UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, ~~2009~~2010

Commission File No. 000-50983

~~SkyPostal~~SkyShop ~~Networks~~Logistics, Inc.

(Exact name of registrant as specified in its charter)


NEVADA	27-0005846
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

7805 NW 15th Street
Miami, Florida	33126
(Address of principal executive offices)	(Zip Code)

(305) 599-1812

(Registrant’s telephone number, including area code)

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

Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.001 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes o 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 o 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 o

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filed, a non-accelerated filer or a smaller reporting company as defined in Rule 12b-2 of the Exchange Act.


Large accelerated file	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	x

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

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter was $510,~~243~~547,~~468~~656 at the closing price of $0.1013 on June 30, ~~2009~~2010. As of ~~March 15~~January 31, ~~2010~~2011, the number of outstanding shares of common stock, $0.001 par value per share, of the registrant was 69120,~~123~~168,~~292 shares.~~223

shares.

No documents are incorporated by reference.

Table of Contents

1st Page	Filing Submission
~~Part I~~	Part I
Item 1	Business	3	3
Item 1a	Risk Factors	7
Item 1A	Risk Factors		8
Item 1b	Unresolved Staff Comments	10
Item 1B	Unresolved Staff Comments		11
Item 2	Properties	10	11
Item 3	Legal Proceedings	10	11
Item 4.	~~Submission~~Removed Ofand ~~Matters To A Vote Of Security Holders~~Reserved	10	11
~~Part II~~	Part II
Item 5	Market ~~For~~for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities	10	11
Item 6.	Selected Financial Data	12	12
Item 7.	Management’s Discussion ~~And~~and Analysis Of Financial Condition ~~And~~and Results Ofof Operations	12	12
Item 8.	Financial Statements And Supplementary Data	20
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk		19
Item 9.	Changes In And Disagreements With Accountants On Accounting And Financial Disclosure	20
Item 8.	Financial Statements and Supplementary Data		19
Item 9A(T).	Controls And Procedures	20
Item 9.	Changes In and Disagreements With Accountants On Accounting and Financial Disclosure		19
Item 9B.	Other Information	23
Item 9A.	Controls and Procedures		19
Part III
Item 9B.	Other Information		20
Item 10.	Directors, Executive Officers And Corporate Governance	24
	Part III
Item 11.	Executive Compensation	25
Item 10.	Directors, Executive Officers and Corporate Governance		21
Item 12.	Security Ownership Of Certain Beneficial Owners And Management And Related Stockholder Matters	27
Item 11.	Executive Compensation		22
Item 13.	Certain Relationships And Related Transactions And Director Independence	28
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		24
Item 14.	Principal Accounting Fees And Services	29
Item 13.	Certain Relationships and Related Transactions and Director Independence		24
Part IV
Item 14.	Principal Accountant Fees and Services		24
Item 15.	Exhibits And Financial Statement Schedules	29
	Part IV
12.1	Code Of Ethics For Senior Management	31
Item 15.	Exhibits, Financial Statement Schedules		25
31.1	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer	32
Exhibits
31.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer	33
31.1	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
32.1	Certification under Section 906 of the Sarbanes-Oxley Act (18 U.S.C. Section 1350)	34
31.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
32.1	Certification under Section 906 of the Sarbanes-Oxley Act (18 U.S.C. Section 1350)

PART I

Forward Looking Statements

Certain statements in this Annual Report on Form 10-K (the “Report”) are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this Report, words such as “may,” “should,” “seek,” “believe,” “expect,” “anticipate,” “estimate,” “project,” “intend,” “strategy” and similar expressions are intended to identify forward-looking statements regarding events, conditions and financial trends that may affect the Company’s future plans, operations, business strategies, operating results and financial position. Forward-looking statements are subject to a number of known and unknown risks and uncertainties that may cause actual results, trends, performance or achievements of the Company, or industry trends and results, to differ materially from the future results, trends, performance or achievements expressed or implied by such forward-looking statements.

These risks and uncertainties include, among others: general economic and business conditions in the United States and other countries in which the Company’s customers, suppliers, and service providers are located; industry conditions and trends; technology changes; competition and other factors which may affect prices which the Company may charge for its products and its profit margins; the availability and cost of the inventory purchased by the Company; relative value of the United States dollar to currencies in the countries in which the Company’s customers, suppliers and competitors are located; changes in, or the failure to comply with, government regulation, principally environmental regulations; the Company’s ability to implement changes in its business strategies and development plans; ~~and~~ the availability, terms and deployment of debt and equity capital if needed for expansion and those factors set forth under “Risk Factors” below. These and certain other factors are discussed in this Report and from time to time in other Company reports filed with the Securities and Exchange Commission. The Company does not ~~assume~~undertake anand specifically disclaims any obligation to update any forward-looking statements to reflect the ~~factors~~occurrence ~~discussed~~of inanticipated ~~this~~or ~~Report~~unanticipated or ~~such~~circumstances ~~other~~as ~~reports~~of the date of such statements.

PART I

ITEM 1

Business

On July 16, 2010, SkyPostal Networks, Inc., ~~(“SkyPostal~~a ®”Nevada corporation, ~~and~~changed its name to SkyShop Logistics, Inc. (together with its subsidiaries, the “Company”), to ~~based~~better indescribe ~~Miami,~~the ~~Florida~~repositioning of its primary operations to that of an international e-commerce service company. Through its trademarked name “PuntoMio,” the Company is ~~the~~engaged ~~largest~~in ~~private~~cross ~~mail~~border ~~network~~shopping infacilitation ~~the~~by ~~Latin~~providing ~~American~~services to non-~~Caribbean~~U.S. ~~(LAC) region~~based ~~handling~~shoppers ~~mail~~accessing ~~and~~U.S. ~~parcels~~online ~~from~~merchant sites. The service provides a U.S. ~~and~~address ~~European~~address ~~postal~~in ~~administrations,~~which ~~mail~~clients ~~consolidators,~~can ~~major~~receive ~~publishers~~their US online purchases. PuntoMio also makes available a cost calculator which estimates the cost of shipping, customs and delivery for the buyer. Online merchants wishing to sell to international ~~mailers,~~buyers can eliminate the risks associated with foreign sales by utilizing the Company’s Global e-~~tailers~~Cart solutions and ~~financial~~delivering ~~institutions~~the ~~that~~purchase ~~require~~to ~~time~~a ~~defined~~U.S. ~~and~~address. ~~reliable~~The ~~delivery~~Company’s ofsubsidiary, ~~their~~SkyPostal, ~~mail~~Inc., ~~including~~provides ~~magazines~~international, bar-coded, low cost distribution of catalogs, books and ~~parcels~~publications below United States Postal Service (“USPS”) costs with track and trace visibility. The Company ~~provides~~relies ~~internet~~on ~~merchants~~its ~~the~~own ~~ability~~proprietary tointegrated ~~expand~~delivery ~~their~~network ~~markets~~consisting ~~internationally~~of ~~without~~commercial ~~the~~and ~~inherent~~cargo ~~risks~~airlines, ofcustoms ~~shipping~~brokers, ~~parcel~~local ~~post~~private topostal ~~foreign~~services ~~buyers~~and ordelivery ~~the~~companies ~~use~~linked ofby ~~expensive~~its ~~express~~PosTrac ~~couriers~~mail and parcel tracking system.

~~In June 2008~~PuntoMio, ~~the~~is ~~Company activated~~ a ~~subsidiary, SkyShop Logistics, Inc. doing business as (“PuntoMio®”), a~~ cross border internet shopping facilitator tothat ~~enable~~enables non-U.S. based online buyers to use PuntoMio as their mailing address for U.S. e-commerce websites. PuntoMio launched its first website, www.puntomio.com, in October 2008 where it facilitates shopping on U.S. merchant websites by providing the “landed cost”, customs clearance and delivery cost, upfront to the shopper. PuntoMio assists the buyers in finding products, price comparison, use of the U.S. address, transportation and customs clearance and delivery to the buyer’s home. It is a less costly alternative to the express carriers and more efficient than the international parcel post service offered by the world’s national postal services. PuntoMio provides secure, online track and trace of the parcel until delivery has taken place to the buyer at their home or office.

The Company’s international mail and parcel network delivers services to over 2050 major countries in Latin ~~American~~America ~~and~~ ,Caribbean, ofEurope, ~~which~~Eastern ~~all~~Europe, ofMiddle ~~the~~East ~~countries~~and ~~would be classified as emerging markets~~Africa. In ~~addition,~~The ~~PuntoMio’s~~Company ~~co-marketing~~is ~~relationship~~in ~~with~~the ~~American~~process ~~Express~~of ~~under~~developing a ~~private~~Far ~~label~~East ~~have~~outsourced ~~increased~~parcel ~~PuntoMio’s~~delivery ~~customer base to include American Express card members in the Middle East and Europe~~network. The Company provides a door-to-door service largely using outsourced transportation via international commercial airlines and local in-country delivery companies, private postal services and national postal services in some countries. The Company generates revenue based on the tonnage of mail and parcels delivered, measured in kilograms, based on the distance to deliver, contract terms for committed annual tonnage or service and volume discounts. The Company manages its business based on where the mail originates, the source of the mail and the ultimate destination. The Company leverages its mail tonnage to provide PuntoMio customers discounted line haul and delivery rates.

~~The~~Based ~~Company operates facilities~~ in Miami, FLFlorida, ~~Newark,~~the NJCompany ~~and~~is ~~Bogota, Colombia for~~ the ~~sorting~~largest ~~and~~private ~~consolidating of~~ mail ~~and~~network ~~parcels~~in ~~for~~the ~~shipment~~Latin toAmerican-Caribbean ~~various~~(LAC) ~~countries in Latin America~~region, ~~Europe~~handling mail and ~~Middle~~parcels ~~East~~from U.S. ~~The~~and ~~facilities~~European inpostal ~~Newark~~administrations, ~~and~~mail ~~Bogota~~consolidators, inmajor ~~particular~~publishers, ~~provide~~international ~~the~~mailers, ~~Company~~e-tailers ~~with~~and ~~certain~~financial ~~competitive~~institutions ~~advantages~~that ~~with~~require ~~respect~~time-defined toand ~~faster~~reliable delivery ~~times~~of totheir ~~Latin~~mail, ~~America~~including ~~and~~magazines, ~~also~~catalogs ~~lower sorting~~ and ~~handling~~parcels. ~~costs~~The inCompany ~~the~~provides ~~case~~internet ofmerchants the ~~Bogota~~ability ~~hub. The~~to ~~Company~~expand ~~outsources~~their ~~its~~markets ~~mail~~internationally ~~sorting~~without ~~requirement~~the toinherent arisks ~~private~~of ~~facility~~shipping inparcel ~~London,~~post ~~which~~to ~~processes~~foreign ~~mail~~buyers ~~originating~~or inthe ~~Europe~~use ~~and~~of ~~bound~~expensive ~~for~~express ~~Latin America~~couriers.

ByThe ~~combining~~Company ~~its~~operates ~~expertise~~facilities in ~~international~~Miami, ~~logistics~~FL, ~~outsourced~~Philadelphia, ~~network~~PA and Bogota, Colombia for the sorting and consolidating of ~~in-country~~mail ~~private~~and ~~postal~~parcels ~~services~~for shipment to various countries in Latin America, Europe Middle East and ~~PuntoMio’s~~Africa. ~~landed~~It ~~cost~~outsources ~~technology~~its operation in Philadelphia. The facilities in Philadelphia and Bogota, provide the Company iswith incertain acompetitive ~~unique~~advantages ~~position~~with respect to ~~reliably~~faster ~~deliver~~delivery ~~international~~times ~~mail~~to Latin America and ~~parcels~~also inlower asorting ~~time~~and ~~defined~~handling ~~period~~costs toin the ~~ultimate~~case ~~recipient~~of inthe ~~Latin~~Bogota ~~America,~~hub. ~~Europe,~~The ~~Middle~~Company ~~East~~outsources ~~and~~its ~~anticipated~~mail ~~new~~sorting ~~destinations~~requirement into ~~Eastern~~a ~~Europe~~private ~~and~~facility ~~Africa~~in London, atwhich ~~costs~~processes ~~substantially~~mail ~~below~~originating ~~express~~in ~~couriers~~Europe and ~~international~~bound ~~postage~~for ~~rates~~Latin ~~of the origin country~~America.

By combining its expertise in international logistics, outsourced network of in-country private postal services, and PuntoMio’s landed cost technology, the Company is in a unique position to reliably deliver international mail and parcels in a time defined period to the ultimate recipient in Latin America, Europe, Middle East Eastern Europe and Africa, at costs substantially below express couriers and international postage rates of the origin country.

The Company uses over eighty suppliers, including airlines for line haul, national postal administrations, and other mail distribution companies. The delivery of international mail is regulated by treaty, the Universal Postal Convention, and by local laws in each country. The ways and methods by which the Company operates are limited in certain circumstances by these regulations.

Products

Business to Consumer International Parcel ~~Post~~ Service

The international consumer has two options when it comes to the delivery of online purchases; courier express which is reliable but expensive, and a postal option which is inexpensive but generally offers no track and trace capabilities ~~and has high loss rates~~. The postal option via the United States Postal Service (“USPS”) relies on the ~~inefficient and unreliable~~ foreign national posts that do not have track and trace capability. Many of the Company’s postal consolidator clients distribute orders for some of the largest online merchants like Amazon and Barnes & Noble using the ~~unreliable~~low cost postal option. The Company’s international parcel ~~post~~service is an alternative to sometimes unreliable ~~and~~foreign ~~expensive~~postal ~~parcel post~~ delivery ~~service~~services. It is priced as a postal product but serviced as a courier product with online visibility, tracking and delivery confirmation. The service is time defined with delivery completed in 4 to 8 days.

Landed Cost – Punto Mio Service

One of the biggest challenges facing U.S. online merchants selling to cross border shoppers is the lack of information on the total cost of an international purchase prior to completion of the purchase. Currently, the cross border online shopper is usually not familiar with the duties and taxes that they will have to pay for their purchase. The merchant does not provide this information and oftentimes the buyer has post purchase dissatisfaction due to the “sticker shock” surprise of customs duties and ~~VAT~~value added taxes that average about 30% of merchandise cost and in some countries as high as 78100% of retail cost. PuntoMio resolves this cross border online shopping challenge by building in a total cost calculator that considers the value of the merchandise, shipping costs, customs duties and taxes, and providing this total “landed cost” to the buyer upfront before they make their purchase.

~~In addition to the Landed Cost service,~~ PuntoMio also provides various other features to the cross border buyer that further ~~facilitates~~facilitate their shopping experience. PuntoMio offers a U.S. address, store and product recommendations, educational material such as relevant customs and shipping information by country, U.S. price comparison tool comparing merchant pricing and buyer ratings, and complete visibility and tracking of all purchases.

Merchant Solutions – Global e Cart

~~PuntoMio~~ Global e Cart provides an integration free technology platform for online merchants allowing them to expand internationally without changing their technology or operational processes. This exclusively licensed technology allows localized checkout experience in both language and currency, localized checkout with local address formats, defined export/import restrictions and compliance by country, and international credit card fraud screening. Global e Cart has launched a fully integrated landed cost solution for BrandsMart, a major Southeast U.S. retail merchant. It is currently in discussions with other major U.S. merchants to launch similar sites during 2011.

Sales and Marketing

In ~~2009~~2010, PuntoMio grew its client ~~based~~base primarily through social media, direct internet marketing and through its relationships with major banks who offer their credit card clients aPuntoMio’s U.S. address ~~and~~ facility as a value-added benefit. This value-added service enhances customer loyalty and retention for banks as well as provides them an additional revenue stream as their customers are more confident shopping on U.S. online merchant sites. PuntoMio has co-marketing partnerships with major regional banks such as Itau in Brazil, Santander in Argentina, Banamex in Mexico and other banks and financial institutions in Latin America~~. In~~, ~~the~~Europe ~~4th~~and ~~quarter~~the ofMiddle ~~2009,~~ East. PuntoMio has launched a private label service under the GlobalShop Brand for clients of American Express in Europe, ~~and~~ the Middle East and Latin America. During 2011, the ~~first~~program ~~half~~will ofbe ~~2010~~expanded ~~PuntoMio~~worldwide ~~expects~~ to ~~finalize~~American ~~agreements~~Express ~~with~~partner ~~other~~banks. ~~major~~The ~~banks~~Company inmarkets ~~the~~its cross border private mail delivery service into Latin America and Caribbean ~~region,~~as a wholesaler in Europe and ~~will~~the ~~continue~~U.S. by soliciting business from European Postal Administrations and international mail consolidators who sell their international mailing service directly to ~~grow~~the producers of the mail. The Company also markets its ~~strategic~~international ~~relationship~~mail ~~with~~delivery ~~American~~and ~~Express~~distribution service on a retail basis directly to publishers, printers, financial institutions and ~~other~~direct ~~banks~~marketers in ~~Europe,~~Latin ~~Africa~~America through its local sales representatives and ~~Middle~~delivery ~~East~~service partners.

The Company markets its cross border private mail delivery service into Latin America and Caribbean as a wholesaler in Europe and the U.S. by soliciting business from European Postal Administrations and international mail consolidators who sell their international mailing service directly to the producers of the mail. The Company also markets its international mail delivery and distribution service on a retail basis directly to publishers, printers, financial institutions and direct marketers in Latin America thru its local sales representatives and delivery service partners.

Intellectual Property

Our intellectual property includes trademarks related to our brands, products and services, trade secrets, and other intellectual property rights and licenses of various kinds. We seek to protect our intellectual property assets through trademark and other laws of the U.S. and other countries of the world, and through contractual provisions.4

WeOur ~~consider~~intellectual ~~the~~property ~~Company’s~~includes trademarks ~~including~~related ~~PuntoMio®~~to our brands, products and ~~SkyPostal® to~~services; betrade ~~valuable~~secrets; toand ~~the~~other ~~Company~~intellectual property rights and welicenses ~~have~~of ~~registered~~various ~~these~~kinds. ~~trademarks~~We inseek to protect our intellectual property assets through trademark and other laws of the U.S. and other countries ~~throughout~~of the world, and ~~aggressively~~through ~~seek~~contractual ~~to protect them~~provisions.

We consider the Company’s trademarks, including PuntoMio® and SkyPostal®, to be valuable to the Company and we have registered these trademarks in the U.S. and other countries throughout the world and aggressively seek to protect them.

Industry and Competition

International wholesale mail delivery is intensely competitive and includes the U.S. Postal Service and many of the postal administrations in Latin America, many wholesale companies that typically focus on specific markets, and smaller wholesalers that typically serve a single country. National postal administrations also provide similar services that compete with the Company.

The Company’s wholesale private postal service was affected by the current global economic downturn and the overall drop in mail volumes as experienced by the USPS. The decline in direct marketing and increased use of electronic media for online banking and migration of publications from hard copy to internet form have eroded the Company’s traditional mail business. As a consequence, the Company eliminated a large amount of low margin business by increasing pricing and has repositioned itself to take advantage of online retail delivery demand to Latin America, the Middle East and Europe from U.S. e-~~tailors~~tailers through the international parcel ~~post~~ product and PuntoMio initiatives.

~~Based~~The ~~on the following trends, the~~ Company believes its future growth and business opportunity lie with persons using cross border online retail services.

●A InJuly 2009 PayPal article explained that the top three reasons online shoppers abandon their ~~2009~~carts ~~4th~~are ~~quarter~~high ~~earnings~~shipping ~~report~~charges, desire to comparison shop, and lack of funds. PuntoMio merchants solution resolves these obstacles by calculating the ~~United~~total ~~Postal~~landed ~~Service~~cost ~~“UPS”~~for the customer upfront, aoffering ~~public~~lower ~~U.S.~~shipping ~~company~~cost via the international parcel service, ~~attributed~~and ~~significant~~giving the option to comparison shop with online ~~retail~~tools ~~sales~~such ~~growth~~as PriceGrabber. PuntoMio is designed to be the only website an international shopper needs to facilitate all their ~~“stronger~~online purchases from U.S. e-~~than~~tailers. The Company provides its partners and e-~~expected”~~tailers ~~results.~~all ~~UPS~~they need to successfully launch an international ~~package~~shopping ~~revenue~~service, ~~grew~~including 6%consistent ~~during~~promotional ~~4th~~offers ~~quarter~~to ~~2009~~existing ~~compared~~customers to ~~4th~~promote ~~quarter~~year-round ~~2008~~shopping and product expansion.

●The ~~According~~logistics solutions industry is fragmented at this time. There is no single e-commerce business to ~~September~~consumer ~~2009~~“landed ~~online~~cost” ~~statistics~~logistics ~~from~~solution ~~internetworldstats~~that has a dominant position for both business and consumer.~~com~~ This gives PuntoMio an opportunity to build on its competitive strengths, ~~Latin~~including ~~America~~its ~~represents~~brand 9%awareness, ofbanking ~~total~~and ~~world~~e-Merchant ~~population~~relationships, ~~but~~and its ~~Internet~~extensive ~~users~~low ~~only~~cost ~~represent~~parcel 3%delivery ofnetwork ~~the~~and ~~world~~customer ~~population.~~service ~~Compare~~capability, ~~this~~to emerge as an industry leader within its target business to ~~the~~cross ~~mature~~border ~~North~~shoppers ~~American~~visiting ~~audience~~U.S. ~~where~~merchant ~~North~~websites. ~~America~~PuntoMio ~~represents~~is 5%the only significant provider of ~~total~~e-commerce ~~population~~logistic ~~and~~landed ~~its~~cost ~~Internet~~solution ~~users~~with ~~represent~~comprehensive 4%Latin American coverage especially in the three key markets of ~~total~~Brazil, ~~population~~Mexico, and Argentina.

● A January 2009 eMarketer article states the number of Internet users in Latin America is growing quickly due to availability of affordable computers and increased broadband.

● Based on comScore’s February and November 2009 presentations, Brazil and Mexico are the two fastest growing Internet markets in Latin America and comprise a high percentage of total global page views. In the same presentations, comScore concludes, “E-commerce and online retail still have a long way to go and could represent a terrific long-term opportunity for new players in this space.”

● In comScore’s November 2009 presentation, the largest increase of internet use occurred in Middle East at 79%, Latin America at 28%, and Asia Pacific at 22%. The top four countries by hours on the Internet are U.S. at 43, Canada at 32, Turkey and Israel both at 30 hours per month.

A July 2009 PayPal article explained that the top three reasons online shoppers abandon their carts are to high shipping charges, desire to comparison shop and lack of funds. PuntoMio resolves these obstacles by calculating the total landed cost for the customer upfront, offering lower shipping cost via the international parcel post service, and the option to comparison shop with online tools such as PriceGrabber. PuntoMio is designed to be the only website an international shopper needs to facilitate all their online purchases from U.S. e-tailors. The Company provides its partners and e-tailors all they need to successfully launch an international shopping service, including consistent promotional offers to existing customers to promote year-round shopping and product expansion.

The logistics solutions industry is fragmented at this time. There is no single e-commerce “landed cost” logistics solution that has dominant position for both business and consumer. This gives PuntoMio an opportunity to build on its competitive strengths, including its brand awareness, banking and e-Merchant relationships, and its extensive low cost parcel post delivery network and customer service capability, to emerge as an industry leader within its target business to cross border shoppers visiting U.S. merchant websites. PuntoMio is the only significant provider of e-commerce logistic landed cost solution with comprehensive Latin American coverage especially in the three key markets of Brazil, Mexico, and Argentina.

Potential competitors such as FedEx, UPS, and DHL have significantly greater financial, technological and managerial resources and greater name recognition than the Company. Many of these companies are better capitalized than the Company, which may enable them to increase market share in periods of economic downturn and higher petroleum prices. At this time, competition from these major couriers is not significant because they do not target the home delivery and customs complexities for United States merchants and cross border online shoppers. Furthermore, Management believes that the major couriers tend to avoid consumer accounts because the market is too small to justify entry and costs of delivering to international residential areas are relatively high, especially into Latin America. However, competition from major couriers may become more significant as the volume of e-commerce and related deliveries grow.

Employees

At December 31, ~~2009~~2010, the Company had 3334 employees, of which 2223 were based in the U.S. and the balance iswere based internationally. Those based abroad assist the Company with sales, clearance and deliveries and a few are dedicated to IT work such as routine programming needs for the Company.

Corporate History and Recent Developments

On April 15, 2008, Omega United, Inc. (“Omega”) entered into and closed an agreement concerning the exchange of securities between Omega and SkyPostal, Inc. and its security holders (the “Securities Exchange”). Pursuant to the Securities Exchange, Omega issued 29,000,000 shares of common stock for all of the issued and outstanding common stock of SkyPostal. On July 25, 2008, Omega changed its name to SkyPostal Networks, Inc. (the “Company”). Prior to the Securities Exchange Agreement, Omega had no significant operations, assets or liabilities. Prior to the 2008 Securities Agreement, SkyPostal, Inc. conducted substantially the same business and management as after the agreement.

On ~~January~~February 2827, 2009, the Company ~~executed~~acquired anseventy ~~engagement~~percent ~~letter~~of ~~with~~the ~~Falcon~~common ~~International~~stock ~~Consulting~~of ~~Limited~~Logistics Enterprises, Ltda (“~~Falcon Consulting~~LEL”), ~~under~~a ~~which~~Colombian ~~Falcon~~company ~~Consulting~~engaged ~~would,~~in onretail mail distribution and related activities. The acquisition of LEL was a ~~best~~strategic ~~efforts~~acquisition ~~basis~~to lower operating costs, ~~raise~~shorten updelivery times to $2Latin ~~million~~America, ~~through~~consolidate ~~the~~greater ~~sale~~tonnage ofand ~~shares~~thereby ofachieve ~~common~~better ~~stock~~line ofhaul rates and generally improve the Company’s atcompetitiveness $in the Latin American market.10 ~~per~~LEL’s ~~share~~operating (facility in the ~~“2009~~customs ~~Private~~Free ~~Placement”).~~Zone ~~The~~near ~~Company~~Bogota’s ~~received~~International ~~proceeds~~Airport ofhas ~~$836,443~~become ~~net~~a principal sorting and handling facility and has replaced a significant amount of ~~placement~~the ~~fees~~sorting ~~paid~~capacity toat ~~Falcon~~the ~~Consulting~~Miami ~~and~~facility. ~~others,~~Using ~~for~~the Bogota facility provides the ~~purchase~~Company ofwith ~~9,630,000~~lower ~~shares~~rental ofand ~~common~~labor ~~stock~~costs. The ~~proceeds~~combination ~~from~~of ~~the~~facilities ~~2009~~in ~~Private~~Philadelphia ~~Placement~~and ~~have~~Bogota ~~been~~allows ~~used~~the Company to ~~support~~deliver mail originating in the ~~development~~U.S. ofapproximately two days faster than competitors. Bringing South America bound tonnage to Bogota allows the Company’s ~~subsidiary,~~to ~~PuntoMio. PuntoMio~~consolidate isa angreater ~~online~~percentage ~~cross~~of ~~border~~its ~~shopping~~freight ~~facilitator~~and ~~that~~thereby ~~began~~achieve ~~operations~~lower line haul costs to most markets in ~~2008~~South America.

OnDuring ~~February 27, 2009~~ the ~~Company~~third ~~acquired~~quarter ~~seventy percent~~ of ~~the common stock of Logistics Enterprises~~2009, Ltda (“LEL”), a Colombian company engaged in retail mail distribution and related activities. The acquisition of LEL was a strategic acquisition to lower operating costs, shorten delivery times to Latin America, consolidate greater tonnage and thereby achieve better line haul rates and generally improve the Company’s ~~competitiveness~~sold inUnits ~~the~~at ~~Latin American market~~$1.00 ~~LEL’s~~per ~~operating~~unit ~~facility~~ in ~~the customs Free Zone near Bogota’s International Airport has become~~ a ~~principal~~private ~~sorting~~placement. ~~and~~The ~~handling~~Units ~~facility~~were ~~and~~comprised ~~has replaced a significant amount~~ of ~~the~~one ~~sorting~~preferred ~~capacity~~share ~~at the Miami facility. Using the Bogota facility provides the Company with lower rental and labor costs. The combination~~ of ~~facilities~~PuntoMio, ~~in Newark and Bogota allows~~ the Company’s tosubsidiary, ~~deliver~~plus ~~mail~~one ~~originating~~warrant ~~in the U.S. approximately two days faster than competitors. Bringing South America bound tonnage~~ to ~~Bogota~~purchase ~~allows~~one ~~the~~share ~~Company~~of tocommon ~~consolidate~~stock ~~a greater percentage~~ of ~~its freight and thereby achieve lower line haul costs to most markets in South America. In 2009,~~ the Company ~~concluded~~at an ~~agreement~~exercise ~~with~~price ~~the~~of ~~Colombian~~$0.10 ~~National~~per ~~Post~~share ~~office~~expiring ~~and~~on ~~has~~July ~~installed~~1, ~~the post’s franking machines in its Bogota hub~~2012. ~~This~~ ~~allows~~The ~~the~~Company ~~Bogota~~sold ~~hub~~1,090,000 toUnits ~~process~~for ~~mail~~proceeds ~~destined~~of ~~to delivery areas in the Latin American and Caribbean region not serviced by the Company’s hand delivery network~~$966,021, atnet ~~much~~of ~~lower~~placement ~~costs~~fees.

~~During~~Effective ~~third~~April ~~quarter~~30, ~~2009~~2010, the Company ~~sold~~entered ~~units~~into atan ~~$1.00~~equity ~~per~~exchange ~~unit~~with inthe apreferred ~~private~~stock ~~placement. The~~holders ~~units were comprised~~ of ~~one~~PuntoMio ~~preferred share of~~ (“PuntoMio, ~~its~~Exchange”). The ~~subsidiary,~~Company ~~plus~~exchanged ~~one~~eight ~~warrant~~shares toof ~~purchase~~convertible ~~one~~preferred ~~common~~stock ~~share~~ of the Company, atfor aneach ~~exercise~~share ~~price~~ of ~~$0.10~~PuntoMio ~~expiring~~preferred ~~July 1, 2012~~stock. ~~The~~Simultaneously ~~Company~~with ~~sold~~the 1PuntoMio Exchange,~~090,000~~ ~~shares~~the ofCompany ~~PuntoMio~~redeemed ~~preferred~~warrants ~~stock~~to ~~and~~acquire 1,090,000 ~~warrants~~shares ~~for~~of the Company’s common stock ~~and~~for ~~received proceeds of~~ $~~966~~109,~~021 net of placement fees paid to Falcon Consulting~~000. InAs ~~addition~~a toresult ~~the~~of ~~cash fee paid to Falcon Consulting,~~ the Company ~~issued~~owns ~~Falcon~~all ~~Consulting~~of ~~284,345 PuntoMio preferred shares for their efforts in connection with~~ the ~~private~~outstanding ~~placement. At December 31, 2009, all of~~ PuntoMio’s ~~common shares are held by SkyPostal Networks, Inc. and its~~ preferred ~~shares are issued and outstanding to Falcon Consulting, investors and a member of the Company's Board of Directors~~stock.

AsIn ~~shown~~March ~~in the accompanying condensed consolidated financial statements~~2010, the Company ~~incurred~~issued a ~~loss~~note ofpayable for $4100,~~263,796,~~000 inat ~~the~~18% ~~twelve~~annual ~~months~~interest ~~ended~~convertible ~~December~~into ~~31,~~shares ~~2009 and cash flow from operations has been negative for each~~ of the ~~last eight quarters through December 31, 2009. As noted by our independent registered public accountants, these factors raise substantial doubt about the~~ Company’s ~~ability~~common tostock ~~continue~~at as a ~~going~~price ~~concern~~of $0. ~~The~~10 ~~consolidated~~per ~~financial~~share. ~~statements~~The donote ~~not~~was ~~include~~paid ~~any~~in ~~adjustments~~full ~~that~~on ~~might~~May ~~result~~20, ~~if the Company is unable to continue as a going concern~~2010.

In March 2010, the Company issued 2% notes totaling $402,000. These notes were convertible into the Company’s common stock at a price of $0.05 per share. In April 2010, the Company issued 2% notes totaling $95,000 convertible into shares of the Company’s common stock at a price of $0.05 per share. These convertible notes were issued with warrants to purchase up to 1,988,000 shares of the Company‘s common stock at an exercise price of $0.05 per share expiring on March 15, 2011. In May 2010, the holders of these notes converted the notes into 10,667,527 shares of the Company’s common stock. As of December 31, 2010, all of the warrants remain outstanding.

On May 19, 2010, the Company issued a $2.26 million convertible note maturing on May 19, 2013 that bears interest at an annual rate of 3% payable monthly beginning on June 1, 2010. The loan proceeds were used to pay off certain loan obligations, trade payables and expenses. The balance of the proceeds were used to support the development of PuntoMio. Principal and accrued interest on the note are convertible at any time at the option of the note holder into shares of the Company’s common stock at a price of $0.05 per share. In conjunction with the convertible debt agreements, the Company issued warrants to acquire 9,040,000 shares of the Company’s common stock at an exercise price of $0.15 per share expiring May 19, 2013. The exercise price is adjustable in the event of any stock split, stock dividend or other recapitalization of the Company. These warrants contain a cashless exercise feature.

In May 2010, the Company paid placement fees related to issuance of the 3% $2.26 million convertible note by issuing a $316,400 convertible note maturing on May 19, 2013 that bears interest at an annual rate of 3% payable monthly beginning on June 1, 2010. Principal and accrued interest on the note are convertible at any time at the option of the note holder into shares of the Company’s common stock at a price of $0.05 per share. In conjunction with the issuance, the Company issued warrants to acquire 1,265,600 shares of the Company’s common stock at an exercise price of $0.15 per share expiring May 19, 2013. The exercise price is adjustable in the event of any stock split, stock dividend or other recapitalization of the Company. These warrants contain a cashless exercise feature.

On May 7, 2010, the Company issued a senior secured convertible note for net proceeds of $150,000 to serve as a bridge loan in anticipation of the 3% $2.26 million convertible note. This note was convertible into shares of common stock of the Company at a conversion price of $0.05 per share. On May 20, 2010, the Company paid the convertible note in full with proceeds from the $2.26 million financing.

On November 9, 2010, the Company issued a $25,000 note maturing on November 9, 2013, that bears interest at an annual rate of 3% payable monthly beginning on December 1, 2010. Principal and accrued interest for this note are convertible at any time at the option of the note holder into shares of the Company’s common stock at a price of $0.05 per share. In conjunction with the issuance, the Company issued warrants to acquire 100,000 shares of the Company’s common stock at an exercise price of $0.15 per share expiring November 9, 2013. The exercise price is adjustable in the event of any stock split, stock dividend or other recapitalization of the Company. These warrants contain a cashless exercise feature.

In November 2010, the Company commenced a private placement for the sale of common stock and warrants of the Company (the “2010 Private Placement”). The Company received proceeds of $1,008,900 net of placement fees totaling $95,100 paid in 2010 and $17,000 paid in 2011, for the subscription of 22,420,000 shares of common stock and warrants to purchase 4,484,000 shares of common stock at an exercise price of $0.15 per share. The Company allocated the gross proceeds of $1,121,000 to the common stock and warrants based on their relative fair values. $791,586 of the total proceeds were allocated to the common stock, which are included in Subscribed stock on the consolidated balance sheets of the Company’s financial statements. $329,414 of the gross proceeds were allocated to the warrants and charged to additional paid in capital. The Company received $1,036,000 of the gross proceeds in 2010. The Company received $85,000 of the gross proceeds in 2011 which are included in Subscriptions receivable on the consolidated balance sheets of the Company’s financial statements. The proceeds from the 2010 Private Placement will be used to support the development of the Company’s subsidiary, PuntoMio.

In November 2010 the Company entered into a strategic partnership with BrandsMart USA, one of the largest per-store-volume retailers in the United States. BrandsMartUSA is now expanding its cross-border online shopping capability to customers in Latin America and the Caribbean through its strategic partnership with PuntoMio. With this new service, consumers accessing www.BrandsMartUSA.com from Brazil, Argentina, Mexico, Peru, Bahamas, Puerto Rico, and other countries are directed to the BrandsMart USA international website, through integration with PuntoMio. Customers will see products displayed in local currency and the purchase price will include transportation to their country, duties, taxes, and delivery within 5 to 8 days of purchase.

In November 2010, the Company entered into a strategic alliance with Banamex, one of the largest banks in Mexico, that will offer the PuntoMio service to over 1.5 million Banamex clients. This alliance will provide Banamex clients with the easiest and most reliable way to shop from U.S. e-tailers. Upon registering at www.puntomio.com/banamex, each client will receive a PuntoMio address in the U.S. where they can receive their online orders, which are subsequently delivered to their home or office in Mexico. Clients will have access to over 1.7 million online stores, catalogs and shopping portals in the United States without having to leave their homes in Mexico.

In December 2010, the Company entered into a strategic alliance with HSBC Bank A.S., which serves Turkey with a full range of banking products and services that will offer the Company’s GlobeBox service to over 2.4 million HSBC credit cardholders in Turkey. This alliance will provide HSBC credit cardholders with the easiest and most reliable way to shop from U.S. e-tailers. Upon registering at www.globebox.net/HSBC each client will receive an address in the U.S. in which they can receive all of their online orders which are subsequently delivered to their home or office in Turkey. HSBC credit cardholders will have access to over 1.7 million online stores, catalogs and shopping portals in the United States without having to leave their homes in Turkey.

Management Plans

Management is constantly seeking opportunities to lower operating and administrative costs, increase revenue, and achieve positive cash flows from operations and profitability, including the following initiatives achieved in the twelve months ended December 31, 2010:

●

Repositioning of the Company’s core focus from low margin mail distribution to the provision of higher margin shopping facilitation services to foreign consumers and U.S. merchants.

●

Increased investment in its PuntoMio’s e-commerce technology, foreign co-marketing banking relationships, internet marketing and international parcel service to foreign shoppers and U.S. online merchants.

●

Repositioning its sales strategy by focusing efforts on generating higher margin international retail sales from and to Latin American countries.

ITEM 1A.

Risk Factors

AnCurrent ~~investment~~and inpotential ~~the~~shareholders ~~Company’s~~should ~~common~~consider ~~stock~~carefully isthe ~~speculative~~risk ~~and~~factors ~~involves~~described abelow. Any ~~high degree~~ of ~~risk.~~these ~~You~~factors, ~~should~~or ~~carefully~~others, ~~consider~~many ~~the~~of ~~risks~~which ~~described~~are ~~below~~beyond ~~and~~ the ~~other~~Company’s ~~information~~control, incould ~~this~~negatively ~~report~~affect ~~before~~our ~~purchasing~~gross ~~any~~revenues, ~~shares~~profitability ofor ~~the~~cash ~~Company’s~~flows ~~common~~in ~~stock.~~the future. The risks and uncertainties described below are not the only ones facing the Company. Additional risks and uncertainties may also adversely impair the Company’s business operations. Such factors may have a significant impact on its business, operating results, liquidity and financial condition. As a result of the identified risk factors, actual results could differ materially from those projected in any forward-looking statements. Additional risks and uncertainties not presently known to the Company, or that are currently considered to be immaterial, may also impact the Company’s business, operating results, liquidity and financial condition. If any such risks ~~occur~~materialize, the Company’s business, operating results, liquidity and financial condition could be materially ~~affected~~adversely ~~in an adverse manner~~affected. In addition, the trading price of the Company’s stock, ~~when and if a market develops for the Company’s stock,~~ could decline.

Risks Related to the Company

As shown in the accompanying consolidated financial statements, the Company has incurred recurring losses from operations and as of December 31, ~~2009~~2010 ~~the~~had an accumulated deficit ~~was~~of $2428,~~299~~355,~~296~~320. As of December 31, ~~2009~~2010, the Company’s current liabilities exceeded its current assets by approximately $2637,~~813,593~~242. Cash ~~flow~~flows from operations has been negative for each quarter of ~~2009~~2010 and ~~2008~~2009. The ~~These~~Company’s independent registered public accounting firm has concluded that these factors raise substantial doubt about the Company’s ability to continue as a going concern, ~~which~~as ~~was~~shown in the ~~opinion~~accompanying ~~included~~consolidated infinancial ~~the~~statements. ~~report~~The ofCompany ~~SkyPostal~~is ~~Networks,~~exploring ~~Inc~~several alternatives for debt and equity capital but there can be no assurances that these efforts will be successful.’s ~~independent~~Management ~~registered~~has ~~public~~taken ~~accounting~~measures ~~firm~~to lower operating and administrative costs and increase revenues in ~~the~~an ~~financial~~effort ~~statements~~to ~~for~~reduce the ~~year~~current ~~ended~~negative ~~December 31~~cash flows from operations. These measures include payroll reduction, ~~2009~~deferral of salary for senior executives, ~~which~~implementation ~~are~~of ~~included~~programs ~~herein~~to increase efficiency of sorting operations, and curtailment of general expenses. It is not expected that the efforts to lower operating and administrative costs will be sufficient to achieve a positive cash flows during the next twelve months.

The Company isrelies ~~exploring~~on ~~several~~its ~~other~~relationships ~~alternatives~~with ~~for~~major ~~financing~~state-owned and ~~additional~~private ~~equity~~postal ~~capital~~operators ~~but~~and ~~there~~cannot ~~can~~ be noassured ~~assurances~~ that these ~~efforts~~relationships will be ~~successful~~sustained, in which event its revenue and any profitability would be reduced. ~~Management~~The Company has agreements with government postal services, such as La Poste, the French postal service, to deliver commercial mail into the Latin American Caribbean region. The Company also ~~identified~~delivers ~~opportunities~~mail to ~~lower~~the ~~operating~~Latin ~~and~~American-Caribbean ~~administrative~~Region ~~costs~~(“LAC”) for a number of large international mail consolidators. The agreements may generally be cancelled on 30 days notice and ~~increase~~do ~~revenue~~not inrequire anany ~~effort~~minimum quantities of mail to ~~reduce~~be delivered. There can be no guarantee that the level of future mail to be delivered from current ~~negative~~clients ~~cash~~will ~~flow~~continue. ~~These~~ ~~measures~~A ~~include~~material ~~payroll~~decrease ~~reduction,~~in ~~deferral~~tonnage from any of ~~salary~~the ~~for~~Company’s ~~senior~~major ~~executives~~mailers, ~~implementation~~or the loss of ~~programs~~any toof ~~increase~~its ~~efficiency~~larger ofclients, ~~sorting~~would ~~operations~~reduce ~~and~~its ~~curtailment~~revenue ofand ~~general~~related ~~expenses~~profitability. ItIn isaddition, ~~not~~to ~~expected~~the extent that new clients are added, whether following the ~~efforts~~loss toof ~~lower~~existing ~~operating~~clients ~~and~~or ~~administrative~~otherwise, ~~costs~~the ~~will~~Company bemay ~~sufficient~~incur tosubstantial ~~achieve~~start-up aexpenses ~~positive~~in ~~cash~~initiating ~~flow~~services to new clients.

The Company’s ~~relies~~growth is dependent on its ~~relationships~~ability ~~with~~to ~~major~~grow ~~state-owned~~its ~~and~~subsidiary ~~private~~PuntoMio ~~postal operators~~ and ~~cannot~~increase beits ~~assured~~parcel ~~that~~business. ~~these~~To ~~relationships~~the ~~will~~extent bethat ~~sustained,~~its incustomer ~~which~~base ~~event~~and its ~~revenue~~services ~~and~~continue ~~any~~to ~~profitability would be reduced. SkyPostal Networks~~grow, ~~Inc.~~this ~~has~~growth ~~agreements~~will ~~with~~place ~~government~~a ~~postal~~significant ~~services,~~demand ~~such~~on asits ~~La Poste~~managerial, ~~the French postal service~~administrative, tooperational ~~deliver~~and ~~commercial~~financial ~~mail into the Latin American Caribbean region~~resources. ~~The~~ ~~Company~~Future ~~also~~performance ~~delivers~~and ~~mail~~results ~~to the LAC for a number~~ of ~~large~~operations ~~international~~will ~~mail~~depend ~~consolidators.~~in ~~The~~part ~~agreements may generally be cancelled~~ on 30its ~~days~~ability ~~notice~~to ~~and~~successfully doimplement ~~not~~enhancements ~~require~~to ~~any~~its ~~minimum~~business ~~quantities~~management ofsystems ~~mail~~and to beadapt ~~delivered.~~those ~~There~~systems ~~can~~as benecessary noto ~~guarantee~~respond ~~that the level of future mail~~ to bechanges ~~delivered~~in ~~from~~the ~~current clients will continue~~business. In AOctober ~~material decrease in tonnage from any of SkyPostal Networks~~2010, ~~Inc.~~the ~~major~~Company ~~mailers,~~contracted orwith ~~the~~a ~~loss~~consulting offirm ~~any~~to ofplan ~~its~~and ~~larger~~install ~~clients,~~an ~~would~~Enterprise ~~reduce~~Resource ~~its~~Planning ~~revenue~~system ~~and~~(ERP) ~~related~~The ~~profitability.~~estimated Incost ~~addition,~~ to install the ~~extent~~ERP ~~that~~system ~~new~~is ~~clients are added~~$535,000 ~~whether~~which ~~following~~will ~~the~~be ~~loss~~incurred ofover ~~existing~~the ~~clients~~next or36 ~~otherwise,~~months. ~~the~~The ~~Company~~ERP ~~may~~system ~~incur~~will ~~substantial~~assist ~~start-up~~management ~~expenses~~ in ~~initiating~~managing ~~services~~the toprojected ~~new~~growth ~~clients~~in PuntoMio.

The Company’s growth is dependent on its ability to grow its subsidiary PuntoMio and increase its parcel business. To the extent that its customer base and its services continue to grow, this growth will place a significant demand on its managerial, administrative, operational and financial resources. Future performance and results of operations will depend in part on its ability to successfully implement enhancements to its business management systems and to adapt those systems as necessary to respond to changes in the business.

In the process of repositioning the Company on developing the PuntoMio online shopping and delivery business from the wholesale mail business, the Company may experience decline in revenues from the wholesale mail business.

The Company’s success is largely dependent on the skills, experience and efforts of Albert P. Hernandez, its Chief Executive Officer, and other key executive officers. The loss of one or more of the Company’s executive officers could have a material adverse effect upon its growth strategy and future business development, and therefore the value of your investment. The Company maintains a key man life insurance policy on Mr. Albert P. Hernandez. Additionally, any failure to attract and retain qualified employees in the future could also negatively impact the Company’s business strategy.

Negative economic and political developments in ~~the~~LAC ~~Latin American Caribbean region~~ may reduce the Company’s revenue and delay any profitability. A large portion of the Company’s services are completed in LAC. As a result, the Company’s financial condition, results of operations and business may be negatively affected by the general condition of LAC’s regional economy, any devaluation of local currencies as compared to the U.S. dollar, as well as inflation, interest rates, regulation, taxation, social instability and other political, social and economic developments in the LAC region. Any of these events could reduce its revenue and delay any profitability.

Currency fluctuations or the devaluation and depreciation of local currencies could limit the Company’s ability to convert those currencies into U.S. dollars or reduce the amount of U.S. dollars received upon currency conversions. The Company bills certain of its European customers in ~~British~~U.S. ~~Pounds~~dollars and incurs operating expenses in British Pounds and some LAC currencies such as the Brazilian Real.

Severe devaluation or depreciation of the currencies of countries in the LAC region may also result in governmental intervention, as ~~has resulted~~ in Venezuela, or disruption of international foreign exchange markets. This may limit the Company’s ability to transfer or convert those currencies into U.S. dollars and other currencies. To the extent that a foreign government institutes restrictive exchange control policies in the future, the Company’s ability to transfer or convert foreign currencies into U.S. dollars may be limited.

The price of crude oil steadily increased from 2002 to mid 2008, and most dramatically during the second quarter of 2008. The price of crude increased from approximately $90 per barrel in January 2008 to approximately $140 per barrel in July 2008. Between July 2008 and ~~January~~February 2010 the price of crude generally decreased~~. During~~ ~~the~~to ~~twelve~~$77 ~~months~~before ~~ending~~gradually ~~December~~increasing ~~31,~~to ~~2009, the price of crude oil fluctuated between~~ $4289 ~~and~~in ~~$76~~December ~~per~~31, ~~barrel~~2010 according to the Energy Information Administration. Increases in crude oil prices affect the worldwide transportation industry, including the Company’s key air and ground delivery service providers. The Company believes that its cost of line haul will continue to increase if petroleum prices rise, that it may not be able to pass on a portion or all of these costs to its customers and that the margin between revenue and delivery cost per kilogram may decline. Any of these outcomes may negatively affect profitability, the ability of the Company to cover its fixed expenses, cash flows, earnings per share and the price of the Company’s stock.

The Company believes that its cost of line haul will continue to increase if petroleum prices rise, that it may not be able to pass on a portion or all of these costs to its customers and that the margin between revenue and delivery cost per kilogram may decline. Any of these outcomes may negatively affect profitability, the ability of the Company to cover its fixed expenses, cash flow, earnings per share and the price of the Company’s stock, if and when a market develops.

The SEC extended the deadline for compliance with Section 404 of the Sarbanes-Oxley Act of 2002 to smaller reporting companies to annual filings after June 30, 2010, therefore the Company’s first year of required compliance is as of December 31, 2010. Failure to achieve and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 could prevent the Company from producing reliable financial reports or identifying fraud. In addition, shareholders could lose confidence in the Company’s financial reporting, which could have an adverse effect on its stock price.

Effective internal controls are necessary for the Company to provide reliable financial reports and effectively prevent fraud, and a lack of effective controls could preclude the Company from accomplishing these critical functions. The Company will be required to document and test its internal control procedures in order to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, which requires annual management assessments of the effectiveness of the Company’s internal controls over financial reporting and a report by its independent registered public accounting firm addressing these assessments. In February 2009, the Company hired a full time CPA to perform Controller and SEC reporting functions and to augment its internal control procedures, but there is no guarantee that these efforts will be adequate to achieve compliance with Section 404 of the Sarbanes-Oxley Act.

During the course of the Company’s testing, it may identify deficiencies that the Company may not be able to remediate in time to meet the deadline imposed by the Sarbanes-Oxley Act for compliance with the requirements of Section 404. In addition, if the Company fails to maintain the adequacy of its internal accounting controls, as such standards are modified, supplemented or amended from time to time, the Company may not be able to ensure that it can conclude on an ongoing basis that it has effective internal controls over financial reporting in accordance with Section 404. Failure to achieve and maintain an effective internal control environment could cause the Company to face regulatory action and also cause investors to lose confidence in its reported financial information, either of which could have an adverse effect on the Company’s stock price.

Risks Relating to the Company’s Securities

Insiders have substantial control over the Company, and they could delay or prevent a change in its corporate control even if its other stockholders wanted it to occur. Accordingly, these insiders may be able to control all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. This could delay or prevent an outside party from acquiring or merging with the Company ~~even if its other stockholders wanted it to occur~~.

The Company needs to raise additional funds in the future. If additional funds are raised through the issuance of equity or convertible debt securities, the percentage ownership of the current stockholders of the Company will be reduced, stockholders may experience additional dilution and such securities may have rights, preferences and privileges senior to those of the common stock and may have covenants that impose restrictions on the Company’s operations. In addition, the Company has 319,~~287~~074,~~166~~766 warrants to purchase common stock outstanding, which if exercised, could dilute existing stockholders’ rights. Finally, the Company has ~~688~~awarded 1,~~046~~650,000 shares ~~awarded~~of common stock to non-executive employees and directors subject to ~~be issued upon meeting the~~ vesting ~~schedule~~schedules in each award agreement.

If the Company fails to remain current on its reporting requirements, it could be removed from the OTC Bulletin Board which would limit the ability of broker dealers to sell its securities and the ability of stockholders to sell their securities in the secondary market.

Companies trading on the OTC Bulletin Board must be reporting issuers under ~~Section 12~~Sections 13 and 15 of the Securities Exchange Act of 1934, as amended, and must be current in their reports under Section 13, in order to maintain price quotation privileges on the OTC Bulletin Board. If the Company fails to remain current on its reporting requirements, it could be removed from the OTC Bulletin Board. As a result, the market liquidity for the Company’s securities could be severely affected and limit the ability of broker-dealers to sell the Company’s securities and the ability of stockholders to sell their securities in the secondary market. In addition, the Company may be unable to get re-listed on the OTC Bulletin Board, which may have an adverse material effect on the Company.

~~Any~~The ~~market that develops in shares of the~~ Company’s common stock ~~will~~is be subject to the penny stock regulations and restrictions, which ~~could~~ impair the shares’ liquidity and make trading more difficult.

SEC Rule 15g-9, as amended, establishes the definition of a “penny stock” as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to a limited number of exceptions. ~~It is likely that the Company’s shares will be considered to be penny stock for the immediately foreseeable future.~~ This classification ~~severely and~~ adversely affects the market liquidity for ~~its~~the Company’s common stock.

For any transaction involving a penny stock, unless exempt, the penny stock rules require that a broker or dealer approve a person’s account for transactions in penny stock and the broker or dealer receive from the investor a written agreement to the transaction setting forth the identity and quantity of the penny stock to be purchased. To approve a person’s account for transactions in penny stock, the broker or dealer must obtain financial information and investment experience and objectives of the person and make a reasonable determination that the transactions in penny stock are suitable for that person and that that person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stock.

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule required by the SEC relating to the penny stock market, which, in highlight form, sets forth:

● the basis on which the broker or dealer made the suitability determination, and ● that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

Disclosure also has to be made about the risks of investing in penny stock in both public offerings and in secondary trading and commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stock.

Because of these regulations, broker-dealers may not wish to engage in the above-referenced necessary paperwork and disclosures and/or may encounter difficulties in their attempt to sell shares of the Company’s common stock, which may affect the ability of stockholders or other holders to sell their shares in any secondary market and have the effect of reducing the level of trading activity in any secondary market. In addition, the liquidity for the Company’s securities may decrease, with a corresponding decrease in the price of the Company’s securities. The Company’s shares, in all probability, will be subject to such penny stock rules for the foreseeable future and its stockholders will, in all likelihood, find it difficult to sell their securities.

The market for penny stock has experienced numerous frauds and abuses that could adversely impact investors in the Company’s stock. OTC Bulletin Board securities are frequent targets of fraud or market manipulation, both because of their generally low prices and because OTC Bulletin Board reporting requirements are less stringent than those of the stock exchanges or NASDAQ.

Patterns of fraud and abuse include:

● Control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; ● Manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; ● “Boiler room” practices involving high pressure sales tactics and unrealistic price projections by inexperienced sales persons; ● Excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and ● Wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the inevitable collapse of those prices with consequent investor losses.

The market price of the Company’s common stock will likely be highly volatile, as is the stock market in general, and the market for OTC Bulletin Board quoted stocks in particular. Some of the factors that may materially affect the market price of the Company’s common stock are beyond the Company’s control, such as changes in financial estimates by industry and securities analysts, announcements made by the Company’s competitors or sales of the Company’s common stock. These factors may have a material adverse affect on the market price of the Company’s common stock, regardless of the Company’s performance.

In addition, the public stock markets have experienced extreme price and trading volume volatility. This volatility has significantly affected the market prices of securities of many companies for reasons frequently unrelated to the operating performance of the specific companies. These broad market fluctuations may adversely affect the market price of the Company’s common stock.

The Company has never paid any cash dividends on its common stock and does not anticipate paying any cash dividends on its common stock in the foreseeable future, so any return on investment may be limited to the value of the Company’s stock. The Company plans to retain any future earnings to finance growth.

Future sales of the Company’s common stock may depress its stock price.

Sales of a substantial number of shares of the Company’s common stock by significant stockholders into the public market could cause a decrease in the market price of the Company’s common stock.

910

ITEM 1B.

Unresolved Staff Comments

None.

ITEM 2.

Properties

Our Company’s ~~headquarter~~headquarters is located in Miami, Florida and consists of 16,665 square feet of office and warehouse space. In July 2009, the Miami lease was extended until June 2015 and PuntoMio operations were consolidated into the ~~headquarter~~headquarters facility. In ~~addition, we lease 5,000 square feet in Newark, NJ whose lease will expire June 2010.~~ In Bogota, we lease facilities on a month -to -month basis.

Management believes that existing facilities are adequate to meet current requirements, and that suitable additional space will be available as needed to accommodate any further physical expansion of operations.

ITEM 3.

Legal Proceedings

AsThe ~~a condition of the Securities Exchange the~~ Company ~~entered~~is ~~into~~not anparty ~~understanding with Omega United’s principle shareholders~~ to ~~set~~any uplegal ~~an escrow fund of $500,000 to be used for investor relations during the 12 months following the reverse merger with Omega~~proceedings. ~~During~~The ~~2008, the~~ Company ~~incurred~~may ~~$123,025~~become ina ~~investor~~party ~~relations~~to ~~expenses~~various ~~that~~claims, ~~reduced~~legal ~~the~~actions ~~escrow deposit balance~~ and ~~were~~complaints ~~charged~~arising toin the ~~Consolidated~~ordinary ~~Statements~~course of ~~Operations~~business. OnIn ~~September 18, 2008,~~ the ~~Company,~~opinion inof ~~error requested the escrow agent~~Management, tothere ~~transfer~~were ~~$149,975~~no ~~from~~matters ~~the~~that ~~escrow~~would ~~account~~have toa ~~Crosscheck~~material ~~Media,~~adverse aneffect ~~investor~~on ~~relations firm used by~~ the ~~Company.~~financial Tocondition ~~date,~~of ~~Crosscheck Media has not produced any services for~~ the Company~~. As~~ aas ~~result, the Company requested a refund~~ of ~~its deposit and when the refund was not received the Company began arbitration proceedings against Crosscheck Media. In March 2009~~December 31, ~~the Company received $227,000 from the escrow account~~2010.

InPART June 2009, the Company was advised that Crosscheck Media filed for protection under the U.S. Bankruptcy laws. Upon further review, the Company determined the recoverability of the deposit was unlikely and the deposit of $149,975 was fully reserved during the three months ended June 30, 2009. There has not been any change to the recoverability of the deposit and the balance remains fully reserved at December 31, 2009.II

Except for the aforementioned matter, the Company is not party to any other legal proceeding. The Company may become a party to various claims, legal actions and complaints arising in the ordinary course of business. In the opinion of Management, there were no matters that would have a material adverse effect on the financial condition of the Company as of December 31, 2009 and 2008.

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

None.

ITEM 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities

Our common stock is listed on the Over-the-Counter (“OTC”) Bulletin Board under the symbol “SKPN.OB”. Until April 2008 there was no public market in the Company’s securities. There has been a limited public trading market for our securities since then. At December 31, ~~2009~~2010, there were 6995,~~443~~083,~~292~~179 common shares issued and 6994,~~123~~763,~~292~~179 shares outstanding that were held by approximately ~~285~~268 stockholders of record. The following table sets forth the high and low closing sales prices for our common stock as quoted by OTC Bulletin Board for the periods indicated:

Year	Quarter Ended	Stock Price
		High		Low

2010	March 31, 2010	$	0.10	$	0.07
	June 30, 2010	$	0.15	$	0.07
	September 30, 2010	$	0.15	$	0.10
	December 31, 2010	$	0.11	$	0.06

2009	March 31, 2009		0.34	$	0.34
	June 30, 2009	$	0.10	$	0.10
	September 30, 2009	$	0.15	$	0.12
	December 31, 2009	$	0.10	$	0.10

Year	Quarter Ended	Stock Price
		High		Low
2009	March 31, 2009	$	0.34	$	0.34
	June 30, 2009	$	0.10	$	0.10
	September 30, 2009	$	0.15	$	0.12
	December 31, 2009	$	0.10	$	0.10
2008	June 30, 2008	$	1.46	$	1.37
	September 30, 2008	$	1.25	$	1.10
	December 31, 2008	$	0.23	$	0.23

Such quotes reflect inter-dealer prices, without retail markup, markdown, or commissions. Such quotes are not necessarily representative of actual transactions and may not be based on any recognized criteria of securities valuation used in the investment banking community.

During the first raise in 2008, 2,197,166 Company warrants were issued to Falcon and certain bridge lenders as part of the transaction. These warrants have an exercise price of $0.50 and expire on March 1, 2011. In the 3rd quarter 2009 capital raise, 1,090,000 warrants were sold with an exercise price of $0.10 and expire July 1, 2012.

Dividend Policy

We have not paid dividends on our common stock and do not plan to pay such dividends in the foreseeable future. Our Board of Directors will determine our future dividend policy on the basis of many factors, including results of operations, capital requirements, and general business conditions.

Recent Sales of Unregistered Securities

During the twelve months ended December 31, ~~2009~~2010, we have sold ~~restricted~~ securities exempt from registration under the Securities Act of 1933 (the “Securities Act”) in reliance upon the ~~exemption~~exemptions provided in Section 4(2) and Rule 506, and ~~there~~also ~~under~~in astransactions ~~described~~with ~~below~~non-U.S. persons outside of the United States.

Name	Date of Sale	No. of Securities	Reason of Issuance
Quarter Three Capital Raise -Warrant holders	September 30, 2009	1,090,000 warrants for 1,090,000 shares of common stock exercisable at $.10 per share.	In consideration for $1 per unit consisting of one SKPN warrant attached to one PuntoMio preferred share. The warrant was valued at $.16. The monies were raised to fund PuntoMio working capital requirements.
Quarter One Capital Raise	March 31, 2009	9,630,000 common stock	In consideration for $.10 per share. The stock was sold to fund Company and PuntoMio working capital requirements.

On March 8 2010, the Company issued a note payable with a face amount of $100,000 for proceeds of $97,000. The note payable was convertible into common stock of the Company at a conversion rate of $0.10 per share and was repaid during May 2010.

~~Securities~~In ~~Authorized~~March ~~For~~and ~~Issuance~~April ~~Under~~2010, ~~Equity~~the ~~Compensation~~Company ~~Plan~~issued convertible notes with an aggregate principal amount of $497,000 and warrants to acquire 1,988,000 shares of common stock for gross proceeds of $497,000. The notes were convertible into shares of the Company’s common stock at $.05 per share. The warrants were exercisable at $0.05 per share and expired unexercised on March 15, 2011. In May 2010, holders of the $497,000 principal amount of convertible notes elected to convert the principal plus accrued interest of $1,483 into 9,969,651 shares of common stock at the $0.05 conversion price. On May 20, 2010, the Company issued 697,876 shares of common stock upon conversion of these notes valued at $55,830 based on the closing trading price of the Company’s common stock on that date. These shares were deemed to be placement fees related to the sale of convertible notes. In total, 10,667,527 shares of common stock were issued for the $497,000 convertible debt.

At December 31, 2009, under plans approved by the Board of Directors, the Company had outstanding to management, employees and directors stock grants of common stock, as shown below.

On May 7 2010, the Company issued a $150,000 convertible note. The note was convertible into the Company’s common stock at a conversion price of $0.05 per share and was repaid in May 2010.

On May 18 2010, the Company issued $2,576,400 3% senior secured convertible notes and warrants to purchase an aggregate of 10,305,600 shares of common stock for proceeds of $2,260,000. The notes are convertible into shares of the Company’s common stock at a of $.05 and the warrants are exercisable at $0.15 per share expiring on May 19, 2013.

In November 2010, the Company issued a $25,000 note maturing on November 9, 2013 that bears interest at an annual rate of 3% payable monthly beginning on December 1, 2010. The principal and accrued interest on this note are convertible at any time at the option of the note holder into shares of the Company’s common stock at a conversion price of $0.05 per share. The purchaser of the note was also issued a warrant to acquire an equivalent of 20% of the shares issuable upon conversion, or 100,000 shares with a strike price of $0.15 per share expiring November 9, 2013.

In November 2010, the Company commenced a private placement for the sale of common stock and warrants of the Company at $.05 per share (the “2010 Private Placement”). The Company received proceeds of $1,008,900 net of placement fees totaling $95,100 paid in 2010 and $17,000 paid in 2011, for the subscription of 22,420,000 shares of common stock and warrants to purchase 4,484,000 shares of common stock at an exercise price of $0.15 per share. $1,036,000 of the gross proceeds were received in 2010 and $85,000 was received in 2011. The proceeds from the 2010 Private Placement will be used to support the development of the Company’s subsidiary, PuntoMio.

Securities Authorized For Issuance Under Equity Compensation Plan

At December 31, 2010, under plans approved by the Board of Directors, the Company had outstanding to management, employees and directors restricted stock grants of common stock, as shown below.

Equity Compensation Plan Information

Plan Category

Number of securities to be issued ~~upon~~exercise ~~vesting~~of outstanding options, warrants and rights

Weighted-average exercise price of outstanding ~~unvested~~options, ~~securities~~warrants ~~granted~~and rigths

Number of securities remaining available for future issuance under equity compensation plans

Equity compensation plans approved by security holders

Equity compensation plans not approved by security holders

~~688~~1,~~046~~650,000

~~0.55~~-

-554,754

Of the ~~688~~1,~~046~~650,000 shares to vest in ~~2010~~2011, 2012 and ~~2011~~2013, none are attributable to executive officers. All 1,650,000 shares of common stock subject to vesting requirements have been issued, are included in the shares outstanding as of December 31, 2010 and are subject to forfeiture in the event vesting requirements are not met.

ITEM 6. ~~SELECTED~~Selected ~~FINANCIAL~~Financial ~~DATA~~Data

Not applicable to smaller reporting companies.

ITEM 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Introduction

You should read the following discussion in conjunction with our audited consolidated financial statements, which are included elsewhere in this Form 10-K, and the special note on Forward -Looking Statements appearing before Item 1. Business. Management’s Discussion and Analysis and its plans of operation contain statements that are forward-looking. These statements are based on current expectations and assumptions, which are subject to risk, uncertainties and other factors. Actual results may differ materially because of the factors discussed in the subsection titled “Risk Factors,” which are located in Item 1A.

Company Overview

The Company provides international, wholesale mail delivery services to 20 major countries in Latin ~~American~~America and the Caribbean, of which all of the countries would be classified as emerging markets. The Company also provides parcel delivery service to consumers living in Europe, Middle East, Eastern Europe and Africa. The Company provides a door-to-door service largely using outsourced transportation via international commercial airlines and local in-country delivery companies, private postal services and national postal services in some countries.

The Company operates facilities in Miami, FL, Newark, NJ and Bogota, Colombia for the sorting and consolidating of mail for shipment to specific countries in Latin America. The facilities in Newark and Bogota, in particular, provide the Company with certain competitive advantages with respect to faster delivery times to Latin America and also lower sorting and handling costs than in the U.S. in the case of Bogota. Management believes that faster delivery times provide a meaningful differential advantage with respect to the decision making of customers. The Company outsources its mail sorting facility in London, which processes mail originating in Europe and bound for Latin America.

In October 2008, the Company activated PuntoMio, a subsidiary, to begin offering a new service. The new service enables non-U.S. resident internet shoppers to use PuntoMio as their mailing address for U.S. e-commerce websites. PuntoMio is a shopping facilitator for foreign online buyers which provides a U.S. address to buyers. This facilitates shopping on U.S. online merchant sites, wherein many e-tailers do not accept orders from foreign buyers. The PuntoMio service assists the buyers in finding products, price comparison, use of the U.S. address, transportation and customs clearance and delivery to the buyer’s home. It is a less costly alternative to the express carriers and more efficient than the international parcel post service offered by the world’s national postal services, since it provides a secured, online visibility of the parcel until delivery has taken place.

~~Given~~The ~~the~~Company ~~conditions~~operates facilities in ~~international~~Miami, ~~financial~~FL ~~markets~~and Bogota, ~~which~~Colombia ~~affect~~for ~~many~~the ~~companies,~~sorting ~~there~~and ~~can~~consolidating beof nomail ~~assurances~~for ofshipment to specific countries in Latin America. The facilities in Bogota, in particular, provide the Company’s ~~ability~~with certain competitive advantages with respect to ~~raise~~faster ~~additional~~delivery ~~capital~~times ~~through~~to Latin America and also lower sorting and handling costs than in the ~~issuance~~U.S. Management believes that faster delivery times provide a meaningful differential advantage with respect to the decision making of ~~debt~~customers. orThe ~~equity~~Company ~~securities~~outsources its mail sorting facilities in ~~order~~Philadelphia toand ~~reduce~~in orLondon, ~~eliminate~~which ~~the~~processes ~~continuing~~mail ~~negative~~originating ~~cash~~in ~~flow~~Europe and bound for Latin America.

~~Acquisition~~In October 2008, the Company activated PuntoMio, a subsidiary, to begin offering a service that enables non-U.S. resident internet shoppers to use PuntoMio as their mailing address for U.S. e-commerce websites. PuntoMio is a shopping facilitator for foreign online buyers which provides a U.S. address to use when making online purchases. This facilitates shopping on U.S. online merchant sites, wherein many e-tailers do not accept orders from foreign buyers. The PuntoMio service assists the buyers in finding products, price comparison, use of the U.S. address, transportation and customs clearance and delivery to the buyer’s home. It is a less costly alternative to the express carriers and more efficient than the international parcel post service offered by the world’s national postal services, since it provides a secured, online visibility of the parcel until delivery has taken place.

~~The~~Given ~~acquisition~~the ofconditions ~~LEL~~in oninternational ~~February 27,~~financial ~~2009 was a strategic acquisition to lower operating costs~~markets, ~~shorten~~which ~~delivery~~affect ~~times~~many ~~to Latin America~~companies, ~~consolidate~~there ~~greater~~can ~~tonnage~~be ~~and~~no ~~thereby~~assurances ~~achieve~~of ~~better line haul rates and generally improve~~ the Company’s ~~competitiveness~~ability in the Latin American market. LEL’s operating facilities in the customs Free Zone near Bogota’s International Airport has become a principal sorting and handling facility and has replaced a significant amount of the sorting capacity at the Miami facility. Using the Bogota facility provides the Company with lower rental and labor costs. The combination of facilities in Newark and Bogota allows the Company to ~~deliver~~raise ~~mail~~additional ~~originating~~capital inthrough the ~~U.S.~~issuance ~~approximately two days faster than competitors. Bringing South America bound tonnage to Bogota allows the Company to consolidate a greater percentage~~ of ~~its~~debt ~~freight~~or ~~and~~equity ~~thereby~~securities ~~achieve lower line haul costs to most markets~~ in ~~South~~order ~~America. The Company has concluded an agreement with the Colombian National Post office and has installed the post’s franking machines in its Bogota hub. This allows our Bogota hub~~ to ~~process~~reduce ~~mail~~or ~~destined~~eliminate ~~to delivery areas in~~ the ~~Latin~~continuing ~~American~~negative ~~and~~cash ~~Caribbean region not serviced by the Company’s hand delivery network, at much lower costs~~flows.

~~The~~Issuance ~~acquisition~~ of LEL has made it possible for the Company to consolidate its service facilities in Miami, further reduce staff in Miami and enable the Company to make greater use of competitive rates offered by Avianca Airlines to service its customer base in Latin America at lower operating costs. The acquisition also makes it possible for the Company to achieve certain competitive advantages with respect to delivery times to Latin America.Debt

~~Effective~~As ~~March~~described ~~1, 2009, for accounting purposes, the Company acquired 70% of the outstanding common stock of LEL~~ in ~~exchange~~Item ~~for~~1 ~~400,000~~- ~~shares of our common stock valued at $100~~Business,~~000. Concurrent~~ ~~with the acquisition, the Company entered into an employment agreement with the seller~~ and ~~chief~~in ~~executive of LEL to serve as~~ the ~~General~~accompanying ~~Manager~~consolidated offinancial ~~Colombian operations for three years. In addition~~statements, ~~as compensation to not compete with~~ the Company ~~for~~issued ~~one~~various ~~year~~debt ~~after~~instruments ~~any~~during ~~separation,~~2010 ~~the~~for ~~Company~~net ~~agreed~~proceeds ~~to make 25 monthly payments~~ of $42,~~000 commencing one month after closing. The Company also has the right to acquire the remaining thirty percent shareholding in LEL at any time after March 1~~994, ~~2011, based on a formula determined in part by LEL’s pre-tax earnings for the preceding twelve months~~211.

Sale of ~~Preferred~~Common Stock ~~in Subsidiary~~

~~During~~As ~~third~~described ~~quarter~~in ~~2009,~~Item ~~the Company sold units at $~~1~~.00~~ ~~per~~- ~~unit~~Business ~~in a private placement. The units were comprised~~ of ~~one~~Part ~~preferred~~I ~~share of PuntoMio~~above, ~~its~~and ~~subsidiary,~~in ~~plus one warrant to purchase one common share of~~ the ~~Company,~~accompanying atconsolidated anfinancial ~~exercise price of $0.10 expiring July 1~~statements, ~~2012. The~~in ~~Company~~2010 ~~sold 1,090,000 shares of PuntoMio preferred stock and 1,090,000 warrants for~~ the Company’s issued common stock and ~~received~~warrants ~~proceeds of $966,021 net of placement fees paid to Falcon Consulting. In addition to the cash fee paid to Falcon Consulting, the Company issued Falcon Consulting 284,345 PuntoMio preferred shares~~ for ~~their efforts in connection with the private placement.~~ Onnet ~~September~~proceeds ~~30, 2009, the Company awarded 53,800 PuntoMio preferred shares valued at $45,192 to one~~ of ~~the Directors of the Board for services performed. At December 31, 2009, all of PuntoMio’s common shares are held by the Company and~~ $1,~~428~~008,~~145 preferred shares are issued and outstanding to investors, Falcon Consulting and a member of the Company’s Board of Directors.~~900

~~PuntoMio’s~~Results ~~preferred stock has $.001 par value, and 2,000,000 shares were authorized at December 31, 2009. Upon any liquidation, dissolution or wind-up~~ of PuntoMio, the holders of the preferred stock have preference to receive distribution before any payment is made to common stock holders. They also have preference to any dividends that may be declared. The preferred stockholders have an equal equity interest to PuntoMio as common stockholders, but do not have voting rights. Accordingly, the allocation of the equity interest is 75.9% to SkyPostal Networks, Inc. and 24.1% to the preferred stockholders as of December 31, 2009.Operations

The following table sets forth, for the periods indicated, the Consolidated Statements of Operations that are used in the following discussion.


	Year Ended December 31,						Increase (Decrease)
	2010			2009			Amount			Percent

NET REVENUES	$	7,624,092		$	8,285,737		$	(661,645	)		(8.0	%)

OPERATING EXPENSES:
Cost of delivery		6,167,940			7,038,584			(870,644	)		(12.4	%)
General and administrative		3,936,125			4,196,529			(260,404	)		(6.2	%)
Stock based compensation		247,998			258,865			(10,867	)		(4.2	%)
TOTAL OPERATING EXPENSES		10,352,063			11,493,978			(1,141,915	)		(9.9	%)

OPERATING LOSS		(2,727,971	)		(3,208,241	)		480,270			(15.0	%)

OTHER EXPENSES (INCOME):
Interest		53,038			-			53,038
Amortization of discounts		814,580			-			814,580
Changes in excess value of put option
over the estimated fair value of shares		64,000			374,400			(310,400	)		(82.9	%)
Provision for escrow deposit		-			149,975			(149,975	)
Impairment losses		139,041			307,455			(168,414	)		(54.8	%)
Other		184,108			299,087			(114,979	)		(38.4	%)
TOTAL OTHER EXPENSES (INCOME)		1,254,767			1,130,917			123,850			11.0	%

NET LOSS		(3,982,738	)		(4,339,158	)		356,420			(8.2	%)

Net loss attributable to the non-controlling interest		(100,567	)		(75,362	)		(25,205	)		33.4	%

Loss attributable to the controlling interest		(3,882,171	)		(4,263,796	)		381,625			(9.0	%)

Deemed dividend on convertible preferred stock		(798,333	)		-

Net loss attributable to common shareholders	$	(4,680,504	)	$	(4,263,796	)	$	(416,708	)		9.8	%

WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		81,748,353			65,356,429			16,391,924			25.1	%
Effect of dilutive shares		-			-			-
Diluted		81,748,353			65,356,429			16,391,924			25.1	%

NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS
Basic and Diluted	$	(0.06	)	$	(0.07	)	$	(0.01	)		12.2	%

Revenue

The Company generates revenue on the tonnage of mail and parcels delivered, measured in kilograms plus service fees charged to non-U.S. based consumers for processing customs and duties and sales commissions earned from merchants. Revenue during the year ended December 31, 2010, compared to the year ended December 31, 2009, decreased by 8.0% as a result of a 19.5% decrease in tonnage and a 5.6% decrease in revenue per ton. The decrease in revenue per ton is a result of the discontinuation of our Postal Injection service during 2009. Going forward, the Company is focused on maintaining and growing higher margin business specifically, mail and parcels originating in and arriving into Latin America. Management believes that overall industry mail tonnage will continue to decrease, while parcel volumes from the U.S into Europe, Middle East and Latin America will increase due to general demand increase for U.S. products. Management believes this demand will drive the growth of fees earned from customs and duties processing, delivery and merchant fees. In addition, Management believes that higher margin, e-commerce consumer business originating in Latin America, Europe and the Middle East will continue to increase as the Company continues to grow its consumer customer base through co-marketing agreements with banks and credit card issuers in those regions where the growth in cross-border shopping is greatest. Revenue growth will also be generated from U.S. merchant agreements wherein the Company assumes the management of foreign shopper transactions that the merchants prefer to outsource.

The following schedule highlights the Company’s U.S. and foreign sourced revenues including the revenues of PuntoMio and, since March 1, 2009, LEL, for the years December 31, 2010 and 2009:

	Twelve Months Ended December 31,										Change
			Percent of					Percent of
Region	2010		Total			2009		Total			Amount			Percent

U.S.	$	3,377,632		44.3	%	$	4,258,115		51.4	%		(880,483	)		-20.7	%
Foreign		4,246,460		55.7	%		4,027,622		48.6	%		218,838			5.4	%
Total	$	7,624,092				$	8,285,737					(661,645	)		-15.2	%

Operating Expenses

Cost of Delivery. Total cost of delivery decreased by 12.4% and the gross margin increased by 4.0% primarily as a result of renegotiated rates with key vendors compared to the same period in the prior year and the phase out of postal injection resulting in less postage expense. The Company expects gross margin to improve in the next twelve months as the parcel business into Latin America, Europe, and the Middle East continues to grow. The cost per kilogram will vary with the price of oil and the margin between revenue and delivery costs would be adversely affected by any significant increases in oil prices.

General and Administrative. This expense decreased by $260,404 during the year ended December 31, 2010, primarily due to reductions in salaries and benefits of $171,471, audit expenses of $45,562 and rent, telephone, and utilities of $81,168.

Other Expenses

Interest. The Company had no interest-bearing debt during the twelve months ended December 31, 2009. The Company accrued $49,446 of interest expense related to various convertible debt agreements entered into during 2010 that did not exist in 2009.

Revaluation of Put Option Liability. The Company’s expense resulting from the mark to market adjustment during the year ended December 31, 2010 was a loss of $64,000 compared to a loss of $374,400 for the year ended December 31, 2009. The decrease was primarily due to the reclassification into equity and the discontinuance of mark to market accounting of a significant portion of the put option during 2010. See Note 17 – Commitments and Contingencies in the accompanying consolidated financial statements.

Amortization of debt discounts. The Company incurred $814,580 of non-cash expense resulting from the amortization of debt discounts related to the issuance of convertible debt and warrants during 2010. See accompanying consolidated financial statements Note 11 – Convertible Debt for full discussion on all convertible debt.

Other income and expenses, which consist of non-operating items such as depreciation, amortization and financing fees, decreased by $114,979 during the year ended December 31, 2010, compared to 2009. In 2010, the Company was able to negotiate reduced payments to satisfy past due amounts and therefore recognized a $35,000 of gain from the write-off of trade payables. The Company also recognized a foreign currency gain of $46,375 during 2010 compared to a loss of $14,518 in 2009.

During 2010, the Company recognized an impairment charge of $139,041 related to the write-down of a non-compete agreement.

Net Loss Attributable to the Non-Controlling Interest

Net losses of $100,567 and $75,362 for the years ended December 31, 2010 and 2009, respectively, are the portion of earnings and losses attributable to the non-controlling shareholder in LEL, which holds a 30% common equity interest in LEL, and shareholders that held a 24.1% preferred equity interest in PuntoMio for the period through April 30, 2010. The Company acquired a 70% interest in LEL effective March 1, 2009. The change of the Company’s equity interest in PuntoMio from 100% to 75.9% occurred effective September 30, 2009 as a result of the third quarter capital raise for PuntoMio. Effective April 30, 2010, the Company entered into an exchange agreement with the holders of the preferred equity interest in PuntoMio and at December 31, 2010, the Company held a 100% equity interest in PuntoMio.

Deemed Dividend

The Company recorded a non-cash deemed dividend of $798,333 in connection with the issuance of its convertible preferred stock in the exchange for preferred shares of its subsidiary, PuntoMio.

Liquidity

The Company’s primary recurring source of liquidity has been cash provided by financing activities. Proceeds from sales of equity securities over the last two years have been used for the development of new products and services and for corporate working capital needs. For the twelve-month period ended December 31, 2010, cash increased by $881,057 to $917,570, compared to $36,513 as of December 31, 2009.

The following table summarizes the Company’s consolidated statements of cash flows:

	Twelve Months Ended December 31
Net cashed (used in) provided by by operating activities	2010			2009
Operating activities	$	(2,569,979	)	$	(2,108,761	)
Investing activities		(68,313	)		52,986
Financing activities		3,492,714			1,789,468

The cash used by operating activities in 2010 of $2.6 million was primarily due to the net loss incurred of $3.9 million adjusted for amortization of debt discounts, decrease in accounts receivable, decrease in accounts payable and accrued liabilities, depreciation and amortization, and stock compensation expense of approximately $815,000, $278,000, $360,000, 193,000 and $248,000 respectively.

The cash used by operating activities in 2009 of $2.1 million was primarily due to the net loss incurred of $4.3 million adjusted for decrease in intangibles and other assets, decrease in accounts receivable, revaluation of the put option liability, and stock compensation expense of approximately $216,000, $433,000, $374,000 and $259,000 respectively.

The cash used by investing activities in 2010 was primarily due to purchases of computers, software and other fixed assets totaling $67,579 during the twelve months ended December 31, 2010.

The cash provided by investing activities in 2009 was due to cash on the balance sheet from the acquisition of LEL of $11,753, collection of amounts advanced to stockholder of $60,395 less purchases of computers and other fixed assets totaling $19,162.

The cash provided by financing activities in 2010 was due to proceeds of approximately $2,994,000 from the issuance of convertible debt and proceeds of $1,036,000 from subscriptions of common stock less a $250,000 repayment of convertible notes and $109,000 paid for the redemption of warrants.

The cash provided by financing activities in 2009 was primarily due to the Company’s private placements of equity securities (see Private Placements below).

Financial Condition

As of December 31, 2010, the Company had $2,601,400 of convertible debt outstanding, all of which matures in 2013, approximately $918,000 of cash on hand, a working capital deficit of $637,242, and an accumulated deficit of $28,355,320.

Private Placements

In 2009, the Company completed the sale of 9,630,000 shares of common stock at $.10 per share from which it received net proceeds of $836,443. The proceeds from the sale were used to support the development of the Company’s PuntoMio subsidiary.

During the third quarter of 2009, the Company sold 1,080,000 units at $1.00 per unit in a private placement. The units were comprised of one preferred share of PuntoMio, the Company’s subsidiary, and one warrant to purchase one share of common stock of the Company, at an exercise price of $0.10 per share expiring July 1, 2012. The Company received proceeds of $966,021 net of placement fees.

Effective April 30, 2010, the Company entered into an equity exchange with the preferred interest holders of PuntoMio (“PuntoMio Exchange”). The Company exchanged eight shares of convertible preferred stock of the Company for each share of PuntoMio preferred stock. Simultaneous with the PuntoMio Exchange, the Company bought back or redeemed warrants to acquire 1,090,000 shares of the Company’s common stock for $109,000. As a result of the PuntoMio Exchange there is no longer a non-controlling interest in PuntoMio. Prior to the PuntoMio Exchange, the allocation of the equity interest was 75.9% to SkyPostal Networks, Inc. and 24.1% to the PuntoMio preferred stockholders.

In November 2010, the Company commenced a private placement of a maximum of $1,200,000 million through the sale of common stock and warrants of the Company (the “2010 Private Placement”). The Company received net proceeds of $1,008,900 net of placement fees of $95,100 paid in 2010 and $17,000 paid in 2011, for the sale of 22,420,000 shares of common stock and warrants to purchase 4,484,000 shares of common stock for an exercise price of $0.15 per share The Company allocated the gross proceeds of $1,121,000 to the common stock and warrants based on their relative fair values. $791,586 of the total proceeds were allocated to the common stock, which are included in Subscribed stock on the consolidated balance sheets of the Company’s financial statements. $329,414 of the gross proceeds were allocated to the warrants and charged to additional paid in capital. The Company received $1,036,000 of the gross proceeds in 2010. The Company received $85,000 of the gross proceeds in 2011 which are included in Subscriptions receivable on the consolidated balance sheets of the Company’s financial statements. The proceeds from the 2010 Private Placement will be used to support the development of the Company’s subsidiary, PuntoMio.

Capital Expenditures

In 2010, capital expenditures totaled $67,579. In 2009, capital expenditures totaled $19,162.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operation is based upon our consolidated audited financial statements, which have been prepared in accordance with Generally Accepted Accounting Principles (“GAAP”). The preparation of these consolidated financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

13An accounting policy is considered to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates reasonably could have been used, or changes in the accounting estimate that are reasonably likely to occur, could materially impact the consolidated financial statements. We believe that the following critical accounting policies reflect the more significant estimates and assumption used in the preparation of the consolidated financial statements.

An accounting policy is considered to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates reasonably could have been used, or changes in the accounting estimate that are reasonably likely to occur, could materially impact the condensed consolidated financial statements. We believe that the following critical accounting policies reflect the more significant estimates and assumption used in the preparation of the condensed consolidated financial statements.

Management has discussed the development and selection of these critical accounting estimates with the Audit Committee of our Board. In addition, there are other items within our consolidated financial statements that require estimation, but are not deemed critical as defined above. Changes in estimates used in these other items could have a material impact on our consolidated financial statements.

Reclassification

Certain reclassifications of amounts previously reported have been made to the accompanying audited consolidated financial statements in order to maintain consistency and comparability between periods presented.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of ~~SkyPostal~~SkyShop ~~Networks~~Logistics, Inc. and all entities in which ~~SkyPostal~~the ~~Networks,~~Company ~~Inc.~~ has a controlling voting interest (“subsidiaries”) required to be consolidated in accordance with U.S. GAAP (collectively referred to as “the Company”). All significant intercompany accounts and transactions between have been eliminated in consolidation.

In April 2008, Omega entered into a reverse merger with SkyPostal, Inc. The merger of a private operating company into a non-operating public shell corporation with nominal net assets typically results in the owners and management of the private company having actual or effective operating control of the combined company after the transaction, with shareholders of the former public shell continuing only as passive investors. The SEC staff’s rules indicate that these transactions are to be capital transactions in substance, rather than business combinations. That is, the transaction is equivalent to the private company issuing stock for the net monetary assets of the shell corporation, accompanied by a recapitalization. The accounting is identical to that resulting from a reverse acquisition, except that no goodwill or other intangible assets should be recorded.

Accordingly, for accounting purposes, SkyPostal Networks, Inc., formerly Omega, is treated as the acquirer and the historical financial statements presented herein are those of SkyPostal Networks, Inc.

Business Combinations

Effective March 1, 2009, the Company acquired 70% of the outstanding common stock of LEL. The acquisition was accounted for using the acquisition method. The acquisition method is required to be used on all events where a business obtains control over another business. The acquisition method establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any non-controlling interests in the acquiree, and goodwill acquired in a business combination or a gain from a bargain purchase. The consolidated financial information presented includes the accounts of LEL as of March 1, 2009. See Note 5- Business Combinations. See Non-controlling ~~Interest~~Interests accounting policy below.

Loss Per Share

Basic loss per share is presented on the face of the ~~condensed~~ consolidated statements of operations. Basic loss per share is calculated as the loss attributable to common stockholders divided by the weighted average number of shares outstanding during each period. Basic loss per share is computed using the weighted average number of shares outstanding during the period. Due to the Company’s losses from continuing operations, dilutive potential common shares in the form of warrants and unvested common stock awards were excluded from the computation of diluted loss per share, as inclusion would be anti-dilutive for the periods presented.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Such estimates and assumptions impact, among others, the following: the amount of uncollectible accounts receivable, the amount to be paid for the settlement of liabilities related to cost of sales, the estimated useful lives for property and equipment, value assigned to the warrants granted in connection with the various financing arrangements, ~~and~~ calculation for stock compensation expense and estimating future cash flows from, and the fair value of, intangible assets for impairment measurement purposes. Actual results could differ from those estimates.

Fair Value Measurements

The Company has determined the estimated fair value amounts presented in these ~~condensed~~ consolidated financial statements using available market information and appropriate methodologies. However, considerable judgment is required in interpreting market data to develop the estimates of fair value. The estimates presented in the ~~condensed~~ consolidated financial statements are not necessarily indicative of the amounts that the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. See Consolidated Financial Statements Note 1213- Fair Value Measurements.

Non-controlling Interests

In December 2007, the Financial Accounting Standards Board (“FASB”) issued guidance that changed the accounting and reporting for non-controlling interests, which is the portion of equity in a subsidiary not attributable, directly or indirectly, to a parent. The guidance was effective for the quarter ended March 31, 2009, for the Company and requires retroactive adoption of its presentation and disclosure requirements. The guidance requires the Company to report net income attributable to the non-controlling interests separately on the face of the ~~condensed~~ consolidated statements of operation. Additionally, the guidance requires that the portion of equity in the entity not attributable to the Company be reported within equity, separately from the Company’s equity on the ~~condensed~~ consolidated balance sheets. The adoption did not have any impact on the Company’s financial position, results of operations or cash flow.

The 30% non-controlling interest in the LEL was accounted for in accordance with the acquisition method. The Company reported the non-controlling interest in the consolidated financial statements as required by U.S. GAAP. The determination of the fair value of the non-controlling interest due to the acquisition of LEL is described in Note 5-Business Combinations.17

~~Effective~~The ~~September~~ 30,% ~~2009,~~non-controlling interest in the LEL was accounted for in accordance with the acquisition method. The Company ~~sold~~reported ~~preferred~~the ~~equity~~non-controlling ~~interests~~interest in ~~its~~the ~~wholly~~consolidated ~~owned~~financial ~~subsidiary~~statements ~~SkyShop~~as ~~Logistics~~required ~~dba~~by ~~“PuntoMio”~~U. S. GAAP. The ~~preferred,~~determination of the fair value of the non-controlling ~~equity~~ interest indue ~~PuntoMio~~to ~~was~~the ~~accounted~~acquisition ~~for~~of asLEL ~~additional~~is ~~paid~~described in ~~capital. No~~Consolidated ~~gain~~Financial ~~was~~Statements ~~recognized~~Note on5-Business ~~this sale~~Combinations.

On September 30, 2009, the Company sold a 24.1% preferred equity interest in its wholly-owned subsidiary, PuntoMio, and Company warrants for cash proceeds of $966,021. Effective April 30, 2010, the Company entered into an equity exchange (“PuntoMio Exchange”) with the preferred share holders of PuntoMio. The Company exchanged eight preferred convertible shares of the Company for every one PuntoMio preferred share. Simultaneously with the PuntoMio Exchange, the Company bought back or redeemed 1,090,000 warrants for $109,000. As a result of the PuntoMio Exchange, there is no longer a non-controlling interest in PuntoMio as of December 31, 2010. The ownership percentage of the non-controlling interest in LEL has not changed.

Software Product Development Costs

Software product development costs incurred prior to reaching technological feasibility are expensed. We have determined that technological feasibility of the software is not established until substantially all product development is complete.

Revenue Recognition and Cost of Delivery

Revenue is recognized upon receipt and verification of mail and parcel weight and destination by country.

Cost of delivery is comprised of air and ground line haul costs, clearance costs, postage, hand delivery costs and recognized when incurred.

This method generally results in recognition of revenues and purchased transportation costs earlier than methods that do not recognize revenues until a proof of delivery is received or that recognize revenues as progress on the transit is made. The company’s method of revenue and cost recognition does not result in a material difference from amounts that would be reported under such other methods.

Currency Translation Policy

The local currency is the functional currency for LEL, the Company’s ~~recently acquired~~ operation located in Colombia. For foreign currency functional locations, assets and liabilities are translated to the U.S. dollar at end-of-period rates, while revenues and expenses are translated at average rates in effect during the period. Equity is translated at historical rates and the resulting cumulative translation adjustments are included as a component of accumulated other comprehensive income.

Contingencies

The Company accrues for contingent obligations, including legal costs, when the obligation is probable and the amount can be reasonably estimated. As facts concerning contingencies become known we reassess our position and make appropriate adjustments to the consolidated financial statements. Estimates that are particularly sensitive to future changes include those related to tax, legal, and other regulatory matters that are subject to change as events evolve and additional information becomes available.

Subsequent Events

During March 2010, the company entered into two convertible debt agreements to raise working capital and continue development of PuntoMio.

Falcon Consulting convertible debenture agreement - $500,000

On March 15th 2010, the Company entered into an agreement with Falcon Consulting to raise up to $500,000 through the sale of convertible debenture notes. Falcon’s fee is comprised of a cash fee equal to 7% of the total amount raised. Falcon will also receive 7% of any common shares sold upon conversion of the notes through July 15, 2010

As of March 26, 2010, the Company has entered into convertible note agreements with several shareholders of the Company totaling $310,000. The terms of the convertible note agreements are:

● The notes become due upon the earlier of July 15, 2010 or completion of a financing event in the amount of $4,000,000 or greater.

● Annual interest rate of 2%, payable annually.

● The convertible note holders have the option to convert the notes into stock of the Company at a conversion ratio of $.05 per $1.00 of principal outstanding.

● The notes provide for a 20% warrant coverage with a strike price of $0.05 per share expiring March 15, 2011. In the event $500,000 was raised and all note holders exercise their warrants, they would have the right to purchase up to 2,000,000 shares at $0.05 per share.

Convertible Bridge Loan Note $100,000

On March 8th 2010, the Company entered into a Loan agreement for $100,000. Terms of the Loan Note are:

● Discount granted at issuance of 3%.

● Interest on the unpaid principal at 1.5% per month, payable monthly.

● Maturity date May 7, 2010.

● Company can prepay all or any part of principal without penalty.

● Subject to lender concurrence, Company can extend the terms of the loan on a month to month basis at monthly interest rate of 1.5%.

● Note is secured by SkyPostal, Inc.’s accounts receivable.

● Lender may convert 100% of the note payable to Company’s common shares at $0.10 per share.

New Pronouncements

Effective July 1, 2009, the Company adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 105-10, Generally Accepted Accounting Principles — Overall (“ASC 105-10”). ASC 105-10 establishes the FASB Accounting Standards Codification (the “Codification”) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”). Rules and interpretive releases of the United States Securities and Exchange Commission (“SEC”) under authority of federal securities laws are also sources of authoritative U.S. GAAP for SEC registrants. In August 2009, the FASB issued an accounting standard update to guidance on fair value measurements and disclosure. The updated guidance clarifies that the fair value of a liability can be measured in relation to the quoted price of the liability when the liability trades as an asset in an active market, without adjusting the price for restrictions that prevent the transfer of the liability. This update is effective for annual and interim periods beginning after August 31, 2009. The Company does not expect the update to have an effect on the valuation techniques used by the Company for measuring liabilities at fair value.

Results of Operations

The following table sets forth, for the periods indicated, the Condensed Consolidated Statements of Operations that is used in the following discussions of our results of operations.

	Twelve Months Ended December 31,						Increase/(Decrease)
	2009			2008			Amount			Percent
NET REVENUES	$	8,285,737		$	9,078,365		$	(792,628	)		(8.7	%)
OPERATING EXPENSES
Cost of Delivery		7,038,584			8,056,868			(1,018,284	)		(12.6	)
General and Administrative		4,483,557			4,604,087			(120,530	)		(2.6	)
Stock Based Compensation		258,865			1,549,631			(1,290,766	)		(83.3	)
Factoring Fees		-			92,036			(92,036	)		(100.0	)
TOTAL OPERATING EXPENSES		11,781,006			14,302,622			(2,521,616	)		(17.6	)
OPERATING LOSS		(3,495,269	)		(5,224,257	)		1,728,988			(33.1	)
OTHER EXPENSES/(INCOME)
Interest		-			385,200			(385,200	)		(100.0	)
Provision for excess of value of put options
over the estimated fair value of shares		374,400			617,600			(243,200	)		(39.4	)
Provision for escrow deposit		149,975			-
Impairment of PDA GPS		231,295			-
Impairment of license agreement		76,160			-
Other		12,059			(66,902	)		78,961			(118.0	)
TOTAL OTHER EXPENSES/(INCOME)		843,889			935,898			(92,009	)		(9.8	)
Net (Loss)		(4,339,158	)		(6,160,155	)		1,820,997			(29.6	)
Less: Net (Loss) attributable to the
noncontrolling interests		(75,362	)		-			(75,362	)
(Loss) attributable to the controlling interest	$	(4,263,796	)	$	(6,160,155	)	$	1,896,359			(30.8	)
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		65,356,429			47,162,919			18,193,510			38.6
Effect of dilutive shares		-			-			-
Diluted		65,356,429			47,162,919			18,193,510			38.6
NET (LOSS) PER SHARE:
Basic	$	(0.07	)	$	(0.13	)	$	(0.07	)		50.1
Diluted	$	(0.07	)	$	(0.13	)	$	(0.07	)		50.1

Revenue

The Company generates revenue on the tonnage of mail and parcels delivered, measured in kilograms, based on the distance to deliver, contract terms for committed annual tonnage, tracking services and volume discounts. Tonnage in the twelve months ended December 31, 2009 decreased by 17.3% compared to the twelve months ended December 31, 2008. The decrease in tonnage for the twelve months ended December 31, 2009 is primarily attributable to the deep economic recession and to the ongoing migration of mail to electronic alternatives. However, the sharp decline in tonnage produced only an 8.7% decline in net revenues due to an increase of revenue per kilogram of 10.3% in the twelve months ending December 31, 2009.

Management believes that overall industry mail tonnage will slightly decrease while parcel volumes from the U.S. and Europe into Latin America will increase due to general demand increase for U.S. products resulting in an increase to PuntoMio’s customer base. In addition, Management believes that higher margin business originating in Latin America and Caribbean will increase as the Company continues to build on new retail customers in the region.

The following schedule highlights the Company’s U.S. and foreign sourced revenue including the revenues of PuntoMio and LEL (since March 1, 2009), for the years December 31, 2009 and 2008:

	Twelve Months Ended December 31,										Change
			Percent of					Percent of
Region	2009		Total			2008		Total			Amount			Percent
U.S.	$	4,258,115		51.4	%	$	5,180,954		57.1	%		(922,839	)		-17.8	%
Foreign		4,027,622		48.6	%		3,897,411		42.9	%		130,211			3.3	%
Total	$	8,285,737				$	9,078,365					(792,628	)		-8.7	%

Operating Expenses

Cost of Delivery. The total cost of delivery decreased as a function of sales, however on a per kilogram basis the expense increased by 5.6% compared with the same period in the prior year, largely reflecting the increased cost of business delivered into Europe during the first half of year. The Company phased out lower margin business during the second half of the year and expects gross margins to continue to improve in the next twelve months. Gross margin, net revenues less cost of delivery, increased 22.1% during the twelve months ended December 31, 2009 primarily due to better margin business and reduced delivery costs in the second half of the year. Cost per kilogram will vary with the price of oil and the margin between revenue and delivery costs would be adversely affected by increases in oil prices.

General and Administrative. This expense decreased by $121,000 primarily due to cost containment of sales, marketing and travel expenses of $186,000; salary and consultant expense reductions of $88,000, decrease in bad debt expense of $51,000, and rent, maintenance, telephone expenses of $46,000. These savings were partially increased by operational costs of $174,000 related to the Bogota and, New Jersey hubs and an outsourced Brazilian customer service center that did not exist during the twelve months ended December 31, 2008. In addition, the Company accounted for $45,192 of PuntoMio preferred shares issued to a member of the Board of Directors as General and Administrative Expense.

Stock Based Compensation. This expense decreased by $1.29 million during the twelve months ended December 31, 2009 primarily due to the decrease in employee and director stock grants for service. In 2009, the Company only granted 300,000 shares subject to three year vesting schedule to one new employee wherein 2008, 2,135,226 shares were granted to employees and directors subject to two year vesting schedule. In 2009, except for 300,000 shares granted to a new employee, there were no other employee grants of stock compensation. In addition, the 2009 non-cash charge decreased due to forfeitures of stock grant that took place in the third and fourth quarters of 2009.

Factoring Fees. The Company did not utilize its line of credit financing facility during the twelve months ended December 31, 2009, thus incurred no interest expense nor factoring fees.

Other Expenses

Interest. The Company had no interest bearing debt during the twelve months ended December 31, 2009.

Revaluation of Put Option Liability. The Company records a mark to market adjustment every reporting period to adjust the fair value of the put option liability (see Put Option and Non-compete Agreements below). During the twelve months ended December 31, 2009, the stock price of the Company was less than the $1.00 exercise price of the put option resulting in a net charge to earnings of $374,400. During the twelve months ended December 31, 2008, the stock price was also below the $1.00 exercise price resulting in a net charge to earnings of $617,600.

Other Expenses increased by $536,000 during the twelve months ended December 31, 2009 primarily due to a reserve of $149,975 recognized for a deposit unlikely to be returned to the Company by Crosscheck Media (see Item 3. – Legal Proceedings) and, based on Management’s analysis, the write-off of PDA-GPS software development project that was determined to by fully impaired in the amount of $231,295. In addition, based on Management’s analysis, the remaining book value of the License Agreement was impaired and $76,160 charged to other expenses.

Net Income (Loss) Attributable to the Non-controlling Shareholders

This amount is the portion of earnings in LEL and PuntoMio attributable to the non-controlling shareholders whom hold 30% common equity and 24.1% preferred equity interest in those subsidiaries, respectively. The Company acquired a 70% interest in LEL effective March 1, 2009. The change of the Company’s equity interest in PuntoMio from 100% to 75.9% occurred effective September 30, 2009 as a result of the third quarter capital raise for PuntoMio.

~~Put~~In ~~Option~~January 2010, the FASB issued an accounting standard update that clarifies that the decrease-in-ownership provisions of the consolidation guidance of the Codification apply to: (1) a subsidiary or group of assets that is a business or nonprofit activity, (2) a subsidiary that is a business or nonprofit activity that is transferred to an equity method investee or joint venture, and ~~Non~~(3) an exchange of a group of assets that constitutes a business or nonprofit activity for a noncontrolling interest in an entity (including an equity method investee or joint venture). The update also clarifies that the decrease in ownership guidance on accounting for decreases in ownership of a subsidiary does not apply if the transaction is a sale of in-~~Compete~~substance ~~Agreements~~real estate or conveyance of oil and properties. This update is effective for interim and annual periods ending on or after December 15, 2009 with retrospective application required for the first period of adoption of the consolidation guidance in the Codification. The Company adopted the amendment upon issuance with no material impact to its financial position or results of operations.

~~The~~In ~~Company~~January ~~entered~~2010, ~~into~~the aFASB ~~and~~issued aan ~~Non-Compete~~accounting ~~agreement~~standard ~~with~~update ~~the~~on ~~same~~fair ~~shareholder~~value onmeasurements ~~April~~and 1,disclosures. ~~2007,~~The ~~referred~~update torequires ~~herein~~more asrobust ~~the~~disclosures ~~“Put~~about ~~Option”~~(1) the ~~agreement~~different ~~and~~classes ~~“Shareholder~~of ~~Non-Compete”~~assets ~~agreement. The~~and ~~Put~~liabilities ~~Option~~measured ~~liability~~at isfair ~~adjusted~~value, on(2) the avaluation ~~quarterly~~techniques ~~basis~~and ~~determined~~inputs byused, (3) the ~~market~~activity ~~share~~in ~~price~~Level on3 ~~the~~fair ~~reporting~~value ~~date. During~~measurements, and (4) the 12transfers ~~months~~between ~~ending~~Levels ~~December~~1, 312, ~~2009~~ and ~~2008,~~3. ~~the~~The ~~Company~~new ~~recognized~~disclosures anand ~~expense~~clarifications of ~~$374,400~~existing disclosures are effective for interim and ~~$617~~annual reporting periods beginning after December 15,~~600,~~ ~~respectively~~2009, ~~related~~ toexcept for the ~~put~~disclosures ~~option~~about ~~agreement. The~~purchases, ~~Company~~sales, ~~has~~issuances, ~~paid~~and ~~down~~settlements ain ~~portion~~the roll forward of ~~the~~activity ~~shareholder~~in ~~Non-Compete~~Level ~~and~~3 atfair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 312010, ~~2009~~ and ~~2008,~~for ~~the~~interim ~~total~~periods ~~due~~within tothose ~~Shareholder~~fiscal ~~Non-Compete~~years. This update is ~~$434,633~~not ~~and~~expected ~~$598,500,~~to ~~respectively~~have an effect on the Company’s consolidated financial statements.

In addition, the Company has a non-compete with LEL’s shareholder referred to as the LEL’s minority shareholder, referred to as the “LEL Non-Compete”. As compensation for the minority shareholder agreeing not to compete with the Company for one year after any separation, the Company agreed to make 25 monthly payments of $4,000 commencing one month after closing of the LEL acquisition. At December 31, 2009, the liability related to the LEL Non-Compete agreement was $72,004, of which $56,004 is classified as current and $16,000 is non-current.

Please refer to Note 9 - Commitments and Contingencies of the Consolidated Financial Statements for a full discussion of information regarding the Put Option and Non-Compete Agreements.

Liquidity

The Company’s primary recurring source of liquidity is the cash provided through its on-going operations. Proceeds from additional sales of equity securities over the last two years have been used for the development of new products and services, operating losses and for corporate working capital needs. For the twelve month period ended December 31, 2009, cash decreased by $272,942 compared to an increase of $308,604 during the same period for 2008.

The following table summarizes the Company’s Consolidated Statement of Cash Flows:

	Twelve Months Ended December 31
Net cashed provided (used) by operating activities	2009			2008
Operating activities	$	(2,076,362	)	$	(6,738,556	)
Investing activities		(7,409	)		(239,224	)
Financing activities		1,817,464			7,286,384

The cash used by operating activities in 2009 of $2.1 million was primarily due to the net loss incurred of $4.2 million adjusted for decrease in intangibles and other assets, decrease in accounts receivable, revaluation of the put option liability, and stock compensation expense of approximately $597,000, $433,000, $374,000 and $259,000 respectively.

The cash used by investing activities in 2009 was primarily due to $19,162 of computers and other fixed assets acquired during the twelve months ended December 31, 2009 less the cash on the balance sheet from the acquisition of LEL of $11,753.

The cash provided by financing activities in 2009 and 2008 was primarily due to the Company’s private placements of equity securities (see further discussion in Private Placements subsection below).

Financial Condition

As of December 31, 2009, the Company had no interest bearing indebtedness, but as described in Note 9. –Commitments and Contingencies, the Company has failed to make scheduled payments totaling $434,633 due on the Shareholder Non-Compete agreement. The Company also owes $8,000 to another shareholder for the LEL Non-Compete. In 2008, two put options, each comprised of 160,000 shares, were put to the Company. The Company paid $320,000 to satisfy the two puts and has 320,000 shares in treasury stock. The agreements do not provide for any significant remedies for the counterparty in the event of non-payment. In Management’s opinion the failure of the company to make payments on the Shareholder Non-Compete will not have an adverse effect on the Company’s business, financial condition or liquidity. Neither the Put Option nor the Shareholder Non-Compete bear any interest penalty on the unpaid portion.

Private Placements

On January 28, 2009, the Company executed an engagement letter with Falcon International Consulting Limited (“Falcon Consulting”) under which Falcon Consulting would, on a best efforts basis, raise up to $2 million through the sale of shares of common stock of the Company at $.10 per share (the “2009 Quarter One Private Placement”). The Company received proceeds of $836,443 net of placement fees paid to Falcon Consulting and others, for the purchase of 9,630,000 shares of common stock, as more fully described in Note 13-Common and Preferred Stock. The proceeds from the 2009 Private Placement have been used to support the development of the Company’s subsidiary, PuntoMio. PuntoMio is an online cross border shopping facilitator.

During third quarter 2009, the Company sold units comprised of one preferred share of PuntoMio, its subsidiary, plus one warrant to purchase one common share of the Company, at an exercise price of $.10 expiring July 1, 2012, at $1.00 per unit in a private placement. The Company sold 1,090,000 shares of PuntoMio preferred stock and 1,090,000 warrants for the Company’s common stock and received proceeds of $966,021 net of placement fees paid to Falcon. In addition to the cash fee paid to Falcon, the Company issued Falcon 284,345 PuntoMio preferred shares for their efforts in connection with the private placement. At December 31, 2009, PuntoMio has 5,928,145 common and preferred shares issued and outstanding. At December 31, 2009, the Company has a 75.9% common equity interest ownership in PuntoMio and preferred shareholders have a 24.1% non-controlling interest in PuntoMio.

Last year, from March 7, 2008 through October 21, 2008, the Company sold 20,741,948 shares of its common stock for $10,370,974, or $.50 per share. The Company sold 80,000 shares for $40,000 in the fourth quarter of 2008. This Private Placement was arranged by Falcon Capital, LLP (“Falcon”). Mathijs van Houweninge, a Director of the Company, was Partner of Falcon until December 31, 2008 when he resigned. Falcon received a cash fee of 10% of the total funds raised and was granted warrants to purchase shares of the Company’s common stock equal to 10% of the number of shares sold. Each warrant entitles the holder to purchase a share of the Company’s common stock at an exercise price of $.50 during an exercise period of three years from the day a stock subscription agreement is paid in full. Falcon is entitled to receive approximately 2,000,000 warrants. A description of the use of proceeds as of December 31, 2008 is shown below.

Use of Proceeds	Amount
Payment of accounts payable and operating expenses	$	6,490,237
Repayment of loans and notes from stockholders	438,317
Repayment of other loans and notes	932,355
Exercise of put option and non-compete payments	456,500
Listing and private placement related expenses	1,553,565
Escrow deposit in connection with investor relations services	500,000
Total	$	10,370,974

Capital Expenditures

In 2009, capital expenditures, net totaled $7,409. In 2008, capital expenditures totaled $239,224, which includes $170,000 in capitalized expense for the development of the Company’s PDA GPS software. The entire capitalized expenditures for the PDA GPS development software of $231,295 was written-off during the 4th quarter 2009.

ITEM 7A.

Quantitative and Qualitative Disclosures About Market Risk

Not applicable to smaller reporting companies. ~~However, risk factors relating to the Company and Company’s securities are described under “Item 1A Risk Factors.”~~

ITEM 8.

Financial Statements and Supplementary Data

See Consolidated Financial Statements and Schedules in Item 15 below.

ITEM 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

ITEM 9A ~~(T)~~. Controls and Procedures

(a) Evaluation of Disclosure ~~Control~~Controls and Procedures

We carried out an evaluation required by Rule 13a-15(b) of the Securities Exchange Act of 1934 or the Exchange Act under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures.

Disclosure controls and procedures are designed with the objective of ensuring that (i) information required to be disclosed in an issuer’s reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and (ii) information is accumulated and communicated to management, including our Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosures.

The evaluation of our disclosure controls and procedures included a review of our objectives and processes and effect on the information generated for use in this Report. This type of evaluation is done quarterly so that the conclusions concerning the effectiveness of these controls can be reported in our periodic reports filed with the SEC. We intend to maintain these controls as processes that may be appropriately modified as circumstances warrant.

Based on their evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures are effective in timely alerting them to material information which is required to be included in our periodic reports filed with the SEC as of the filing of this Report.

(b) Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, ~~2009~~2010 based on the criteria set forth in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the criteria set forth in Internal Control — Integrated Framework, our management concluded that our internal control over financial reporting was effective as of December 31, ~~2009~~2010.

However, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Management necessarily applied its judgment in assessing the benefits of controls relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. Because of the inherent limitations in a control system, misstatements due to error or fraud may occur and may not be detected.

This Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. We were not required to have, nor have we engaged our independent registered public accounting firm to perform, an audit on our internal control over financial reporting pursuant to the rules of the SEC that permit us to provide only management’s report in this Report.

In our Form 10-K for the period ending December 31, 2008, we identified the material weaknesses noted below. During 2009, Management, under the guidance of the Audit Committee, remediated each material weakness as described below. As of December 31, 2009 Management concluded that our internal control over financial reporting was effective.

Changes in Internal Control Over Financial Reporting

AThere ~~material~~were ~~weakness~~no isother achanges ~~control~~in ~~deficiency,~~our orinternal ~~combination of~~ control ~~deficiencies,~~over ~~that~~financial ~~results~~reporting ~~in more than a remote likelihood~~ that aoccurred ~~material~~during ~~misstatement~~2010 ~~of the annual or interim financial statements will not be prevented or detected. Management identified the following control deficiencies~~ that ~~represented~~have ~~material~~materially ~~weaknesses in our 2008 Annual Report on Form 10-K~~affected, asor ~~amended~~are byreasonably ~~Form 10-K/A~~likely ~~filed on April 24, 2009. During 2009, Management invested significant resources~~ to ~~remediate~~materially ~~all the identified material weaknesses. Below are the 2008 identified material weakness and how Management remediated them during 2009. As of December 31~~affect, ~~2009~~our ~~all~~internal ~~the~~control ~~identified material weaknesses have been remediated and Management continues to implement processes and procedures to identify and remediate weaknesses~~ over financial reporting ~~as they are identified~~. ~~No additional material weaknesses were identified as of March 31, 2010.~~

(b) Internal Control Over Financial Reporting

In connection with the assessment of our internal control over financial reporting included in our Annual Report on Form 10-K, as amended by Form 10-K/A filed on April 24, 2009, we determined that material weaknesses existed in our internal controls over financial reporting. A material weakness is a control deficiency, or combination of control deficiencies, that results in a more than remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.

The Company has completed a risk assessment, which is the first phase of the necessary work to improve internal controls over financial reporting and comply with Sarbanes-Oxley. In addition, the Company has taken the following actions to address material weaknesses in controls and procedures outlined on page 23 and 24 of our 2008 Form 10-K:

(i) We did not maintain a sufficient depth of personnel with an appropriate level of accounting knowledge, experience and training in the selection and application of GAAP commensurate with financial reporting requirements. Historically, we have lacked staff with experience pertaining to GAAP and SEC regulations. This control deficiency could result in material misstatements of significant accounts and disclosures that would result in a material misstatement to our interim or annual consolidated financial statements that would not be prevented or detected. Based on Management’s actions described below, Management deems the deficiency fully remediated and no longer constitutes a material weakness in our financial reporting.

● Company Action - In February 2009, the Company hired its first fulltime Controller. This executive is a CPA who previously worked at Grant Thornton. Her primary responsibility is to ensure our accounting and financial reporting comply fully with U.S. GAAP and SEC requirements for smaller reporting companies. She also has significant experience in developing and implementing controls and procedures consistent with the requirements of Sarbanes-Oxley Section 404.

● Company Action - Effective June 1, 2009, the Company engaged on a consulting basis a former Partner of a Big 4 accounting firm with extensive experience in addressing complex and technical transactions to assist the Company with technical transactions, external reporting and enhancement of our internal control environment over financial reporting. This Consultant assisted in the preparation and review of our Form 10-Q for the periods ending June 30, 2009 and September 30, 2009. For the period ending December 31, 2009, Management engaged another firm also with previous Big 4 and extensive SEC technical accounting experience to ensure complete disclosure and correct presentation as required by the SEC for smaller reporting companies.

(ii) We did not adequately inform and educate employees of our standards and expectations of integrity and ethical values which includes (but is not limited to) guidelines and policies that address sexual harassment, conflicts of interest, confidential information and trust regulations as well as the Foreign Corrupt Practices Act. We did not actively engage employees on these matters in a way that ensures they not only understand the guidelines and polices established but also know how they are to be integrated into business practices that foster good corporate citizenship. Based on Management’s actions described below, Management deems the deficiency fully remediated and no longer constitutes a material weakness in our financial reporting.

● Company Action — In November 2009, the Company issued a revised employee handbook that addresses the guidelines and policies that address sexual harassment, conflicts of interest, confidential information and trust regulations as well as the Foreign Corrupt Practices Act. All employees were required to attend a presentation regarding the November 2009 revised employee handbook and sign an acknowledgement form as evidence of their attendance. Management will continue to hold this presentation annually to continue to educate the employees and foster good corporate citizenship.

(iii) We did not maintain effective control over certain spreadsheets utilized in the period-end financial reporting process. Specifically, we lacked effective controls related to the completeness, accuracy, validity, and security (restricted access and data security) of consolidation spreadsheet schedules that report revenue, expenses, assets, liabilities and stockholders’ equity. This control deficiency did not result in audit adjustments to the 2009 nor 2008 interim or annual consolidated financial statements. This control deficiency could result in a material misstatement of the aforementioned accounts or disclosures that would result in a material misstatement to our interim or annual consolidated financial statements that would not be prevented or detected. Based on Management’s actions described below, Management deems the deficiency fully remediated and no longer constitutes a material weakness in our financial reporting.

● Company Action — The Company has implemented restricted user access on all schedules related to financial reporting. In addition, all materially significant schedules relevant to monthly and quarterly closes are reviewed by an appropriate member of Management to ensure validity, completeness and accuracy. Finally, the consolidation spreadsheet schedules are prepared and maintained by the Controller and reviewed by the CEO and SEC Advisor.

(iv) We did not maintain effective controls over access to and maintenance of financial data. Specifically, financial and non-financial data is stored on non-networked laptops and hard drives instead of a central data storage site at our headquarters’ location. Furthermore, management lacks data retention policies and processes that ensure the security and availability of current and historic data. Based on Management’s actions and facts described below, Management deems the deficiency fully remediated and no longer constitutes a material weakness in our financial reporting.

● Company Action — Every Company computer, including laptops, used for financial reporting are password restricted. In addition, the Company has implemented automatic daily backup for all computers containing schedules and other data used for financial reporting.

(v) We did not maintain effective controls over the design and maintenance of the headquarters general ledger application. Inadequate maintenance of the headquarters general ledger is manifest in the lack of change management policies, absence of data maintenance plans, and absence of backup/recovery procedures. Furthermore, ongoing monitoring of security and access control is absent. This control deficiency did not result in audit adjustments to the 2009 nor 2008 interim or annual consolidated financial statements. Based on Management’s actions and facts described below, Management deems the deficiency fully remediated and no longer constitutes a material weakness in our financial reporting.

● Company Action — The Company’s general ledger system is an off the shelf commonly used application with no customization. The Company maintains its general ledger system on a server kept in a secured server room with limited access. The general ledger application is backed up daily and data restoration tests have been successful. Access to make any changes to the general ledger was severely restricted during the third quarter 2009 and is password protected. Only accounting personnel have access to make changes to the Company’s general ledger and only those changes within the scope of their responsibility. Other personnel with a need to see reports from the general ledger system possess view-only access.

(vi) We did not maintain effective controls over segregation of duties. Specifically, certain key financial accounting and reporting personnel had an expansive scope of duties that allowed for the creation, review, approval and processing of financial data without independent review and authorization for preparation of consolidation schedules and resulting financial statements and related disclosures. This control deficiency did not result in audit adjustments to our 2009 nor 2008 interim or annual consolidated financial statements. Based on Management’s actions described below, Management deems the deficiency fully remediated and no longer constitutes a material weakness in our financial reporting.

● Company Action — The Company has developed and implemented a system of reviews where all schedules that materially impact financial reporting are reviewed by an appropriate member of Management on a monthly basis to ensure validity, completeness and accuracy. No one person at the Company has the right to create, approve and execute financial transactions. The Company requires all transactions to be approved by an appropriate member of Management and the accounting entry for the transaction is completed by a non-member of Management supporting proper segregation of duties and preventing errors or fraud. As of March 31, 2010, the Company has not found any evidence of fraud or malfeasance.

Except for the remediation disclosed above, there were no other changes in our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. The continued monitoring of the described initiatives is among our highest priorities. Our Audit Committee will continually assess the progress and sufficiency of these initiatives and we will make adjustments as and when necessary. As of the date of this report, our Management believes that the plan referred to above has remediated the material weaknesses in internal control over financial reporting as described above.

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

ITEM 9B.

Other Information

~~The following information was filed in a Form 8-K with the SEC during the fourth quarter of 2009 and through March 31, 2010:~~None.

~~● On January 27, 2010, the Company announced it had been awarded the exclusive contract for La Poste, the French postal service, to deliver mail into Latin America.~~20

● On December 17, 2009, the Company announced a co-marketing partnership for PuntoMio, the Company’s subsidiary, with Garanti Bank, who represents American Express Card members in Turkey, under the name Global Shop.

● On November 20, 2009, SkyPostal Network reported the Non-Executive Director, Mr. David Fineman, resigned from the Company’s Board of Directors effective November 17th, 2009 due to conflict of interest from serving on the DHL Global Mail (DHLGM) board that he began to serve on May 1, 2009.

PART III

ITEM 10.

Directors, Executive Officers and Corporate Governance

Directors and Executive Officers

Set forth below are our directors and executive officers, their ages, their positions with the Company, their business experience during the past five years or more, and additional biographical data.

Name	Age	Position	Director Since		Serves Until
Albert Hernandez	6162	Chairman and Chief Executive Officer		2008		2011
AJ Hernandez	3940	Chief Financial and Chief Operating Officer		2008		2011
Chris Weber	62	Director of European Operations		2008		2011
E. Harold “Hal” Gassenheimer	72	Director		2010		2013
David Fineman*	64	Director		2008	Nov. 2009
John Nolan	62	Director		2010		2013
Florian Schubauer	31	Director		2008		2010
Michael Margolies	51	Director		2010		2012
Jose Misrahi	52	Director		2008		2012
Menachem Kranz	35	Director		2010		2012
Mathijs van Houweninge	43	Director		2008		2012

Albert P. Hernandez has served as the Chief Executive Officer and Chairman of the Board of the Company since its inception. Prior to that time, from 2002 to March 2008, he served as the Chief Executive Officer of SkyPostal, Inc. From 1972 to 2002 he served in various executive positions with companies in the logistics business, including ~~Sky~~SkyCourier ~~Courier~~ Network which was sold to Airborne Express in 1988 and SkyNet Worldwide Express which was sold to a division of Lan Chile Airlines in 2001. Mr. Hernandez has BBA in Accounting and MBA in finance from Iona College, New Rochelle, NY

A.J. Hernandez has served as the Chief Operating Officer of the Company since its inception and as the Chief Financial Officer since December 2008. From 2001 until March 2008 he served as the Chief Operating Officer of SkyPostal, Inc. From 1993 to 2001 he served in executive positions with SkyBox Services, Inc., a company providing a USU.S. address facility to enable upscale Latin American residents to receive mail, catalogues and Internet purchases via a mail warehouse facility in Miami, Florida. AJ Hernandez is the son of Albert Hernandez. Mr. Hernandez has an MBA in International Business from Florida International University, Miami,Fl.

~~Christian~~Mr. JE. ~~Weber~~Harold “Hal” Gassenheimer was appointed Director of SkyPostal Network, Inc.’s Board of Directors effective May 5, 2010. Mr. Gassenheimer brings over 30 years of financial and general management experience to the Company’s Board of Directors. Mr. Gassenheimer obtained his MBA from the Harvard School of Business and began his career at ExxonMobil where he served 23 years in various executive positions developing expertise in international tax, legal and accounting matters. Since ExxonMobil, Mr. Gassenheimer has ~~been~~participated ~~responsible~~as a partner with responsibility for ~~all~~finance in several large real estate development projects where he arranged debt financing and handled reporting requirements with banks. He was the Treasurer of ~~sales~~Cunard Line Limited and ~~service~~Seabourn inCruise ~~Europe~~Line, a division of Carnival Corporation for ~~SkyPostal~~three ~~since~~years ~~2002~~where he rebuilt the controls, systems and procedures for cash management. Following ~~From~~that, ~~1981~~Mr. toGassenheimer ~~2002~~served as CFO for Avalon Research Group until its successful sale in 2005. Since then he ~~was~~has ~~Managing~~served ~~Director~~as CFO of ~~SkyNet~~Reefbreak ~~Worldwide~~Management, ~~Express~~a hedge fund, and ~~SkyMail~~COO UKof MAMC, ~~Ltd~~Inc., ~~international~~a ~~delivery~~mortgage ~~companies~~servicer. Hal is currently the CFO of Littlebanc, an investment firm.

~~Mathijs~~John ~~van~~Nolan, ~~Houweninge~~Former Deputy Postmaster General, has ~~served~~significant asexecutive aexperience ~~Director~~in ofboth the ~~Company~~government ~~since~~and ~~its~~private ~~inception~~sectors. He ~~From~~is ~~2005~~currently toa ~~December 2008~~board hemember ~~served~~for asStreamlite, a ~~partner~~business to consumer lightweight package delivery service in ~~Falcon~~the ~~Consulting~~U.S.. He ~~From~~serves ~~1990~~as senior advisor to ~~2003~~All heVision and Western Union. John served inas ~~executive~~Deputy ~~positions~~Postmaster General for just over five years ending in mid 2005, one of the most challenging yet successful periods for the U.S.P.S. He began his postal career as a ~~software~~management ~~consultancy~~intern ~~company~~and ~~that~~quickly herose ~~eventually~~through ~~sold~~the ranks to ~~Orvida~~become Regional General Manager for Delivery, Regional Director for Customer Services, and Postmaster/General Manager of ~~Holland~~the world’s largest post office, New York City. From He1989 isto a2000 ~~member~~he ofwas recruited to run the ~~Board~~operations of ~~Cyber~~Tritech, ~~City~~a print/fulfillment/lettershop/proxy services company within Merrill Lynch. In addition to his corporate work, ~~USA~~John ~~and~~serves aon ~~member~~the board of several nonprofit organizations including the ~~Advisory~~Smithsonian ~~Board~~National ~~Private~~Postal ~~Equity~~Museum, ~~for~~the ~~Triodos~~Envelope Manufacturers Foundation, Washington & Lee University’s Shepherd Poverty Program and St. Columba Episcopal Church. He also offers pro bono consulting services to nonprofits in the ~~Netherlands~~Washington DC area for board improvement. John’s undergraduate degree is from Washington & Lee University and he also attended Harvard Business School’s Program for Management Development.

~~Florian~~Michael M.Margolies ~~Schuhbauer~~ has ~~served~~over as25 years of investment banking experience. Mr. Margolies was a Managing Director of ~~the~~Ladenburg ~~Company~~Thalmann ~~since~~& ~~its~~Co., ~~inception~~Inc. Inwhere ~~2006~~ he led the firm’s PIPE practice. Mr. Margolies founded NGand ~~Outsourcing~~served as CEO of independent research provider, Avalon Research Group Inc., afrom ~~consulting~~1995 through its sale in 2004. With over 100 hedge fund and ~~investment~~mutual ~~boutique~~fund clients, Avalon was a top rated independent research firm and ~~joined~~founding ~~General~~member ~~Capital~~of ~~Group.~~Investorside HeResearch ~~became~~Association, a ~~partner~~non-profit trade association of ~~General~~investment ~~Capital~~research ~~Group~~providers not engaging in ~~2008~~investment banking. ~~From~~Prior ~~2002~~ to ~~2006~~founding heAvalon, ~~served~~Mr. inMargolies ~~executive~~managed ~~positions~~long/short atdiscretionary ~~Deusche~~accounts ~~Post~~for AGM.A. Berman & Co., ~~including~~a ~~Chief~~boutique ~~Financial~~money ~~Officer~~management and ~~Executive~~brokerage ~~Vice~~firm ~~President~~with ofmore ~~DHL~~than ~~Global~~$500 ~~Mail~~million Uunder management.S In the eighties to early nineties, Mr. ~~operations~~Margolies managed discretionary accounts as a Senior V.P. Heand ~~previously~~Limited ~~served~~Partner inat ~~trading~~Oppenheimer and ~~equity~~Company ~~research~~in ~~positions~~New York. Mr. Margolies is currently Chief Executive Officer at ~~Dresdner~~Littlebanc, ~~Bank/Dresdner~~a ~~Kleinwort~~boutique ~~Benson~~investment ~~from~~banking ~~1994-1999~~firm.

Jose Misrahi has served as a Director of the Company since its inception. Since 2006 he has been the Chief Financial Officer of Facey Commodity Company Limited, a multi-national company operating in 29 countries. From 2003 to 2006, Mr. Misrahi was a Managing Director of Vaupen Financial Advisors, a boutique investment bank. From 1992 to 2002, he served as Vice President, Finance for the Cisneros group of companies, a $3 billion multinational group with extensive media and communications holdings. Mr. Misrahi is a CPA and is head of our Audit Committee.21

S.Menachem ~~David~~Kranz ~~Fineman~~has ~~served~~worked asfor over a ~~Director~~decade ofin the ~~Company~~securities ~~since~~and ~~its~~finance ~~inception~~industry, ~~until~~most ~~November~~recently ~~2009.~~as HeVice isPresident ~~currently~~in the ~~Senior~~PIPEs ~~Partner~~practice ofat ~~Fineman,~~Ladenburg ~~Krekstein~~ Thalmann & ~~Harris~~Co. Prior to joining Ladenburg, aMr. ~~law~~Kranz ~~firm~~leveraged his extensive contacts and relationships within the hedge and mutual fund communities in ~~Philadelphia,~~a ~~Pennsylvania~~variety of contexts, ~~and~~including ~~has~~as ~~been~~a ~~since~~hybrid ~~1998.~~trader ~~From~~with ~~1995~~RBC toCapital ~~2004~~Markets heand ~~served~~a onSenior ~~the~~Vice ~~Board~~President of ~~Governors~~institutional ofresearch ~~the~~sales Uat Avalon Research Group Inc.S. ~~Postal~~where ~~Service~~he ~~and~~was ~~served~~instrumental asin ~~Chairman~~the ~~from~~rapid ~~2001~~growth toand ~~2004~~development of the firm. Mr. ~~Fineman~~Kranz’s ~~resigned~~educational ~~from~~background, ~~the~~Rabbinical ~~Board~~College of ~~Directors~~America, ~~effective~~laid ~~November~~the ~~17,~~foundation ~~2009~~for sound analytical minded process and affability.

Section 16(a) Beneficial Ownership Reporting Compliance

~~Each~~Based solely on a review of ~~our~~copies ~~executive~~of ~~officers~~reports ~~and~~filed ~~directors~~with ~~failed~~the toSEC, ~~file~~the ~~Form~~Company 5believes –that ~~Annual~~during ~~Statement~~fiscal 2010, and through the date of ~~Beneficial~~this ~~Ownership~~report, certain of ~~Securities~~its bydirectors ~~the~~did ~~due~~not ~~date~~timely file all of ~~February~~the ~~15,~~reports ~~2010. All~~required ~~forms~~to ~~were~~be filed onby ~~March~~them ~~26,~~under ~~2010~~Section 16(a) of the Securities Exchange Act of 1934.

Code of Ethics

Effective June 9, 2008, the Board of Directors adopted a Code of Business Conduct and Ethics that applies to all of our employees, officers and directors, including our principal executive officer, principal financial officer and principal accounting officer. The code consists of basic standards of business practice as well as professional and personal conduct. The code provides guidance in how to uphold these standards. The code is filed as Exhibit 12.1 to ~~this~~our 10-K ~~filing~~for the year ended December 31, 2009 filed with the SEC on March 31, 2010.

Committees of the Board of Directors

The Board of Directors has established several committees to assist it in fulfilling its responsibilities:

● The Audit Committee (comprised of Messrs. ~~Misrahi,~~ ~~Schuhbauer~~Gassenheimer (Chairman), Margolies and ~~Fineman~~Kranz);

● The Compensation Committee (comprised of Messrs. ~~Schuhbauer,~~Margolies ~~Misrahi~~(Chairman), Nolan and ~~van Houweninge~~Gassenheimer);

● The Governance and Nominating Committee (comprised of Messrs. ~~Schuhbauer~~Kranz (Chairman), ~~van~~Gassenheimer, ~~Houweninge~~Nolan and Albert P. Hernandez)

All of the members of the committees are nominated by the Governance and Nominating Committee and appointed by the Board of Directors. Members of these committees are elected annually at the Board of Directors’ meeting following the annual meeting of stockholders. All compensation paid or accrued for the members of the Company’s Board of Directors are reported on under Item 11. Executive Compensation subsection Director Compensation.

ITEM 11.

Executive Compensation

Compensation of Executive Officers

The following summary compensation table sets forth information concerning the total cash and non-cash compensation paid to or accrued for the three named executive officers for the fiscal year ended December 31, 2010.


Name and Principal Position	Paid and Accrued Salary		Bonus		Stock Awards		Option Awards		All Other Compensation		Total
Albert P. Hernandez
Chief Executive Officer and
Chairman of the Board	$	153,899	$	—	$	—	$	—	$	26,925	$	180,824
A.J. Hernandez
Chief Operating and
Financial Officer		144,745		—		—		—		20,959		165,704
Chris Weber
Director of European Operations
Director on the Board of Directors	$	87,000	$	—	$	—	$	—	$	1,515	$	88,515


Name and Principal Position	Paid and Accrued Salary		Bonus		Stock Awards		Option Awards		All Other Compensation		Total
Albert P. Hernandez
Chief Executive Officer and
Chairman of the Board	$	206,730	$	—	$	—	$	—	$	30,636	$	237,366
A.J. Hernandez
Chief Operating and
Financial Officer		185,616		—		—		—		17,178		202,794
Chris Weber
Director of European Operations
Director on the Board of Directors	$	102,000	$	—	$	—	$	—	$	3,935	$	105,935

Name and Principal Position	Paid and Accrued Salary		Bonus		Stock Awards		Option Awards		All Other Compensation		Total
Albert P. Hernandez
Chief Executive Officer and
Chairman of the Board	$	198,338	$	—	$	430,696	$	—	$	—	$	629,034
A.J. Hernandez
Chief Operating and
Financial Officer		159,339		—		391,121		—		—		550,460
Clement Harary
Former Chief Financial Officer	$	109,138	$	—	$	50,000	$	—	$	—	$	159,138

Employment Agreements

Albert P. Hernandez

On ~~August 1~~May 17, ~~2006~~2010, the Company entered into an employment agreement with Mr. Albert Hernandez, the Chief Executive Officer. His employment agreement has an initial term of ~~five~~three years from the effective date. Mr. Hernandez currently receives a base salary of $~~200~~130,000, subject to annual increases at the discretion of the Board of Directors~~, and an annual performance bonus equal to 3 percent of pre-tax income, such annual bonus not to exceed $500,000~~. During the period of employment, Mr. Hernandez will also be entitled to additional benefits, including reimbursement of business expenses, paid vacation, an automobile allowance, a telephone allowance, life insurance and participation in other company benefit plans or programs that may be available to other executives or employees of our company.

A.J. Hernandez

On ~~August 1~~May 17, ~~2006~~2010, the Company entered into an employment agreement with Mr. A.J. Hernandez, the Chief Financial and Chief Operating Officer. His employment agreement has an initial term of ~~five~~three years from the effective date. Mr. Hernandez currently receives a base salary of $~~175~~130,000, subject to annual increases at the discretion of the Board of Directors, ~~and an annual performance bonus equal to 1 percent of pre-tax income.~~ During the period of employment, Mr. Hernandez will also be entitled to additional benefits, including reimbursement of business expenses, paid vacation, an automobile allowance, a telephone allowance and participation in other company benefit plans or programs that may be available to other executives or employees of our company.

In November 2008 Albert and A.J. Hernandez agreed to defer 35 and 30 percent of their base salaries, respectively, until such time as the Company’s cash flow permits the payment of their full salaries in cash. In October 2009, Albert and AJ Hernandez agreed to defer their salaries to 45 and 37 percent, respectively, until such time as the Company’s cash flow permits the payment of their full salaries in cash.

Under the employment agreement dated August 1, 2006 between the Company and Mr. Albert P. Hernandez, he is entitled to receive upon termination of employment without cause following a change of control a lump sum payment equal to the greater of: (1) the balance of his salary for the remainder of the existing term of his employment agreement or (2) 150 percent of his annual salary as then in effect. He is also entitled to receive the benefits covered in the agreements for two years following such termination.

Under the employment agreement dated August 1, 2006 between the Company and Mr. A.J. Hernandez, he is entitled to receive upon termination of employment without cause following a change of control a lump sum payment equal to 100 percent of his salary, bonus and benefits for the year preceding the termination.

Assuming that the triggering event in question occurred on December 31, 2009, the estimated payments due each executive are shown below.

Executive	Salary		Benefits		Total
Albert P. Hernandez	$	300,000	$	78,043	$	378,043
A.J. Hernandez	$	175,000	$	20,190	$	195,190

Mssrs. Hernandez do not have any rights to options, shares with accelerated vesting or restricted shares in the event of a change in control.

Director Compensation

InThe ~~2008,~~Director ~~the four non-executive directors and Mr. Weber received no cash~~ compensation for ~~their~~2010 board services but were entitled to expense reimbursement for reasonable expenses incurred to attend board meetings. In 2008, these five directors were each granted 135,000 shares of common stock with monthly vesting over a two year period from the date of grant. At the time of grant a share was valued at $1.29 or $870,750 in total and this amount is ~~being~~shown ~~expensed over the two year vesting period~~below.

Director	Fees earned or paid in cash			Stock awards		Option awards		Non-equity incentive plan compensation		Change in pension value and nonqualified deferred compensation earnings		All other compensation		Total
Albert P. Hernandez (1)	$	—		$	—	$	—	$	—	$	—	$	—	$	—
A.J. Hernandez (1)		—			—		—		—		—		—		—
E. Harold “Hal” Gassenheimer		20,000	(2)		39,000		—		—		—		—		59,000
John Nolan		(23,000	)		39,000		—		—		—		—		42,000
Michael Margolies		—			39,000		—		—		—		—		39,000
Menachem Kranz		—			39,000		—		—		—		—		39,000
Christian J. Weber (1)		—			—		—		—		—		—		—
Mathijs van Houweninge		—			—		—		—		—		—		—
S. David Fineman		—			—		—		—		—		—		—
Florian M. Schuhbauer		—			—		—		—		—		—		—
Jose Misrahi		30,000			—		—		—		—		—		30,000

~~During~~(1) ~~2009,~~Compensation nofor ~~additional~~these ~~stock~~individuals ~~was~~are ~~granted~~included toin the ~~Directors~~executive ~~except,~~compensation ~~Mr.~~table ~~van Houweninge was granted 53,800 preferred shares of the Company’s PuntoMio subsidiary for service to PuntoMio~~above. These shares were valued at $.84 each for a preferred stock grant of $45,192 based on an independent third party appraisal. In addition, $22,500 and $17,000 was accrued for Mssrs. Jose Misrahi and David Fineman, respectively, for their services as Directors. Of these amounts, $5,000 was paid to each during 2009.

(2)

These payments are pursuant to consulting agreements signed by each of Mr. Gassenheimer and Mr. Nolan for services that are outside of the scope of the responsibilities of these individuals as members of the Company’s board of directors. See discussion in Item 13 below.

The Director compensation for 2009 is shown below.


Director	Fees earned or paid in cash		Stock awards		Option awards		Non-equity incentive plan compensation		Change in pension value and nonqualified deferred compensation earnings		All other compensation		Total
Albert P. Hernandez	$	—	$	—	$	—	$	—	$	—	$	—	$	—
A.J. Hernandez		—		—		—		—		—		—		—
Christian J. Weber		—		—		—		—		—		—		—
Mathijs van Houweninge		—		—		—		—		—		45,192		45,192
S. David Fineman		17,000		—		—		—		—		—		17,000
Florian M. Schuhbauer		—		—		—		—		—		—		—
Jose Misrahi	$	22,500	$	—	$	—	$	—	$	—	$	—	$	22,500

~~The Director compensation for 2008 is shown below.~~23

Director	Fees earned or paid in cash		Stock awards (b)		Option awards		Non-equity incentive plan compensation		Change in pension value and nonqualified deferred compensation earnings		All other compensation		Total
Albert P. Hernandez (a)	$	—	$	—	$	—	$	—	$	—	$	—	$	—
A.J. Hernandez (a)		—		—		—		—		—		—		—
Christian J. Weber (a)		—		174,150		—		—		—		—		174,150
Mathijs van Houweninge		—		174,150		—		—		—		—		174,150
S. David Fineman (c)		—		174,150		—		—		—		—		174,150
Florian M. Schuhbauer		—		174,150		—		—		—		—		174,150
Jose Misrahi	$	—	$	174,150	$	—	$	—	$	—	$	—	$	174,150

(a) solely in their capacity as a Director

(b) subject to vesting

ITEM 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Management and Certain Beneficial Owners

The following table sets forth as of ~~December 31~~February 28, ~~2009~~2011, certain information regarding the beneficial ownership of our outstanding common stock by (i) each person known to us to beneficially own more than 5% of our common stock, (ii) each Named Executive Officer, (iii) each of our Directors and (iv) all of such Directors and officers as a group. Except as otherwise indicated, the persons named in the table below have sole voting and investment power with respect to all of the common shares owned by them.

	Beneficial Ownership
Name and Address (1)	Shares		%
Directors and Named Executive Officers
Albert P. Hernandez		4,585,821	3.89	%
A.J. Hernandez		4,611,658	3.91	%
E. Harold “Hal” Gassenheimer (2)		300,000	0.25	%
John Nolan (2)		300,000	0.25	%
Michael Margolies (2)		300,000	0.25	%

Menachem Kranz (2)		300,000	0.25	%
All current executive officers and directors as a group (6 persons)		10,397,479	8.82	%

Beneficial Owners of More than 5%
Cede & Co		15,342,766	12.77	%
Holston Investments, BVI		7,626,780	6.61	%

	Beneficial Ownership
Name and Address (1)	Shares		%
Directors and Named Executive Officers (a)
Albert P. Hernandez		3,907,851		5.57	%
A.J. Hernandez		3,886,058		5.53	%
Mathijs van Houweninge (b)		796,000		1.13	%
Christian J. Weber (c)		435,000		0.62	%
Florian M. Schuhbauer		135,000		0.19	%
Jose Misrahi		135,000		0.19	%
All current executive officers and directors as a group (6 persons)		9,294,909		13.24	%
Beneficial Owners of More than 5%
Cede & Co		12,924,549		18.41	%
Holston Investments, BVI		7,626,780		10.86	%
Albert P. Hernandez		3,907,851		5.57	%
A.J. Hernandez		3,886,058		5.53	%

(1)

The address of all Directors is care of the Company at the address shown on the cover of this filing.

(a2) ~~All~~ These shares ofhave ~~Executive~~been ~~Officers~~issued ~~and Directors were~~ subject to avesting ~~“lock~~of ~~up”~~100,000 ~~which~~shares ~~restricted~~on ~~the~~each ~~sale~~ of ~~shares until October 15~~August16, ~~2009. Mr. van Houweninge~~2011, ~~Mr. Weber~~2012, ~~Mr. Schuhbauer~~ and Mr2013. ~~Misrahi were granted 135,000 shares for their service as Directors that were become fully vested on April 1, 2010.~~

(b) Mr. van Houweninge obtained 461,000 common shares and 296,333 warrants with an exercise price of $0.50, expiration March 11, 2011, from Falcon Consulting for his work in 2008. In addition, he bought 200,000 shares in the open market.

(c) All of Mr. Weber’s shares are fully vested except the 135,000 shares granted to him for serving as a Director that become fully vested in April 1, 2010.

ITEM 13.

Certain Relationships and Related Transactions and Director Independence

~~Agreements~~Agreement with ~~Falcon~~Hal ~~Consulting~~Gassenheimer

In ~~March 2008~~July 2010, the Company entered into ~~agreements~~agreement with ~~Falcon~~Mr. ~~Consulting~~Gassenheimer tofor ~~engage~~international ~~their~~management ~~services~~and tofinancial ~~raise~~services. The ~~capital~~agreement ~~through~~provides ~~the~~for ~~sale~~a ofmonthly ~~new~~retainer ~~shares in the amounts~~ of $104,000~~,000. Falcon~~ ~~Consulting sold 20,741,948 common shares at $0.50 per share netting $8,817,409 for the Company. In addition~~ to ~~the~~be ~~cash~~paid ~~fee, Falcon Consulting earned approximately 2,136,000 warrants~~ to ~~purchase shares of the Company’s common stock at an exercise price of $0~~Mr.50 ~~during~~Gassenheimer anand ~~exercise~~may ~~period~~be ofterminated ~~three~~by ~~years~~either ~~from~~party ~~the~~at ~~day~~any ~~a stock subscription agreement is paid in full~~time.

~~Mathijs~~Investment ~~van~~Banking Houweninge, a member of the Board of Directors, was a partner of Falcon Consulting until December 2008. As a result of Mr. van Houweringe’s resignation from Falcon Consulting on December 2008, the Company believes it is independent of Falcon Consulting.Agreement

InAn ~~February 2009,~~entity ~~Falcon~~affiliated ~~Consulting~~with ~~requested~~Messrs.. Margolies, Gassenheimer and Kranz provided investment banking services to the Company ~~agreed~~related to ~~exchange~~the ~~approximately~~May ~~456,000~~2010 ~~warrants~~issuance ~~earned~~of ~~but~~convertible ~~unissued~~debt ~~for~~and ~~100~~warrants,~~000~~ ~~shares~~and ofhas ~~common~~a ~~stock~~consulting relationship with the Company. The ~~transaction~~affiliated ~~reduced~~entity ~~additional~~received ~~paid~~a inconvertible ~~capital~~note byin the ~~par~~amount ~~value~~ of ~~the~~$316,400 and warrants to purchase 1,265,600 shares of common stock at $0.15 per share.

During 2009, the Company entered into two additional agreements to raise capital for the Company.

In February 2009, the Company engaged Falcon Consulting to raise up to $2,000,000 for the Company. Falcon Consulting sold 9,630,000 common shares at $0.10 per share netting $835,480 for the Company. Under the February 2009 agreement Falcon Consulting earned one new share of common stock for each ten shares sold. Therefore Falcon Consulting earned 963,000 shares as equity fee for its efforts in the quarter one 2009 capital raise.

In July 2009, the Company engaged Falcon Consulting to raise up to $3,000,000 by selling units for $1.00 each comprised of one preferred share of the subsidiary, PuntoMio, and one warrant of the Company. 1,090,000 units were sold netting the Company $966,021. The Company warrants have an exercise price of $0.10 that expire on July 1, 2012. In addition to cash fees, Falcon Consulting earned 284,345 PuntoMio preferred shares.

Director Independence

As of the date of this Report, the Company’s common stock is traded on the OTC Bulletin Board and does not have securities listed on a larger national securities exchange or in an inter-dealer quotation system. As such, there is no requirement that a majority of the members of our Board of Directors be independent. Under these standards, a director is not “independent” if he has financial transactions with the Company or any other relationships that, in the opinion of the Board, would interfere with his exercise of independent judgment as a Director. ~~With~~ ~~Mr. van~~Albert ~~Houweninge’s~~and ~~resignation~~A.J. ~~from~~Hernandez ~~Falcon~~are ~~Consulting~~employed onby ~~December 31,~~the ~~2008,~~Company ~~under~~and ~~such~~are ~~standards,~~not asindependent. Messrs. ~~of December 31~~Margolies, ~~2008~~Gassenheimer aand ~~majority~~Kranz ofmay ~~the~~not ~~members~~be ofindependent ~~the~~because ~~Board~~ of ~~Directors are independent. With~~ the ~~resignation~~relationship ofdescribed ~~Mr. Fineman~~ in ~~November~~the ~~2009~~preceding paragraph, although the ~~Board~~board ofhas ~~Directors is~~ not ~~considered~~made toany ~~have~~determination ~~majority~~concerning ofwhether ~~independent~~they ~~directors~~are ~~at December 31, 2009~~independent.

ITEM 14. Principal ~~Accounting~~Accountant Fees and Services

The firm of Morrison, Brown, Argiz and Farra, ~~LLP~~LLC (“MBAF”), an independent registered public accounting firm, has served as our auditors for the fiscal years ending December 31, ~~2009~~2010 and ~~2008~~2009.

Audit and Non-Audit Fees

The following table presents fees for professional audit services rendered by MBAF for the audit of our annual consolidated financial statements and fees billed for other services for the years ended December 31, ~~2009~~2010 and ~~2008~~2009.

Services	~~2009~~2010		~~2008~~2009
Fees for annual audit and quarterly reviews	$	~~110~~85,000	$	~~162~~110,~~700~~000
Review of SEC filings		~~10,000~~-		2610,~~745~~000
Tax and other matters		~~9,200~~-		69,~~400~~200
Total	$	~~129~~85,~~200~~000	$	~~195~~129,~~845~~200

Audit Committee Pre-Approval Policies and Procedures

Consistent with SEC policies regarding auditor independence, the Audit Committee has responsibility for appointing, setting auditor compensation and overseeing the work of the independent auditor. In recognition of this responsibility, the Audit Committee established a policy to pre-approve all audit and permissible non-audit services provided by the independent auditor.

PART IV

ITEM 15.	Exhibits and Audited Consolidated Financial Statements
12.1	Code Of Ethics For Senior Management
31.1	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
31.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
32.1	Certification under Section 906 of the Sarbanes-Oxley Act (18 U.S.C. Section 1350)

ITEM 15.

Exhibits, Consolidated Financial Statement Schedules

2931.1 Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer

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

32.1	Certification under Section 906 of the Sarbanes-Oxley Act (18 U.S.C. Section 1350)

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	SkyPostal Networks, Inc.
	SkyShop Logistics, Inc.
Date: March 31, 2010	/s/ Albert P. Hernandez
Date: March 17, 2011	/s/ Albert P. Hernandez
	Albert P. Hernandez
	Chief Executive Officer and President
Date: March 31, 2010	/s/ A.J. Hernandez
Date: March 17, 2011	/s/ A.J. Hernandez
	A.J. Hernandez
	Chief Financial Officer

Date: March 17, 2011	/s/ Hal Gassenheimer
	Director

	/s/ Michael Margolies
	Director

~~TABLE OF CONTENTS~~26

Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets	F-3
Consolidated Statements of Operations	F-4
Consolidated Statements of Changes in Stockholders’ Deficit	F-5
Consolidated Statements of Cash Flows	F-6
Notes to Consolidated Financial Statements	F-7

INDEX TO FINANCIAL STATEMENTS

F-1


Report of Independent Registered Public Accounting Firm		F-2

Consolidated Balance Sheets as of December 31, 2010 and 2009		F-3

Consolidated Statements of Operations for the Years Ended December 31, 2010 and 2009		F-4

Consolidated Statements of Changes in Stockholders’ Deficit for the Years Ended December 31, 2010 and 2009		F-5

Consolidated Statements of Cash Flows for the Years Ended December 31, 2010 and 2009		F-9

Notes to Consolidated Financial Statements		F-10

~~ITEM~~F 8.- ~~FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA~~1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of ~~SkyPostal~~SkyShop ~~Networks~~Logistics, Inc.

We have audited the accompanying consolidated balance sheets of ~~SkyPostal~~SkyShop ~~Networks~~Logistics, Inc. (the “Company”) as of December 31, ~~2009~~2010 and ~~2008~~2009 and the related consolidated statements of operations, changes in stockholders’ deficit and cash flows for the years ended December 31, ~~2009~~2010 and ~~2008~~2009. The Company’s management is responsible for these consolidated financial statements. 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 audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included 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 on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 consolidated financial position of ~~SkyPostal~~SkyShop ~~Networks~~Logistics, Inc. as of December 31, ~~2009~~2010 and ~~2008~~2009, and the results of its consolidated operations and its cash flows for the year ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has suffered recurring losses from operations, has a deficiency in working capital and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

March 31 16, ~~2010~~2011

Morrison, Brown, Argiz & Farra, LLP

Miami, Florida

MIAMI 1001 Brickell Bay Drive, 9th Floor, Miami FL 33131 | T 305 373 5500 F-2 305 373 0056 | www.mbafcpa.com

~~SKYPOSTAL~~F ~~NETWORKS,~~- ~~INC.~~2

~~CONSOLIDATED~~SKYSHOP ~~BALANCE~~LOGISTICS, ~~SHEETS~~INC.

~~DECEMBER~~CONSOLIDATED ~~31,~~BALANCE

	2009			2008
ASSETS
CURRENT ASSETS
Cash	$	36,513		$	309,455
Accounts receivable, net		1,140,021			1,498,995
Prepaid expenses and other		61,135			177,968
TOTAL CURRENT ASSETS		1,237,669			1,986,418
DUE FROM STOCKHOLDER		1,974			69,569
PROPERTY AND EQUIPMENT, net		97,770			98,493
INTANGIBLE ASSETS, net		776,253			1,071,513
OTHER ASSETS, net		79,269			455,068
TOTAL ASSETS	$	2,192,935		$	3,681,061
LIABILITIES AND STOCKHOLDERS’ DEFICIT
LIABILITIES
CURRENT LIABILITIES
Accounts payable	$	1,648,305		$	1,763,228
Accrued liabilities		772,217			361,880
Current portion of amount due on non-compete agreements		333,137			280,000
Customer deposits		1,603			-
Due to stockholders		-			7,200
Current portion of put option payable		1,296,000			616,000
TOTAL CURRENT LIABILITIES		4,051,262			3,028,308
NON-COMPETE AGREEMENTS, less current portion		173,500			318,500
EXCESS OF VALUE OF PUT OPTIONS OVER THE ESTIMATED FAIR VALUE OF SHARES, less current portion		1,296,000			1,601,600
TOTAL LIABILITIES		5,520,762			4,948,408
COMMITMENTS AND CONTINGENCIES (NOTE 9)
STOCKHOLDERS’ DEFICIT
Preferred stock, $.001 par value, 50,000,000 authorized, none issued and outstanding		-			-
Common stock, $.001 par value, 150,000,0000 authorized, 69,443,292 and 56,814,664 shares issued and 69,123,292 and 56,494,664 shares outstanding at December 31, 2009 and December 31, 2008, respectively		69,444			56,815
Additional paid-in capital		21,308,161			19,031,338
Accumulated deficit		(24,299,296	)		(20,035,500	)
Treasury stock, at cost (320,000 shares at December 31, 2009 and 2008)		(320,000	)		(320,000	)
Accumulated other comprehensive loss		(4,644	)		-
Noncontrolling interest		(81,492	)		-
TOTAL STOCKHOLDERS’ DEFICIT		(3,327,827	)		(1,267,347	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	2,192,935		$	3,681,061

SHEETS

	December 31, 2010			December 31, 2009

ASSETS
CURRENT ASSETS:
Cash	$	917,570		$	36,513
Accounts receivable, net		826,670			1,140,021
Prepaid expenses and other		144,208			61,135
TOTAL CURRENT ASSETS		1,888,448			1,237,669

DUE FROM STOCKHOLDER		2,708			1,974
PROPERTY AND EQUIPMENT, net		119,697			97,770
INTANGIBLE ASSETS, net		489,392			776,253
OTHER ASSETS, net		290,492			79,269
TOTAL ASSETS	$	2,790,737		$	2,192,935

LIABILITIES AND STOCKHOLDERS’ DEFICIT
LIABILITIES
CURRENT LIABILITIES:
Accounts payable	$	1,139,523		$	1,648,305
Accrued liabilities		735,558			772,217
Current portion of amount due on non-compete agreements		370,740			333,137
Customer deposits		1,469			1,603
Current portion of put option payable		278,400			1,296,000
TOTAL CURRENT LIABILITIES		2,525,690			4,051,262

CONVERTIBLE DEBT, NET		532,915			-
NON-COMPETE AGREEMENTS, less current portion		52,500			173,500
EXCESS OF VALUE OF PUT OPTIONS OVER THE ESTIMATED
FAIR VALUE OF SHARES, less current portion		22,400			1,296,000
TOTAL LIABILITIES		3,133,505			5,520,762

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS’ DEFICIT
Convertible preferred stock, $.001 par value, 50,000,000 authorized, 1,360,000 issued and outstanding at December 31, 2010 and none issued and outstanding at December 31, 2009		1,360			-
Common stock, $.001 par value, 350,000,000 authorized, 95,083,179 and 69,443,292 shares issued and 94,763,179 and 69,123,292 shares outstanding at December 31, 2010 and December 31, 2009, respectively		95,084			69,444
Subscribed stock		791,586			-
Subscriptions receivable		(85,000	)		-
Additional paid-in capital		27,503,528			21,308,161
Accumulated deficit		(28,355,320	)		(24,299,296	)
Treasury stock, at cost (320,000 shares at December 31, 2010 and December 31, 2009)		(320,000	)		(320,000	)
Accumulated comprehensive income (loss)		14,001			(4,644	)
Non-controlling interest		11,993			(81,492	)
TOTAL STOCKHOLDERS’ DEFICIT		(342,768	)		(3,327,827	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	2,790,737		$	2,192,935

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

F - 3

~~SKYPOSTAL~~SKYSHOP ~~NETWORKS~~LOGISTICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31,

	Year Ended December 31,
	2010			2009

NET REVENUES	$	7,624,092		$	8,285,737

OPERATING EXPENSES:
Cost of delivery		6,167,940			7,038,584
General and administrative		3,936,125			4,196,529
Stock based compensation		247,998			258,865
TOTAL OPERATING EXPENSES		10,352,063			11,493,978

OPERATING LOSS		(2,727,971	)		(3,208,241	)

OTHER EXPENSES (INCOME):
Interest		53,038			-
Amortization of discounts		814,580			-
Changes in excess value of put option over the estimated fair value of shares		64,000			374,400
Provision for escrow deposit		-			149,975
Impairment losses		139,041			307,455
Other		184,108			299,087
TOTAL OTHER EXPENSES (INCOME)		1,254,767			1,130,917

NET LOSS		(3,982,738	)		(4,339,158	)

Net loss attributable to the non-controlling interest		(100,567	)		(75,362	)

Loss attributable to the controlling interest		(3,882,171	)		(4,263,796	)

Deemed dividend on convertible preferred stock		(798,333	)		-

Net loss attributable to common shareholders	$	(4,680,504	)	$	(4,263,796	)

WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		81,748,353			65,356,429
Effect of dilutive shares		-			-
Diluted		81,748,353			65,356,429

NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS
Basic and Diluted	$	(0.06	)	$	(0.07	)

	2009			2008
NET REVENUES	$	8,285,737		$	9,078,365
OPERATING EXPENSES
Cost of Delivery		7,038,584			8,056,868
General and Administrative		4,483,557			4,604,087
Stock Based Compensation		258,865			1,549,631
Factoring Fees		-			92,036
TOTAL OPERATING EXPENSES		11,781,006			14,302,622
OPERATING LOSS		(3,495,269	)		(5,224,257	)
OTHER EXPENSES/(INCOME)
Interest		-			385,200
Provision for excess of value of put options over the estimated fair value of shares		374,400			617,600
Provision for escrow deposit		149,975			-
Impairment of PDA GPS		231,295			-
Impairment of license agreement		76,160			-
Other		12,059			(66,902	)
TOTAL OTHER EXPENSES/(INCOME)		843,889			935,898
Net (Loss)		(4,339,158	)		(6,160,155	)
Less: Net income attributable to the noncontrolling interest		(75,362	)		-
(Loss) attributable to the controlling interest	$	(4,263,796	)	$	(6,160,155	)
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		65,356,429			47,162,919
Effect of dilutive shares		-
Diluted		65,356,429			47,162,919
NET (LOSS)/INCOME PER SHARE:
Basic	$	(0.07	)	$	(0.13	)
Diluted	$	(0.07	)	$	(0.13	)

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

F - 4

~~SKYPOSTAL~~SKYSHOP ~~NETWORKS~~LOGISTICS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE YEARS ENDED DECEMBER 31, ~~2009~~2010 AND ~~2008~~2009

																		Accumulated
												Additional
	Common					Additional									Non-			Other			Total
	Preferred Stock					Common Stock						Paid-In			Subscribed			Subscriptions
	Stock			Common		Paid-In			Accumulated			Treasury			Controlling			Comprehensive			Stockholder’s
	Shares			Amount		Shares			Amount			Capital			Stock			Receivable
	Outstanding			Stock		Capital			Deficit			Stock			Interest			Loss			Deficit
BALANCES AT DECEMBER 31, 2008		-		$	-		56,494,664		$	56,815		$	19,031,338		$	-		$	-
BALANCES AT DECEMBER 31, 2007		25,131,215		$	25,131	$	5,127,123		$	(13,875,345	)	$	-		$	-		$	-		$	(8,723,091	)
Components of comprehensive
Net loss					-		-			(6,160,155	)		-			-			-			(6,160,155	)
loss:
Sale of common stock through private placement		20,741,948			20,742		10,350,232			-			-			-			-			10,370,974
Net loss		-			-		-			-			-			-			-
Stock compensation		3,604,354			3,605		881,852			-			-			-			-			885,457
Foreign currency translation adjustment		-			-		-			-			-			-			-
Stock compensation (nonvested shares)					-		934,992			-			-			-			-			934,992
Total comprehensive loss		-			-		-			-			-			-			-
Conversion of debt to common stock		7,107,147			7,107		2,992,177			-			-			-			-			2,999,284
Sale of common stock through private placement	-				-		9,630,000			9,630			953,370			-			-
Conversion of accounts payable to common stock		200,000			200		99,800			-			-			-			-			100,000
Private placement transaction costs		-			-		1,063,000			1,063			(127,620	)		-			-
Warrants issued					-		188,144			-			-			-			-			188,144
Warrants converted for common stock		-			-		100,000			100			14,900			-			-
Warrants exercised					-		10,613			-			-			-			-			10,613
Stock compensation
Private placement transaction costs		30,000			30		(1,553,595	)		-			-			-			-			(1,553,565	)
(nonvested shares)		-			-		-			-			258,865			-			-
Treasury stock		(320,000	)		-		-			-			(320,000	)		-			-			(320,000	)
Recognition of employee and director
BALANCES AT DECEMBER 31, 2008		56,494,664		$	56,815	$	19,031,338		$	(20,035,500	)	$	(320,000	)	$	-		$	-		$	(1,267,347	)
stock grants vested		-			-		1,076,091			1,076			(1,076	)		-			-
Components of comprehensive loss:
Common stock issued for LEL acquisition		-			-		400,000			400			99,600			-			-
Net loss		-			-		-			(4,263,796	)		-			(75,362	)		-			(4,339,158	)
Common stock issued for trade payable		-			-		39,537			40			23,682			-			-
Foreign currency translation adjustment		-			-		-			-			-			(1,990	)		(4,644	)		(6,634	)
Common stock issued for consulting fees payable		-			-		320,000			320			31,680			-			-
Total comprehensive loss		-			-		-			-			-			-			-			(4,345,792	)
Sale of subsidiary preferred stock through private placement		-			-		-			-			915,600			-			-
Sale of common stock through private placement		9,630,000			9,630		953,370			-			-			-			-			963,000
Subsidiary private placement transaction costs		-			-		-			-			(123,979	)		-			-
Private placement transaction costs		1,063,000			1,063		(127,620	)		-			-			-			-			(126,557	)
Warrants issued with sale of subsidiary preferred stock		-			-		-			-			174,400			-			-
Warrants converted for common stock		100,000			100		14,900			-			-			-			-			15,000
Subsidiary preferred stock issued for director fees payable		-			-		-			-			-			-			-
Stock compensation (nonvested shares)		-			-		258,865			-			-			-			-			258,865
Noncontrolling interest in LEL		-			-		-			-			-			-			-
Recognition of employee and director stock grants vested		1,076,091			1,076		(1,076	)		-			-			-			-			-
Noncontrolling interest in PuntoMio		-			-		-			-			57,401			-			-
Common stock issued for LEL acquisition		400,000			400		99,600			-			-			-			-			100,000
BALANCES AT DECEMBER 31, 2009		-			-		69,123,292		$	69,444		$	21,308,161		$	-		$	-
Common stock issued for trade payable		39,537			40		23,682			-			-			-			-			23,722
Common stock issued for consulting fees payable		320,000			320		31,680			-			-			-			-			32,000
Sale of subsidiary preferred stock through private placement		-			-		915,600			-			-			-			-			915,600
Subsidiary private placement transaction costs		-			-		(123,979	)		-			-			-			-			(123,979	)
Warrants issued with sale of subsidiary preferred stock		-			-		174,400			-			-			-			-			174,400
Subsidiary preferred stock issued for director fees payable		-			-		-			-			-			45,192			-			45,192
Noncontrolling interest in LEL		-			-		-			-			-			8,069			-			8,069
Noncontrolling interest in PuntoMio		-			-		57,401			-			-			(57,401	)		-			-
BALANCES AT DECEMBER 31, 2009		69,123,292		$	69,444	$	21,308,161		$	(24,299,296	)	$	(320,000	)	$	(81,492	)	$	(4,644	)	$	(3,327,827	)

(Continued on next page)

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

F - 5

~~SKYPOSTAL~~SKYSHOP ~~NETWORKS~~LOGISTICS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 (Continued)

							Non-			Accumulated			Total
	Accumulated			Treasury			Controlling			Comprehensive			Stockholders’
	Deficit			Stock				Interest		Income			Deficit

BALANCES AT DECEMBER 31, 2008	$	(20,035,500	)	$	(320,000	)	$	-		$	-		$	(1,267,347	)
Components of comprehensive loss:
Net loss		(4,263,796	)		-			(75,362	)		-			(4,339,158	)
Foreign currency translation adjustment		-			-			(1,990	)		(4,644	)		(6,634	)
Total comprehensive loss		-			-			-			-			(4,345,792	)
Sale of common stock through private placement		-			-			-			-			963,000
Private placement transaction costs		-			-			-			-			(126,557	)
Warrants converted for common stock		-			-			-			-			15,000
Stock compensation		-			-			-			-			258,865
(nonvested shares)
Recognition of employee and director stock grants vested														-
Common stock issued for LEL acquisition		-			-			-			-			100,000
Common stock issued for trade payable		-			-			-			-			23,722
Common stock issued for consulting fees payable		-			-			-			-			32,000
Sale of subsidiary preferred stock through private placement		-			-			-			-			915,600
Subsidiary private placement transaction costs		-			-			-			-			(123,979	)
Warrants issued with sale of subsidiary preferred stock		-			-			-			-			174,400
Subsidiary preferred stock issued for director fees payable		-			-			45,192			-			45,192
Noncontrolling interest in LEL		-			-			8,069			-			8,069
Noncontrolling interest in PuntoMio		-			-			(57,401	)		-			-
BALANCES AT DECEMBER 31, 2009	$	(24,299,296	)	$	(320,000	)	$	(81,492	)	$	(4,644	)	$	(3,327,827	)

(Continued on next page)

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

F - 6

SKYSHOP LOGISTICS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 (Continued)

											Additional
	Preferred Stock						Common Stock				Paid-In			Subscribed		Subscriptions
	Shares			Amount			Shares		Amount		Capital			Stock		Receivable

BALANCES AT DECEMBER 31, 2009		-		$	-			69,123,292	$	69,444	$	21,308,161		$	-	$	-
Components of comprehensive loss:
Net loss		-			-			-		-		-			-		-
Foreign currency translation
adjustment		-			-			-		-		-			-		-
Total comprehensive loss		-			-			-		-		-			-		-

Subscriptions received		-			-			-		-		329,414			706,586		-
Subscriptions receivable		-			-			-		-		-			85,000		(85,000	)
Offering costs relataed to
subscriptions received		-			-			-		-		(95,100	)		-		-
Stock compensation - employees
and director shares		-			-			3,050,900		3,051		244,947			-		-
Common stock issued for
accrued payroll		-			-			856,300		856		84,774			-		-
Common stock issued for
trade payable		-			-			1,000,000		1,000		99,000			-		-
PuntoMio Exchange		11,425,160			11,425			-		-		786,908			-		-
Disposition of non-controlling
interest in PuntoMio		-			-			-		-		(12,209	)		-		-
Deemed dividend from
PuntoMio Exchange		-			-			-		-		(798,333	)		-		-
Redemption of warrants included in
PuntoMio preferred stock exchange		-			-			-		-		(109,000	)		-		-
Conversion of preferred stock		(10,065,160	)		(10,065	)		10,065,160		10,065		-			-		-
Effect of adjustment of put option
payable		-			-			-		-		2,355,200			-		-
Broker fee for 3% $2.26m
Convertible Note		-			-			-		-		(52,522	)		-		-
Warrants issued with 3% $2.26m
Convertible Note		-			-			-		-		375,268			-		-
Beneficial conversion feature attributed
to 3% $2.26m Convertible Note		-			-			-		-		1,884,732			-		-
Warrants issued with 3% $316k
Convertible Note		-			-			-		-		52,538			-		-
Beneficial conversion feature attributed
to 3% $316k Convertible Note		-			-			-		-		263,862			-		-
Conversion of 2% $402k & $95k Convertible Notes into common stock		-			-			9,969,651		9,970		488,513			-		-
Beneficial conversion feature attributed
to 3% $25k Convertible Note		-			-			-		-		20,896			-		-
Warrants issued with Convertible Notes												4,104
Private placement equity fee for conversion
of 2% $402k & $95k convertible notes		-			-			697,876		698		(698	)		-		-
Private placement fees for 2% $402k Convertible Notes		-			-			-		-		(5,592	)		-		-
Warrants issued with Convertible Notes		-			-			-		-		79,865			-		-
Beneficial conversion features attributed to Convertible Notes		-			-			-		-		198,800			-		-

BALANCES AT DECEMBER 31, 2010		1,360,000		$	1,360			94,763,179	$	95,084	$	27,503,528		$	791,586	$	(85,000	)

(Continued on next page)

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

F - 7

SKYSHOP LOGISTICS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 (Continued)

							Non-			Accumulated			Total
	Accumulated			Treasury			Controlling			Comprehensive			Stockholders’
	Deficit			Stock			Interest			Income			Deficit

BALANCES AT DECEMBER 31, 2009	$	(24,299,296	)	$	(320,000	)	$	(81,492	)	$	(4,644	)	$	(3,327,827	)
Components of comprehensive loss:
Net loss		(3,882,171	)		-			(100,567	)		-			(3,982,738	)
Foreign currency translation adjustment		-			-			7,990			18,645			26,635
Total comprehensive loss		-			-			-			-			(3,956,103	)

Subscriptions received		-			-			-			-			1,036,000
Subscriptions receivable		-			-			-			-			-
Offering costs relataed to subscriptions received	-			-				-			-			(95,100	)
Stock compensation - employees and director shares		-			-			-			-			247,998
Common stock issued for accrued payroll		-			-			-			-			85,630
Common stock issued for trade payable		-			-			-			-			100,000
PuntoMio Exchange		-			-			-			-			798,333
Disposition of non-controlling interest in PuntoMio		(173,853	)		-			186,062			-			-
Deemed dividend from PuntoMio Exchange		-			-			-			-			(798,333	)
Redemption of warrants included in PuntoMio preferred stock exchange		-			-			-			-			(109,000	)
Conversion of preferred stock		-			-			-			-			-
Effect of adjustment of put option payable		-			-			-			-			2,355,200
Broker fee for 3% $2.26m Convertible Note		-			-			-			-			(52,522	)
Warrants issued with 3% $2.26m Convertible Note		-			-			-			-			375,268
Beneficial conversion feature attributed to 3% $2.26m Convertible Note		-			-			-			-			1,884,732
Warrants issued with 3% $316k Convertible Note		-			-			-			-			52,538
Beneficial conversion feature attributed to 3% $316k Convertible Note		-			-			-			-			263,862
Conversion of 2% $402k & $95k Convertible Notes into common stock		-			-			-			-			498,483
Beneficial conversion feature attributed to 3% $25k Convertible Note		-			-			-			-			20,896
Warrants issued with Convertible Notes														4,104
Private placement equity fee for conversion of 2% $402k & $95k convertible notes		-			-			-			-			-
Private placement fees for 2% $402k Convertible Notes		-			-			-			-			(5,592	)
Warrants issued with Convertible Notes		-			-			-			-			79,865
Beneficial conversion features attributed to Convertible Notes		-			-			-			-			198,800

BALANCES AT DECEMBER 31, 2010	$	(28,355,320	)	$	(320,000	)	$	11,993		$	14,001		$	(342,768	)

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

F - 8

SKYSHOP LOGISTICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31,

	2010			2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(3,982,738	)	$	(4,339,158	)
Adjustments to reconcile net loss including noncontrolling interest
to net cash used in operating activities:
Amortization of debt discounts		814,580			-
Amortization of financing fees		83,658			-
Depreciation and amortization		193,472			212,305
Bad debt expense		34,884			38,234
Provision for escrow deposit		-			149,975
Impairment losses		139,041			307,455
Stock compensation expense		247,998			258,865
Conversion of interest on convertible debt		1,483			-
Revaluation of put option liability		64,000			374,400
Changes in assets and liabilities
Decrease in accounts receivable		278,466			433,195
(Increase) decrease in prepaid expense and other assets		(84,877	)		116,833
Decrease in intangible assets		-			216,020
(Decrease) increase in accounts payable and accrued liabilities		(359,812	)		121,512
(Decrease) increase in customer deposits		(134	)		1,603
Net cash used in operating activities		(2,569,979	)		(2,108,761	)

CASH FLOWS FROM INVESTING ACTIVITIES:
(Advances to) repayments from stockholders		(734	)		60,395
Cash acquired in acquisition of LEL		-			11,753
Payment of trademark costs		(17,528	)		(9,996	)
Capital expenditures		(50,051	)		(9,166	)
Net cash (used in) provided by investing activities		(68,313	)		52,986

CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of capital stock, net of offering costs		-			836,443
Proceeds from subscriptions received not issued		1,036,000			-
Payment of offering costs related to subscriptions received not issued		(95,100	)		-
Issuance of warrants in connection with sale of subsidiary preferred stock, net		-			174,400
Issuance of subsidiary preferred stock		-			791,621
Warrants (redeemed) exercised		(109,000	)		15,000
Payments of amounts due for non-compete agreements		(83,397	)		(27,996	)
Proceeds from issuance of convertible notes payable, net of offering costs		2,994,211			-
Payment of principal on convertible notes payable		(250,000	)		-
Net cash provided by financing activities		3,492,714			1,789,468

Effect of exchange rate changes		26,635			(6,635	)

Net increase (decrease) in cash		881,057			(272,942	)
Cash, beginning of period		36,513			309,455
Cash, end of period	$	917,570		$	36,513

Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest	$	3,592		$	-

Supplemental Disclosures of Non-Cash Investing and Financing Activities:
Non-compete agreement-LEL acquisition	$	-		$

Filing Compare · SkyShop Logistics, Inc.