Financial Officer pursuant
                  to Section
                  906 of the Sarbanes-Oxley Act of
                  2002
 _______________________
  (1)Incorporated
        by reference to the registration statement on Form SB-2 file number 333-90618,
        as amended, as declared effective by the Securities and Exchange Commission
        on
        November 5, 2002.
 
 (2)Incorporated
        by reference to the Form 8-K filed with the Securities and Exchange Commission
        on March 7, 2003.
 
 (3)Incorporated
        by reference to the Form 8-K filed with the Securities and Exchange Commission
        on January 26, 2005 as Item 10.1.
  20
  **ITEM
        14. PRINCIPAL ACCOUNTING FEES AND SERVICES.**
 
 During
        the fiscal years ended April 2006 and 2005, the Company incurred the following
        fees for professional services rendered by the principal
        accountant:
 
 2006
              
              2005Fees
                  for audit services
              
              $
              34,460
              
              $
              27,080Fees
                  for audit related services
              
              
              -
              
              
              -Tax
                  fees
              
              
              -
              
              
              -All
                  other fees
              
              
              -
              
              
              -
 
 The
        board
        of directors pre-approves all audit and non-audit services to be performed
        by
        the company’s independent auditors.
  21
  **SIGNATURES**
 
 In
        accordance with Section 13 or 15(d) of the Exchange Act, the registrant has
        caused this report to be signed on its behalf by the undersigned, thereunto
        duly
        authorized.
 
 
 **Infotec
        Business Systems, Inc.**
 (Registrant)
 
 
 By: /s/
        Arthur
        Griffiths
 Arthur
        Griffiths
 President, Chief Executive Officer, Director
 
 
 Date:
        July 21, 2006
 
 In
        accordance with the Exchange Act, this report has been signed below by the
        following persons on behalf of the registrant, and in the capacities and
        on the
        dates indicated.
  
 Signature
              
              Title
              
              Date/s/
                  Arthur Griffiths
              
              President,
                  Director, CEO,
              
              July
                  21, 2006Arthur
                  Griffiths
              
              Principal
                  Executive, Officer/s/
                  Carol Shaw
              
              Secretary,
                  Treasurer, Director
              
              July
                  21, 2006Carol
                  Shaw
              
              Principal
                  Finance and Accounting Officer
 
 22