SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

                 Annual Report under Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

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

                              For Fiscal Year Ended
                                 March 31, 2004

                           Commission File # 333-69686

                    ANSCOTT INDUSTRIES, INC. AND SUBSIDIARIES
                            ------------------------
             (Exact name of registrant as specified in its charter)

                                     Florida
                                     -------
         (State or other jurisdiction of incorporation or organization)

                                   86-0000714
                                   ----------
                      (IRS Employer Identification Number)

                     26 Hanes Drive, Wayne, New Jersey 07470
                    ----------------------------------------
               (Address of principal executive offices) (Zip Code)

                                 (973) 305-8700
                                  -------------
                (Registrant's telephone no., including area code)

              ----------------------------------------------------
      (Former name, former address and former fiscal year, if changed since
                                  last report)

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

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

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 [ ]

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B not contained in this form, and no disclosure will be contained,
to the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB.

Revenues for year ended March 31, 2004: $4,522,525.

Aggregate market value of the voting common stock held by non-affiliates of the
registrant as of September 10, 2004, was: $6,679,099

Number of shares of the registrant's common stock outstanding as of September
10, 2004, 2004 was: 57,989,083.

Transfer Agent as of September 10, 2004:

                  Standard Register and Transfer Company
                              12528 South 1840 East
                               Draper, Utah 84020
                                  801-571-8844


<PAGE>


                                     PART I
                                     ------

Item 1.  Description of Business

Business organization as used herein the "term Company refers to Anscott
Industries Inc. and Subsidiaries, a New Jersey Corporation unless the context
indicates otherwise. Learners World, Inc. was formed in New York on June 28,
1996 with the intent to own and operate facilities for the care, education and
recreation of children. On September 26, 2001 (the "Effective Date"), pursuant
to a Stock Purchase Agreement and Share Exchange between Learners World, Inc.
("Learners World"), and Liquidics, Inc. ("Liquidics") a Nevada corporation,
Learners World acquired all of the shares of Advanced Fluid Systems, Inc.
("Advanced Fluid") from Liquidics. Pursuant to the terms of the Agreement,
Liquidics sold Advanced Fluid to Learners World and paid $400,000 to Learners
World in consideration for the issuance of 27,000,000 Learners World shares to
the Liquidics shareholders. Pursuant to the Agreement, Advanced Fluid became a
wholly owned subsidiary of the Learners World. In addition, the company's name
was changed to Liquidix, Inc. ("Liquidix") and re-domesticated in the State of
Florida.

On April 15, 2003, (April 1, 2003 for accounting purposes) pursuant to a Stock
Purchase Agreement and Share Exchange ("Merger Agreement") between Liquidix, AFS
Seals, Inc ("AFS") and Anscott Industries, Inc., ("Anscott") Liquidix acquired
all of the outstanding shares of Anscott from the Anscott shareholders in
consideration for the issuance of a total of 45,000,000 shares of Liquidix
common stock. Pursuant to the Merger Agreement, Anscott became a wholly owned
subsidiary of Liquidix, Anscott's directors and officers replaced all of
Liquidix's directors and officers. Accordingly, a change in control of Liquidix
occurred in connection with the acquisition, and the acquisition was deemed a
"reverse acquisition" for accounting purposes. The reverse acquisition was
accounted for as a recapitalization of Anscott and the stockholders' deficiency
was retroactively restated to April 1, 2002. The financial statements prior to
April 1, 2003 are those of Anscott. Liquidix filed articles of amendment in the
state of Florida changing its name to Anscott Industries, Inc. We maintain our
principal offices at 26 Hanes Drive, Wayne, New Jersey 07470 and our telephone
number is (973) 305-8700.

Concurrent with the issuance of the 45,000,000 shares, Liquidix transferred of
all of their operating assets and liabilities to AFS for no monetary
consideration. ASF is controlled by the former directors and officers if
Liquidix. At April 1, 2003 Liquidix assets and liabilities consisted of
approximately:

           Current Assets                           $ 1,061,000
           Property and Equipment                       183,000
           Other Assets                                 209,000
                                             ------------------
                                                                    1,453,000

           Liabilities                                              1,352,000
                                                           ------------------

           Fair value of net assets                               $   101,000
                                                           ==================

As a result of the reverse acquisition we changed our year end from December
31st to March 31st. Accordingly all financial information has been reported with
a March 31st year end. We made several corrections to the financial statements
(See Note 15 of our consolidated financial statements included herein). In
addition, we issued to a placement agent 4,000,000 shares of our common stock
and agreed to issue at a future date 3,750,000 shares to a financial consultant
for their services in facilitating the reverse acquisition. Accordingly, we
recorded an expense in the amount $4,650,000, which represents the fair value of
the common stock.

<PAGE>

We have not been involved in any bankruptcy, receivership or similar proceeding.
We have not been involved in any material reclassification, merger,
consolidation, or purchase or sale of a significant amount of assets not in the
ordinary course of business.

Business of Issuer.

Currently our principal activity is to manufacture and sell specialty chemicals,
cleaning agents, odor eliminators, water and stain repellents, treatments,
purification and decontamination processes for the commercial laundry and
garment cleaning industries. Our business is chemical & additive technology for
cleaning and coatings of textiles; filtration and equipment that extends the
life traditional cleaning chemicals through a recycling process. We have our
operations in New Jersey. We sell to approximately 100 distributors and 5,000
end-users throughout North America. Sales of chemicals and additives products
accounted for 80% of our 2004 revenue and filtration and equipment, accounted
for the additional 20%, of our 2004 revenues.

We were established in 1960 and are a leading manufacturer servicing the
commercial laundry and garment cleaning industry. We manufacture chemicals and
filter equipment that clean textiles and clothes professionally. We sell our
products and services through an established distribution network of local
warehouses nationwide. We maintain a dedicated sales and technical force of
chemical technicians that provide service throughout the US and Canada. The
following sets forth some of our products:


We have recently established a dedicated group that will provide alternative
cleaning technology with advanced solvent products. The new solvents replace
"PERC", a probable carcinogen. These products will revolutionize the commercial
dry cleaning industry by providing an alternative without toxic chemicals such
as perchloroethylene (perc).


We are a specialty chemical company with a product line of disposable filters &
delivery systems adding in the sales of its chemical business. We have one of
the largest technical forces in the industry. Currently we are servicing over
5,000 businesses in more than 40 cities and expect to service over 10,000
businesses within the next two years.

The following sets forth some of our products:

o     Flame Fighter is an approved fire retardant that protects drapes, clothes
      and textiles. It's perfect for hotels, office buildings and homes.

o     XPel Fabric Protector is a barrier coating that protects against all sorts
      of fluids such as blood that carries HIV or Hepatitis, Formulated for
      hospital scrubs, police uniforms and protective gear for professionals.

o     Smoke Out Odor Neutralizer removes all type of foul odors. It was
      specially formulated to remove smoke, pet and musty smells.

o     Rx is the prescription to clean hard to remove paint, oil and grease
      stains. Professionally formulated to be safe and effective.

o     NuTouch is an advanced cleaning detergent that is better, whitener and
      softer than other products.

o     HyPur Filters recycle chemicals and improve cleaning performance.

<PAGE>

     Our product lines are managed as follows:

     Caled Chemical, established 1953, is a leading manufacturer of traditional
     cleaning products. The products for existing cleaning methods include a
     full line of brand name detergents, spotting agents and XPel Fabric
     Protection. Caled has developed specially formulated additives for all
     textiles cleaning technology.

o    All the chemical products translate 51 years of cleaning knowledge and
     experience into practical cleaning applications customized for the
     specialized needs of the market.

o    Caled's products are practical and easy to use, developed by Ph.D. chemists
     on staff. The chemists explain the basic use of the products in unusually
     clear and easy-to-understand terms.

     HyPur Equipment, established 1971, currently manufacturers filter equipment
     for existing dry cleaning machines.

o    High quality and technical service is the key to HyPur's long-standing
     customer base.

o    HyPur has been innovative and aggressive in new product development.

Anscott Industries distributes its products through a national network of
established distributors throughout the US and Canada. The distributors purchase
for inventory needs at a local level to support the sales of Anscott's branded
products.

Anscott Industries products are specialized and unique, requiring a field
technician to support distribution. With these complexities Anscott Industries
has only two such competitors that can match the level of service and product
offering. Anscott Industries sees itself in the third position on a national
level, based on volume. The company's product formulations are unique and its
raw materials are readily available from multiple sources of distributions and
manufacturers.

Anscott Industries owns several of its branded products names as trademarks, as
an example; Ultra Brite, Chinch, Nu Touch, Rx, Caled, HyPur to name a few.

Anscott Industries conducts its own research and development to find alternative
chemicals that are environmentally acceptable and perform better as technologies
improve, these cost nominal and have no impact on the operations of the company.

Anscott Industries is in compliance with today's environmental laws and it
maintains so with its existing staff at no additional cost to the operation

Anscott Industries Technical Service force is a self-standing field service that
has 22 technical service representatives servicing our product lines. Our
technical service force is one of the only national service networks that serve
professional cleaners and laundries. It currently represents three product
lines.

Employees

We currently employ a total of 42 full time and 8 part time employees in the
following manner: 26 field representatives and 24 headquarters personnel. None
of our employees are covered by a collective bargaining agreement and we believe
we have good relations with our employees.

Item 2. Description of Property

We own the property located at 26 Hanes Drive, Wayne, New Jersey 07470. We have
a 22 year term mortgage with a 1.75% over prime with CIT as the lender. This
property is our headquarters and is comprised of 41,000 square feet with 4,000
square feet of office space and laboratory and the rest is warehouse for our
products. The property is presently subject to foreclosure proceedings (See Item
3 Legal Proceedings).

<PAGE>

Item 3. Legal Proceedings

We have two lawsuits against us. The plaintiff, Internet Marketing Solutions,
Inc. has filed a lawsuit to seek 250,000 shares issued to it for services
provided to the Company prior to the reverse acquisition between Liquidix and
Anscott. Such matter has been filed by the plaintiff in the U.S. District Court
of Utah. The plaintiff claims that it was issued 250,000 of Liquidix shares for
services rendered. Pursuant to the complaint, on December 18, 2002, we cancelled
those shares. We have been in contact with the plaintiff's attorney to attempt
to settle this matter amicably. We have also been in discussion with the
previous officers and directors of the Company to determine the validity of this
lawsuit. We intend to retain Florida counsel to respond to this claim and we
believe that such claim may be covered under the indemnification clause set
forth in the Stock Purchase Agreement and Share Exchange between Anscott and
Liquidix.

Our headquarters building mortgage lender, CIT, has commenced a foreclosure
action in 2004. We have begun negotiations with the lender and the lender agreed
to delay the foreclosure proceedings while we are in settlement negotiations. We
are confident that we will resolve this matter with no significant financial
consequence. However, there can be no assurance that we will be successful.

We are also in an arbitration proceeding with Itochu International regarding
each of our 50% ownership in Global Technologies, L.L.C. whereby Itochu is
claiming we owe money to Itochu for joint venture expenditures. We believe that
the results of the arbitration will not have a significant financial impact on
the company.

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

None


<PAGE>


                                     PART II
                                     -------

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.

On September 10, 2004, we had 601 shareholders of record of our common stock.
Our common stock is available for trading through electronic trading services
via the OTC Bulletin Board.

Our common stock is currently traded on the OTC Bulletin Board under the symbol
"ASCT." The following charts indicate the high and low sales price for the
common stock for each fiscal quarter indicated, as quoted on the OTC Bulletin
Board. These quotations reflect inter-dealer prices, without retail mark-up,
mark-down or commission, and may not represent actual transactions.

                                                       Price $
Quarter Ended                                High                    Low
-------------                                ----                    ---
June 2002                                    1.51                   0.35
September 2002                               0.45                   0.13
December 2002                                0.27                   0.10
March 2003                                   0.17                   0.05
June 2003                                    2.80                   0.87
September 2003                               2.78                   1.44
December 2003                                1.36                   0.67
March 2004                                   1.02                   0.70
June 2004                                    0.72                   0.52

Dividends

We currently intend to retain future earnings, if any, to support our growth.
Any payment of cash dividends in the future will be dependent upon: the amount
of funds legally available therefore; our earnings; financial condition; capital
requirements; and other factors which our Board of Directors deems relevant.

On April 15, 2003 in connection with the Merger Agreement, the Company issued
shares of its common stock as follows:
<TABLE>
<CAPTION>

                                                                                           Shares to be
                                                                        Shares Issued        issued [1]
<S>                                                                        <C>               <C>
           Shares issued to Anscott shareholders                           45,000,000
           Shares issued to placement agent                                 4,000,000
           Shares to be issued to financial consultant                                       3,750,000
                                                                   ------------------- --------------------
                                                                           49,000,000        3,750,000
                                                                   ------------------- --------------------
</TABLE>

     [1] We had a written agreement with the consultant that upon Anscott
     becoming a publicly traded company, we would issue the consultant 10% of
     the shares received by the Anscott shareholders. This agreement expired
     prior to the merger transaction with Liquidix. However we have agreed to
     issue the consultant 3,750,000 as consideration for assistance in
     facilitating the reverse acquisition.

During the year ended March 31, 2004, 1,350,000 of the 3,750,000 shares of
common stock to be issued were issued to the financial consultant.

<PAGE>

During the year ended March 31, 2004 the Company sold 4,359,729 shares of its
common stock for an aggregate purchase price of $843,563.

During the year ended March 31, 2004 the Company issued 300,000 shares of its
common stock upon the conversion of $150,000 of notes payable

During the year ended March 31, 2004 the Company issued 450,000 shares of its
common stock as payment of accrued professional fees of approximately $45,000
and for future professional fees valued at $15,000 per month through March 31,
2005. Accordingly, the Company has recorded at March 31, 2004 $180,000 of
deferred compensation expense.

During the year ended March 31, 2004, the Company issued 27,500 shares of its
common stock in lieu of interest on notes payable issued during the year.

Item 6.  Management's  Discussion  and Analysis of Financial  Condition and
Results of Operations

INTRODUCTION

The following discussion should be read in conjunction with our financial
statements and related notes included herein. Certain statements are not based
on historical facts, but are forward-looking statements that are based upon
assumptions about our future conditions that could prove to be inaccurate.
Actual events, transactions and results may materially differ from the
anticipated events, transactions or results described. Our ability to consummate
transactions and achieve events or results is subject to certain risks and
uncertainties, which include, but are not limited to, the existence of demand
for and acceptance of our products, regulatory approvals and developments,
economic conditions, the impact of competition and pricing, and other factors
affecting our business that are beyond our control.

We undertake no obligation and do not intend to update, revise or otherwise
publicly release the result of any revisions to forward-looking statements that
may be made to reflect future events or circumstances.

YEAR ENDED MARCH 31, 2004 COMPARED TO THE YEAR ENDED MARCH 31, 2003

Revenues for the year ended March 31, 2004 were $4,522,525 as compared to
$4,816,164 in March 31, 2003. Sales declined due to lower filter and cleaning
additive revenues. As new technology enters the industry, filter sales have
decline because the new technology moves from disposable to reusable.

Cost of sales for the year ended March 31, 2004 were $2,209,971 as compared to
$2,405,257 for the year ended March 31, 2003. As of percentage of sales, cost of
sales decreased approximately 1% due to a better mix of product sales. The
product mix is shifting from lower gross margin items such as oil based products
to products that have a higher gross margin such as water based products.

Selling expenses were $1,690,047 for the year ended March 31, 2004 as compared
to $1,894,243. As percentage of sales, selling expenses decrease approximately
2% primarily due to reduction in salaries for sales personnel have not been
covering their draw on commission and revision to the commission policy from a
graduated commission scale to a salary plus bonus system..

General and administrative expenses were $1,161,446 for 2004 as compared to
$1,086,035 for 2003. As of percentage of sales, general and administrative
expenses increased approximately 3% due to increased real estate taxes and
insurance and transactional cost of the reverse merger.

<PAGE>

The real estate taxes and insurance increases were nominal. The bulk of the
increase of G&A came from transactional cost of approximately $50,000.

Other expenses were $4,894,007 for 2004 as compared to $106,690, an increase of
approximately $4,787,000 due primarily to the reverse acquisitions expenses in
the amount of $4,650,000 and increased interest expense. Asset based lender
charged monthly fees and interest above normal rates, which is now bought out
and will be at normal lending rates going forward.

For the year ended March 31, 2004, we incurred a net operating loss of
$5,432,946 or $.02 per share compared to net operating loss of $676,061 or $.02
per share for the year ended March 31, 2003.

We do not believe that inflation will have any material impact on its commercial
activities for the ensuing year, as our products do not fall under categories
that are traditionally affected.

LIQUIDITY AND CAPITAL RESOURCES

The Company is reliant upon outside sources to eliminate its working capital
deficiency. As a result we are actively seeking additional capital resources
through the sale of equity. In April, 2004 we borrowed $1,300,000 in the form of
a convertible note (See Note 16 to the consolidated financial statements). These
funds were used to repay the Company's asset based lender with a balance of
$680,915 substantially reducing the company's cost of money. The remaining funds
have been used to expand the company's national sales force, launch new products
and assist in operational cost. Management believes these fundamental
investments will increase gross sales by more that 10%, which we expect will
enable the Company to become profitable in the coming year. The Company's is
expected growth and positive cash flow is expected to sustain its cash
requirements over the next twelve months. At the present time we have adequate
working capital for our immediate business. Historically, the Company's primary
source of cash has been from operations and debt financing by related parties.

Cash used in operating activities during the year ended March 31, 2004 was
approximately $605,000 as compared to cash provided by operating activities for
the year ended March 31, 2003 of $62,000. The primary reason is during the year
ended March 31, 2003 accounts payable increased by approximately $436,000 as
compared to an increase of approximately $84,000 for the year ended March 31,
2004. In addition prepaid expenses decreased by approximately $78,000 during the
year ended March 31, 2003 and increased by approximately $93,000 during the year
ended March 31, 2004. The remaining difference is a result of a larger loss
during the year of approximately $107,000 offset by an impairment of deferred
financing charges of $47,000.

Cash used in investing activities was $44,000 and $68,000 for the years ended
March 31, 2004 and 2003. The cash was used to purchase property and equipment.

Cash provided by financing activities for the year ended March 31, 2004 of
approximately $720,000 resulted from the sale of 4,359,729 shares of common
stock for net proceeds of $843,000 offset by net repayments of notes payable and
long-term debt of $123,000.

Cash used in financing activities the year ended March 31, 2003of approximately
$9,000 resulted from cash contribution of $20,000 and issuance of debt of
approximately 84,000, offset by net repayments of notes payable and long-term
debt of $113,000.

PLAN OF OPERATIONS FOR FISCAL YEAR 2005

We anticipate that sales will increase and we should be able to achieve
profitability during fiscal year 2005. Future activities will be directed
towards expanding our footprint within our existing market for our products and
penetrating new markets. We currently have operations in the United States.

<PAGE>

During the coming year Anscott Industries will be implementing strategic
acquisition plan that will include similar manufacturing companies to maximize
the company's existing operations and staff. The national sales and
distributions channel will be expanded to increase volume to the company's
existing end-user market. We believe that the cash flows from the successful
execution of our national sales and distributions channel will result in
increased sales and any additional capital that we may obtain through sales of
its equity and debt securities will be sufficient to pay that portion of its
debt that is due within the next twelve months, as well as to fund our
operations.

In addition we have obtained a firm commitment from two key stockholders that if
needed they will assists in funding the Company's operations and meet the
Company's current debt requirements. These commitments and pledges extend though
at least March 31, 2005 and any advances will not be due no early than March 31,
2006. On August 26, 2004 one of the stockholders advanced the Company $100,000
as part of the Company's negotiations with its mortgage lender.

However, there can be no assurance that we will be successful in any of our
plans. To the extent that we are unsuccessful in our plans to increase our cash
position, we may find it necessary to curtail some of our operations and
possible future acquisitions.



<PAGE>

Item 7. Financial Statements and Supplementary Data



                                      Index
<TABLE>
                                                                                          Page No.

<S>                                                                                          <C>
Report of Independent Registered Public Accounting Firm                                      F-1

Consolidated Balance Sheets as of March 31, 2004 and March 31, 2003                          F-2

Consolidated Statements of Operations for the years ended March 31, 2004
 and 2003                                                                                    F-4

Consolidated Statements of Stockholders' Deficiency for the years ended
   March 31, 2004 and 2003                                                                   F-5

Consolidated Statements of Cash Flows for the years ended March 31, 2004
   and 2003                                                                                  F-6

Notes to Consolidated Financial Statements                                                   F-8

</TABLE>


<PAGE>


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

To the Board of Directors of
Anscott Industries, Inc.

We have audited the accompanying consolidated balance sheets of Anscott
Industries, Inc. and Subsidiaries as of March 31, 2004 and 2003, and the related
consolidated statements of operations, stockholders' deficiency and cash flows
for the years then ended. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Anscott
Industries, Inc. and Subsidiaries as of March 31, 2004 and 2003, and the results
of their operations and their cash flows for the then ended in conformity with
accounting principles generally accepted in the United States of America.



/s/Marcum & Kliegman LLP


August 6, 2004
                                       F-1


<PAGE>

                    ANSCOTT INDUSTRIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                             MARCH 31, 2004 AND 2003


                                     ASSETS
                                     ------
<TABLE>
<CAPTION>

                                                                            2004                       2003
                                                                         ------------------------------------
CURRENT ASSETS
--------------
<S>                                                                      <C>                          <C>
 Cash and cash equivalents                                               $   80,466                   10,079
 Accounts receivable, less allowance for doubtful accounts
  of $12,000  and $ --  in 2004 and 2003, respectively                      556,305                  581,791

 Inventories                                                                458,580                  365,283

 Prepaid expenses and other current assets                                  239,621                  183,553
                                                                         ----------               ----------


   Total Current Assets                                                   1,334,972                1,140,706
                                                                         ----------               ----------

PROPERTY AND EQUIPMENT, Net
----------------------                                                    1,245,787                1,257,446
                                                                         ----------               ----------

OTHER ASSETS
------------

 Investments in equity investees                                            360,123                  298,030

 Other long term assets                                                      18,650                   19,475
                                                                         ----------               ----------


   Total Other Assets                                                       378,773                  317,505
                                                                         ----------               ----------

   TOTAL ASSETS                                                          $2,959,532               $2,715,657
                                                                         ==========               ==========



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

                                                     F-2

</TABLE>


<PAGE>


                    ANSCOTT INDUSTRIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                             MARCH 31, 2004 AND 2003


                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY
<TABLE>
<CAPTION>

                                                                                         2004                2003
                                                                               --------------------------------------
CURRENT LIABILITIES
-------------------
<S>                                                                                  <C>                <C>
 Current maturities of long-term debt                                                $ 1,324,084        $ 1,360,937
 Accounts payable and accrued expenses                                                 1,266,106          1,361,106
 Line of credit                                                                          562,754            707,309
    Due to officer and affiliate                                                         204,452            199,452
 Convertible notes payable, net of discount of $14,464 and -0-                            40,536            150,000
                                                                                     -----------        -----------

   Total Current Liabilities                                                           3,397,932          3,778,804
                                                                                     -----------        -----------


    Long-term debt, net of current maturities                                            406,828            409,100
    Other liabilities                                                                    777,134            643,114
                                                                                     -----------        -----------

TOTAL LIABILITIES                                                                      4,581,894          4,831,018
                                                                                     -----------        -----------

COMMITMENTS AND CONTINGENCIES
-----------------------------

STOCKHOLDERS' DEFICIENCY
------------------------
 Common stock, $.001 par value ; 75,000,000 shares
          Authorized, 56,171,298 and 45,000,000 shares
          issued and outstanding, respectively                                            56,172             45,000
 Common stock to be issued, $0.001 par value,  2,400,000 shares                            2,400                 --
 Additional paid in capital                                                            6,900,927            834,191
 Accumulated deficit                                                                  (8,449,588)        (3,016,642)
 Deferred compensation                                                                  (180,000)                --
 Accumulated other comprehensive income                                                   47,727             22,090
                                                                                     -----------        -----------

   TOTAL STOCKHOLDERS' DEFICIENCY                                                     (1,622,362)        (2,115,361)
                                                                                     -----------        -----------

   TOTAL LIABILITIES AND
    STOCKHOLDERS' DEFICIENCY                                                         $ 2,959,532        $ 2,715,657
                                                                                     ===========        ===========



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

                                                        F-3
</TABLE>


<PAGE>


                 ANSCOTT INDUSTRIES, INC. AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF OPERATIONS
                FOR THE YEARS ENDED MARCH 31, 2004 AND 2003
<TABLE>
<CAPTION>

                                                                 2004                         2003
                                                         -------------------          --------------------
<S>                                                         <C>                         <C>
NET SALES                                                   $  4,522,525                $  4,816,164
---------

COST OF SALES                                                  2,209,971                   2,405,257
-------------                                               -------------               -------------

   GROSS PROFIT                                                2,312,554                   2,410,907

OPERATING EXPENSES
------------------
 Selling expenses                                              1,690,047                   1,894,243
 General and administrative expenses                           1,161,446                   1,086,035
                                                            -------------               -------------

   TOTAL OPERATING EXPENSES                                    2,851,493                   2,980,278
                                                            -------------               -------------

   OPERATING LOSS                                               (538,939)                   (569,371)
                                                            -------------               -------------

OTHER INCOME (EXPENSE)
----------------------
 Non cash - reverse acquisition expense                       (4,650,000)                         --
 Interest expense                                               (359,207)                   (283,875)
 Income on equity investees                                       29,870                       8,418
 Forgiveness of debt income                                       16,140                     198,621
 Asset impairment                                                     --                     (45,584)
 Other income, net                                                69,190                      15,730
                                                            -------------               -------------

   TOTAL OTHER EXPENSE                                        (4,894,007)                   (106,690)
                                                            -------------               -------------

   NET LOSS                                                 $ (5,432,946)               $   (676,061)
                                                            =============               =============

Per share Information

Net loss per share, Basic and Diluted                              (0.11)                      (0.02)
                                                            =============               =============

Weighted average number of shares outstanding                 50,586,498                  45,000,000
                                                            =============               =============



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

                                              F-4

</TABLE>


<PAGE>

<TABLE>
<CAPTION>

                                      ANSCOTT INDUSTRIES, INC. AND SUBSIDIARIES
                                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY
                                    FOR THE YEARS ENDED MARCH 31, 2004 AND 2003

                                                                                   Common           Common
                                                                                  Stock to         Stock to
                                                     Common         Common           be                be           Additional
                                                     Stock          Stock          Issued            Issued           Paid-In
           Description                               Shares         Amount          Shares           Amount           Capital
           -----------                             ----------     -----------    ------------      -----------      -----------
<S>                                                <C>            <C>               <C>            <C>              <C>
Balance -April 1, 2002                             45,000,000     $    45,000              --               --      $   814,191
Capital contribution                                       --              --              --               --           20,000
Net Loss                                                   --              --              --               --               --
Translation adjustment                                     --              --              --               --               --

Balance -March 31, 2003                            45,000,000     $    45,000              --      $        --      $   834,191
                                                   ----------     -----------    ------------      -----------      -----------

Issuance of Liquidix Shares as
part of the April 15, 2003 merger                     684,069             684              --               --             (684)
 Common stock  issued to
placement agent/ financial
consultant                                          4,000,000           4,000       3,750,000            3,750        4,642,250

Issuance of common stock                            1,350,000           1,350      (1,350,000)          (1,350)              --

Sale of common stock for cash                       4,359,729           4,360              --               --          839,202
 Common stock issued for
services                                              450,000             450              --               --          269,903
 Common stock issued upon
conversion of note payable                            300,000             300              --               --          299,700
 Common stock issued in lieu of
interest payment                                       27,500              28              --               --           16,365

Translation adjustment                                     --              --              --               --               --

Net loss                                                   --              --              --               --               --
                                                   ----------     -----------    ------------      -----------      -----------
Balance- March 31, 2004                            56,171,298     $    56,172       2,400,000      $     2,400      $ 6,900,927
                                                   ==========     ===========       =========      ===========      ===========
</TABLE>
<TABLE>
<CAPTION>


                                                                                   Accumulated
                                                                                      Other
                                                    Deferred       Accumulated     Comprehensive    Comprehensive
                                                  Compensation        Deficit       Income(loss)     Income(loss)           Total
                                                  -----------       ----------      -----------      -----------      ------------
<S>                                               <C>              <C>              <C>              <C>              <C>
Balance -April 1, 2002                            $        --       (2,340,581)     $    (3,662)              --      $ (1,485,052)
Capital contribution                                       --               --               --               --            20,000
Net Loss                                                   --         (676,061)              --         (676,061)         (676,061)
Translation adjustment                                     --               --           25,752           25,752            25,752
                                                  -----------       ----------      -----------      -----------      ------------

Balance -March 31, 2003                           $        --      $(3,016,642)     $    22,090      $  (650,309)     $(2,115,361)
                                                                                                     ===========
Issuance of Liquidix Shares as
part of the April 15, 2003
merger                                                     --               --               --               --                --
 Common stock  issued to
placement agent/ financial
consultant                                                 --               --               --               --         4,650,000

Issuance of common stock                                   --               --               --               --                --


Sale of common stock for cash                              --               --               --               --           843,562
 Common stock issued for
services                                             (180,000)              --               --               --            90,353
 Common stock issued upon
conversion of note payable                                 --               --               --               --           300,000
 Common stock issued in lieu of
interest payment                                           --               --               --               --            16,393

Translation adjustment                                     --               --           25,637           25,637            25,637

Net loss                                                   --       (5,432,946)              --       (5,432,946)       (5,432,946)
                                                  -----------       ----------      -----------      -----------      ------------
Balance- March 31, 2004                           $  (180,000)      (8,449,588)     $    47,727      $(6,057,618)     $ (1,622,362)
                                                  ===========       ==========      ===========      ===========      ============



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

                                                              F-5
</TABLE>

<PAGE>

<TABLE>
<CAPTION>


                                ANSCOTT INDUSTRIES, INC. AND SUBSIDIARIES
                                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                              FOR THE YEARS ENDED MARCH 31, 2004 AND 2003

                                                                             2004                        2003
CASH FLOWS FROM OPERATING ACTIVITIES                                     ---------------------------------------
<S>                                                                      <C>                        <C>
 Net loss                                                                $(5,432,946)               $  (676,061)
                                                                         ------------               ------------
Adjustments to reconcile net loss to net
    cash (used in) provided by operating activities:
  Non cash - reverse acquisition expense                                   4,650,000
  Deferred Compensation
                                                                              45,000                         --
  Interest - beneficial conversion feature on note payable
                                                                             150,000                         --
  Interest - accretion of debt discount on notes payable
                                                                               1,927                         --
  Change in value of equity investments
                                                                             (36,456)                     8,401
  Depreciation and amortization
                                                                              55,823                     60,913
  Impairment charge - deferred financing costs
                                                                                  --                     45,584
Changes in operating assets and liabilities:
  Accounts receivable, net
                                                                              25,486                    (64,062)
  Inventories
                                                                             (93,297)                    78,768
  Prepaid expenses and other current assets
                                                                             (56,068)                   162,892
  Other assets
                                                                                 825                     10,104
  Accounts payable and accrued expenses
                                                                              84,375                    435,663
                                                                         ------------               ------------

 TOTAL ADJUSTMENTS
                                                                           4,827,615                    738,263
                                                                         -----------                -----------

 NET CASH (USED IN) PROVIDED BY
  OPERATING ACTIVITIES                                                      (605,331)                    62,202
                                                                         ------------               ------------

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchases of property and equipment
                                                                             (44,164)                   (67,758)
                                                                         ------------               ------------
NET CASH USED IN
  INVESTING ACTIVITIES                                                   $   (44,164)               $   (67,758)
                                                                         ============               ============


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

                                                       F-6

</TABLE>


<PAGE>

<TABLE>
<CAPTION>

                                     ANSCOTT INDUSTRIES, INC. AND SUBSIDIARIES
                                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    FOR THE YEARS ENDED MARCH 31, 2004 AND 2003

                                                                                              2004                     2003
                                                                                       -----------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
------------------------------------
<S>                                                                                        <C>                      <C>
 Repayment of line of credit                                                                (144,555)                 (65,849)
 Proceeds from issuance of notes payable                                                          --                   55,000
 Proceeds from long-term debt                                                                     --                   37,225
 Capital contribution                                                                             --                   20,000
 Net advances from stockholder                                                                 5,000                   47,001
 Proceeds from sale of common stock                                                               --                  843,562
 Repayment of debt-bank                                                                      (39,125)                 (47,463)
                                                                                           ---------                ---------

NET CASH PROVIDED BY (USED IN)
  FINANCING ACTIVITIES                                                                       719,882                   (9,086)
                                                                                           ---------                ---------

NET INCREASE IN CASH AND
  CASH EQUIVALENTS
                                                                                              70,387                  (14,642)

CASH AND CASH EQUIVALENTS - Beginning                                                         10,079                   24,721
-------------------------                                                                  ---------                ---------

CASH AND CASH EQUIVALENTS - Ending                                                         $  80,466                $  10,079
-------------------------                                                                  =========                =========


SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
-------------------------------------------------
Cash paid during the years for:


Interest                                                                                   $   7,739                $   8,014
Taxes                                                                                      $     500                $     500


 Non-cash investing and financing activities:

Conversion of Note Payable                                                                 $ 150,000                $      --
Common Stock issued for services                                                           $ 270,355                $      --
Common Stock issued to Liquidix stockholders                                               $     685                $      --


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

                                                              F-7
</TABLE>

<PAGE>


                    ANSCOTT INDUSTRIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Anscott  Industries,  Inc. (the  "Company") was originally  incorporated in
1960 in the  State of New  Jersey  and  subsequently,  as a  result  of the
reverse  acquisition  (See  Note 2),  became  a  Florida  corporation.  The
Company is engaged in the business of  manufacturing  and  distribution  of
cleaning  chemicals  and  filters  used  specifically  in the dry  cleaning
industry.  HD  Realty  Inc.  is a  wholly-owned  subsidiary  and  owns  the
headquarters  building  and  leases it to the  Company.  Anscott of Canada,
Inc. is a wholly-owned  subsidiary  that holds a non  controlling  interest
in Caled Signal, Ltd, which distributes similar products in Canada.

The Company sells the cleaning chemicals and filters primarily to customers
throughout the United States.

NOTE 2 - REVERSE AQUISITION

On April 15, 2003, (April 1, 2003 for accounting purposes) Liquidix acquired
100% of the outstanding capital stock of Anscott Industries, Inc. In connection
with this acquisition, Anscott became a wholly-owned subsidiary and Anscott's
directors and officers replaced all of Liquidix directors and officers. The
stockholders of Anscott were issued 45,000,000 of Liquidix shares of common
stock, in exchange for their shares, or 98.6% of Liquidix total outstanding
common shares. Accordingly, a change in control of Liquidix occurred in
connection with the acquisition, and the acquisition was deemed a "reverse
acquisition" for accounting purposes. The reverse acquisition was accounted for
as a recapitalization of Anscott and the stockholders' deficiency was
retroactively restated to April 1, 2002. The financial statements prior to April
1, 2003 are those of Anscott.

Concurrent with the issuance of the 45,000,000 shares, Liquidix transferred of
all of their operating assets and liabilities to AFS for no monetary
consideration. ASF is controlled by the former directors and officers if
Liquidix. At April 1, 2003 Liquidix assets and liabilities consisted of
approximately:
<TABLE>
<S>                                                         <C>                 <C>
           Current Assets                                   $ 1,061,000
           Property and Equipment                               183,000
           Other Assets                                         209,000
                                                            -----------

                                                                                 1,453,000
           Liabilities                                                           1,352,000
                                                                               -----------
           Loss on disposal                                                     $  101,000
                                                                               ===========
</TABLE>

As a result of the reverse acquisition Liquidix changed its name to Anscott
Industries, Inc. and Anscott changed its year end from December 31st to March
31st. Accordingly all financial information has been reported with a March 31st
year end. The Company made several corrections to the financial statements (See
Note 16). As a result of the reverse acquisition with Liquidix the Company
issued to a placement agent 4,000,000 shares of its common stock and agreed to
issue at a future date 3,750,000 shares to a financial consultant. The agent and
the consultant were issued stock in consideration for assistance in facilitating
the reverse acquisition.

                                       F-8

<PAGE>

                    ANSCOTT INDUSTRIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                    CONTINUED

The Company had a written agreement with the consultant that upon Anscott
becoming a publicly traded company, Anscott, would issued to the consultant 10%
of the shares received by the Anscott shareholders. This agreement expired prior
to the reverse acquisition transaction with Liquidix. The Company and the
consultant agreed to issue the consultant 3,750,000 as consideration for
assistance in facilitating the reverse acquisition. Accordingly the Company
recorded an expense in the amount of $4,650,000 relating to the issuance of the
4,000,000 shares and the 3,750,000 shares to be issued.

NOTE 3 - MANAGEMENTS LIQUIDITY PLANS

The accompanying audited consolidated financial statements have been prepared in
conformity with accounting principles generally accepted in the United Sates of
America, which contemplate continuation of the Company as a going concern.
However, for the year ended March 31, 2004, the Company incurred a net loss of
approximately $5,433,000 and had a working capital deficiency of approximately
$2,063,000.

The Company has begun implementing various marketing plans to increase revenues
and is also seeking to make strategic acquisitions. In April 2004 the Company
raised $1,300,000 in the form of a convertible term loan (See Note 16) and if
needed will attempt to raise additional capital to assist in the further
execution of its marketing plans and to fund any possible future acquisitions. A
portion of the new term loan was used to pay off the line of credit. In addition
in July 2004 the Company entered into an agreement with the Internal Revenue
Service whereby agreeing to pay $10,000 per month in overdue payroll taxes (See
Note 5).

The Company believes that with the capital raised in April 2004, the cash flows
from the successful execution of its marketing plans resulting in increased
sales, and any additional capital that the Company may obtain through sales of
its equity and debt securities will be sufficient to pay that portion of its
debt that is due within the next twelve months, as well as to fund the Company's
operations. The Company also believes that they will be able to resolve
foreclosure proceedings with their mortgage lender (See Note 5).

In addition the Company has obtained a firm commitment from two key stockholders
that if needed they will assists in funding the Company's operations and meet
the Company's current debt requirements. These commitments and pledges extend
though at least March 31, 2005 and any advances will be due no early than March
31, 2006. On August 26, 2004 one of the stockholders advanced the Company
$100,000 as part of the Company's negotiations with its mortgage lender.

However, there can be no assurance that the Company will be successful in any of
its plans. To the extent that the Company is unsuccessful in its plans to
increase its cash position, the Company may find it necessary to curtail some of
its operations and possible future acquisitions.

NOTE 4 - SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION
---------------------------
The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiaries. All significant inter-company transactions and
balances have been eliminated in consolidation.


                                       F-9
<PAGE>

                    ANSCOTT INDUSTRIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                    CONTINUED

LOSS PER SHARE
--------------

Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings per
Share", requires the presentation of basic and diluted earnings per share
("EPS"). Basic EPS is computed by dividing loss available to common stockholders
by the weighted-average number of common shares outstanding for the period.
Diluted EPS includes the potential dilution that could occur if options or other
contracts to issue common stock were exercised or converted. The Company has no
outstanding stock options and warrants at March 31, 2004 and 2003. Accordingly,
basic and diluted earnings per share are identical.

ADVERTISING
-----------

Advertising costs are charged to operations as incurred. Advertising expense was
approximately $6,900 and $24,000 for the years ended March 31, 2004 and 2003,
respectively.

ACCOUNTS RECEIVABLE
-------------------

The Company provides for potentially uncollectible accounts receivable by use of
the allowance method. The allowance is provided based upon a review of the
individual accounts outstanding, and the Company's prior history of
uncollectible accounts receivable. As of March 31, 2004 and 2003, a provision
for uncollectible accounts receivable in the amounts of $ 12,000 and $0
respectively, had been established.

The Company is subject to credit risk on its trade receivables. In the normal
course of business, the Company extends credit, on open account, to its
customers. The Company performs ongoing credit evaluations of its customers'
financial condition and provides reserves for accounts doubtful of collection.

INVENTORIES
-----------

Inventory consists primarily of raw materials and finished goods. Inventory is
stated at the lower of cost, using the first-in, first-out (FIFO) method, or
market. Reserves and write downs are established against Company-owned inventory
for excess, slow moving, and obsolete items where the estimated net realizable
value is less than the carrying value.

USE OF ESTIMATES
----------------

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

                                       F-10

<PAGE>

                    ANSCOTT INDUSTRIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                    CONTINUED

IMPAIRMENT OF LONG-LIVED ASSETS
-------------------------------

The Company reviews long-lived assets for impairment whenever events or changes
in circumstances indicate the carrying amount of an asset may not be
recoverable. Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to future undiscounted net cash
flows expected to be generated by the asset. If such assets are considered to be
impaired, the impairment to be recognized is measured by the amount by which the
carrying amount of the assets exceeded the fair value of the assets. Assets to
be disposed of are reported at the lower of the carrying amount or fair value
less costs to sell.

PROPERTY PLANT AND EQUIPMENT
----------------------------

Property, plant and equipment are recorded at cost. Depreciation is provided for
on the straight-line method over the estimated useful lives of the assets.
Maintenance and repairs that neither materially add to the value of the property
nor appreciably prolong its life are charged to expense as incurred. Betterments
or renewals are capitalized when incurred.

The estimated useful lives of the assets are as follows:

                 Furniture and fixtures                 7 years
                 Machinery and equipment                7 years
                 Office equipment                       3 years
                 Building & improvements            20-39 years

INCOME TAXES
------------

The Company accounts for income taxes using the liability method, which requires
the determination of deferred tax assets and liabilities based on the
differences between the financial and tax bases of assets and liabilities using
enacted tax rates in effect for the year in which differences are expected to
reverse. Deferred tax assets are adjusted by a valuation allowance, if, based on
the weight of available evidence, it is more likely than not that some portion
or all of the deferred tax assets will not be realized.

At March 31, 2004, the Company has net operating loss carry forwards of
approximately $3,200,000 which expire at dates through 2024. Pursuant to Section
382 of the Internal Revenue Code regarding substantial changes in ownership,
utilization of these losses may be limited. Based on this and the fact that the
Company has generated operating losses through March 31, 2004 and 2003, the
deferred tax asset of approximately $1,100,000 and $845,000 has been offset by a
valuation allowance of $1,100,000 and $845,000, respectively.

                                      F-11

<PAGE>

                    ANSCOTT INDUSTRIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                    CONTINUED

STOCK BASED COMPENSATION
------------------------

SFAS No. 148, "Accounting for Stock-Based Compensation-Transition and
Disclosure-an amendment of FASB Statement No. 123" amends SFAS No. 123,
"Accounting for Stock-Based Compensation", to provide alternative methods of
transition for a voluntary change to the fair value based method of accounting
for stock-based employee compensation. In addition, this Statement amends the
disclosure requirements of SFAS 123 to require prominent disclosures in both
annual and interim financial statements about the method of accounting for
stock-based compensation and the effect of the method used on reported results.
The Company continues to follow the pro-forma disclosures for stock-based
compensation as permitted in SFAS 123. As of March 31, 2004 and 2003, the
Company had no outstanding options and warrants, therefore no pro forma
disclosures are required.

FAIR VALUE OF FINANCIAL INSTRUMENTS
-----------------------------------

Accounts receivable, notes receivable, accounts payable, notes payable and
accrued liabilities are substantially current or bear reasonable interest rates.
As a result, the carrying values of these financial instruments approximate fair
value.

REVENUE RECOGNITION
-------------------

Revenue consists of the sale of cleaning chemicals and filters. Revenue on the
sale of cleaning chemicals and filters is recognized upon evidence of an
agreement and when title of merchandise has passed...

FOREIGN CURRENCY TRANSLATION
----------------------------

Account balances and transactions denominated in foreign currencies and the
accounts of the Corporation's foreign operations have been translated into
United States funds, as follows: (i) assets and liabilities at the rates of
exchange prevailing at the balance sheet date; (2) exchange gains and losses
arising from the translation of the Corporation's foreign operations are
deferred and included as a separate component of stockholders' equity. The
foreign currency translation adjustments for the years ended March 31, 2004 and
for March 31, 2003 were ($28,369) and $34,154, respectively.

                                      F-12

<PAGE>


                    ANSCOTT INDUSTRIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                    CONTINUED

NEW ACCOUNTING PRONOUCEMENTS
----------------------------

In January 2003, Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46"),
an interpretation of Accounting Research Bulletin No. 51. FIN 46 expands upon
and strengthens existing accounting guidance that addresses when a company
should include in its financial statements the assets, liabilities and
activities of another entity. A variable interest entity is any legal structure
used for business purposes that either does not have equity investors with
voting rights nor has equity investors that do not provide sufficient financial
resources for the entity to support its activities. FIN 46 requires a variable
interest entity to be consolidated by a company if that company is subject to a
majority of the risk of loss from the variable interest entity's activities or
entitled to receive a majority of the entity's residual returns or both. The
consolidation requirements of FIN 46 apply immediately to variable interest
entities created after January 31, 2003. The consolidation requirements apply to
older entities in the first fiscal year or interim period beginning after June
15, 2003. However, in December 2003, FASB deferred the latest date by which all
public entities, which meet the definition of small business issuer under SEC
Regulation S-B ("Public SB's), must apply FIN 46 to the first interim or annual
reporting period ended after December 15, 2004. The effect of the adoption of
this new accounting pronouncement is not expected to have a significant impact
on the Company financial statements.

SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities"
("SFAS 146"), provides guidance on the recognition and measurement of
liabilities for costs associated with exit or disposal activities. The
provisions of SFAS 146 are effective for exit or disposal activities that are
initiated after December 31, 2002. The Company implemented this standard
effective January 1, 2003 with no material impact to the Company's financial
statements.

In April 2003, FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities" ("SFAS 149"), which is effective
for contracts entered into or modified after June 30, 2003. SFAS 149 amends FASB
Statement No. 133, "Accounting for Derivative Instruments and Hedging
Activities," to clarify financial accounting and reporting for derivative
instruments, including certain derivative instruments embedded in other
contracts. The effect of the adoption of this new accounting pronouncement on
Company's financial statements has not been significant.

In May 2003, FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity" ("SFAS 150"),
which is effective for financial instruments entered into or modified after May
31, 2003, and otherwise is effective at the beginning of the first interim
period beginning after June 15, 2003. SFAS 150 establishes standards for how an
issuer classifies and measures certain financial instruments with
characteristics of both liabilities and equity. It requires that an issuer
classify a financial instrument that is within its scope as a liability. The
adoption of SFAS 150 did not have a material effect on the Company's financial
statements

                                      F-13

<PAGE>


                    ANSCOTT INDUSTRIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                    CONTINUED

NOTE 5 - COMMITMENTS AND CONTINGENCIES

LITIGATION
----------

The Company is involved in litigation with a vendor relating to the issuance of
shares of common stock for services rendered. The plaintiff, Internet Marketing
Solutions, Inc. has filed a lawsuit in the U.S. District Court of Utah to seek
250,000 shares issued to it for services. The plaintiff claims that it was
issued 250,000 of Liquidix shares for services rendered. Pursuant to the
complaint, on December 18, 2002, the shares were cancelled. The Company cannot
make a determination of the outcome of this matter. No adjustments have been
recorded in the financial statements related to this matter.

The mortgage lender or the Company's headquarters building located in Wayne NJ,
has commenced a foreclosure action on the building in 2004. The Company has
begun negotiations with the lender. On August 26, 2004 the Company paid $100,000
which was put into escrow until a settlement with the lender can be completed.
Management believes that we will resolve this matter with no material impact to
the Company's financial statements or operations. However there can be no
assurances that the Company will be successful.

The Company is also in an arbitration proceeding with Itochu International
regarding the 50% ownership in Global Technologies, L.L.C. whereby Itochu is
claiming the Company owes $250,000 to Itochu for joint venture expenditures. The
Company has filed a counter claim alleging that the Company is owed monies from
the joint venture. The case is in its early stage and the Company cannot make a
determination of the outcome of this matter. However, the Company has accrued
approximately $149,000 (which is included in Due to Stockholder and Affiliate)
related to this matter.

The Company is involved in various claims and legal actions arising in the
ordinary course of business. In the opinion of management, the ultimate
disposition of these matters will not have a material adverse effect on the
Company's financial position or results of operations.

FORGIVENESS OF DEBT INCOME
--------------------------

During the years ended March 31, 2004 and 2003, the Company negotiated with
several vendors to reduce the amount owed to the respective vendor. Upon
receiving release from such vendors the Company recorded forgiveness of debt
income in the amount of $16,140 and $198,621, for the years ended March 31, 2004
and 2003, respectively.

                                      F-14

<PAGE>


                    ANSCOTT INDUSTRIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                    CONTINUED

PAYROLL TAXES PAYABLE
---------------------

At March 31, 2004 and 2003 $777,134 and $643,114 of unpaid payroll taxes
(including interest and penalties) are included in other liabilities,
respectively and $120,000 is included in accounts payable and accrued expenses.
On July 2, 2004, the Company entered into a settlement agreement with the
Internal Revenue Service, whereby the Company agreed to pay in the aggregate
$902,384 payable in monthly installments of $10,000.

Future minimum payments on the Internal Revenue Service Settlement Agreement are
as follows:

           March 31,
              2005                    $    120,000
              2006                         120,000
              2007                         120,000
              2008                         120,000
           Thereafter                      422,384
                                  ----------------------
                                          $902,384
                                  ======================


NOTE 6 - INVESTMENTS IN EQUITY INVESTEES

The Company, through its wholly owned subsidiary Anscott of Canada, Inc, has a
50% non controlling ownership interest in Caled Signal, which is carried on the
equity method. The investment balance of Anscott of Canada, Inc., as of March
31, 2004 is $360,123.

Summarized financial data, which has been obtained from the audited financial
statements for the years ended June 30, 2003 and 2002 and the unaudited interim
financial statements for the March 31, 2004 and 2003 of the investment are as
follows:
<TABLE>
<CAPTION>
                                For the Nine        For the Nine
                                Months Ended        Months Ended           For the year ended    For the year ended
                               March 31, 2004       March 31, 2003           June 30, 2003         June 30, 2002
                                (Unaudited)          (Unaudited)               (Audited)            (Audited)
                             ------------------- --------------------    --------------------- ---------------------
<S>                                  <C>                  <C>                      <C>                   <C>
      Revenues                       $  655,100           $  586,489               $  818,230            $  727,829
      Expenses                          637,949              569,617                  762,587               723,488
                             ------------------- --------------------    --------------------- ---------------------
      Income                         $   17,151           $   16,872               $   55,643            $    4,341
                             =================== ====================    ===================== =====================
</TABLE>

                                      F-15

<PAGE>

                    ANSCOTT INDUSTRIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                    CONTINUED

A summary of the assets and liabilities of the investment is as follows:
<TABLE>
<CAPTION>
                                   March 31, 2004     March 31, 2003    June 30, 2003    June 30, 2002
                                     (Unaudited)       (Unaudited)       (Audited)         (Audited)
<S>                                   <C>               <C>               <C>               <C>
        Cash                          $ 87,067          $ 60,523          $ 42,196          $ 41,360

        Accounts receivable            221,011           206,951           243,155           215,328

        Inventories                    296,789           248,057           258,862           204,395

        Other current assets            17,390            12,125            52,652            17,244

        Other assets                     7,283             5,505

        Fixed assets                   153,366           141,096           153,432           140,628
                                      --------          --------          --------          --------

        Total Assets                  $775,623          $668,752          $757,580          $624,460
                                      ========          ========          ========          ========

        Current liabilities           $ 55,300          $ 65,076          $ 55,082          $ 56,608

        Equity                         720,323           603,676           702,499           567,853
                                      --------          --------          --------          --------

                                      $775,623          $668,752          $757,581          $624,461
                                      ========          ========          ========          ========
</TABLE>

Global Technologies, L.L.C. ("Global") is a 50% owned limited liability Company,
which is accounted for using the equity method. Global was started during 1995
as a joint venture to produce and market a new dry cleaning system called "Dry
Wash." Through March 31, 2002 Global had not generated significant revenues nor
was expected to in the foreseeable future. Accordingly the Company recorded an
impairment of the asset as of March 31, 2002. The Company is currently in
arbitration relating to the assets of Global (See Note 4)

NOTE 7 - INVENTORIES:

Inventories at March 31, 2004 and 2003 consist of:

                                          2004                    2003
                                   -------------------- ----------------------
      Raw materials                     $  98,042                $  96,226
      Work in process                      32,906                   33,612
      Finished goods                      327,632                  235,445
                                        ---------                ---------
        Total inventory                 $ 458,580                $ 365,283
                                        =========                =========

                                      F-16

<PAGE>


                    ANSCOTT INDUSTRIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                    CONTINUED

NOTE 8 - PROPERTY AND EQUIPMENT:

Property and equipment at March 31, 2004 and 2003 consists of:
<TABLE>
<CAPTION>
                                                                 2004                   2003
                                                          -------------------- -------------------------
<S>                                                          <C>                       <C>
              Furniture and equipment                        $   962,492               $  960,026
              Leasehold improvements                             340,308                  298,609
              Land and building                                1,308,098                1,308,099
                                                               ---------                ---------
                                                               2,610,898                2,566,734
              Less:  accumulated depreciation                 (1,365,111)              (1,309,288)
                                                              ----------               ----------
                  Property and equipment, net                 $1,245,787               $1,257,446
                                                              ==========               ==========
</TABLE>

Depreciation and amortization expense for the years ending March 31, 2004 and
2003 were $55,823 and $60,913, respectively.

NOTE 9 - DUE TO OFFICER' AND AFFILIATE

The balance includes approximately $55,000 of advances received from an officer
of the Company, which are non-interest-bearing and have no definitive repayment
terms. Any imputed interest is deemed immaterial. The remaining balance of
approximately $149,000 is owed to Global (See Note 5)

NOTE 10 - LINE OF CREDIT:

The Company had a revolving line of credit with a financial institution that
expired on March 31, 2004. Advances under the credit line were based on 85% of
eligible accounts receivable plus the lessor of 50% of eligible inventory or
$300,000. Borrowings under the credit line were not to exceed $1,300,000 and
bears interest at 10% per annum. At March 31, 2004 and 2003, the balance on the
credit line was $562,764 and $707,309, respectively. On March 31, 2004, the line
was extended until May 15, 2004. The line was subsequently paid in April, 2004
through the issuance of a convertible note with a new lender (See Note 16). The
line was guaranteed by the Company's Chief Operating Officer.

                                      F-17

<PAGE>

                    ANSCOTT INDUSTRIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                    CONTINUED

NOTE 11 - LONG TERM DEBT

       Long-term debt at March 31, 2004 and 2003 consists of the following:
<TABLE>

                                                                                           2004               2003
                                                                                    ------------------- ------------------
<S>                                                                                 <C>                   <C>
      On April 29, 1999, the Company entered into a loan agreement with CIT. The
      loan bears interest at the prime rate plus 1.75%. The loan is
      collateralized by the Company's land and building and is presently subject
      to a foreclosure action by CIT. Due to the foreclosure action, the entire
      loan has been classified as current. The Company is in negotiation with
      CIT to try and resolve this matter. Prior to the foreclosure action the
      loan was payable in monthly installments of principal and interest of
      $11,541, with the remaining principal and accrued interest due and payable
      264 months from the date of the initial disbursement. The mortgage is
      guaranteed by the Company's Chief Operating Officer. [1]                      $     1,263,125       $   1,263,125

      During the year ended March 31, 2003, the Company received a Small
      Business Administration disaster relief loan due to hardship from the
      September 11, 2001 attacks. All principal and interest payments are
      deferred until December 2004. Commencing January 2005 the loan is payable
      in monthly installments of principal and interest of $3,287 with the
      remaining principal and accrued interest due and payable 15 years at an
      interest rate of 4% per annum.                                                        409,100             409,100

      Term equipment loan payable to the Bank, due in monthly installments of
      $3,260 including interest at the prime rate plus 1.75% due in 2005. The
      loan was subsequently paid in April, 2004 through the issuance of a
      convertible note with a new lender (See Note 16). The line was guaranteed
      by the Company's Chief Operating Officer.                                              58,687              97,812

             Total Long-Term Debt                                                         1,730,912           1,770,037
                                                                                      -------------        ------------
       Less:  current maturities of long-term debt                                       (1,324,084)         (1,360,937)
                                                                                      -------------        ------------
             Long-Term Debt, less Current Maturities                                $       406,828       $     409,100
                                                                                      =============         =============
</TABLE>

Future minimum payments on the long-term debt are as follows:

           March 31,
           ---------
       Current (Default)                    $ 1,321,812
              2005                                2,272
              2006                               27,273
              2007                               28,151
              2008                               28,996

           Thereafter                           322,408
                                  ----------------------
                                            $ 1,730,912
                                  ======================

                                      F-17

<PAGE>

                    ANSCOTT INDUSTRIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                    CONTINUED


[1] During the year ended March 31, 2003, the Company failed to make the
required payments under the agreement. Accordingly the Company wrote off the
deferred financing costs associated with the agreement and recorded a charge of
$45,584.


NOTE 12 - CONVERTIBLE NOTES PAYABLE

2002 NOTES
----------

During the year ended March 31, 2002 the Company issued a notes payable in the
amount of $150,000. The notes were convertible upon Anscott becoming a publicly
traded company, which occurred on April 15, 2003 (See Note 2). If Anscott were
to become public the note would become due on demand and immediately convertible
at a conversion price equal to 50% of the fair market value of the common stock
at the date of conversion. Accordingly on April 15, 2003, the Company recorded a
beneficial conversion feature of $150,000, which was charged to interest. On
November 23, 2003, the Notes were converted into 300,000 shares of the Company's
common stock.


2004 NOTES
----------

At various dates in February and March 2004, the Company issued Notes Payable in
varying amounts to six (6) individuals for an aggregate amount of $55,000. The
notes are due one (1) year from issuance date. In lieu of interest, the Company
issued one (1) of its common stock for each two (2) dollars of debt. Accordingly
the Company issued 27,500 shares of common stock. The relative fair value of the
stock in the amount of $16,391 has been recorded as a deferred debt discount and
will accrete to interest expense over the life of the notes. At March 31, 2004,
the company recognized $1,927 of interest expense relating to the notes.

If the Company defaults on the notes they become convertible into the Company's
common stock at a conversion price equal to 50% of the fair market value on the
date of conversion. Accordingly if the Company defaults on any or all of the
notes, they will record a beneficial conversion feature in the aggregate of
$27,500.

NOTE 13 - STOCKHOLDERS' DEFICIENCY

During the year ended March 31, 2004, 1,350,000 of the 3,750,000 shares of
common stock to be issued were issued to a financial consultant (See Note 2).

During the year ended March 31, 2004 the Company sold 4,359,729 shares of its
common stock for an aggregate purchase price of $843,562.

During the year ended March 31, 2004, the Company issued 300,000 shares of its
common stock upon the conversion of $150,000 of notes payable (See Note 12).

                                      F-18

<PAGE>


                    ANSCOTT INDUSTRIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                    CONTINUED

During the year ended March 31, 2004 the Company issued 450,000 shares of its
common stock as payment of accrued profession fees of approximately $45,000 and
for future professional fees valued at $15,000 per month through March 31, 2005.
Accordingly the Company has recorded at March 31, 2004, $180,000 of deferred
compensation expense.

During the year ended March 31, 2004, the Company issued 27,500 shares of its
common stock in lieu of interest on notes payable issued during the year (See
Note 12).

NOTE 14 - EMPLOYEE BENEFIT PLAN:

The Company has a 401(k) plan covering substantially all of its employees. The
Company has the option of making an annual discretionary contribution and can
also match each employee's contribution to the plan up to a predetermined limit.
For the years ended March 31, 2004 and 2003, the Company has elected not to
contribute to the plan.

NOTE  15  -  RESTATEMENT   AND   PRESENTATION   OF  QUARTERLY   INFORMATION
(UNAUDITED)

The financial information contained in the Company's Quarterly Reports on Form
10QSB for the periods ended June 30, 2003 filed on September 2, 2003, September
30, 2003 filed on November 12, 2003, and December 31, 2003 filed on February 14,
2004 contained various errors and they did not include comparative information
for the June 30, 2002, September 30, 2002, and December 31, 2002 periods. These
errors consist primarily of:

     (1)  error relating to the application of purchase accounting and reverse
          acquisition transaction;

     (2)  recording of an impairment charge on Global at March 31, 2002;

     (3)  improper matching of expenses to revenues relating to sales commission
          expense, inventory purchases, and amortization of certain intangible
          assets; and

     (4)  establishment of a valuation allowance on deferred tax assets.

The aggregate effects of the corrections are as follows
<TABLE>
<CAPTION>
                                                               December 31,          September 30,
                                                                    2003                 2003          June 30, 2003
                                                              -------------------  ----------------   --------------
<S>                                                           <C>                   <C>                <C>
           Stockholders' Equity (Deficiency), as reported     $        2,171,191    $   (1,466,592)    $ (1,269,622)

           Net effect of restatement                                  (3,682,377)         (790,217)        (869,307)
                                                              -------------------  ----------------   --------------

           Stockholders' Deficiency, as restated              $       (1,511,186)   $   (2,256,809)    $ (2,138,929)
                                                             ====================  ================   ==============

</TABLE>

                                      F-19

<PAGE>

                    ANSCOTT INDUSTRIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                    CONTINUED

<TABLE>
<CAPTION>
                                                     For the Three Months Ended
                                      --------------------------------------------------------

                                         December 31,       September 30,      June 30, 2003
                                             2003               2003
                                      ------------------- ------------------ -----------------
<S>                                     <C>                   <C>                   <C>
Net Income (Loss), as reported          $    35,778           $  (207,372)          $  (116,933)

Net effect of restatement                   (34,873)               79,089            (4,706,635)
                                        -----------           -----------           -----------

Net Income (Loss), as restated          $       905           $  (128,283)          $(4,823,568)
                                        ===========           ===========           ===========
</TABLE>

The Condensed Consolidated Balance Sheets for the periods discussed above are as
follows:
<TABLE>
<CAPTION>
                                           December       September        June        December
                                           31, 2003       30, 2003       30, 2003      31, 2002      September        June
                                           Restated       Restated       Restated      Restated       30, 2002      30, 2002
                                         -----------    -----------    -----------    -----------    -----------    -----------
ASSETS
  Current assets:
<S>                                      <C>            <C>            <C>            <C>            <C>            <C>
     Cash and cash equivalents           $    77,249    $    13,518    $     2,914    $    29,637    $    36,082    $    11,959

     Accounts receivable, net                645,996        537,341        500,234        453,600        470,671        582,526

     Inventories, net                        459,525        423,102        450,824        398,699        443,411        538,361

     Prepaid expenses and other assets       252,125        212,254        204,401        165,227        238,197        270,149
                                         -----------    -----------    -----------    -----------    -----------    -----------
Total current assets                       1,434,895      1,186,215      1,158,373      1,047,163      1,188,361      1,402,995
Property and equipment, net                1,255,297      1,251,325      1,269,241      1,257,488      1,260,102      1,240,115
Other assets:

     Intangibles                                  --             --             --         46,213         46,522         47,151

     Investments                             364,646        332,234        298,030        298,030        255,757        255,757

     Other long term assets                   18,650         18,650         18,650         13,475         44,418         36,643
                                         -----------    -----------    -----------    -----------    -----------    -----------
Total Assets                             $ 3,073,488    $ 2,788,424    $ 2,744,294    $ 2,662,369    $ 2,795,160    $ 2,982,661
                                         ===========    ===========    ===========    ===========    ===========    ===========

LIABILITIES AND
STOCKHOLDERS' DEFICIENCY
  Current Liabilities:
     Current portion of long-term debt   $ 1,331,698    $ 1,341,479    $ 1,351,156    $ 1,370,719    $ 1,382,150    $ 1,391,956
     Accounts payable and accrued
         Expenses                          1,989,705      2,211,461      2,065,391      1,832,362      1,874,768      1,613,156

     Line of  credit                         649,649        727,741        708,124        653,428        630,697        809,691

 Convertible notes payable                        --        150,000        150,000        150,000        150,000        150,000

     Due to stockholders                     204,522        205,452        199,452        189,352        198,851        184,251
                                         -----------    -----------    -----------    -----------    -----------    -----------
Total Current Liabilities                  4,175,574      4,636,133      4,474,123      4,195,861      4,236,466      4,149,054

Long term debt                               409,100        409,100        409,100        409,100        409,100        409,100

Stockholders' deficiency:

     Common stock                             53,134         49,684         49,684         45,000         45,000         45,000

     Additional paid-in capital            6,351,903      5,629,507      5,629,507        834,191        834,191        885,390
     Accumulated Deficit                  (7,967,588)    (7,968,493)    (7,840,210)    (2,843,873)    (2,725,935)    (2,502,221)

     Other comprehensive income (loss)        51,365         32,493         22,090         22,090         (3,662)        (3,662)
                                         -----------    -----------    -----------    -----------    -----------    -----------
                 Total stockholders'
deficiency                                (1,511,186)    (2,256,809)    (2,138,929)    (1,942,592)    (1,850,406)    (1,575,493)
                                         -----------    -----------    -----------    -----------    -----------    -----------
     Total                               $ 3,073,488    $ 2,788,424      2,744,294    $ 2,662,369      2,795,160    $ 2,982,661
</TABLE>

                                      F-21

<PAGE>

                    ANSCOTT INDUSTRIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                    CONTINUED

The Condensed Consolidated Statements of Operations for the periods discussed
above are as follows:
<TABLE>
<CAPTION>
                                                                 Nine Months
                                           Nine Months Ended         Ended          Six Months Ended    Six Months Ended
                                           December 31, 2003      December 31,     September 30, 2003    September 30,
                                              (Restated)             2002             (Restated)             2002
                                             -------------       -------------       -------------       -------------
<S>                                          <C>                 <C>                 <C>                 <C>
Revenues                                        3,429,173           3,693,139           2,231,839           2,452,629
Cost of revenues                                1,570,871           1,788,663           1,019,590           1,195,801
                                             -------------       -------------       -------------       -------------
     Gross profit                               1,858,302           1,904,476           1,212,249           1,256,828
                                             -------------       -------------       -------------       -------------

Operating expenses:
    Selling                                     1,248,131           1,503,671             832,519             991,713
    General and administrative                    742,088             846,333             500,948             547,351
                                             -------------       -------------       -------------       -------------
Total operating expenses                        1,990,219           2,350,004           1,333,467           1,539,064
                                             -------------       -------------       -------------       -------------

Loss from operations                             (131,917)           (445,528)           (121,218)           (282,236)

Other Income (expenses)

Non cash - reverse acquisition expense         (4,650,000)                 --          (4,650,000)                 --
Interest expense                                 (315,596)           (228,013)           (251,495)           (159,782)
Forgiveness of debt income                         67,299             159,651              32,431              62,586
Other Income (expense)-net                         79,268              10,598              38,431              (5,922)
                                             -------------       -------------       -------------       -------------
Total Other Expense                            (4,819,029)            (57,764)         (4,830,633)           (103,118)
                                             -------------       -------------       -------------       -------------

Net Loss                                     $ (4,950,946)       $   (503,292)       $ (4,951,851)       $   (385,354)
                                             =============       =============       =============       =============

Per Share Information
Net Loss per share, basic and diluted        $      (0.10)       $      (0.01)       $      (0.10)       $      (0.01)
Weight shares outstanding                      49,638,974          45,000,000          48,644,391          45,000,000

</TABLE>

















                                      F-22



<PAGE>

                    ANSCOTT INDUSTRIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                    CONTINUED

The restated quarterly Condensed Consolidated Statements of Operations for the
year ended March 31, 2004 are as follows:
<TABLE>
<CAPTION>
                                                                   Three Months       Three Months        Three Months
                                               Three Months      Ended December     Ended September     Ended June 30,
                                             Ended March 31,        31, 2003            30, 2003             2003
                                                  2004              Restated            Restated           Restated

                                           -------------------- ------------------ ------------------- ------------------
<S>                                          <C>                 <C>                 <C>                 <C>
Revenues                                     $  1,093,352        $  1,197,334        $  1,118,245        $  1,113,594
Cost of revenues                                  639,100             551,281             512,869             506,721
                                           -------------------- ------------------ ------------------- ------------------
     Gross profit                                 454,252             646,053             605,376             606,873
                                           -------------------- ------------------ ------------------- ------------------

Operating expenses:
    Selling                                       441,916             415,612             451,319             381,200
    General and administrative                    419,358             241,140             269,764             231,184
                                           -------------------- ------------------ ------------------- ------------------
Total operating expenses                          861,274             656,752             721,083             612,384
                                           -------------------- ------------------ ------------------- ------------------

Loss from operations                             (407,022)            (10,699)           (115,707)             (5,511)

Other Income (expenses)
 Non cash - reverse acquisition
expense                                                --                  --                  --          (4,650,000)
 Interest expense                                 (43,611)            (64,101)            (45,489)           (206,006)
 Forgiveness of debt income                       (51,159)             34,868               1,112              31,319

 Other Income (expense)-net                        19,792              40,837              31,801               6,630
                                           -------------------- ------------------ ------------------- ------------------
Total Other Expense                               (74,978)             11,604             (12,576)         (4,818,057)
                                           -------------------- ------------------ ------------------- ------------------

Net Loss                                     $   (482,000)       $        905        $   (128,283)       $ (4,823,568)
                                           ==================== ================== =================== ==================
Per Share Information
 Net Loss per share, basic and diluted       $      (0.01)       $       0.00        $      (0.00)       $      (0.10)
 Weight shares outstanding                     53,449,896          51,617,330          49,684,069          47,593,288
</TABLE>

                                      F-23

<PAGE>

                    ANSCOTT INDUSTRIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                    CONTINUED

The quarterly Condensed Consolidated Statements of Operations for the year ended
March 31, 2003 are as follows:
<TABLE>
<CAPTION>
                                                            Three Months      Three Months
                                           Three Months       Ended              Ended          Three Months
                                           Ended March      December 31,      September 30,      Ended June
                                             31, 2003           2002              2002            30, 2002
                                          ------------      ------------      ------------      ------------
<S>                                       <C>               <C>               <C>               <C>
Revenues                                  $  1,123,025      $  1,240,510      $  1,182,034      $  1,270,595

Cost of revenues                               616,594           592,862           596,609           599,192
                                          ------------      ------------      ------------      ------------

     Gross profit                              506,431           647,648           585,425           671,403
                                          ------------      ------------      ------------      ------------

Operating expenses:

    Selling                                    390,572           511,958           528,884           462,829

    General and administrative                 239,702           298,982           280,209           267,142
                                          ------------      ------------      ------------      ------------

Total operating expenses                       630,274           810,940           809,093           729,971
                                          ------------      ------------      ------------      ------------


Loss from operations                          (123,843)         (163,292)         (223,668)          (58,568)

Other Income (expenses)

Interest expense                               (55,862)          (68,231)          (76,158)          (83,624)

Forgiveness of debt income                      38,970            97,065            57,112             5,474

Other Income (expense)-net                      13,550            16,520            19,000           (24,922)
                                          ------------      ------------      ------------      ------------

Total Other Expense                             (3,342)           45,354               (46)         (103,072)
                                          ------------      ------------      ------------      ------------

Net Loss                                  $   (127,185)     $   (117,938)     $   (223,714)     $   (161,640)
                                          ============      ============      ============      ============

Per Share Information
Net Loss per share, basic and diluted     $      (0.00)     $      (0.00)     $      (0.00)     $      (0.00)
Weight shares outstanding                   45,000,000        45,000,000        45,000,000        45,000,000
</TABLE>


                                      F-24

<PAGE>

                    ANSCOTT INDUSTRIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                    CONTINUED

NOTE 16-SUBSEQUENT EVENTS (Unaudited)

(A)      On April 20, 2004, the Company issued a convertible term note in the
         amount of $1,300,000 and seven (7) year warrants to purchase 520,000
         shares of the Company's common stock with exercise prices of (i) $0.79
         for the first 195,000 warrants (ii) $0.99 for the next 195,000 warrants
         (iii) $1.15 for the remaining. The note is convertible into the
         Company's common stock at an initial fixed conversion price of $0.68.


(B)      On August 26, 2004 a stockholder advanced the Company $100,000. The
         advance is non-interest bearing and can be converted into common stock
         at fair market value at the time of conversion. The proceeds were used
         to assist the Company with the foreclosure proceeding on their main
         operating building (See Note 5)



                                      F-25



<PAGE>

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

We changed our accountant from Semple & Cooper, LLP in Arizona to Sellers &
Andersen, LLC of Utah. We again changed accountants on February 16, 2004 from
Sellers & Anderson, LLC to our accountants, Madsen & Associates, CPA's Inc.
Effective June 17, 2004, Madsen & Associates CPA's, Inc. ("Madsen") was
dismissed as the independent auditor for the Company and Marcum & Kliegman, was
appointed as the new independent auditor for the Company.

Section 102 of the Sarbanes-Oxley Act of 2002 makes it unlawful after October
22, 2003 for any person that is not a registered public accounting firm (i.e.
registered with the PCAOB) to prepare or issue, or to participate in the
preparation or issuance of any report with respect to an issuer. Sellers &
Anderson, LLC was not registered with the PCAOB, but issued a draft audit
opinion dated July 11, 2003 that was incorporated into our original Form 10-K,
dated July 14, 2003. Although registration with PCAOB was not required for
public accounting firms on the filing date of the Form 10-K, the accountant
labeled the financial statements as a draft. Therefore, we had our Madsen &
Associates re-audit the financial statements in the amendment No. 1 to Form
10-KSB.

At no time has there been any disagreement with such accountants regarding any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure.

ITEM 8A. Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed in our Securities Exchange Act reports is
recorded, processed, summarized, and reported within the time periods specified
in the SEC's rules and forms, and that such information is accumulated and
communicated to our management, including our Chief Executive Officer and Chief
Financial Officer, as appropriate, to allow timely decisions regarding required
disclosure. In designing and evaluating the disclosure controls and procedures,
management recognized that any controls and procedures, no matter how well
designed and operated, can provide only reasonable assurance of achieving the
desired control objectives, as ours are designed to do, and management
necessarily was required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures.

As of March 31, 2004, an evaluation was performed under the supervision and with
the participation of our management, including the Chief Executive Officer /
Chief Financial Officer, of the effectiveness of the design and operation of our
disclosure controls and procedures. Based upon that evaluation, the Chief
Executive Officer and / Chief Financial Officer concluded that our disclosure
controls and procedures were effective. Except as discussed in the following
paragraph, subsequent to the date of this evaluation, there have been no
significant changes in our internal controls or in other factors that could
significantly affect these controls.

In connection with the audits of our consolidated financial statements as of and
for the years ended March 31, 2004 and 2003, Marcum & Kliegman LLP advised our
management and that it had identified a deficiency in internal controls, which
was designated a "material weakness." The material weakness indicated that there
is inadequate structure within our accounting department. We believe this
resulted from continued cost cutting efforts, which resulted in the termination
of employees during the years ended March 31, 2004 and 2003. Management believes
that sufficient compensating controls have been implemented to minimize the
risks associated with this material weakness, including using a public
accounting firm to review monthly closings and the engagement of a consultant to
assist the Company with complex accounting issues.

<PAGE>

                                    PART III
                                    --------

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

Our directors and officers, as of September 10, 2004, are set forth below. The
directors hold office for their respective term and until their successors are
duly elected and qualified. Vacancies in the existing Board are filled by a
majority vote of the remaining directors. The officers serve at the will of the
Board of Directors.


                             With Company
Name                   Age   Position
--------------------   ---   -----------------------------
Jack Belluscio         42    President, Chief Executive Officer,
                             Chief Financial Officer and
                             Chairman of the Board
Steven Hoh             56    Secretary, Treasurer and Director

Jack  Belluscio has been the  President,  Chief  Executive  Officer,  Chief
Financial  Officer and Chairman of our Board of  Directors  since April 15,
2003.  He  has  been  employed  as  the  Chief  Financial  Officer  of  our
subsidiary,  Anscott  Industries,  Inc.,  since 2000. From 1995 to 2000 Mr.
Belluscio  was  assigned to Global  Technologies,  El  Segundo,  Ca. as its
President.  From 1990 to 1995 he was  President of Caled  Chemical,  Wayne,
NJ. From 1987 to 1990 Mr.  Belluscio was employed by Western  Union,  Upper
Saddle River,  NJ. From 1983 - 1987 he was employed by Citibank,  New York,
NY.  Mr.  Belluscio  has  an  MBA  with  a  concentration  in  finance  and
economics.  He has held  positions on the Board of Directors of the Textile
Care Association and New York Military Academy.

Steven Hoh has been our Secretary  and  Treasurer and Director  since April
15,  2003.  Mr.  Hoh has been  the  Vice  President  of  Operations  of our
subsidiary,  Anscott  Industries,  Inc.  since  1980.  He has held  several
positions  within  Anscott  Industries,  Inc. and currently is  responsible
for  manufacturing  personnel  coordination  of  materials  throughout  the
company's worldwide distribution network.

All officers and directors listed above will remain in office until the next
annual meeting of our stockholders, and until their successors have been duly
elected and qualified. There are no agreements with respect to the election of
Directors. We have not compensated our Directors for service on our Board of
Directors, any committee thereof, or reimbursed for expenses incurred for
attendance at meetings of our Board of Directors and/or any committee of our
Board of Directors. Officers are appointed annually by our Board of Directors
and each Executive Officer serves at the discretion of our Board of Directors.

We do not have any standing committees. Our Board of Directors may in the future
determine to pay Directors' fees and reimburse Directors for expenses related to
their activities.

None of our Officers and/or Directors have filed any bankruptcy petition, been
convicted of or been the subject of any criminal proceedings or the subject of
any order, judgment or decree involving the violation of any state or federal
securities laws within the past five (5) years.

<PAGE>

COMMITTEES OF THE BOARD

We presently do not have any committees.

Compliance with Section 16(a) of the Exchange Act

None

Item 10. Executive Compensation

The following table sets forth the annual and long-term compensation for
services in all capabilities to the Company.
<TABLE>
<CAPTION>
Name & Position                   Year           Salary     Bonus       Other      Annual Long Term
                                  Compensation                                     Compensation
------------------------------------------------------------------------------------------------
<S>                                   <C>        <C>             <C>      <C>           <C>
Jack Belluscio                        2004       $27,996         0        0             0
President and Director

Steven Hoh                            2004       $47,277         0        0             0
Secretary, Treasurer
and Director
</TABLE>

Our Directors do not receive compensation for their services as directors but
may be reimbursed for their reasonable expenses for attending Board meetings.

Item 11. Security Ownership of Certain Beneficial Owners and Management

The following table sets forth as of September 10, 2004, information with
respect to the beneficial ownership of the Company's Common Stock by (i) each
person known by the Company to own beneficially 5% or more of such stock, (ii)
each Director of the Company who owns any Common Stock, and (iii) all Directors
and Officers as a group, together with their percentage of beneficial holdings
of the outstanding shares.

                                   Number of Shares of
Name of Beneficial Owner/          Common Stock             % of Beneficial
Identity of Group                  Beneficially Owned         Ownership
-------------------------------------------------------------------------------

Jack R. Belluscio                    34,521,565(1)             59.53%


Steven Hoh                                    0                    0

DIRECTORS AND
OFFICERS AS A
GROUP                                34,521,565                59.53%

(1)  The Company had previously filed documents with the Securities and Exchange
     Commission disclosing that Jack Belluscio owned 44,000,000 shares of the
     Company's common stock. However, after consulting with its independent
     auditors, Company's management realized that these shares should have been
     distributed pro rata to all of the shareholders of Anscott Industries, Inc.
     pursuant to the Share Exchange Agreement with Liquidix, Inc. Based upon
     same, the 44,000,000 shares were redistributed, pro rata, to the Anscott
     shareholders and Jack Belluscio, the President and Chief Executive Officer
     of the Company, retained a total of 34,521,565 shares.

<PAGE>

Item 12. Certain Relationships and Related Transactions.

None.

Item 13. Exhibits and Reports on Form 8-K

(a)  Exhibits      None.

(b)  Reports of Form 8-K:

     On May 18, 2004 we filed a report on Form 8-K for a change in auditor and
     we filed an amendment thereto on May 28, 2004.

     On June 18, 2004 we filed a report on Form 8-K for a change in auditor and
     we filed an amendment thereto on June 25, 2004.

Item 14. Principal Accounting Fees and Services

Marcum & Kliegman LLP was engaged on June 17, 2004, to perform an audit of our
financial statements for the years ended March 31, 2004 and 2003 and perform a
SAS 100 review of our interim financial statements to be included on Form 10QSB
for the periods ended June 30, 2003, September 30, 2003, and December 31, 2003.
The estimated fee for such services is $130,000.

<PAGE>

                                   SIGNATURES

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

                            ANSCOTT INDUSTRIES, INC.

                            By: /s/ Jack Belluscio
                            --------------------------------
                                    Jack Belluscio
                                    President and Director


Dated: September 13, 2004

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

<TABLE>
<CAPTION>
Name                        Title                                    Date
---------                   -------                                  -------
<S>                         <C>                                      <C>
/s/ Jack Belluscio          President, CEO, CFO and Director         September 13, 2004
------------------------
    Jack Belluscio

/s/ Steven Hoh
------------------------    Secretary, Treasurer and Director        September 13, 2004
    Steven Hoh
</TABLE>