UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-K
 (Mark One)
[X]             ANNUAL REPORT PURSUANT TO SECTION 13 OR 5(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                                December 31, 2006

                                       OR

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

                        Commission File Number 000-08187

                       CabelTel International Corporation
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                 Nevada                                       75-2399477
------------------------------------------      --------------------------------
     (State or other jurisdiction of                    (IRS Employer
     Incorporation or organization)                   Identification Number)

    1755 Wittington Place, Suite 340
              Dallas, Texas                                      75234
------------------------------------------      --------------------------------
(Address of principal executive offices)                      (Zip Code)

Registrant's Telephone Number, including area code         (972) 407-8400
                                                     ---------------------------

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

          Title of Each Class                     Name of each exchange on
                                                      which registered
    Common Stock, $0.01 par value                 American Stock Exchange
----------------------------------              --------------------------------

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the  registrant is a well-known  seasoned  issuer,  as
defined in Rule 405 of the Securities Act. Yes [ ] No [X]

Indicate  by  check  mark if the  registrant  is not  required  to file  reports
pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period 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 [ ]

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation S-K (ss.229.405 of this chapter) is not contained herein, and will
not be contained,  to the best of registrant's knowledge, in definitive proxy or
information  statements  incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [X]

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Act). Yes [ ] No [X]

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act. Yes [ ] No [X]

Indicate by check mark whether the registrant is a large  accelerated  filer, an
accelerated  filer or a  non-accelerated  filer.  See definition of "accelerated
filer and large  accelerated  filer" in Rule 12b-2 of the Exchange  Act.  (Check
one):
Large accelerated filer ____ Accelerated filer _____Non-accelerated filer __X___


The aggregate market value of the shares of voting and non-voting  common equity
held by non-affiliates  of the Registrant,  computed by reference to the closing
price at which the common  equity was last sold which was the sales price of the
Common  Stock on the  American  Stock  Exchange  as of June 30,  2006  (the last
business day of the Registrant's most recently  completed second fiscal quarter)
was $923,780  based upon a total of 410,569  shares held as of December 31, 2006
by persons  believed to be  non-affiliates  of the Registrant.  The basis of the
calculation  does not constitute a determination by the Registrant as defined in
Rule 405 of the Securities Act of 1933, as amended, such calculation, if made as
of a date within sixty days of this filing, would yield a different value.

As of March 24, 2007, there were 986,953 shares of common stock outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      NONE

<PAGE>

                       CABELTEL INTERNATIONAL CORPORATION
                       Index to Annual Report on Form 10-K
                       Fiscal year ended December 31, 2006

   FORWARD-LOOKING STATEMENTS..............................................- 3 -
   --------------------------

PART I....................................................................- 3 -
------

   ITEM 1.  BUSINESS......................................................- 3 -
   -----------------
   ITEM 1A. RISK FACTORS..................................................- 8 -
   ---------------------
   ITEM 1B. UNRESOLVED STAFF COMMENTS.....................................- 9 -
   ----------------------------------
   ITEM 2.  PROPERTIES....................................................- 9 -
   -------------------
   ITEM 3.  LEGAL PROCEEDINGS.............................................- 9 -
   --------------------------
   ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...........- 10 -
   ------------------------------------------------------------

PART II...................................................................- 11 -
-------

   ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER
            MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.............- 11 -
   -----------------------------------------------------------------------------
   ITEM 6.  SELECTED FINANCIAL DATA.......................................- 13 -
   --------------------------------
   ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATION..- 13 -
   ---------------------------------------------------------------------
   ITEM 7A:  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK...- 17 -
   --------------------------------------------------------------------
   ITEM 8.  FINANCIAL STATEMENTS..........................................- 17 -
   -----------------------------
   ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
            AND FINANCIAL DISCLOSURE......................................- 17 -
   -----------------------------------------------------------------------------
   ITEM 9A(T).  CONTROLS AND PROCEDURES...................................- 17 -
   ------------------------------------
   ITEM 9B.  OTHER INFORMATION............................................- 18 -
   ---------------------------

PART III..................................................................- 19 -
--------

   ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT...........- 19 -
   ------------------------------------------------------------
   ITEM 11.  EXECUTIVE COMPENSATION.......................................- 23 -
   --------------------------------
   ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
             MANAGEMENT...................................................- 24 -
   ------------------------------------------------------------------------
   ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.............. - 25 -
   --------------------------------------------------------
   ITEM 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES...................... - 26 -
   ------------------------------------------------

PART IV.................................................................. - 28 -
-------

   ITEM 15.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES................. .- 28 -
   ----------------------------------------------------

SIGNATURES............................................................... - 31 -
----------


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM................. .- 32 -
-------------------------------------------------------


EXHIBIT INDEX............................................................ - 56 -
-------------





                                      -2-
<PAGE>




                           FORWARD-LOOKING STATEMENTS

Certain statements in this Form 10-K are  forward-looking  statements within the
meaning of the Private Securities  Litigation Reform Act of 1995, Section 27A of
the Securities  Act of 1933,  and Section 21E of the Securities  Exchange Act of
1934. The words "estimate", "plan", "intend", "expect", "anticipate",  "believe"
and similar  expressions  are intended to identify  forward-looking  statements.
These  forward-looking  statements are found at various places  throughout  this
Report  and  in  the  documents  incorporated  herein  by  reference.   CabelTel
International  Corporation  disclaims  any  intention or obligation to update or
revise any forward-looking  statements,  whether as a result of new information,
future events or otherwise.  Although we believe that our expectations are based
upon  reasonable  assumptions,  we can give no assurance  that our goals will be
achieved.  Important  factors that could cause our actual results to differ from
estimates or projects contained in any forward-looking  statements are described
under ITEM 1A. RISK FACTORS beginning on page - 8 -.

                                     PART I

ITEM 1. BUSINESS
CabelTel International Corporation ("CabelTel" or the "Company" or "we" or "us")
was  incorporated in Nevada on May 31, 1991,  originally  under the name Medical
Resource Companies of America. The Company is the  successor-by-merger to Wespac
Investors  Trust, a California  business trust that began  operating in 1982. On
March 26, 1996, the name was changed to Greenbriar  Corporation;  on February 8,
2005, the name of the Company was changed to CabelTel International Corporation.

Business Operations

     We own, lease and operate real estate through:

     (i)  leasing and operation of a retirement  community in King City, Oregon,
          with a capacity of 114 residents, and

     (ii) ownership and operation of an outlet mall in Gainesville,  Texas, with
          approximately 315,000 square feet of retail space available for lease.

Real Estate

Retirement Property

The Company leases and operates Pacific Pointe Retirement Inn ("Pacific Pointe")
in King  City,  Oregon.  Pacific  Pointe  has a capacity  of 114  residents  and
provides  community  living  with basic  services  such as meals,  housekeeping,
laundry, 24/7 staffing,  transportation and social and recreational  activities.
These  residents do not yet need  assistance or support with activities of daily
living  but prefer  the  physical  and  psychological  comfort of a  residential
community  of  like-minded  people  and access to health  care and other  senior
oriented services.

Pacific Pointe is not required to hold a license for its independent  retirement
operation.

At Pacific Pointe,  the Company's  marketing and sales efforts are undertaken at
the local level.  These efforts are intended to create  awareness of a community
and  its  services  among  prospective  residents,  their  families,  other  key
decision-makers and professional referral sources.



                                      -3-
<PAGE>


Pacific Pointe has a stellar  reputation in its community and has operated at or
near capacity for a number of years.  However, the retirement housing market has
little barrier to entry and Pacific Pointe's  present and potential  competitors
have, or may have access to, greater  financial,  management and other resources
than those of the facility. There can be no assurance that competitive pressures
will not have a material adverse effect on the property.

Operating  Community - The following table sets forth certain  information  with
respect to Pacific  Pointe.  The Company  considers  its community to be in good
operating condition and suitable for the purpose for which it is being used.

                                                          Community
                                Care            Resident  Operations
Community       Location     Level(1)  Units  Capacity(2) Commenced   Ownership
--------------------------------------------------------------------------------
Pacific Pointe  King City, OR  S       114       114         1993     Leased (3)
Retirement Inn

         Key:

     (1)  S   basic support and supplemental services are offered.

     (2)  Reflects actual number of units for Independent Living.

     (3)  Leased from a partnership. Initial lease term is 10 years, expiring in
          2012. The Company is responsible  for all costs  including  repairs to
          the community,  property taxes and other direct operating costs of the
          community.  The lease includes clauses that allow for rent to increase
          over time based on a specified schedule.

Repair and Maintenance - The Company  conducts  routine repairs and maintenance,
as needed,  of its  properties  on a regular  basis.  The  Company  has no other
current plans for significant  expenditures  relating to its existing properties
and considers them to be in good repair and working order.

The  Company  has  attracted,  and  continues  to  seek,  highly  dedicated  and
experienced personnel.  All employees are required to complete training programs
which include a core curriculum  comprised of personal care basics,  job related
specific  training,  first aid, fire safety,  nutrition,  infection  control and
customer  service.  Executive  Directors receive training in all of these areas,
plus  marketing,   community   relations,   healthcare   management  and  fiscal
management.  In addition to some classroom training,  the Company's  communities
provide new employees with on- the-job training,  utilizing experienced staff as
trainers and mentors.

Outlet Shopping Mall Property

The Company's outlet mall does business as Gainesville Factory Shops ("GFS") and
is located in Gainesville,  Texas. GFS has approximately  315,000 square feet of
retail space available for lease.  Purchased in December 2003, GFS presented the
Company with an opportunity to make an investment at what the Company  believed,
at the time, was a bargain price.  The Company  believed that mall traffic could
be enhanced by a more aggressive  marketing effort as well as development in its
immediate  Gainesville,  Texas area  including the opening of a restaurant and a
90-unit hotel immediately  adjacent to the mall and the ongoing  development and
operation of a casino four miles from the mall.

A number of shopping  alternatives are available to potential customers within a
reasonable  driving  distance.  Further,  conditions  which the  Company  cannot
control  such as highway  construction,  economic  downturn or the high price of
gasoline can have a negative impact on traffic at GFS.

Marketing is general,  market wide  advertising  to build  overall mall traffic.
Where possible, the mall coordinates this advertising with its tenant merchants'
advertising to enhance the mall as a specific destination for shoppers.



                                      -4-
<PAGE>


Business Strategy

In  choosing  investment  properties,  the  Company's  strategy  is to  choose a
property that can achieve and sustain a strong  competitive  position within its
chosen market.  The Company also seeks to continue to enhance the performance of
the properties it operates directly. In its real estate properties,  the Company
seeks to enhance current  operations by (i) maintaining and improving  occupancy
rates,  (ii)  opportunistically  increasing  rents  and  fees,  (iii)  improving
operating efficiencies and (iv) improving a property's market positioning.

The Company is a Nevada  corporation  which has  principally  been a real estate
company,  owning or leasing retirement  specific real estate, an outlet shopping
mall and certain oil and natural gas leases through  subsidiaries.  During 2006,
the  Company  disposed  of its  subsidiaries  engaged in the oil and natural gas
lease and operation business.  The Company seeks to re-enter the oil and natural
gas industry  through an acquisition of interests in a significant  block of oil
and natural  gas leases in  Cleburne  County,  Arkansas  covering  approximately
10,209 net acres,  which the Company seeks to develop  using  various  financing
sources.  The oil  and  natural  gas  leases  cover  properties  located  in the
Fayetteville  Shale area of the State of Arkansas.  There is no  assurance  that
this acquisition will occur.

Insurance

The Company currently  maintains  property and liability  insurance  intended to
cover claims in its retirement community,  outlet mall and corporate operations.
The  provision  of  personal  services  entails an  inherent  risk of  liability
compared  to  more   institutional   long-term  care   communities.   Retirement
communities of the type operated by the Company offer residents a greater degree
of  independence  in their daily lives.  This increased  level of  independence,
however, may subject the resident and the Company to certain risks that would be
reduced in a more  institutionalized  setting. The Company also carries property
insurance on each of its owned and leased properties.

Employees

At December 31,  2006,  the Company  employed,  in all  segments,  65 people (20
full-time  and  45   part-time).   The  Company   believes  it  maintains   good
relationships  with  its  employees.   None  of  the  Company's   employees  are
represented by a collective bargaining group.

The Company's  operations  are subject to the Fair Labor  Standards Act. Many of
the  Company's  employees  are paid at rates related to the minimum wage and any
increase  in the  minimum  wage  will  result  in an  increase  in labor  costs.
Management  is  not  aware  of any  non-compliance  by the  Company  as  regards
applicable regulatory  requirements that would have a material adverse effect on
the Company's financial condition or results of operations.

Quality Assurance

In operating a retirement  community,  our  commitment  to quality  assurance is
designed  to achieve a high degree of resident  and family  member  satisfaction
with the care and  services  the Company  provides.  In addition to training and
performance  reviews of all employees,  the Company's  quality control  measures
include:

Philosophy  of  Management  -  The  Company's  philosophy  of  management  is to
demonstrate  by its actions and require  from its  employees  high  standards of
personal  integrity,  to develop a climate of openness and trust, to demonstrate



                                      -5-
<PAGE>

respect  for  human  dignity  in every  circumstance,  to be  supportive  in all
relationships,  to promote teamwork by involving  employees in the management of
their own work and to promote the free expression of ideas and opinions.

Regular Property  Inspections - Property  inspections are conducted by corporate
personnel.  These  inspections cover the appearance of the exterior and grounds,
the  appearance  and  cleanliness  of  the  interior,  the  professionalism  and
friendliness of staff and notes on maintenance.

Marketing

In real estate, the Company's  marketing and sales efforts are undertaken at the
local  level.  These are  intended  to create  awareness  of a property  and its
services  among  prospective  customers,  their  families and other key referral
sources.  The property engages in traditional types of marketing activities such
as special events,  radio spots, direct mailings,  print advertising,  signs and
yellow page advertising. These marketing activities and media advertisements are
directed to potential customers.

Government Regulation

Pacific  Pointe is not  required  to hold a state  license  for its  independent
retirement operation.

Management  is  not  aware  of any  non-compliance  by the  Company  as  regards
applicable regulatory  requirements that would have a material adverse effect on
the Company's financial condition or results of operations.

Competition

The  retirement  industry  is highly  competitive  and will  continue  to become
increasingly  competitive  in  the  future.  The  Company  competes  with  other
retirement  companies and numerous other companies  providing  similar long-term
care alternatives,  such as home healthcare  agencies,  community-based  service
programs and convalescent centers (nursing homes).

The shopping mall  industry is also  competitive  but the Company's  property in
Gainesville,  Texas is  geographically  isolated and the Company  feels that the
market will not support another mall. To be successful,  an outlet mall needs to
attract shoppers from more highly populated areas at a greater distance than its
local market.

Acquisition and disposition of CableTEL AD

On October 12, 2004, the Company acquired, for 31,500 shares of newly-designated
Series J 2% Cumulative  Preferred Stock (the "Series J Preferred Stock"),  74.8%
of CableTEL AD ("CableTEL"),  a Bulgarian  telecommunications company. The terms
of the acquisition  agreement  required the Company to present a proposal to its
stockholders  to  approve  the  mandatory  exchange  of all  shares  of Series J
Preferred  Stock into  8,788,500  shares of common stock  which,  if approved by
stockholders,  would have  represented  90% of the  resulting  total  issued and
outstanding shares of common stock in the Company.

The acquisition  agreement,  as amended,  provided that the  stockholders of the
Company had until June 30,  2006 to approve  the  exchange of Series J Preferred
Stock into the Company  common  stock.  If the exchange was not approved by June
30, 2006, the holders of the Series J Preferred  Stock had the option to rescind
the entire transaction.



                                      -6-
<PAGE>


Until the  acquisition  was completed,  the financial  statements of CableTEL AD
were not  included  in the  Company's  consolidated  financial  statements.  The
financial  statements of the Company at December 31, 2005 did reflect the Series
J  Preferred  Stock  as well as a  contra  equity  account  reflecting  that the
transaction had not yet occurred.

Effective June 1, 2006, the Company and the owners of CableTEL AD entered into a
Rescission Agreement whereby the original Acquisition Agreement dated October
12, 2004, as amended, was rescinded in its entirety. Pursuant to the Rescission
Agreement:

     (a) The Company  received  back and cancelled the 31,500 shares of Series J
     2% Cumulative Preferred Stock it issued.

     (b) The  Company  returned  the equity  securities  of all  entities it had
     acquired on October 12, 2004 to the original owners.

     (c) A corporation  affiliated with one of the original sellers assumed from
     the Company all indebtedness  incurred by the Company since October 1, 2004
     in connection  with or related to advances by the Company to CableTEL AD or
     its  affiliates  to fund the  operation  of CableTEL  AD. In  exchange  the
     Company surrendered all claims it had against CableTel AD or its affiliates
     for reimbursement for such advances.

     (d) Ronald C. Finley,  Chief Executive  Officer of CableTEL AD resigned his
     positions  in the  Company as a  director,  as Chairman of the Board and as
     Chief Executive Officer. His resignation was effective June 1, 2006.

     (e) The Company agreed that subject to its  compliance  with all applicable
     American Stock Exchange,  Inc. rules and federal  securities laws, it would
     in the  future  change  its name to a name that does not  include  the word
     "cable" or "cabel".

     (f) An  affiliate  of  one of the  original  sellers  assumed  control  and
     responsibility of any and all litigation  involving the Company or in which
     the Company is named as a party involving the Company's  relationship  with
     the parties to the Rescission Agreement and/or CableTEL AD.

     (g) All of the parties agreed to pay their own expenses with respect to any
     costs associated with the Rescission Agreement.

     (h) The Company received,  as a "break up fee", a $1,500,000  participation
     in a 9 1/2% tax free bond. The bond, with a total face value of $2,406,850,
     was  originally  issued by an  unrelated  third  party.  In June 2006,  the
     Company  recorded  $1,467,000 as other income,  representing the $1,500,000
     net of expenses.



                                      -7-
<PAGE>


Available Information

     The Company  maintains an internet website at  http://www.cabeltel.us.  The
     Company has available through the website,  free of charge,  Annual Reports
     on Form 10-K,  Quarterly Reports on Form 10-Q, Current Reports on Form 8-K,
     reports filed pursuant to Section 16 of the Securities Exchange Act of 1934
     (the "Exchange  Act") and amendments to those reports as soon as reasonably
     practicable after we  electronically  file or furnish such materials to the
     Securities and Exchange Commission. In addition, the Company has posted the
     charters for our Audit Committee, Compensation Committee and Governance and
     Nominating  Committee,  as well as our Code of Business Conduct and Ethics,
     Corporate  Governance   Guidelines  on  Director   Independence  and  other
     information  on  the  website.   These  charters  and  principles  are  not
     incorporated  in this Report by reference.  The Company will also provide a
     copy of these  documents free of charge to stockholders  upon request.  The
     Company issues Annual Reports  containing  audited financial  statements to
     its common stockholders.

ITEM 1A. RISK FACTORS

Risks Related to the Company

The  retirement  industry  is highly  competitive.  Competition  for  residents,
employees and facilities is very keen in the retirement industry.

The shopping mall business is dependent on leasing space to successful  tenants.
The Company's  shopping mall in  Gainesville,  Texas is unique in its market but
must maintain good  relationships with its current and future tenants as well as
generate adequate traffic for those tenants to be successful.

Our governing documents contain  anti-takeover  provisions that may make it more
difficult  for a  third  party  to  acquire  control  of  us.  Our  Articles  of
Incorporation  contain  provisions  designed to  discourage  attempts to acquire
control of the Company by a merger,  tender  offer,  proxy contest or removal of
incumbent  management  without  the  approval  of our Board of  Directors.  As a
result, a transaction  which otherwise might appear to be in your best interests
as a stockholder could be delayed, deferred or prevented altogether, and you may
be  deprived  of an  opportunity  to  receive a  premium  for your  shares  over
prevailing   market  rates.   The  provisions   contained  in  our  Articles  of
Incorporation include:

     *    the requirement of an 80% vote to make, adopt, alter, amend, change or
          repeal  our  Bylaws or  certain  key  provisions  of the  Articles  of
          Incorporation  that  embody,  among other  things,  the  anti-takeover
          provisions;

     *    the  so-called   business   combination   "control  act"  requirements
          involving the Company and a person that  beneficially owns 10% or more
          of the  outstanding  common stock except under certain  circumstances;
          and

     *    the requirement of holders of at least 80% of the  outstanding  Common
          Stock to join together to request a special meeting of stockholders.

As of December 31, 2006, officers, directors and affiliated entities owning more
than 5% of the Company's outstanding common stock owned approximately 59% of the
outstanding  shares  of  common  stock.  In light of this,  these  anti-takeover
provisions  could  help  entrench  the  existing  Board  of  Directors  and  may
effectively  give our  management  the  power to block any  attempted  change in
control.



                                      -8-
<PAGE>


ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2.  PROPERTIES

The Company's  principal offices are located at 1755 Wittington  Place,  Dallas,
Texas 75234 in  approximately  5,000  square feet of leased  space.  The Company
believes  its leased  space is presently  suitable,  fully  utilized and will be
adequate for the  foreseeable  future.  The  Company's  retirement  property and
outlet mall property are described in detail  beginning on page - 3 - under ITEM
1.  BUSINESS,  all of which are  suitable  and adequate for the purpose to which
each is devoted.

ITEM 3.  LEGAL PROCEEDINGS

During  the  fourth  quarter  of the fiscal  year  covered  by this  report,  no
proceeding previously reported was terminated.

On December 1, 2005, Cable Partners  Bulgaria,  LLC ("CPB") instituted an action
in the 95th  Judicial  District  Court of  Dallas  County,  Texas  styled  Cable
Partners Bulgaria,  LLC and Cable Partners Europe, LLC v. CabelTel International
Corporation  f/k/a Greenbriar  Corporation,  Gene Phillips and Ronald C. Finley,
Cause No. 05-12021 County, Texas. The complaint alleges that a representative of
the plaintiffs talked to Ronald Finley about their possible purchase of CableTEL
AD's telecommunications systems during 2004, and that during the conversation in
November  2004,  told Mr. Finley that they had an agreement to purchase  Eurocom
Plovdiv EOOD ("Eurocom").  The complaint further alleges that (i) the two owners
of Eurocom (who are not defendants in this action)  advised the plaintiffs  that
they  had  agreed  to  sell  the  entity  to  CableTEL  AD and had  been  paid a
non-refundable  deposit;  (ii) the two individuals informed CPB's representative
that they would  complete  the sale of Eurocom to CPB only if  CableTEL  AD were
unable to complete the purchase,  and CPB's price increased to  (euro)23,000,000
with limited further due diligence and the purchase of stock rather than assets.
Plaintiffs' complaint alleges tortiuous  interference with an existing contract,
breach of contract,  and seeks a temporary and permanent  injunction,  exemplary
damages,  costs and  attorneys'  fees. An answer has been filed on behalf of the
Company  denying all of the material  allegations in the  Complaint.  Management
intends to vigorously defend the action,  which it perceives to be without merit
as to the Company.  Management also believes that the action  misstates or seeks
to conveniently  rearrange  certain facts and events central to the controversy.


As part of the Rescission Agreement unwinding the acquisition of CableTEL AD, an
affiliate of one of the original sellers assumed control and  responsibility  of
any and all litigation involving the Company or in which the Company is named as
a party involving the Company's  relationship with the parties to the Rescission
Agreement and/or CableTEL AD.

On June 23, 2006,  Commerce and Industry  Insurance Company instituted an action
against the Company and its subsidiaries, styled Commerce and Industry Insurance
Company vs. Cabeltel International Corporation DBA Greenbriar Corporation, Et Al
(Citation No. DC-06-6040-M,  District Court, Dallas County, Texas),  alleging an
underpayment  of insurance  premiums of $113,000 in 2002. The Company  disagrees
with the plaintiff as to any obligation owed.  Further,  should an obligation be
owed the  Company  believes  the  amount  would be less  than the  amount in the
complaint.



                                      -9-
<PAGE>


The  ownership  of property and  provision of services to the public  entails an
inherent risk of liability. Although the Company and its subsidiaries, from time
to time, have been and are involved in various items of litigation incidental to
and in the ordinary  course of its business,  in the opinion of Management,  the
outcome of such  litigation  will not have a material  adverse  impact  upon the
Company's financial condition, results of operations or liquidity.

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

An Annual Meeting of Stockholders was held on December 1, 2006, at which meeting
stockholders were asked to consider and vote upon the election of directors.  At
the meeting, stockholders elected the following individuals as directors:

                                               Shares Voting

                   Director             FOR                  ABSTAINED
Roz Campisi Beadle                     671,305                     612
Gene S. Bertcher                       671,301                     612
James E. Huffstickler                  669,635                     612
Dan Locklear                           671,305                     612
Victor L. Lund                         671,305                     612

There  were no broker  non-votes  in the  election  of  directors  at the annual
meeting.



                                      -10-
<PAGE>



                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S  COMMON EQUITY,  RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES

The  common  stock of the  Company  is traded  on the  American  Stock  Exchange
("AMEX") using the symbol "GBR". The following table sets forth the high and low
sales prices as reported in the reporting system of the AMEX and other published
financial sources.  (All prices have been adjusted for a 2002 stock dividend and
October 2003 stock split.)

                                        2006                        2005
                                   High       Low             High        Low
                              ----------- ----------     ----------- ----------

     First Quarter                 $6.10      $3.00           $6.44      $3.66
     Second Quarter                 2.15       1.90            8.08       4.63
     Third Quarter                  3.58       2.18            5.65       4.20
     Fourth Quarter                 3.72       2.65            4.15       2.70

On March 24, 2007, the closing price of the Company's common stock was $3.80 per
share.  According to the Transfer Agent's records,  at March 24, 2007 our common
stock was held by approximately 450 holders of record.

Performance Graph

The following graph compares the cumulative total return on a $100 investment in
the Company's common stock on December 31, 2002 through December 31, 2006, based
on the Company's closing stock price on December 31 for each of those years. The
same  information  is provided  using the  Standard & Poor 500 index and the Dow
Jones Total Market Index.
                          2002     2003       2004        2005      2006
CabelTel International
Corporation               100.00   113.24     130.64       88.38     96.67

Dow Jones US Market
Index                     100.00   128.71     141.80      148.16    168.19

S&P 500                   100.00   126.43     137.80      141.93    161.26



                                      -11-
<PAGE>

The Company paid no  dividends on its common stock in 2006 or 2005.  The Company
has not paid cash  dividends  on its common  stock  during at least the last ten
fiscal years and it has been the policy of the Board of Directors of the Company
to retain all earnings to pay down long-term  debt and finance future  expansion
and  development of its  businesses.  The payment of dividends,  if any, will be
determined by the Board of Directors in the future in light of  conditions  then
existing,  including the Company's financial condition and requirements,  future
prospects,  restrictions in financing agreements,  business conditions and other
factors deemed relevant by the Board of Directors.

Securities Authorized for Issuance under Equity Compensation Plans

We have two stock-based equity compensation plans that have been approved by our
stockholders.  See NOTE J - STOCKHOLDERS  EQUITY for a description of the plans,
the number of shares of common stock to be issued upon  exercise of  outstanding
stock options,  the weighted average exercise price of outstanding stock options
and the number of shares of common stock remaining for future issuance under the
plans. We have no stock-based  compensation plans which were adopted without the
approval of our stockholders.

Purchases of Equity Securities

The Board of Directors has not  authorized  the  repurchase of any shares of its
common stock under any share repurchase program, except when stockholders owning
less than one round lot (100  shares) so  request,  the  Company  will  purchase
shares  at market  closing  on the last  trading  day  prior to  receipt  of the
certificate(s).  The following table represents  shares  repurchased  during the
three months ended December 31, 2006.
                                          Total No. of Shares
                                          Repurchased as part
                              Weighted       of            Maximum No. of Shares
                Total No. of  Average     Publicly-          that May Yet Be
                   Shares     Price Per   Announced        Repurchased Under the
       Period   Repurchased   Share       Program                 Program
10/01-31/2006       -0-         -0-          -0-                     -0-
11/01-30/2006       -1-        3.10          -1-                     -0-
12/01-31/2006       -0-         -0-          -0-                     -0-



                                      -12-
<PAGE>
<TABLE>
<CAPTION>



ITEM 6.  SELECTED FINANCIAL DATA

The selected  consolidated  financial data presented  below are derived from the
Company's audited financial statements.

                                           For the fiscal year ended December 31,

                                      2006        2005             2004       2003        2002
                                      ----        ----             ----       ----        ----
<S>                                   <C>         <C>              <C>        <C>         <C>

                                      (dollar amounts in thousands, except per share data)

Operating revenue                 $  4,268    $  4,098         $  4,643    $  2,486    $  3,300
Operating expenses                   5,090       5,124            5,783       3,195       5,373
Operating profit (loss)               (822)     (1,026)          (1,140)       (709)     (2,073)

Earnings (loss) from continuing
     operations before income
         taxes                    $  1,285    $ (1,241)        $   (987)   $    614    $ (2,724)
Income tax (income) expense           (437)       --               --          --          (749)


Earnings (loss) from continuing
     operations                        848      (1,241)            (987)        614      (3,473)

Income (loss) from discontinued
operations                             453         255              171        (392)     (4,900)

     NET EARNINGS (LOSS)          $  1,301    $   (986)        $   (816)   $    222    $ (8,373)

Earnings (loss) per common
     share - basic and diluted
     Continuing operations            0.86      $(1.28)        $  (1.01)   $   0.31    $  (4.88)
     Discontinued operations          0.46        0.27             0.18         --        (6.79)

        Net earnings (loss) per    $  1.32      $(1.01)        $  (0.83)       0.31    $ (11.67)
         share
Basic weighted average
     common shares                     987         977              977         706         718

BALANCE SHEET DATA:
Total assets                      $  9,702    $ 20,080         $ 16,766    $ 18,131    $ 12,624
Long-term debt                       6,078      13,560            8,338       2,053       8,479
Total liabilities                    7,623      19,328           16,766      18,131      12,624
Total stockholders equity         $  2,079    $    752         $  1,738    $  2,554    $  1,351

</TABLE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATION

Overview

As of December 31, 2006,  the Company  leased one assisted  living  community in
Oregon, with a capacity of 114 residents. The Company also owns a 315,000 square
foot outlet mall in Gainesville, Texas.

Since 1996,  the  Company has owned,  leased and  operated  assisted  living and
retirement  communities throughout the United States. During that period of time
the Company has both acquired and sold over seventy  communities.  The acquiring
and  disposing  of its  real  estate  assets  has been an  integral  part of the
Company's business.



                                      -13-
<PAGE>


During  2004 and  2005,  the  Company  anticipated  acquiring  a cable  operator
CableTEL  AD.  For the most  part,  all of its  efforts  were  directed  to that
acquisition.  In June 2006, the  acquisition of CableTEL AD was rescinded by the
parties  and the  Company  received  a break  up fee of  $1,500,000.  After  the
rescission  of the  CableTEL  AD  acquisition  the  Company  began  seeking  new
acquisitions.

During 2006,  the Company  disposed of its  subsidiaries  engaged in the oil and
natural gas leasing and  operation  business.  The Company seeks to re-enter the
oil  and  natural  gas  industry  through  an  acquisition  of  interests  in  a
significant  block of oil and natural gas leases in  Cleburne  County,  Arkansas
covering approximately 10,209 net acres which the Company seeks to develop using
various  financing  sources.  The oil and  natural gas leases  cover  properties
located in the  Fayetteville  Shale area of the State of  Arkansas.  There is no
assurance that this acquisition will occur.


Critical Accounting Policies and Estimates

The Company's  discussion and analysis of its financial condition and results of
operations are based upon the Company's consolidated financial statements, which
have been prepared in accordance with accounting  principles  generally accepted
in the United States.  Certain of the Company's  accounting policies require the
application of judgment in selecting the appropriate assumptions for calculating
financial estimates. By their nature, these judgments are subject to an inherent
degree  of  uncertainty.  These  judgments  and  estimates  are  based  upon the
Company's historical  experience,  current trends and information available from
other sources that are believed to be reasonable  under the  circumstances,  the
results of which form the basis for making judgments about the carrying value of
assets and liabilities that are not readily apparent from other sources.  Actual
results  may  differ  from  these  estimates  under  different   assumptions  or
conditions.

The  Company  believes  the  following  critical  accounting  policies  are more
significant  to the  judgments  and  estimates  used in the  preparation  of its
consolidated  financial statements.  Revisions in such estimates are recorded in
the period in which the facts that give rise to the revisions become known.

The Company's allowance for doubtful accounts receivable and notes receivable is
based on an  analysis  of the risk of loss on specific  accounts.  The  analysis
places  particular  emphasis on past due  accounts.  Management  considers  such
information as the nature and age of the receivable,  the payment history of the
tenant,  customer or other debtor and the  financial  condition of the tenant or
other debtor. Management's estimate of the required allowance, which is reviewed
on a quarterly basis, is subject to revision as these factors change.

Deferred Tax Assets

Significant  management  judgment is required in  determining  the provision for
income taxes,  deferred tax assets and liabilities  and any valuation  allowance
recorded  against net  deferred  tax assets.  The future  recoverability  of the
Company's  net deferred tax assets is dependent  upon the  generation  of future
taxable income prior to the expiration of the loss carry  forwards.  The company
believes that it will generate  future  taxable  income to fully utilize the net
deferred tax assets.


Liquidity and Capital Resources

At December 31, 2006,  the Company had current  assets of $1,854,000 and current
liabilities of $1,127,000.



                                      -14-
<PAGE>


On December 31, cash and cash equivalents totaled $324,000 and $650,000 in 2006,
and 2005, respectively.  CabelTel's principal sources of cash have been and will
continue to be property operations, proceeds from property sales and refinancing
of debt.  If cash from  future  operations  does not prove to be  sufficient  to
satisfy  all  of  CabelTel's  obligations,   as  they  mature,  when  necessary,
management may also  selectively  sell  income-producing  properties,  refinance
properties  and/or incur  additional  borrowings  secured by real estate to meet
cash requirements.

Net cash provided by (used in) continuing operating activities was ($908,000) in
2006, $38,000 in 2005 and ($2,129,000) in 2004.

Net cash provided by (used in) investing  activities was  ($1,219,000)  in 2006,
$3,560,000  in 2005 and  $734,000  in  2004.  In  2006,  the net  cash  used was
principally a cash loan to Eurenergy Resources, a related party, $1,377,000.  In
addition  the  Company  purchased  an  interest  in a gas well in  Fayetteville,
Arkansas for $118,000.  In 2005 the cash provided was principally  from the sale
of two  assisted  living  facilities.  In 2004,  the cash  provided was from the
collection  of existing  notes  receivable  of  $1,579,000  less the purchase of
$845,000 in property and equipment principally at the Gainesville outlet mall.

Net cash  provided by (used in)  financing  activities  was  ($204,000) in 2006,
($3,969,000)  in 2005 and  $1,533,000  in  2004.  In  2006,  the  cash  used was
principally for the payment of the mortgage for the Gainesville  Outlet Mall. In
2005,  the  cash  used  was  principally  for  the  repayment  of  the  mortgage
obligations  on two  assisted  living  facilities  that were sold as well as the
Gainesville  Outlet Mall. In 2004,  the cash provided was  principally  from the
refinancing of the Gainesville Outlet Mall.

Net cash provided (used in) by  discontinued  operations was $2,005,000 in 2006,
$259,000 in 2005 and  ($64,000) in 2004.  In 2006 the Company sold Gaywood Oil &
Gas and received cash proceeds of  $1,737,000.  Additionally,  in 2006,  Gaywood
provided cash from operations of $268,000.

Results of Operations

Fiscal 2006 as Compared to Fiscal 2005

Revenues and  Operating  Expenses  from  operations  of a  retirement  facility:
Revenues were  $2,695,000 in 2006 as compared to $2,597,000 in 2005.  Retirement
operating expenses,  which consist of assisted living operations expense,  lease
expense and depreciation and  amortization,  were $2,130,000 in 2006 as compared
to $2,006,000 in 2005.

Revenues and Operating Expenses from operations of an outlet mall: Revenues were
$1,235,000 in 2006 as compared to $1,501,000  in 2005.  Operating  expenses were
$1,760,000 in 2006 as compared to $1,845,000 in 2005. The decrease in revenue is
due to the net reduction in occupancy and rent  adjustments for several tenants.
The  increase in  expenses  is due to overall  operating  costs  throughout  the
operation.

Corporate General and Administrative  Expense: These expenses were $1,091,000 in
2006 and $1,191,000 in 2005. During 2006, the Company reduced certain salary and
personnel expenses that existed in 2005.

Interest and Dividend Income:  Interest and dividend income was $447,000 in 2006
and  $700,000 in 2005.  During 2006,  the Company  recorded  interest  income of
$314,000  from  funds  it  had  advanced  to  CabelTEL  AD  for  operations  and
acquisitions  in Bulgaria as compared  to 515,000 in 2005.  (See  discussion  of
interest expense)

Interest Expense:  Interest expense was $924,000 in 2006 and $1,161,000 in 2005.
During the fourth  quarter of 2004 and  continuing  through  2005,  the  Company



                                      -15-
<PAGE>

borrowed a total of $7,200,000  which it advanced to CabelTEL AD for  operations
and acquisitions in Bulgaria.  The interest expense on this debt was $314,000 on
2006 as compared to $515,000 in 2005.

Other Income  (Expense):  Other income was $2,584,000 in 2006. In June 2006, the
Company  rescinded its acquisition of CableTel AD and received a break up fee of
$1,500,000 which resulted in net income, after deducting expenses of $1,467,000.
In addition,  in November  2006,  the Company  settled its  obligation to Sylvia
Gilley and recorded a gain on such settlement of $1,021,000.  Additionally,  the
Company collected  certain payments on certain  receivables that were previously
written off.

Discontinued  Operations:  During  2006,  the Company  sold Gaywood Oil and Gas.
During  2005,  the Company  disposed of an assisted  living  community  in South
Carolina.  During 2004, the Company  disposed of assisted living  communities in
Georgia and Washington. In addition, the Company entered into a contract to sell
a third assisted living  community in North Carolina,  which was sold in January
2005. These were reflected as assets held for sale.

Fiscal 2005 as Compared to Fiscal 2004

Revenues and  Operating  Expenses  from  operations  of a  retirement  facility:
Revenues were $2,597,000 in 2005, as compared to $2,566,000 in 2004.  Retirement
operating expenses,  which consist of assisted living operations expense,  lease
expense and depreciation and  amortization,  were $2,006,000 in 2005 as compared
to $1,967,000 in 2004.

Revenues and  Operating  Expenses  from the  Gainesville  outlet mall:  In 2005,
revenues were  $1,501,000  and  operating  expenses  were  $1,845,000.  In 2004,
revenues were $2,077,000 and operating expenses were $2,013,000. The decrease in
revenue  is due to the net  reduction  in  occupancy  and rent  adjustments  for
several  tenants.  The  reduction  in  expenses  is due to better  cost  control
throughout the operation. The Company acquired the mall on December 10, 2003.

Corporate General and Administrative  Expense: These expenses were $1,191,000 in
2005 as compared to $1,694,000 in 2004.  During 2004, the Company incurred legal
fees related to a dispute with the IRS and overall professional fees with regard
to its acquisition of the CableTEL AD. These expenses did not occur in 2005.

Interest and Dividend Income:  Interest and dividend income was $700,000 in 2005
and $213,000 in 2004.  During the fourth quarter of 2004 and continuing  through
2005,  the  Company  borrowed a total of  $7,200,000,  which it had  advanced to
CabelTEL AD for  operations  and  acquisitions  in  Bulgaria.  The Company has a
receivable from CableTEL AD for principal and interest equivalent to the amounts
the Company has incurred.

Interest  Expense:  Interest  expense  was  $1,161,000  in 2005 as  compared  to
$904,000 in 2004.  The net increase in interest  expense is primarily due to two
specific items.  The Company  acquired the  Gainesville  Outlet Mall in December
2003.  When the Company  acquired the mall,  it was  initially  financed  with a
short-term note with interest rates  escalating from 3% to 15%. These notes were
refinanced in August 2004 through a five year note with  interest at 5.85%.  The
additional  interest that was incurred  through  August 2004 was not incurred in
2005. During the fourth quarter of 2004 and continuing through 2005, the Company
borrowed  a total  of  $7,200,000,  which it had  advanced  to  CabelTEL  AD for
operations  and  acquisitions  in  Bulgaria.  The  additional  interest  in 2005
represents the interest on this debt. The Company has a receivable from CableTEL
AD for  principal  and  interest  equivalent  to the  amounts  the  Company  has
incurred.

Other Income  (Expense):  Other income was $285,000 in 2005,  which  principally
represents the collection of certain  receivables  that were previously  written
off.

Discontinued Operations: During 2005, the Company disposed of an assisted living
community  in South  Carolina.  During  2004,  the Company  disposed of assisted


                                      -16-
<PAGE>

living communities in Georgia and Washington.  In addition,  the Company entered
into a contract to sell a third  assisted  living  community in North  Carolina,
which was sold in January 2005. These were reflected as assets held for sale.


ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

All of the Company's debt is financed at fixed rates of interest. Therefore, the
Company has minimal risk from exposure to changes in interest rates.


ITEM 8. FINANCIAL STATEMENTS

The financial statements required by this Item begin at page 32 of this Report.


ITEM  9.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE

None.


ITEM 9A(T). CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

A review and evaluation was performed by management  under the  supervision  and
with the  participation  of the Acting  Principal  Executive  Officer  and Chief
Financial Officer of the effectiveness of the Company's  disclosure controls and
procedures, as required by Rule 13a-15(b) of the Securities Exchange Act of 1934
as of  December  31,  2006.  Based upon that most recent  evaluation,  which was
completed  as of the end of the period  covered  by this Form  10-K,  the Acting
Principal  Executive  Officer and Chief  Financial  Officer  concluded  that the
Company's disclosure controls and procedures were effective at December 31, 2006
to ensure that information  required to be disclosed in reports that the Company
files submits under the Securities Exchange Act of 1934 is recorded,  processed,
summarized  and timely  reported  as  provided in the  Securities  and  Exchange
Commission  ("SEC") rules and forms. As a result of this evaluation,  there were
no  significant  changes  in  the  Company's  internal  control  over  financial
reporting  during the three months ended December 31, 2006 that have  materially
affected or are reasonably likely to materially  affect,  the Company's internal
control over financial reporting.

Management Report on Internal Control Over Financial Reporting

Management  of the  Company is  responsible  for  establishing  and  maintaining
adequate internal control over financial reporting as defined in Rules 13a-15(f)
and  15d-15(f)  under the  Securities  Exchange  Act of 1934,  as amended,  as a
process  designed  by, or under the  supervision  of,  the  Company's  principal
executive and principal  financial officers and effected by the Company's board,
management and other  personnel to provide  reasonable  assurance  regarding the
reliability of financial  reporting and the preparation of financial  statements
for  external  purposes  in  accordance  with  accounting  principles  generally
accepted in the United  States  ("GAAP,  US") and  includes  those  policies and
procedures that:



                                      -17-
<PAGE>


*    pertain to the maintenance of records that in reasonable  detail accurately
     and fairly reflect the  transactions  and  dispositions  of the assets of a
     company;

* provide  reasonable  assurance that the transactions are recorded as necessary
to permit  preparation of financial  statements in accordance  with GAAP, US and
that  receipts and  expenditures  of a company are being made only in accordance
with authorizations of management and directors of a company; and

*    provide reasonable  assurance  regarding  prevention or timely detection of
     unauthorized  acquisition,  use or disposition  of a company's  assets that
     could have a material effect on the financial statements.

Because  of  the  inherent   limitations  of  internal  control  over  financial
reporting,  including the  possibility of human error and the  circumvention  or
overriding of controls,  material misstatements may not be prevented or detected
on a timely basis.  Projections  of any  evaluation of  effectiveness  to future
periods are subject to the risks that controls may become inadequate  because of
changes  and  conditions  or that the  degree of  compliance  with  policies  or
procedures may deteriorate.  Accordingly, even internal controls determine to be
effective can provide only reasonable  assurance that information required to be
disclosed  in and reports  filed under the  Securities  Exchange  Act of 1934 is
recorded,  processed,   summarized  and  represented  within  the  time  periods
required.

Management of the Company has assessed the effectiveness of its internal control
over  financial  reporting at December 31, 2006.  To make this  assessment,  the
Company  used  the  criteria  for  effective  internal  control  over  financial
reporting  described in Internal Control - Integrated  Framework,  issued by the
Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Based
on this  assessment,  management of the Company believes that as of December 31,
2006, the internal control system over financial reporting met those criteria.

This  Annual  Report  does not include an  attestation  report of the  Company's
registered  public  accounting  firm regarding  internal  control over financial
reporting.  Management's  report was not subject to attestation by the Company's
registered  public  accounting  firm pursuant to temporary rules of the SEC that
permit the Company to provide only management's report in this annual report.

Changes in Internal Control Over Financial Reporting

There has been no change in the  Registrant's  internal  control over  financial
reporting  during  the  quarter  ended  December  31,  2006 that has  materially
affected,  or is  reasonably  likely  to  materially  affect,  the  Registrant's
internal control over financial reporting.


ITEM 9B. OTHER INFORMATION

Not applicable.


                                      -18-
<PAGE>



                                    PART III


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Directors

The affairs of the Company are managed by the Board of Directors.  The directors
are elected at the Annual Meeting of  Stockholders or appointed by the incumbent
Board and serve until the next Annual Meeting of Stockholders, until a successor
has been elected or approved, or until earlier resignation, removal or death.

After  December  31,  2003  changes  occurred  involving  the  creation of Board
Committees, the adoption of Committee charters, the adoption of a Code of Ethics
for Senior  Financial  Officers  and the  adoption of  Guidelines  for  Director
Independence.  Also,  following the acquisition of two U.S.  entities in October
2004, and following the Annual Meeting of Stockholders held on October 20, 2004,
Ronald C. Finley, Chief Executive Officer of CableTEL AD was elected a director,
Chairman of the Board and Chief Executive Officer of the Company;

It is the Board's objective that a majority of the Board consists of independent
directors.  For a  director  to be  considered  "independent",  the  Board  must
determine  that the  director  does not have any  direct  or  indirect  material
relationship with the Company. The Board has established guidelines to assist it
in  determining  director  independence,  which conform to, or are more exacting
than, the  independence  requirements  in the American  Stock  Exchange  listing
rules.  The  independence  guidelines are set forth in the Company's  "Corporate
Governance  Guidelines".  The  text of this  document  has  been  posted  on the
Company's internet website at http://www.cabeltel.us,  and is available in print
to any  stockholder  who requests it. In addition to applying these  guidelines,
the Board  will  consider  all  relevant  facts and  circumstances  in making an
independent determination.

The  Company  has  adopted a code of  conduct  that  applies  to all  directors,
officers and employees,  including our principal  executive  officer,  principal
financial officer and principal  accounting  officer.  Stockholders may find our
Code of Conduct on our internet  website address at  http://www.cabeltel.us.  We
will post any  amendments to the Code of Conduct as well as any waivers that are
required to be disclosed by the rules of the SEC or the AMEX on our website.

Our Board of  Directors  has adopted  charters for our Audit,  Compensation  and
Governance and Nominating Committees of the Board of Directors. Stockholders may
find  these   documents  on  our  website  by  going  to  the  website   address
http://www.cabeltel.us.  Stockholders  may  also  obtain a  printed  copy of the
materials referred to by contacting us at the following address:

                       CabelTel International Corporation
                            Attn: Investor Relations
                        1755 Wittington Place, Suite 340
                               Dallas, Texas 75234
                            972-407-8400 (Telephone)



                                      -19-
<PAGE>


The Audit  Committee of the Board of Directors is an "audit  committee"  for the
purposes of Section 3(a) (58) of the Exchange Act. The members of that Committee
are Dan Locklear (Chairman), James Huffstickler and Victor Lund. Mr. Locklear is
qualified as an "audit  committee  financial  expert"  within the meaning of SEC
regulations  and the Board has determined that he has the accounting and related
financial  management  expertise within the meaning of the listing  standards of
the AMEX. All of the members of the Audit  Committee meet the  independence  and
experience requirements of the listing standards of the AMEX.

All members of the Audit  Committee,  Compensation  Committee and the Governance
and Nominating  Committee must be  independent  directors.  Members of the Audit
Committee must also satisfy additional  independence  requirements which provide
(i) that they may not accept, directly or indirectly,  any consulting,  advisory
or compensatory fee from the Company or any of its subsidiaries other than their
director's  compensation  (other than in their capacity as a member of the Audit
Committee, the Board of Directors or any other Committee of the Board), and (ii)
no member of the Audit Committee may be an "affiliated person" of the Company or
any of its subsidiaries, as defined by the Securities and Exchange Commission.

The current directors of the Company are listed below, together with their ages,
terms of service,  all positions and offices with the Company,  their  principal
occupations,  business  experience and directorships with other companies during
the last five years or more. The designation "affiliated",  when used below with
respect to a director,  means that the director is an officer or employee of the
Company or one of its  subsidiaries.  The designation  "independent",  when used
below with respect to a director,  means that the director is neither an officer
of the  Company  nor a director,  officer or  employee  of a  subsidiary  of the
Company,  although  the  Company  may  have  certain  business  or  professional
relationships  with the director as discussed in ITEM 13. CERTAIN  RELATIONSHIPS
AND RELATED TRANSACTIONS.

Roz Campisi Beadle, age 50, (Independent) Director since December 2003

Ms.  Beadle is Executive  Vice  President of Unified  Housing  Foundation  and a
licensed  realtor.  She has a background in public relations and marketing.  Ms.
Beadle is also extremely  active in various civic and community  services and is
currently working with the Congressional Medal of Honor Society and on the Medal
of Honor Host City Committee in Gainesville, Texas.

Gene S. Bertcher,  age 58, (Affiliated) Director November 1989 to September 1996
and since June 1999

Mr.  Bertcher  was  elected  President  and Chief  Financial  Officer  effective
November  1,  2004.  He was  elected  Chairman  and Chief  Executive  Officer in
December 2006. Mr.  Bertcher has been Chief  Financial  Officer and Treasurer of
the Company since  November 1989 and Executive Vice President from November 1989
until  he was  elected  President  in  2003.  He has  been  a  certified  public
accountant since 1973.

James E. Huffstickler, age 64, (Independent) Director since December 2003

Mr.  Huffstickler has been Chief Financial Officer of Sunchase America,  Ltd., a
multi-state  property  management  company,  for more than five  years.  He is a



                                      -20-
<PAGE>

graduate  of the  University  of South  Carolina  and was  formerly  employed by
Southmark  Management,  Inc., a nationwide real estate management  company.  Mr.
Huffstickler has been a certified public accountant since 1976.

Dan Locklear, age 55, (Independent) Director since December 2003

Mr. Locklear has been Chief Financial  Officer of Sunridge  Management  Group, a
real estate  management  company,  for more than five years.  Mr.  Locklear  was
formerly  employed by  Johnstown  Management  Company,  Inc.  and  Trammel  Crow
Company.  Mr. Locklear has been a certified  public  accountant since 1981 and a
licensed real estate broker in the State of Texas since 1978.

Victor L. Lund, age 78, (Independent) Director since March 1996

Mr. Lund founded  Wedgwood  Retirement  Inns, Inc.  ("Wedgwood") in 1977,  which
became a wholly owned  subsidiary of the Company in 1996. For most of Wedgwood's
existence,  Mr. Lund was Chairman of the Board,  President  and Chief  Executive
Officer,  positions he held until Wedgwood was acquired by the Company. Mr. Lund
is  President  and  Chief  Executive  Officer  of  Wedgwood  Services,  Inc.,  a
construction services company not affiliated with the Company.

Board Committees

The  Board of  Directors  held six  meetings  during  2006.  For such  year,  no
incumbent  director  attended  fewer than 75% of the  aggregate of (i) the total
number of meetings  held by the Board  during the period for which he or she had
been a director, and (ii) the total number of meetings held by all Committees of
the Board on which he or she served during the period that he or she served.

The Board of Directors  has standing  Audit,  Compensation  and  Governance  and
Nominating Committees.  The Audit Committee was formed on December 12, 2003, and
its function is to review the Company's operating and accounting  procedures.  A
Charter  of the Audit  Committee  has been  adopted by the  Board.  The  current
members  of the Audit  Committee,  all of whom are  independent  within  the SEC
regulations,  the  listing  standards  of the AMEX and the  Company's  Corporate
Governance  Guidelines are Messrs.  Locklear (Chairman),  Huffstickler and Lund.
Mr. Dan Locklear is qualified as an Audit Committee  financial expert within the
meaning  of SEC  regulations,  and  the  Board  has  determined  that he has the
accounting and related financial  management expertise within the meaning of the
listing standards of the AMEX. The Audit Committee met once in 2006.

The  Governance  and  Nominating  Committee is  responsible  for  developing and
implementing  policies  and  practices  relating  to the  corporate  governance,
including  reviewing and monitoring  implementation  of the Company's  Corporate
Governance   Guidelines.   In  addition,  the  Committee  develops  and  reviews
background  information on candidates for the Board and makes recommendations to
the Board regarding such candidates.  The Committee also prepares and supervises
the Board's annual review of director  independence and the Board's  performance
and self-evaluation.  The Charter of the Governance and Nominating Committee was
adopted  on  October  20,  2004.  The  members  of  the  Committee  are  Messrs.
Huffstickler  (Chairman),  Lund and Ms.  Beadle.  The  Governance and Nominating
Committee met once in 2006.



                                      -21-
<PAGE>


The Board has also formed a  Compensation  Committee of the Board of  Directors,
adopted a Charter  for the  Compensation  Committee  on October  20,  2004,  and
selected Ms. Beadle (Chairman) and Messrs.  Huffstickler and Locklear as members
of that Committee. The Compensation Committee met once in 2006.

The  members  of the  Board  of  Directors  at the date of this  Report  and the
Committees of the Board on which they serve are identified below:

 -------------------------------------------------------------------------------
                                           Governance and          Compensation
 Director              Audit Committee  Nominating Committee        Committee
 Roz Campisi Beadle                              |X|                 Chairman
 Gene S. Bertcher
 James E. Huffstickler       |X|              Chairman                  |X|
 Dan Locklear             Chairman                                      |X|
 Victor L. Lund              |X|                 |X|
--------------------------------------------------------------------------------

Executive Officers

The following persons currently serve as executive officers of the Company: Gene
S. Bertcher, Chairman of the Board, President, Chief Executive Officer and Chief
Financial  Officer;  and  Oscar  Smith,  Vice  President  and  Secretary.  Their
positions  with the  Company are not  subject to a vote of  stockholders.  Their
ages,  terms of service and all  positions  and offices with the Company,  other
principal   occupations,   business  experience  and  directorships  with  other
companies  during the last five years or more are listed below.  For information
relating to Mr.  Bertcher,  see the  description  under the caption  "Directors"
above.

Oscar Smith,  age 64,  Secretary  (since December 2001),  Vice President  (since
1994)

Mr. Smith has been  Secretary of the Company  since  December  2001. He has been
Vice  President of the Company since June 1994.  Prior to joining the Company he
owned and operated a multi-unit  retail and  manufacturing  business in Norfolk,
Virginia.

In addition to the foregoing officers, the Company has other officers not listed
herein who are not considered executive officers.

Code of Ethics

The Board of Directors has adopted a code of ethics  entitled  "Code of Business
Conduct and Ethics" that applies to all directors, officers and employees of the
Company and its  subsidiaries.  In  addition,  the Company has adopted a code of
ethics entitled "Code of Ethics for Senior  Financial  Officers" that applies to
the principal executive officer,  president,  principal financial officer, chief
financial  officer,  principal  accounting  officer and controller.  The text of
these  documents  is  posted  on  the  Company's  internet  website  address  at
http://www.cabeltel.us and is available in print to any stockholder who requests
them.



                                      -22-
<PAGE>
<TABLE>
<CAPTION>


Section 16(a) Beneficial Ownership Reporting Compliance

Based solely upon a review of Forms 3, 4 and 5 furnished to the Company pursuant
to Rule  16a-3(e)  promulgated  under the  Securities  Exchange Act of 1934 (the
"Exchange Act"), or upon written  representations  received by the Company,  the
Company is not aware of any failure by any director, officer or beneficial owner
of more than 10% of the Company's  common stock to file with the  Securities and
Exchange Commission on a timely basis.


ITEM 11. EXECUTIVE COMPENSATION

The following  tables set forth the  compensation  in all categories paid by the
Company for services  rendered  during the fiscal years ended December 31, 2006,
2005 and 2004 by the Chief  Executive  Officer of the  Company  and to the other
executive  officers and  Directors of the Company  whose total annual  salary in
2006  exceeded  $100,000,  the number of options  granted to any of such persons
during 2006 and the value of the unexercised options held by any of such persons
on December 31, 2006.

                           SUMMARY COMPENSATION TABLE

                                                                                          Change in
                                                                                          Pension
                                                                          Non-            Value and
Name                                                                      Equity          Nonqualified
and                                                                       Incentive       Deferred        All
Principal                                             Stock     Option    Plan            Compensation    Other
Position                 Year      Salary      Bonus  Awards    Awards    Compensation    Earnings        Compensation      Total
<S>                      <C>       <C>         <C>    <C>       <C>       <C>             <C>             <C>

Gene S. Bertcher          2006  $  186,000                                                                               $  186,000
Chairman, President
Chief Executive
Officer
& Chief Financial
Officer
                          2005     186,000                                                                                  186,000
                          2004     137,000                                                                                  137,000

</TABLE>


                           GRANTS OF PLAN-BASED AWARDS

                                      None

                  OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

                                      None

                        OPTION EXERCISES AND STOCK VESTED

                                      None

                                PENSION BENEFITS

                                      None

                       NONQUALIFIED DEFERRED COMPENSATION

                                      No




                                      -23-
<PAGE>
<TABLE>
<CAPTION>



                                                DIRECTOR COMPENSATION
                                                                     Change in
                                                                     Pension
                                                                     Value and
                                                         Non-Equity  Nonqualified
                         Fees Earned                     Incentive   Deferred
                         Or Paid in   Stock    Option    Plan        Compensation    All Other
Name                     Cash         Awards   Awards    Compensatio Earnings        Compensation     Total
<S>                      <C>          <C>      <C>       <C>         <C>             <C>              <C>

Roz Campisi Beadle       $   8,500                                                                    $ 8,500
Gene S. Bertcher                 --                                                                        --
James E. Huffstickler        8,500                                                                      8,500
Dan Locklear                 8,500                                                                      8,500
Victor L. Lund               8,500                                                                      8,500
</TABLE>


                     MANAGEMENT AND CERTAIN SECURITY HOLDERS

                                      None

Stock Option Plan

The Board of Directors  administers  the  Company's  1997 Stock Option Plan (the
"1997  Plan") and the 2000 Stock  Option Plan (the "2000  Plan"),  each of which
provide for grants of incentive and non-qualified stock options to the Company's
executive  officers,  as well as its  directors  and  other  key  employees  and
consultants.  Under the two Plans,  options are granted to provide incentives to
participants to promote  long-term  performance of the Company and specifically,
to retain and motivate  senior  management in achieving a sustained  increase in
stockholder  value.  Currently,  none of the  Plans  has a  pre-set  formula  or
criteria for determining the number of options that may be granted. The exercise
price for an option granted is determined by the Compensation  Committee,  in an
amount not less than 100% of the fair market value of the Company's common stock
on the date of grant.  The  Compensation  Committee  reviews and  evaluates  the
overall compensation package of the executive officers and determines the awards
based on the overall  performance of the Company and the individual  performance
of the  executive  officers.  The  Company's  stock plans total 50,000 shares of
common  stock  under the 1997 Plan and 50,000  shares of common  stock under the
2000 Plan. Options have been granted for all shares reserved under the 1997 Plan
and 10,000 shares for the 2000 Plan.

Compensation of Directors

The Company  pays each  non-employee  director a fee of $2,500 per year,  plus a
meeting  fee of  $2,000  for  each  board  meeting  attended.  Company  employee
directors serve with no fees being paid.


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following  table sets forth,  as of December 31, 2006,  certain  information
with respect to all stockholders  known by the company to own beneficially  more
than 5% of the outstanding  common stock, which is the only outstanding class of
securities of the Company, except for Series B Preferred Stock (the ownership of
which is  immaterial),  as well as  information  with  respect to the  Company's
common stock owned beneficially by each director and current executive officers,
whose  compensation  from the  company  in 2005  exceeded  $100,000,  and by all



                                      -24-
<PAGE>

directors and executive officers as a group. Unless otherwise indicated, each of
these  stockholders  has sole voting and  investment  power with  respect to the
shares beneficially owned.

                                                         Common Stock
                                            ------------------------------------
Name of Beneficial Owner                     No. of Shares     Percent of Class*
--------------------------------------------------------------------------------
HKS Investment Corp. (1)                          108,994           11.04%
Gene S. Bertcher(2)                                71,811            7.28%
Roz Campisi Beadle                                    100              **
James E. Huffstickler                                   -              -
Dan Locklear                                            -              -
JRG Investment Company, Inc.(3)(5)                156,884           15.89%
TacCo Financial, Inc.(3)(4)(6)                    228,726           23.17%
International Health Products, Inc.(3)(7)           9,770              **
All  executive  officers  and  directors
  as a group (six persons)                        180,905           18.33%
-----------------------
* Based on 976,955 shares of common stock outstanding at March 31, 2006. ** Less
than 1%.

     (1)  Consists of 108,994  shares of common  stock  owned by HKS  Investment
          Corporation  ("HKS").  According to an original  statement on Schedule
          13D dated  January  9,  2006,  the group  consists  of HKS  Investment
          Corporation,  David Hensel,  John Kellar and Marshall  Stagg,  each of
          whom are  deemed to be the  beneficial  owner of all  108,994  shares.
          Hensel is stated to be a  shareholder,  director and President of HKS;
          Kellar is a  shareholder,  director,  Vice  President and Treasurer of
          HKS; and Stagg is a shareholder, director and Secretary of HKS.
     (2)  Consists of 71,811 shares of common stock owned by Mr. Bertcher.
     (3)  Based on a Schedule 13D,  amended  December 14, 2004, filed by each of
          these entities and by Gene E. Phillips,  an individual;  each of these
          entities owns of record the number of shares set forth for such entity
          in the table.  The amended Schedule 13D indicates that these entities,
          Mr. Phillips and Basic Capital Management, Inc., collectively,  may be
          deemed a "Person"  within the meaning of Section 13D of the Securities
          Exchange Act of 1934.
     (4)  Consists  of 228,726  shares of common  stock  (which does not include
          156,884  shares held by JRG Investment  Company,  Inc. or an option to
          40,000  shares  of  common  stock at an  exercise  price of $2.60  per
          share). TacCo Financial, Inc. also holds a warrant to purchase 170,000
          shares at $3.58 per share, exercisable only after stockholder approval
          to exchange the Company's Series J 2% Preferred Stock for common stock
          before October 1, 2005, and not  exercisable if such approval does not
          occur.
     (5)  Officers and Directors of JRG Investment  Co., Inc.  ("JRG") are J. T.
          Tackett,  Director,  President  and  Treasurer  and  E.  Wayne  Starr,
          Director,  Chairman and Chief Executive Officer. JRG is a wholly owned
          subsidiary of TacCo Financial, Inc.
     (6)  Officers  and  Directors  of TacCo  Financial,  Inc.  ("TFI") are J.T.
          Tackett, Director, Chairman and CEO; Wayne Starr, Director,  President
          and  Treasurer and R. Neil Crouch II, Vice  President  and  Secretary.
          TFI's  stock is owned by  Electrical  Networks,  Inc.  (75%) and Starr
          Investments (25%).
     (7)  Officers and Directors of International Health Products, Inc. ("IHPI")
          are R. Neil Crouch II,  Director,  President and Treasurer and Cecelia
          Maynard, Secretary. IHPI is wholly owned by a trust for the benefit of
          the wife and children of Gene E. Phillips.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In July 2006, the Company loaned Eurenergy Resources Corporation $1,377,000. The
Company received a demand note with interest of 8% per annum.



                                      -25-
<PAGE>


In October 2004, the Company issued Series J 2% Preferred Stock to acquire 74.8%
of CableTEL AD.  Certain of the holders of the Series J 2%  Preferred  Stock are
deemed to be related parties with the Company. In June 2006, the transaction was
rescinded.

It is the policy of the Company  that all  transactions  between the Company and
any  officer  or  director,  or any of their  affiliates,  must be  approved  by
non-management  members of the Board of  Directors  of the  Company.  All of the
transactions described above were so approved.


ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The following table sets forth the aggregate fees for professional services
rendered to the Company for the years 2006 and 2005 by the Company's principal
accounting firms, Grant Thornton & Company and Farmer, Fuqua & Huff, PC:

Type of Fees                2006       2005 (a)
Audit Fees               $106,046   $ 72,062
Audit Related Fees           --         --
Tax Fees                    9,625      9,973
All Other Fees               --         --

            Total Fees   $115,671   $ 82,035

          (a)  The amount of audit fees paid in 2005 was $68,151 to Farmer Fuqua
               & Huff PC and $3,911 to Grant Thornton. The tax fees paid in 2005
               were to Farmer, Fuqua & Huff PC.

All services rendered by the principal auditors are permissible under applicable
laws and regulations  and were  pre-approved by either of the Board of Directors
or the Audit Committee,  as required by law. The fees paid to principal auditors
for  services  described  in the above  table fall under the  categories  listed
below:

     Audit  Fees:  These are fees for  professional  services  performed  by the
     principal   auditor  for  the  audit  of  the  Company's  annual  financial
     statements  and review of financial  statements  included in the  Company's
     Form 10-Q filings and services  that are  normally  provided in  connection
     with statutory and regulatory filings or engagements.

     Audit-Related  Fees:  These are fees for  assurance  and  related  services
     performed  by the  principal  auditor  that are  reasonably  related to the
     performance of the audit or review of the Company's  financial  statements.
     These services  include  attestation  by the principal  auditor that is not
     required   by  statute  or   regulation   and   consulting   on   financial
     accounting/reporting standards.

     Tax  Fees:  These  are  fees for  professional  services  performed  by the
     principal  auditor  with  respect  to tax  compliance,  tax  planning,  tax
     consultation, returns preparation and reviews of returns. The review of tax
     returns includes the Company and its consolidated subsidiaries.


     All Other Fees: These are fees for other  permissible work performed by the
     principal auditor that does not meet the above category descriptions.



                                      -26-
<PAGE>


These  services  are  actively  monitored  (as to both  spending  level and work
content) by the Audit  Committee to maintain  the  appropriate  objectivity  and
independence  in the principal  auditor's  core work,  which is the audit of the
Company's consolidated financial statements.

Financial Information Systems Design and Implementation Fees

Farmer,  Fuqua & Huff,  P.C.  did not render any  professional  services  to the
Company  in 2006 with  respect  to  financial  information  systems  design  and
implementation.

Under  the  Sarbanes-Oxley  Act of 2002  (the "SO  Act"),  and the  rules of the
Securities and Exchange Commission (the "SEC"), the Audit Committee of the Board
of Directors is responsible for the  appointment,  compensation and oversight of
the work of the independent auditor. The purpose of the provisions of the SO Act
and the SEC rules for the Audit  Committee's  role in retaining the  independent
auditor  is  two-fold.   First,  the  authority  and   responsibility   for  the
appointment, compensation and oversight of the auditors should be with directors
who are independent of management.  Second,  any non-audit work performed by the
auditors should be reviewed and approved by these same independent  directors to
ensure that any  non-audit  services  performed by the auditor do not impair the
independence of the independent  auditor.  To implement the provisions of the SO
Act, the SEC issued rules  specifying  the types of services that an independent
may not  provide  to its audit  client,  and  governing  the  Audit  Committee's
administration  of the engagement of the  independent  auditor.  As part of this
responsibility,  the Audit  Committee is required to  pre-approve  the audit and
non-audit services performed by the independent  auditor in order to assure that
they do not impair the auditor's independence.  Accordingly, the Audit Committee
has  adopted  a  pre-approval  policy  of  audit  and  non-audit  services  (the
"Policy"),  which sets forth the  procedures  and  conditions  pursuant to which
services to be  performed  by the  independent  auditor are to be  pre-approved.
Consistent  with  the  SEC  rules  establishing  two  different   approaches  to
pre-approving  non-prohibited services, the Policy of the Audit Committee covers
pre-approval   of  audit   services,   audit-related   services,   international
administration tax services,  non-U.S.  income tax compliance services,  pension
and benefit plan consulting and compliance services, and U.S. tax compliance and
planning.  At the  beginning  of each  fiscal  year,  the Audit  Committee  will
evaluate other known potential engagements of the independent auditor, including
the scope of work  proposed  to be  performed  and the  proposed  fees,  and the
approve or reject  each  service,  taking  into  account  whether  services  are
permissible  under  applicable  law and the  possible  impact of each  non-audit
service on the independent auditor's independence from management. Typically, in
addition to the generally  pre-approved  services,  other services would include
due  diligence  for an  acquisition  that may or may not have been  known at the
beginning of the year.  The Audit  Committee has also delegated to any member of
the Audit  Committee  designated by the Board or the financial  expert member of
the Audit Committee  responsibilities to pre-approve services to be performed by
the independent auditor not exceeding $25,000 in value or cost per engagement of
audit and non-audit services,  and such authority may only be exercised when the
Audit Committee is not in session.




                                      -27-
<PAGE>



                                     PART IV


ITEM 15.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

         (a) The following documents are filed as a part of this report:

(1)  FINANCIAL STATEMENTS:  The following financial statements of the Registrant
     and the Report of Independent Public Accountants  therein are filed as part
     of this Report on Form 10-K:

       Report of Farmer, Fuqua & Huff, P.C....................................32
       Consolidated Balance Sheets............................................33
       Consolidated Statement of Operations...................................35
       Consolidated Statements of Cash Flows..................................36
       Consolidated Statement of Changes in Stockholders' Equity..............38
       Notes to Consolidated Financial Statements.............................39

(2)  FINANCIAL  STATEMENT  SCHEDULES:  Other financial  statement schedules have
     been omitted  because the  information  required to be set forth therein is
     not  applicable,  is immaterial or is shown in the  consolidated  financial
     statements or notes thereto.


(3)    EXHIBITS

The following  documents are filed as exhibits (or are incorporated by reference
as indicated) into this Report:

  Exhibit Designation                                        Exhibit Description

           3.1      Articles of Incorporation  of Medical Resource  Companies of
                    America  (incorporated  by 3.1  reference  to Exhibit 3.1 to
                    Registrant's  Form S-4 Registration  Statement No. 333-55968
                    dated December 21, 1992)

          3.2       Amendment  to  the  Articles  of  Incorporation  of  Medical
                    Resource Companies of America  (incorporated by reference to
                    Exhibit 3.5 to Registrant's Form 8-K dated April 1, 1993)

          3.3       Restated Articles of Incorporation of Greenbriar Corporation
                    (incorporated  by reference to Exhibit 3.1.1 to Registrant's
                    Form 10-K dated December 31, 1995)



                                      -28-
<PAGE>


          3.4       Amendment  to  the  Articles  of  Incorporation  of  Medical
                    Resource Companies of America  (incorporated by reference to
                    Exhibit to Registrant's PRES 14-C dated February 27, 1996)

          3.5       Bylaws of Registrant  (incorporated  by reference to Exhibit
                    3.2 to  Registrant's  Form S-4  Registration  Statement  No.
                    333-55968 dated December 21, 1992)

          3.6       Amendment  to Section  3.1 of Bylaws of  Registrant  adopted
                    October 9, 2003  (incorporated by reference to Exhibit 3.2.1
                    to  Registrant's   Form  S-4   Registration   Statement  No.
                    333-55968 dated December 21, 1992)

          3.7       Certificate  of Decrease  in  Authorized  and Issued  Shares
                    effective  November 30, 2001  (incorporated  by reference to
                    Exhibit 2.1.7 to  Registrant's  Form 10-K dated December 31,
                    2002)

          3.8       Certificate  of  Designations,  Preferences  and  Rights  of
                    Preferred  Stock dated May 7, 1993 relating to  Registrant's
                    Series B  Preferred  Stock  (incorporated  by  reference  to
                    Exhibit  4.1.2  to   Registrant's   Form  S-3   Registration
                    Statement No. 333-64840 dated June 22, 1993)

          3.9       Certificate of Voting Powers, Designations,  Preferences and
                    Rights of Registrant's Series F Senior Convertible Preferred
                    Stock dated December 31, 1997  (incorporated by reference to
                    Exhibit  2.2.2 of  Registrant's  Form  10-KSB for the fiscal
                    year ended December 31, 1997)

          3.10      Certificate of Voting Powers, Designations,  Preferences and
                    Rights   of   Registrant's   Series  G   Senior   Non-Voting
                    Convertible   Preferred   Stock  dated   December  31,  1997
                    (incorporated  by reference to Exhibit 2.2.3 of Registrant's
                    Form 10-KSB for the fiscal year ended December 31, 1997)

          3.11      Certificate of Designations  dated October 12, 2004 as filed
                    with the  Secretary  of State of Nevada on October  13, 2004
                    (incorporated  by reference  to Exhibit 3.4 of  Registrant's
                    Current Report on Form 8-K for event  occurring  October 12,
                    2004)

          3.12      Certificate  of  Amendment  to  Articles  of   Incorporation
                    effective  February 8, 2005  (incorporated  by  reference to
                    Exhibit 3.5 of  Registrant's  Current Report on Form 8-K for
                    event occurring February 8, 2005)

          3.13      Certificate  of  Amendment  to  Articles  of   Incorporation
                    effective  March 21,  2007  (incorporated  by  reference  to
                    Exhibit 3.13 of Registrant's  Current Report on Form 8-K for
                    event occurring March 21, 2005)

          10.1      Registrant's 1997 Stock Option Plan (filed as Exhibit 4.1 to
                    Registrant's Form S-8 Registration  Statement,  Registration
                    No. 333-33985 and incorporated herein by this reference).

          10.2      Registrant's 2000 Stock Option Plan (filed as Exhibit 4.1 to
                    Registrant's Form S-8 Registration  Statement,  Registration
                    No. 333-50868 and incorporated herein by this reference)



                                      -29-
<PAGE>


          10.3      Form of Umbrella Agreement between  Greenbriar  Corporation,
                    James R. Gilley and Jon Harder, Sunwest Management,  Inc. et
                    al

          10.4      Form   of   Acquisition    Agreement   between    Greenbriar
                    Corporation,  Ronald Finley, Jeffery A. Finley,  Bradford A.
                    Phillips  and  Gene  E.  Phillips  dated  October  12,  2004
                    (incorporated  by reference to Exhibit 10.1 of  Registrant's
                    Current Report on Form 8-K for event  occurring  October 12,
                    2004)

          10.5      Amendment No. 1 to Acquisition  Agreement effective July 29,
                    2005 among  CabelTel  International  Corporation,  Ronald C.
                    Finley,  Jeffrey A. Finley,  Bradford A.  Phillips,  Gene E.
                    Phillips, joined by CIC Investment, LLC and PSII Management,
                    LLC   (incorporated   by   reference   to  Exhibit  10.2  of
                    registrants  current report on Form 8-K for event  occurring
                    July 29, 2005)

          10.6      Warrant to Purchase  20,000  shares of Common  Stock  issued
                    October 20, 2004  (incorporated by reference to Exhibit 10.5
                    of  registrants  annual  report of Form 10-K for the  fiscal
                    year ended December 31, 2004)

          10.7      Warrant to Purchase  170,000  shares of Common  Stock issued
                    October 20, 2004  (incorporated by reference to Exhibit 10.5
                    of  registrants  annual  report of Form 10-K for the  fiscal
                    year ended December 31, 2004)

          14.0      Code of Ethics for Senior Financial  Officers  (incorporated
                    by reference to Exhibit 14.0 to  Registrant's  Annual Report
                    on Form 10-K for the fiscal year ended December 31, 2003)

         21.1*      Subsidiaries of the Registrant

         23.1*      Consent of Farmer, Fuqua & Hunt, P.C.

         31.1*      Rule 13a-14(a) Certification by Chief Executive Officer

         32.1*      Certification of Chief Executive Officer and Chief Financial
                    Officer pursuant to 18 U.S.C.  ss.1350,  as adopted pursuant
                    to Section 906 of the Sarbanes-Oxley Act of 2002

*Filed herewith.




                                      -30-
<PAGE>



                                   SIGNATURES

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

                                CABELTEL INTERNATIONAL CORPORATION

March 30, 2007                       by:    /s/ Gene S. Bertcher
                                         ---------------------------------------
                                         Gene S. Bertcher
                                         President and Chief Financial Officer


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


        Signature                       Title                           Date
/s/ Gene S. Bertcher        President, Chairman, Chief Executive  March 30, 2007
  --------------------      Officer, Chief Financial Officer and
Gene S. Bertcher            Director

/s/ Roz Campisi Beadle      Director                              March 30, 2007
 -------------------------
Roz Campisi Beadle
/s/ James Huffstickler      Director                              March 30, 2007
 ----------------------
James Huffstickler
/s/ Dan Locklear            Director                              March 30, 2007
 ----------------
Dan Locklear
/s/ Victor Lund                                                   March 30, 2007
 ------------------         Director
Victor Lund



                                      -31-
<PAGE>



             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders
Cabeltel International Corporation, formerly Greenbriar Corporation

We have  audited  the  accompanying  consolidated  balance  sheets  of  Cabeltel
International Corporation, formerly Greenbriar Corporation, and subsidiaries, as
of December 31,  2006,  and 2005,  and the related  consolidated  statements  of
income,  shareholders'  equity and cash flows for each of the three years in the
period ended December 31, 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
consolidated 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 audits include  consideration of
internal  control  over  financial  reporting  as a basis  for  designing  audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion of 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  consolidated  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 Cabeltel  International
Corporation,  formerly Greenbriar  Corporation,  and subsidiaries as of December
31, 2006, and 2005, and the  consolidated  results of their operations and their
cash flows for each of the three years in the period ended  December 31, 2006 in
conformity with accounting principles generally accepted in the United States of
America.

/s/ FARMER FUQUA & HUFF, P.C.

Plano, Texas March 30, 2007




                                      -32-
<PAGE>




              CabelTel International Corporation and Subsidiaries


                           CONSOLIDATED BALANCE SHEETS
                             (Amounts in thousands)


               CabelTel International Corporation and Subsidiaries


                           CONSOLIDATED BALANCE SHEETS
                             (Amounts in thousands)






                                                                  December 31,
                                                               -----------------
Assets                                                          2006      2005
                                                               -------   -------

Current assets

  Cash and cash equivalents                                    $   324   $   650
  Accounts receivable - trade                                       31       339
  Note and interest receivable - related party                   1,428      --
  Notes receivable                                                --         306
  Other current assets, net                                         71       179
                                                                 -------   -----
                     Total current assets                        1,854     1,474

Notes receivable net of deferred income                           --         309

Property and equipment, at cost
  Land and improvements                                          2,237     2,232
  Buildings and improvements                                     5,240     5,298
  Equipment and furnishings                                        315       292
  Proven oil and gas properties (full cost method)                --       1,401
                                                               -------   -------
                                                                 7,792     9,223

  Less accumulated depreciation, depletion, and amortization       959       963
                                                               -------   -------
                                                                 6,833     8,260

Deferred tax asset                                                 491     1,161

Due from CableTEL AD - related party                              --       8,004

Deposits                                                           146       129

Other assets                                                       378       743
                                                               -------   -------
Total Assets                                                   $ 9,702   $20,080
                                                               =======   =======








                   The accompanying notes are an integral part
                              of these statements.

                                      -33-
<PAGE>

<TABLE>
<CAPTION>


               CabelTel International Corporation and Subsidiaries

                     CONSOLIDATED BALANCE SHEETS - CONTINUED
                  (Amounts in thousands, except share amounts)





                                                                                              December 31,
======================================================================               --------------------------------
Liabilities And Stockholders' Equity                                                     2006              2005
                                                                                     -------------     --------------
<S>                                                                                  <C>               <C>

Current liabilities

    Current maturities of long-term debt                                             $        135      $      2,383
    Accounts payable - trade                                                                  500               842
    Accrued expenses                                                                          339             1,236
    Other current liabilities                                                                 153               371
                                                                                     -------------     --------------

                      Total Current Liabilities                                             1,127             4,832


Long-term debt                                                                              6,078            13,560

Other long-term liabilities                                                                   418               936

                                                                                     -------------     --------------

                          Total liabilities                                                 7,623            19,328

Stockholders' equity
    Preferred stock, Series B                                                                   1                 1
    Preferred stock, Series J 2%                                                                --             3,150
    Preferred stock, Series J contra equity                                                     --            (3,150)
    Common stock, $.01 par value; authorized, 4,000,000
       shares; issued and outstanding, 986,953 shares at
          December 31, 2006 and 976,955 shares at
          December 31, 2005                                                                    10                10
    Additional paid-in capital                                                             55,992            55,966
    Accumulated deficit                                                                   (53,924)          (55,225)
                                                                                     -------------     --------------

                                                                                            2,079               752
                                                                                     -------------     --------------

Total Liabilities & Equity                                                           $      9,702      $     20,080
                                                                                     =============     ==============


</TABLE>


The accompanying notes are an integral part of these statements.



                                      -34-
<PAGE>
<TABLE>
<CAPTION>



               CabelTel International Corporation and Subsidiaries

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                (Amounts in thousands, except per share amounts)



                                                                                                    Year Ended
                                                                                                   December 31,
                                                                              ------------------------------------------------------
                                                                                   2006                 2005               2004
                                                                              ----------------      --------------     -------------
<S>                                                                           <C>                   <C>                <C>
Revenue
    Real estate operations                                                    $      4,268          $    4,098         $    4,643
                                                                              ----------------      --------------     -------------

Operating expenses
    Real estate operations                                                           3,060               3,001              3,172
    Lease expense                                                                      939                 932                917
    Corporate general and administrative                                             1,091               1,191              1,694
                                                                              ----------------      --------------     -------------
                                                                              ----------------      --------------     -------------

                      Operating earnings (loss)                                       (822)             (1,026)            (1,140)

Other income (expense)
    Interest income                                                                    447                 700                213
    Interest expense                                                                  (924)             (1,161)              (904)
    Gain (loss) on sale of assets, net                                                  --                 (39)             1,247
    Other income (expense), net                                                      2,584                 285               (403)
                                                                              ----------------      --------------     -------------
                                                                                     2,107                (215)               153
                                                                              ----------------      --------------     -------------

             Earnings (loss) from continuing operations                              1,285              (1,241)              (987)
          Provision for income taxes                                                  (437)                  --                  --
                                                                              ----------------      --------------     -------------

          Net income (loss) from continuing operations                                 848              (1,241)              (987)


Discontinued operations
    Gain from operations (net of $91 income tax in 2006)                               177                 337                (38)
    Gain from sale of assets (net of $142 income tax in 2006)                          276                 (82)               209
                                                                              ----------------      --------------     -------------

       Net gain (loss) from discontinued operations                                    453                 255                171
                                                                              ----------------      --------------     -------------

Net income (loss) applicable to common shares                                        1,301                (986)              (816)
                                                                              ================      ==============     =============

Earnings (loss) per common share - basic and diluted
    Continuing operations                                                     $      0.86           $    (1.27)        $    (1.01)
    Discontinued operations                                                          0.46                 0.26               0.17
                                                                              ----------------      --------------     -------------
                    Net earnings (loss) per share                             $      1.32           $    (1.01)        $    (0.84)
                                                                              ================      ==============     =============

Weighted average common and equivalent shares                                        987                   977                977
    outstanding - basic and diluted

</TABLE>

The accompanying notes are an integral part of these statements.



                                      -35-
<PAGE>
<TABLE>
<CAPTION>


               CabelTel International Corporation and Subsidiaries

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Amounts in thousands)

                                                                  Year ended December 31,
                                                                  -----------------------

                                                               2006      2005       2004
                                                               ----      ----       ----
<S>                                                            <C>       <C>        <C>

Cash flows from operating activities
   Net earnings (loss) from continuing operations          $   848    $(1,241)   $  (987)
   Adjustments to reconcile net earnings (loss) to net
      cash provided by (used in) operating activities
         Depreciation and amortization                         369        389        246
             Depreciation from assets classified as
               discontinued operations                        --          121        323
         (Gain) loss from affiliates                        (1,500)      --       (1,247)
         (Gain) from settlement with Sylvia Gilley          (1,303)
         (Gain) loss on sale of assets                        --           39       --
         Change in deferred tax asset                          437
         Write-down of impaired assets                        --         --          147
         Changes in operating assets and liabilities
             Accounts receivable - trade                       308       (117)      (122)
             Other current and non-current assets               77       (299)      (132)
             Accounts payable and other liabilities           (144)     1,146       (357)
                                                           -------    -------    -------
     Net cash provided by (used) in operating activities      (908)        38     (2,129)

Cash flows from investing activities
   Funding of a note receivable                             (1,377)      --         --
   Investment in gas well                                     (118)      --         --
   Purchase of property and equipment, net                     (30)       (47)      (845)
   Net repayment of notes receivable                           306        550      1,579
   Proceeds from sale of other real estate                    --        1,147       --
   Proceeds from sale of properties                           --        1,910       --
                                                           -------    -------    -------
     Net cash provided by (used in) investing activities    (1,219)     3,560        734
                                                           -------    -------    -------

Cash flows from financing activities
   Proceeds from common stock issuance                          26       --         --
   Proceeds from borrowings                                   --        6,500
   Payments on debt                                           (230)    (3,831)    (5,591)
   Distributions from equity partnerships'
      financing cash flow                                     --         --          507
   Repurchase of common stock                                 --         --         --
   Net advances from affiliates                               --         (138)       117
                                                           -------    -------    -------
                Net cash provided by (used in)
                     financing activities                     (204)    (3,969)     1,533
                                                           -------    -------    -------

Cash flows from discontinued operations
         Cash provided by operating activities                 268        259        (64)
         Cash provided by investing activities -
             proceeds from sale                              1,737       --         --
                                                           -------    -------    -------
         Net cash provided by (used in) discontinued
             operations                                      2,005        259        (64)

               Net increase (decrease) in cash
                     and cash equivalents                     (326)      (112)        74
Cash and cash equivalents at beginning of year                 650        762        688
                                                           -------    -------    -------

Cash and cash equivalents at end of year                   $   324    $   650    $   762

</TABLE>

The accompanying notes are an integral part of these statements


                                      -36-
<PAGE>
<TABLE>
<CAPTION>




                                                                    December 31,
                                                            ----------------------------
                                                             2006       2005       2004
                                                             ----       ----       ----
<S>                                                          <C>        <C>        <C>

Supplemental information on cash flows is as follows:

Interest paid                                             $   380    $   370   $   705

Non-cash investing and financing activities:
   Notes payable dissolved under rescission                (7,245)      --        --
   Interest payable dissolved under rescission               (991)      --        --
   Funds due from affiliate dissolved under rescission      8,236       --        --
   Notes receivable funded under rescission                 1,500       --        --
   Notes payable cancelled under Gilley settlement         (2,255)      --        --
   Interest payable cancelled under Gilley settlement        (857)      --        --
   Notes receivable transferred to Gilleys                  1,809       --        --
   Disposal of property to satisfy debt                      --         --       935
   Notes payable agreed by buyer on sale of real estate      --         --       906

</TABLE>


The accompanying notes are an integral part of this statement.


                                      -37-
<PAGE>
<TABLE>
<CAPTION>



               CabelTel International Corporation and Subsidiaries

            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                             (Amounts in thousands)



                                                                                       Series J
                                       Series B            Series J        Preferred Stock             Common
                                    Preferred stock    Preferred stock      Contra Equity           Stock
                                  ------------------- ------------------- ------------------- -------------------
                                  Shares    Amount    Shares    Amount    Shares    Amount     Shares    Amount
                                  -------- ---------- -------- ---------- -------- ---------- --------- ---------
<S>                               <C>      <C>        <C>      <C>        <C>      <C>        <C>       <C>


 Balance at January 1, 2004             1          1     --          --      --          --       977        10
         Net loss

         Issuance of Series J
                                                  --      32      3,150     (32)    (3,150)
             Preferred Stock            --                                                          --         --
         Net loss                       --        --      --         --        --         --        --         --
                                  -------- ---------- -------- ---------- -------- ---------- --------- ---------

 Balance at December 31, 2004           1          1      32      3,150     (32)    (3,150)       977        10


         Net loss
                                  -------- ---------- -------- ---------- -------- ---------- --------- ---------

 Balance at December 31, 2005
                                        1          1      32      3,150     (32)    (3,150)       977        10
         Rescission of Series J
                  Preferred Stock                        (32)    (3,150)     32      3,150
         Exercised stock option                                                                    10         --
         Net income

Balance at December 31, 2006            1          1      --          --      --         --       987        10

</TABLE>

The accompanying notes are an integral part of this statement.


                                      -38-
<PAGE>

<TABLE>
<CAPTION>

                                             Additional       Accum-
                                           paid in         ulated
                                           capital        deficit        Total
                                          -----------    -----------    --------
                                          <C>            <C>            <C>


 Balance at January 1, 2004                  55,966       (53,423)       2,554
         Net loss

         Issuance of Series J
                                                --              --           --
             Preferred Stock
         Net loss                               --             (816)      (816)
                                          -----------    -----------    --------

 Balance at December 31, 2004                55,966       (54,239)       1,738


         Net loss                                             (986)       (986)
                                          ----------- -- ----------- -- --------

 Balance at December 31, 2005
                                             55,966       (55,225)         752
         Rescission of Series J
                  Preferred Stock
         Exercised stock option                  26                         26
         Net income                                           1,301       1,301

Balance at December 31, 2006                 55,992       (53,924)       2,079

</TABLE>








               CabelTel International Corporation and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                December 31, 2006

The accompanying  Consolidated  Financial  Statements of CabelTel  International
Corporation  and   consolidated   entities  were  prepared  in  conformity  with
accounting  principles  generally accepted in the United States of America,  the
most  significant  of which are  described  in NOTE B.  SUMMARY  OF  SIGNIFICANT
ACCOUNTING  POLICIES.  The Notes to  Consolidated  Financial  Statements  are an
integral part of these Consolidated Financial Statements.  The data presented in
the Notes to  Consolidated  Financial  Statements are as of December 31, of each
year and for the year then ended, unless otherwise indicated.  Dollar amounts in
tables are in thousands, except per share amounts.

Certain balances for 2004 and 2005 have been reclassified to conform to the 2006
presentation.


NOTE A - BUSINESS DESCRIPTION AND PRESENTATION

Name Change

On  February  10,  2005,  Greenbriar  Corporation  changed  its name to CabelTel
International  Corporation  (which is  referred  throughout  this report as "the
Company" or "CIC").

Acquisition and disposition of CableTEL AD

On October 12, 2004, the Company acquired, for 31,500 shares of newly-designated
Series J 2%  Preferred  Stock,  74.8% of CableTEL AD  ("CableTEL"),  a Bulgarian
telecommunications  company. The terms of the Acquisition Agreement required the
Company to present a  proposal  to its  stockholders  to approve  the  mandatory
exchange of all shares of Series J 2% Preferred  Stock into 8,788,500  shares of
common stock which, if approved by  stockholders,  would have represented 90% of
the  resulting  total  issued  and  outstanding  shares of  common  stock in the
Company.

The Acquisition  Agreement,  as amended,  provided that the  stockholders of the
Company had until June 30, 2006 to approve the exchange of Series J 2% Preferred
Stock into the Company  common  stock.  If the exchange was not approved by June
30,  2006,  the  holders  of the Series J 2%  Preferred  Stock had the option to
rescind the entire transaction.

Until the  acquisition  was completed,  the financial  statements of CableTEL AD
were not  included  in the  Company's  consolidated  financial  statements.  The
financial  statements of the Company at December 31, 2005 did reflect the Series
J 2% Preferred  Stock as well as a contra  equity  account  reflecting  that the
transaction had not yet occurred.

     Effective June 1, 2006, the Company and the owners of CableTEL AD entered
     into a Rescission Agreement whereby the original Acquisition Agreement
     dated October 12, 2004, plus all amendments, was rescinded in its entirety.



                                      -39-
<PAGE>

Pursuant to the Rescission Agreement:

(a) The Company  received  back and  cancelled  the 31,500 shares of Series J 2%
Cumulative Preferred Stock it issued.

(b) The Company  returned the equity  securities of all entities it had acquired
on October 12, 2004 to the original owners.

(c) A corporation  affiliated with one of the original  sellers assumed from the
Company  all  indebtedness  incurred  by the  Company  since  October 1, 2004 in
connection  with or related to  advances  by the  Company to  CableTEL AD or its
affiliates  to fund the  operation  of  CableTEL  AD. In  exchange,  the Company
surrendered  all  claims  it  had  against  CableTel  AD or its  affiliates  for
reimbursement for such advances.


(d) Ronald C.  Finley,  Chief  Executive  Officer of  CableTEL AD and one of the
original  sellers,  resigned  his  positions  in the Company as a  director,  as
Chairman  of the Board  and as Chief  Executive  Officer.  His  resignation  was
effective June 1, 2006.

 (e) The Company agreed that, subject to its
     compliance with all applicable American Stock Exchange, Inc. rules and
federal securities laws, it would in the future change its name to a name
     that does not include the word "cable" or "cabel".

(f)  An  affiliate  of  one  of  the  original   sellers   assumed  control  and
responsibility  of any and all litigation  involving the Company or in which the
Company  is named  as a party  involving  the  Company's  relationship  with the
parties to the Rescission Agreement and/or CableTEL AD.

(g) All of the  parties  agreed to pay their own  expenses  with  respect to any
costs associated with the Rescission Agreement.

(h) The Company, as a "break up fee", received a $1,500,000 participation in a 9
1/2% tax free bond. The bond, with a total face value of $2,406,850,  is from an
unrelated  third party. In June 2006, the Company  recorded  $1,467,000 as other
income, representing the $1,500,000, net of expenses.

Disposition of Gaywood Oil & Gas


Effective June 30, 2006, the Company sold all of its membership interests in the
two limited liability companies Gaywood Oil & Gas, LLC and Gaywood Oil & Gas II,
LLC which own oil and gas leases in Gregg and Rusk Counties,  Texas and on which
approximately  50 oil-producing  wells are operating.  These are wells averaging
two to three barrels of oil per day. The sale price of  $1,737,000  was received
in cash on July 5, 2006. The Company recorded a gain on the sale of $418,000.


Nature of Operations

As of December 31, 2006, the Company leases and operates a retirement community,
in King City  Oregon,  with a capacity of 114  residents.  The  Company  owns an
outlet shopping mall in  Gainesville,  Texas with  approximately  315,000 square
feet of retail space available for lease.



                                      -40-
<PAGE>

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of the significant accounting policies applied in the preparation
of the accompanying consolidated financial statements follows:

Principles of Consolidation

The  consolidated   financial   statements  include  the  accounts  of  CabelTel
International Corporation and its majority-owned subsidiaries (collectively, the
"Company"  or "CIC")  and are  prepared  on the basis of  accounting  principles
generally accepted in the United States of America. All significant intercompany
transactions and accounts have been eliminated.

Depreciation

Depreciation  is  provided  for in  amounts  sufficient  to  relate  the cost of
property and equipment to operations over their estimated service lives, ranging
from 3 to 40  years.  Depreciation  is  computed  by the  straight-line  method.
Depreciation expense,  included in operations expenses,  was $248,000,  $493,000
$355,000 for 2006, 2005 and 2004, respectively.

Accounting for Leases

Leases of property,  plant and equipment where the Company assumes substantially
all the  benefits  and risks of  ownership  are  classified  as finance  leases.
Finance leases are capitalized at the estimated  present value of the underlying
lease  payments.  Each lease  payment is  allocated  between the  liability  and
finance  charges  so as to  achieve  a  constant  rate  on the  finance  balance
outstanding.  The corresponding rental obligations,  net of finance charges, are
included in other long-term payables. The interest element of the finance charge
is charged to the income  statement over the lease period.  Property,  plant and
equipment  acquired  under finance  leasing  contracts is  depreciated  over the
useful life of the asset.

Leases  of assets  under  which all the risks  and  benefits  of  ownership  are
effectively retained by the lessor are classified as operating leases.  Payments
made  under  operating   leases  are  charged  to  the  income  statement  on  a
straight-line  basis over the period of the lease.  When an  operating  lease is
terminated before the lease period has expired,  any payment required to be made
to the  lessor by way of penalty  is  recognized  as an expense in the period in
which termination takes place.

Revenue Recognition

Rental income for commercial  property  leases is recognized on a  straight-line
basis over the respective  lease terms.  Rental income for residential  property
leases is recorded when due from  residents  and is recognized  monthly as it is
earned, which is not materially different than on a straight-line basis as lease
terms are generally for periods of one year or less.

Use of Estimates

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




                                      -41-
<PAGE>


Cash Equivalents

The Company considers all short-term  deposits and money market investments with
a maturity of less than three months to be cash equivalents.

Other Intangible Assets

The cost of  acquired  patents,  trademarks  and  licenses  is  capitalized  and
amortized using the  straight-line  method over their useful lives. The carrying
amount of each intangible asset is reviewed  annually and adjusted for permanent
impairment where it is considered necessary.

Impairment of Notes Receivable

Notes  receivable  are  identified as impaired when it is probable that interest
and principal will not be collected  according to the  contractual  terms of the
note  agreements.  The accrual of interest is discontinued on such notes, and no
income is  recognized  until all past due amounts of principal  and interest are
recovered in full.

Impairment of Long-Lived Assets

The Company reviews its long-lived assets and certain  identifiable  intangibles
for  impairment  when  events or  changes  in  circumstances  indicate  that the
carrying   amount  of  the  assets  may  not  be   recoverable.   In   reviewing
recoverability,  the Company  estimates the future cash flows expected to result
from use of the  assets  and  eventually  disposing  of them.  If the sum of the
expected future cash flows  (undiscounted  and without interest charges) is less
than the carrying amount of the asset, an impairment loss is recognized based on
the asset's fair value.

The  Company  determines  the fair value of assets to be disposed of and records
the asset at the lower of fair  value less  disposal  costs or  carrying  value.
Assets are not depreciated while held for disposal.

Stock Options

The Company  follows  Statement of Financial  Accounting  Standards No.  123(R),
"Share-Based  Payment"  ("SFAS 123R) for its stock  options.  The effect of SFAS
123R is immaterial to the Company's financial statements.

Sales of Real Estate

Gains on  sales  of real  estate  are  recognized  to the  extent  permitted  by
Statement of Financial  Accounting  Standards No. 66,  "Accounting  for Sales of
Real Estate" ("SFAS No. 66").  Until the  requirements  of SFAS No. 66 have been
met for full profit  recognition,  sales are accounted for by the installment or
cost recovery method, whichever is appropriate.



                                      -42-
<PAGE>


Real Estate Held for Sale
-------------------------

Statement of Financial  Accounting  Standards No. 144, ("SFAS No. 144") requires
that  properties  held for sale be reported  at the lower of carrying  amount or
fair value  less costs of sale.  If a  reduction  in a held for sale  property's
carrying  amount to fair value less costs of sale is required,  a provision  for
loss is recognized by a charge against earnings.  Subsequent  revisions,  either
upward or  downward,  to a held for sale  property's  estimated  fair value less
costs of sale are recorded as an adjustment to the property's  carrying  amount,
but not in excess of the property's  carrying amount when originally  classified
as held for sale.  A  corresponding  charge  against  or credit to  earnings  is
recognized. Properties held for sale are not depreciated.

Recent Accounting Pronouncements

In February 2006, the FASB issued  Statement of Financial  Accounting  Standards
No. 155, "Accounting for Certain Hybrid Financial  Instruments--an  Amendment of
FASB  Statements No. 133 and 140" ("SFAS No. 155").  The purpose of SFAS No. 155
is to simplify  the  accounting  for certain  hybrid  financial  instruments  by
permitting fair value  re-measurement  for any hybrid financial  instrument that
contains an embedded derivative that otherwise would require  bifurcation.  SFAS
No. 155 is effective for all financial  instruments acquired or issued after the
beginning of an entity's first fiscal year that begins after September 15, 2006.
We do not expect the  adoption of SFAS No. 155 to have a material  impact on our
cash flows, results of operations, financial position or liquidity.

In March 2006, the FASB issued Statement of Financial  Accounting  Standards No.
156,  "Accounting  for  Servicing  of  Financial  Assets--an  Amendment  of FASB
Statement  No. 140" ("SFAS No.  156").  SFAS No. 156 requires  recognition  of a
servicing  asset or a  servicing  liability  each time an entity  undertakes  an
obligation to service a financial  asset by entering into a servicing  contract.
SFAS No. 156 also requires that all separately  recognized  servicing assets and
servicing  liabilities  be  initially  measured  at fair value and  subsequently
measured at fair value at each reporting  date.  SFAS No. 156 is effective as of
the beginning of an entity's  first fiscal year that begins after  September 15,
2006. We do not expect the adoption of SFAS No. 156 to have a material impact on
our cash flows, results of operations, financial position or liquidity.

In June 2006, the FASB issued Interpretation No. 48, "Accounting for Uncertainty
in Income Taxes,  an  Interpretation  of FASB Statement No. 109" ("FIN No. 48").
FIN No. 48 clarifies the accounting for  uncertainty in income taxes  recognized
in a company's financial  statements and prescribes a recognition  threshold and
measurement attribute for the financial statement recognition and measurement of
a tax  position  taken or expected to be taken in a tax return.  FIN No. 48 also
provides  guidance  on  description,  classification,  interest  and  penalties,
accounting  in  interim  periods,  disclosure  and  transition.  FIN  No.  48 is
effective for fiscal years  beginning  after December 15, 2006. We do not expect
the adoption of FIN No. 48 to have a material impact on our cash flows,  results
of operations, financial position or liquidity.



                                      -43-
<PAGE>


In  September  2006,  the  Securities  and  Exchange   Commission  issued  Staff
Accounting   Bulletin   No.  108,   "Considering   the  Effects  of  Prior  Year
Misstatements   When   Quantifying   Misstatements  in  Current  Year  Financial
Statements"  ("SAB No. 108"). SAB 108 provides  guidance on the consideration of
the  effects  of  prior  period   misstatements  in  quantifying   current  year
misstatements for the purpose of a materiality assessment.  SAB 108 requires the
quantification of financial statement  misstatements based on the effects of the
misstatements  on each of the  company's  financial  statements  and the related
financial statement disclosures. This model is commonly referred to as the "dual
approach"  because  it  requires  quantification  of errors  under both the iron
curtain and the roll-over methods. The roll-over method focuses primarily on the
impact of a misstatement on the income statement--including the reversing effect
of  prior  year  misstatements--but  its use can  lead  to the  accumulation  of
misstatements in the balance sheet. The iron-curtain method focuses primarily on
the effect of correcting the period-end  balance sheet with less emphasis on the
reversing  effects of prior year  errors on the  income  statement.  SAB 108 was
effective for financial  statements  for fiscal years ending after  November 15,
2006. The adoption of SAB 108 did not have a material  impact on our cash flows,
results of operations, financial position or liquidity.

In September 2006, the FASB issued Statement of Financial  Accounting  Standards
No. 157, "Fair Value  Measurements"  ("SFAS No. 157"). The new FASB rule defines
fair  value,  establishes  a framework  for  measuring  fair value in  generally
accepted  accounting  principles,  or GAAP, and expands  disclosures  about fair
value measurements.  The statement is effective for financial  statements issued
for fiscal years  beginning  after November 15, 2007, and interim periods within
those fiscal  years.  We are  currently  evaluating  the impact,  if any, to our
financial condition or results of operations from the adoption of SFAS No. 157.

NOTE C - SHORT TERM NOTE RECEIVABLE - RELATED PARTY

In July  2006,  the  Company  made an  unsecured  $1,377,000  loan to  Eurenergy
Resources  Corporation  (a company  that is 20% owned by an entity  deemed to be
related to CabelTel).  The loan has an annual interest rate of 8% with principal
and interest payable within 30 days after demand, and if not sooner demanded, on
July 17, 2007.

NOTE D - NOTES RECEIVABLE

As a result of the sale of two properties in 2001, the Company, as of January 1,
2006, held  tax-exempt  notes in the amount of $4,030,000,  bearing  interest at
9.5%.  The notes mature on April 1, 2032 and August 1, 2031,  respectively.  The
repayment of the notes and  interest  thereon is limited to the cash flow of the
respective  properties either from operations,  refinancing or sale. The Company
has deferred gains in the amount of $3,721,000 as well as unpaid interest, which
will be  recognized  when it is  received.  In the third  quarter  of 2006,  the
Company   determined  that  a  $3,200,000  note  due  April  1,  2032  would  be
uncollectible  and therefore wrote off the note and the  corresponding  deferred
gain. The write off caused no gain or loss for the Company.

As a result of the  CableTEL  AD  rescission,  the  Company  holds a  $1,500,000
participation  in a tax-exempt  note with a face amount of  $2,406,000,  bearing
interest at 9.5%.  The note  matures on August 20,  2037.  The  repayment of the
notes and interest  thereon is limited to the cash flow of the  property  either
from operations, refinancing or sale.

As of  September  30,  2006 the  Company  had two  notes  for  $2,330,000  and a
corresponding deferred gain of $521,000.



                                      -44-
<PAGE>
<TABLE>
<CAPTION>



                                                  Notes          Deferred
                                               Receivable          Gain            Net
                                             ---------------- --------------- --------------
<S>                                          <C>              <C>             <C>
Balance 1/1/2006                             $4,030,000       $3,721,000      $  309,000
Write off of uncollectible note                (3,200,000)    (3,200,000)             --
62% Participation in $2,406,000
     Note                                       1,500,000               --     1,500,000
Settlement of Note to Sylvia Gilley -
     See Note F                                (2,330,000)       (521,000)    (1,809,000)
                                             ---------------- --------------- --------------

                                             ================ =============== ============
Balance 12/31/06                             $             --  $           --   $         --
                                             ================ =============== ==============
</TABLE>

NOTE E - FAIR VALUE OF FINANCIAL INSTRUMENTS

The following  methods and  assumptions  were used to estimate the fair value of
each class of  financial  instruments  for which it is  practicable  to estimate
values at December 31, 2006 and 2005:

Cash and cash equivalents - The carrying amount  approximates fair value because
of the short maturity of these instruments.

Long-term  debt - The fair value of the  Company's  long-term  debt is estimated
based on market  rates for the same or similar  issues.  The  carrying  value of
long-term debt approximates its fair value.

Notes  receivable  - The fair  value of the note  receivable  from an  affiliate
partnership is estimated to approximate  fair value based on its short maturity.
It is not practical to estimate the fair value of notes  receivable from sale of
properties  because no quoted  market  exists and there are no  comparable  debt
instruments to provide a basis for valuation.

NOTE F - NOTES PAYABLE

LONG TERM DEBT

Long-term debt is comprised of the following (in thousands):

                                                                 December 31,
                                                             2006          2005
                                                        ------------------------

Notes payable to a financial institution
maturing in 2008 with a fixed interest
rate of 5.75%, collateralized by real
 property, fixtures, equipment (with a
carrying value of $6,719 at December 31,
2006) and assignment of rents                            $  6,213       $  6,341

Note payable to an individual with a
fixed interest rate of 10%                                     --          2,255

Notes payable to related parties
bearing interest at rates ranging
From 15% to18% (funds re-advanced
to CableTEL AD)                                                --          7,347
                                                        ------------------------
                                                            6,213         15,943

         Less current maturities                              135          2,383

                                                        ========================
                                                         $  6,078      $  13,560
                                                        ========================



                                      -45-
<PAGE>


Aggregate annual principal maturities of long-term debt at December 31, 2006 are
as follows (in thousands):

2007                                    135
2008                                    143
2009                                  5,935
2009                                     --
2010                                     --
2011                                     --
                         ----------------------
Thereafter                               --
                         ----------------------
                         $            6,213
                         ======================

In November 2002, the Company converted an existing obligation to Sylvia Gilley,
the wife of the former CEO, into a note for $2,255,000 with interest accruing at
10% per year.  At November 30, 2006,  the total  obligation to Sylvia Gilley was
$3,112,148.  The Company and Mrs.  Gilley have  negotiated a settlement  whereby
Mrs. Gilley will agree to cancel the obligation owed to her in exchange for:

o    The transfer of two notes  receivable from third parties  currently held by
     the Company. These notes are have a book value of $1,809,000 (see Note D);

o    5% of the cash flow from Pacific  Pointe,  a retirement  facility leased by
     the Company, for as long as the Company holds the lease; and

o    Interest received from the notes since June 2006.

The  transaction  resulted  in  the  Company  being  relieved  of  a  $3,112,148
obligation  and,  based upon the value of the assets  provided  to Mrs.  Gilley,
recording a gain of $1,034,000, which has been reflected as other income.


NOTE F - OPERATING LEASES

The Company leases a retirement community under an operating lease in which the
basic term expires December 31, 2011, and has operating leases for equipment and
office space. The leases generally provide that the Company pay property taxes,
insurance and maintenance.

Future  minimum  payments  following  December  31,  2006  are  as  follows  (in
thousands):

2007                                    861
2008                                    858
2009                                    875
2010                                    892
2011                                    910
Thereafter                              925
                         ------------------

                         $            5,321

Lease expense in 2006, 2005, and 2004 was $939, $932 and $917, respectively.



                                      -46-
<PAGE>


NOTE G - AFFILIATED PARTNERSHIP

In October 2001,  the Company became a 56% limited  partner in Corinthians  Real
Estate Investors,  LP ("CREI"),  a partnership formed to acquire two properties.
In  October  2001,  CREI  acquired  a  retirement  community  for  approximately
$9,100,000  and in January  2002, it acquired an assisted  living  community for
approximately $2,800,000.

The Company  issued a $1,600,000  note to the seller in 2001 as partial  payment
for the purchase of the retirement community. CREI gave the Company a $1,600,000
note in  consideration  for payment of that amount of the  purchase  price.  The
notes bore interest at 8.75% and were due December 30, 2003.  The balance of the
purchase price was funded by borrowings of CREI from a third party in the amount
of $7,840,000, which was guaranteed by the Company.

In September  2002, CREI sold its two properties for cash and notes and paid off
its  third  party  debt.  As part of the  proceeds,  CREI  received  a note  for
$1,600,000,  which  was  transferred  to  the  Company  in  satisfaction  of its
$1,600,000 note receivable from CREI.

The Company  transferred the $1,600,000 note it received in 2002 to the original
owner of the retirement  community in payment of the Company's  $1,600,000 debt.
The Company guaranteed payment of the $1,600,000 note.

CREI  recognized  a gain on sale in the amount of  $1,322,000.  The  Company has
deferred  recognition  of  its  $740,000  share  of  the  gain  because  of  the
aforementioned  guaranty.  In addition,  CREI has deferred a gain on sale in the
amount $994,000 that will be recognized on the installment method.

In 2004, the purchaser of the CREI paid off the remaining  notes,  including the
$1,600,000  note  guaranteed by the Company.  The Company  realized its deferred
gain of $740,000 as well as $492,000, representing its 56% share of the proceeds
received by CREI on its outstanding note net of partnership expenses.



                                      -47-
<PAGE>


   NOTE H - EARNINGS PER SHARE

   The following table sets forth the computations of pro forma basic and
   diluted earnings per share from continuing operations (in thousands, except
   per share data):

                                                       Year ended December 31,
                                                      2006     2005        2004
                                                      ----     ----        ----

   Numerator:
  Net income (loss) from continuing operations     $   848   $(1,241)   $  (987)
  Net income (loss) from discontinued operations       453       255        171

Denominator:
  Shares used in basic earnings per share
    calculation                                        987       977        977

Effect of diluted securities:
  Employee stock options                              --        --         --

Pro forma basic earnings per share from
  continuing operations                            $  0.86   $ (1.24)   $ (1.01)
Pro forma basic earnings per share from
  discontinued operations                             0.46      0.26       0.17

Pro forma diluted earnings per share               $  1.32   $ (1.01)   $ (0.84)

  Shares used in diluted earnings per share
    calculations                                       987       977        977




                                      -48-
<PAGE>


NOTE I - INCOME TAXES

At December  31,  2006,  the Company had net  operating  loss carry  forwards of
approximately $21,600,000, which expire between 2012 and 2024.


Deferred  tax  assets  and  liabilities  were  comprised  of the  following  (in
thousands):

                                                          Year ended
                                                          December 31,
                                                     2006              2005
                                                     ----              ----
Deferred tax assets:
     Net operating loss carry forwards         $       7,363     $       8,043
     Alternative minimum tax carry forwards              324               324
     Other                                               496               496
                                               -------------     -------------
     Total deferred tax assets                         8,183             8,863
Valuation allowance                                   (7,692)           (7,702)
                                               --------------    --------------

     Net deferred tax asset                    $         491     $       1,161
                                               =============     =============

Tax computed at the federal statutory rate of 34% (in thousands):

                                                        Year ended
                                                       December 31,
                                                 2006        2005          2004
                                                 ----        ----          ----
Federal income tax expense (benefit)
 at the statutory rate Change in                $  670     $  (331)    $  (216)
 deferred tax asset valuation allowance,
 attributable to continuing operations            (670)       (331)       (216)
                                           ------------  ----------  ----------

Federal income tax expense                     $   --     $     --    $     --
                                            ===========  =========== ===========

Changes in the deferred tax valuation  allowance result from assessments made by
the Company each year of its expected future taxable income  available to absorb
its carry  forwards.  $620,000 of the deferred tax asset was used against income
in 2006 resulting in a deferred  income tax expense of $670,000 on the financial
statements  with $437,000 in continuing  operations and $233,000 in discontinued
operations.  The Company  believes  that it is more likely than not that the net
deferred tax asset at December 31, 2006, of $491,000 will be realized.  However,
this  evaluation is  inherently  subjective  as it requires  estimates  that are
susceptible  to  significant  revision as more  information  becomes  available.
Accordingly,  the  ultimate  realization  of the net deferred tax asset could be
less than the carrying amount.

NOTE J - STOCKHOLDERS' EQUITY

Outstanding Preferred Stock

Preferred stock consists of the following (amounts in thousands):


                                                                    Year ended
                                                                  December 31,
                                                                2006       2005
                                                                ----       ----

Series B cumulative  convertible  preferred stock,
$.10 par value;  liquidation value of $100;                $       1    $      1
authorized, 100 shares; issued and outstanding,             =========    =======
1 share


                                      -49-
<PAGE>



The Series B preferred  stock has a  liquidation  value of $100 per share and is
convertible  into common stock over a ten-year period at prices  escalating from
$500 per share in 1993 to $1,111 per share by 2002. The right to convert expired
April 30,  2003.  Dividends  at a rate of 6% are  payable  in cash or  preferred
shares at the option of the Company.

Stock Options

In 1997,  the Company  established a long-term  incentive plan (the "1997 Plan")
for the benefit of certain key employees. Options granted to employees under the
1997 Plan become  exercisable over a period as determined by the Company and may
be  exercised  up to a maximum  of 5 years  from  date of  grant.  The 1997 Plan
allowed up to 50,000  shares of the  Company's  common  stock to be reserved for
issuance.  In 2000, the Company adopted the 2000 Stock Option Plan,  under which
up to 50,000 shares of the Company's common stock are reserved for issuance.

The  Company   granted  options  to  two  officers  during  1996  through  2001,
aggregating 80,000 shares not covered by either plan. These options were granted
at market, were exercisable immediately and expire 10 years from date of grant.


Information with respect to stock option activity is as follows:


                                                              Weighted
                                                               average
                                                              exercise
                                           Shares               price
                                         -------------     ----------------
                                         -------------     ----------------

Outstanding January 1, 2004                142,000           $ 30.27

Outstanding December 31, 2004 and 2005     142,000           $ 30.27
         Exercised                         (10,000)             2.60
         Cancelled                         (62,000)             5.68

Outstanding December 31, 2006               70,000           $ 51.86

Additional  information about stock options  outstanding at December 31, 2006 is
summarized as follows:

                               Options outstanding and exercisable
                                            Weighted Average
                               Number          Remaining        Weighted average
Range of exercise price     Outstanding     contractual life    exercise price
                            ------------    ----------------   --------------
$2.60                            50,000              3.0               $2.60
$175.00                          60,000              2.0             $175.00


50

<PAGE>


NOTE K - OTHER INCOME (EXPENSE)

Other income (expenses) consists of the following: (amounts in thousands)

                                                         Year ended December 31,
                                                        2006      2005      2004
                                                    ----------------------------

Break -up fee upon the rescission of the Cabeltel AD
acquisition                                         $  1,467  $     --  $    --
Gain from the settlement with Sylvia Gilley            1,034
Write off start up costs in projects not completed        --        --     (167)
Collection of previously deferred receivables             61       145       --
Other                                                     22       140     (236)
                                                    ------------------ ---------

                                                    $  2,584  $    285  $  (403)
                                                    ======== ========= =========


NOTE L - DISCONTINUED OPERATIONS AND SALES OF REAL ESTATE

In October 2001, the Financial  Accounting  Standards  Board (the "FASB") issued
Statement  of  Financial  Accounting  Standards  No.  144,  "Accounting  for the
Impairment or Disposal of  Long-Lived  Assets"  ("SFAS No.  144").  SFAS No. 144
supersedes FASB Statement of Financial Accounting Standards No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of" ("SFAS No. 121") and the accounting  and reporting  provisions for disposals
of a segment of a business as addressed in Accounting  Principles  Board Opinion
No.30, "Reporting the Results of Operations-Reporting the Effects of Disposal of
a Segment of a Business,  and Extraordinary,  Unusual and Infrequently Occurring
Events and  Transactions"  ("APB  Opinion No. 30").  SFAS No. 144  establishes a
single  accounting  model for  long-lived  assets to be  disposed of by sale and
addresses various  implementation issues of SFAS No. 121. In addition,  SFAS No.
144 extends the reporting  requirements  of  discontinued  operations to include
components  of an entity that has either been  disposed of or is  classified  as
held for sale. The Company adopted SFAS No. 144 as of January 1, 2002.

During  2004,  the Company  disposed of an assisted  living  community  in North
Carolina  and entered  into a contract to sell an assisted  living  community in
South Carolina. The operations of these two facilities have been reflected as an
assets held for sale. Revenue for the two properties was $841,000,  in 2004. The
net loss for the two properties was $184,000 in 2004.

The South Carolina facility was sold in May 2005.  Revenue and net loss for 2005
were $40,610 and $11,640, respectively.

Effective June 30, 2006, the Company sold all of its membership interests in two
limited  liability  companies,  Gaywood Oil & Gas, LLC and Gaywood Oil & Gas II,
LLC ("Gaywood"),  which own oil and gas leases in Gregg and Rusk Counties, Texas
and on which approximately 50 oil-producing wells are operating. These are wells
averaging two to three barrels of oil per day. The sale price of $1,737,000  was
received  in cash on July 5, 2006.  The Company  recorded a pre-tax  gain on the
sale of  $418,000.  The  operation of Gaywood and the gain on the sale have been
reflected as a discontinued operation in 2006 and prior years.

The following  table shows  discontinued  operations  detail for 2006,  2005 and
2004, respectively (amounts in thousands).

                                       51
<PAGE>


                                                  December 31,
                                        -----------------------------
                                           2006       2005       2004
                                        -------    -------    -------

Revenue
 Oil & gas operations                       995      1,723      1,410
 Other                                     --           41        170
                                        -------    -------    -------


                                            995      1,764      1,580
Operating expenses
 Oil and gas operating expenses             674      1,250      1,003
 Depreciation and amortization               53        122        323
 Corporate general and administrative      --         --           20
                                        -------    -------    -------


                                            727      1,372      1,346

Operating income                            268        392        234

Other income (expense)
 Interest expense                          --          (55)       (89)
 Loss from assisted living operations      --         --         (164)
 Gain (Loss) on sale of assets              418        (82)       210
 Discontinued operations                   --         --          (20)
 Other                                     --         --         --
                                        -------    -------    -------


                                            418       (137)       (63)

Earnings before income tax                  686        255        171

 Income tax                                (233)      --         --

       Net earnings                     $   453    $   255    $   171
                                        =======    =======    =======



                                       52
<PAGE>



NOTE N - CONTINGENCIES


Cable Partners Bulgaria LLC vs. Greenbriar Corporation and Ronald C. Finley
---------------------------------------------------------------------------

On December 1, 2005, Cable Partners  Bulgaria,  LLC ("CPB") instituted an action
in the 95th  Judicial  District  Court of  Dallas  County,  Texas  styled  Cable
Partners Bulgaria,  LLC and Cable Partners Europe, LLC v. CabelTel International
Corporation  f/k/a Greenbriar  Corporation,  Gene Phillips and Ronald C. Finley,
Cause No. 05-12021.  The complaint makes allegations,  in another state district
court in Dallas County, Texas (which was non-suited on October 17, 2005), but in
addition  alleges  that a  representative  of CPE talked to Finley  about  CPE's
possible purchase of CableTEL AD's  telecommunications  systems during 2004, and
that during the  conversation  in November 2004,  told Ronald C. Finley that CPB
had an  agreement to purchase  Eurocom  Plovdiv  EOOD  ("Eurocom").  The current
complaint  alleges that (i) the two owners of Eurocom (who are not defendants in
this action)  advised CPE that they had agreed to sell the entity to CableTEL AD
and had been paid a non-refundable  deposit,  (ii) the two individuals  informed
the CPE representative  that they would complete the sale of Eurocom to CPB only
if CableTEL AD were unable to complete the purchase,  and CPB's price  increased
to (euro)23,000,000 with limited further due diligence and the purchase of stock
rather than assets,  (iii) subsequently CPE, CableTEL AD and the Company entered
into  negotiations  relating to CPE's  potential  acquisition  of  CableTEL  AD,
including  Eurocom,  (iv) the parties executed a "letter  agreement" whereby the
parties agreed that they would "engage in good faith discussions"  regarding the
potential  transaction,  which purportedly  included an exclusivity period up to
April 29, 2005, (v) in June 2005, Plaintiffs entered into a "term sheet summary"
setting forth the principle  provisions of the  transaction,  but the defendants
continued to endeavor to sell CableTEL AD to third party  purchasers,  failed to
cooperate  with CPE's due  diligence  efforts,  and  refused to provide CPE with
copies of certain  contracts,  and (vi)  Plaintiffs  continued  to complete  the
transaction and expended efforts and funds up to November 23, 2005.  Plaintiffs'
complaint  alleges tortious  interference with an existing  contract,  breach of
contract,  and seeks a temporary and permanent  injunction,  exemplary  damages,
costs and  attorneys'  fees.  An answer has been filed on behalf of the  Company
denying all of the material allegations in the Complaint.

As a component of the Rescission Agreement,  an affiliate of one of the original
sellers assumed control and  responsibility of any and all litigation  involving
the Company or in which the Company is named as a party  involving the Company's
relationship with the parties to the Rescission Agreement and/or CableTEL AD.

Commerce and Industry Insurance Company vs. Cabeltel  International  Corporation
DBA Greenbriar Corporation, Et Al

On June 23, 2006,  Commerce and Industry  Insurance Company instituted an action
against the Company and its subsidiaries, styled Commerce and Industry Insurance
Company vs. Cabeltel International Corporation DBA Greenbriar Corporation, Et Al
(Citation No. DC-06-6040-M,  District Court, Dallas County, Texas),  alleging an
underpayment  of insurance  premiums of $113,000 in 2002. The Company  disagrees
with the plaintiff as to any obligation owed.  Further,  should an obligation be
owed the  Company  believes  the  amount  would be less  than the  amount in the
complaint. Other

The  Company  has been named as a defendant  in other  lawsuits in the  ordinary
course of business.  Management  is of the opinion that these  lawsuits will not
have a material effect on the financial condition, results of operations or cash
flows of the Company.






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<PAGE>




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<PAGE>

<TABLE>
<CAPTION>


NOTE P - QUARTERLY DATA (UNAUDITED)

The table below reflects the Company's  selected  quarterly  information for the
years  ended  December  31,  2006 and  2005.  Certain  2005  amounts  have  been
reclassified to conform to the current presentation of discontinued  operations.
All amounts shown are in thousands.

                                                                    First            Second            Third            Fourth
                 Year ended December 31, 2006                      Quarter           Quarter          Quarter           Quarter
                                                                 -------------     ------------     -------------     ------------
<S>                                                              <C>               <C>              <C>               <C>

Revenue                                                            $  1,176           $1,072          $ 1,091           $    929
Operating (expense)                                                  (1,084)            (942)          (1,027)              (946)
Corporate general and administrative expense                           (348)            (249)            (202)              (292)
Other income (expense) net                                             (143)           1,799               10                441
Net income (loss) from continuing operations                           (399)           1,680             (128)               132
Provision for income taxes                                                --            (233)               --              (437)
Gain (loss) from discontinued operations                                101              585                --                 --
Income (loss) allocable to common shareholders                         (298)           2,032             (128)              (305)
Income (loss) per common share -
         basic and diluted                                         $  (0.31)          $ 2.08        $    (0.14)      $     (0.31)

                                                                     First             Second             Third           Fourth
                  Year ended December 31, 2005                      Quarter            Quarter           Quarter          Quarter
                                                                 ---------------     ------------      ------------     ------------

Revenue                                                          $    1,100          $    1,136        $      969          $    893
Operating (expense)                                                  (1,179)             (1,234)           (1,263)             (257)
Corporate general and administrative expense                           (262)               (268)             (256)             (405)
Other income (expense) net                                             (181)                (87)             (102)              155
Net income (loss) from continuing operations                           (522)               (453)             (652)              386
Gain (loss) from discontinued operations                                 45                  77               107                26
Income (loss) allocable to common shareholders                         (477)               (376)             (545)              412
Income (loss) per common share -
         basic and diluted                                       $    (0.49)      $       (0.38)          $  (0.56)      $     0.42


</TABLE>



                                       55
<PAGE>



                                  EXHIBIT INDEX

    Exhibit No.       Exhibit                                            On Page


    21.1     Subsidiaries of the Registrant                                   55


    23.1     Consent of Farmer, Fuqua & Hunt, P.C.                            56

    31.1     Rule 13a-14(a)  Certification  by Chief Executive  Officer and
             Chief Financial Officer                                          57

    32.1     Certification  of Chief Executive  Officer and Chief Financial
             Officer pursuant to  18 U.S.C.  ss.1350, as adopted pursuant
             to Section 906 of the Sarbanes-Oxley Act of 2002                 59



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