SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                                 FORM 10-KSB/A2

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

                   For the fiscal year ended December 31, 2005

                                       Or

            Transition Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

             For the Transition period from            to
                                            ----------    ----------

                         Commission file number 0-14039

                                 eNUCLEUS, INC.
                  --------------------------------------------
                 (Name of small business issuer in its charter)

        Delaware                                         11-2714721
 ----------------------                      ----------------------------------
(State of incorporation)                    (I.R.S. Employer Identification No.)

                      2850 Golf Road
                 Rolling Meadows, Illinois            60008
          --------------------------------------     --------
         (Address of principal executive offices)   (Zip Code)

                                 (847) 640-0909
                ------------------------------------------------
               (Registrant telephone number, including area code)

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

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

                          Common Stock, $.001 par value

Check whether the issuer (l) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
periods that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
                                 Yes |X| No |_|

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

The issuer's revenues were approximately $9,338,000 for the year ended December
31, 2005.

As of May 18, 2006, the market value of the issuer's common stock held by
non-affiliates was approximately

Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes |X| No |_|

As of May 18, 2006, the number of common stock shares outstanding is
approximately 47,000,000 shares.

                       DOCUMENTS INCORPORATED BY REFERENCE

Transitional Small Business Disclosure Format (check one) Yes |_| No |X|


                                     Page 1
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                                 eNUCLEUS, INC.

                                   FORM 10-KSB

                                TABLE OF CONTENTS


ITEM 1.   DESCRIPTION OF BUSINESS..............................................2

ITEM 2.   DESCRIPTION OF PROPERTIES............................................7

ITEM 3.   LEGAL PROCEEDINGS....................................................7

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..................7

ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS............7

ITEM 6.   MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
          AND RESULTS OF OPERATIONS...........................................10

ITEM 7.   FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA..........................20

ITEM 8.   CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
          AND FINANCIAL DISCLOSURE............................................20

ITEM 8A.  CONTROLS AND PROCEDURES.............................................20

ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS,
          COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT...................21

ITEM 10.  EXECUTIVE COMPENSATION..............................................22

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS.....................23

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS......................24

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K....................................24

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES..............................24

          SIGNATURE...........................................................25

          EXHIBIT INDEX.......................................................26


                                        i
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Some of the statements contained in this Form 10-KSB under the captions
"Business" and "Management Discussion and Analysis of Financial Condition and
Results of Operations" and in other places are "forward-looking statements.
"Forward-looking statements include statements that relate to our beliefs or
expectations as to future events and statements that are not historical facts.
In some cases, you can identify these statements by forward-looking words such
as "may", "might", "will", "should", "expects", "plans", "anticipate",
"believe", "estimate", "intend", the negative of these terms and other
comparable terminology. Because forward-looking statements involve this risk and
uncertainty, there are important factors that could cause actual results, level
of activity, performance or achievements to differ materially and adversely from
those expressed or implied by the forward-looking statements. These factors,
which should be carefully considered by you, include, among other things:

      o     general effects of our restructuring and emergence from Chapter 11
            reorganization,

      o     the availability and terms of capital to finance our operations, and

      o     continuing development of our products and solutions,

      o     successful build out of our distribution channels,

      o     general economic and business condition, both nationally and
            regionally,

      o     currency fluctuations between US and foreign subsidiaries'
            currencies,

      o     competition from others in the industry, whether existing or new,

      o     the experience level of our management team,

      o     changes in our business strategy or growth plans,

      o     our ability to attract and retain qualified personnel,

      o     other factors discussed under "Management Discussion and Analysis of
            Financial Condition and Results of Operations-- Factors Affecting
            Future Operations."

                                       ii
<PAGE>

                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

General

The company is a Software as a Service (SAAS) vendor providing its applications
and Business Process Management (BPM) solutions on a per-month/per-seat/per-use
basis. The Company's current software and services span 22 countries in five
continents and operate in multiple languages.

For accelerated growth, eNucleus has its own off shore engineering center that
focuses on new development, integration and customization for its acquired
software applications.

Strategy

Focus: Deliver applications and services to two primary verticals (Insurance and
Energy) where there are tightly defined oportunties focused on genuine industry
challenges.

Acquisitions: The Company intends to acquire Technology Applications as product
extensions to our existing technology, specialized BPO Centers to further extend
our back office services and consulting companies that would utilize our
technology as an intricate part of their services offerings.

Leverage and scale: The Company's innovative applications combined with off
shore services enable significant cost savings to its customers and higher
margins for the Company. The Company will rely on its global sales force for
exponential growth and its India Engineeering Center for customer integrations,
managed services and product advancement.

Market Environment

Software industry experts have stated that "By 2010, 30 percent of software
revenue will be derived from software delivered via SAAS models". The past few
years have seen the evolution of several new service delivery models, such as
technology outsourcing for development, utilizing internet-based software
delivery for the reduction of capital expenditures on costly internal IT
infrastructure, as well as a greater acceptance of using 3rd parties for back
office processing needs. While clearly the issue for most companies that have
moved to these new service delivery models was the reduction of costs, it is
clear that the trend for the future will be to look beyond just "cost" and try
to uncover more "value" from these new service delivery opportunties.

Another market factor that has shaped the decisions of the Company in its growth
strategy is the tremendous opportunities that exist in the global marketplace.
NASSCOM is India's National Association of Software and Service Companies, the
premier trade body and the chamber of commerce of the IT software and services
industry in India. NASSCOM is a global trade body with over 950 members, of
which over 150 are global companies from the US, UK, EU, Japan and China. These
members currently account for over 95 percent of the revenues of the software
industry in India. NASSCOM's member companies are in the business of software
development, software services, software products and IT-enabled/BPO services.
Nasscom recently completed a survey of the industry body and reported that the
India domestice IT market would grow to $4.3 billion in 2005-2006 from $3.5
billion in 2004-2005

The current market environment for SAAS companies along with the global
opportunities found in developing nations such as India would appear to have
created a number of opportunities within the software industry in which numerous
software products currently enjoy market favor. However many of these companies
may not have the infrastructure, services component or developed utilizing the
latest technology tools that would enable them to deliver their applications
utilizing the SAAS model. Also, in developing countries such as India, price
becomes a critical factor for companies to utilize technology and thus the SAAS
model is considered more favorable due to the concern of capital expenditures on
costly internal IT infrastructure.

                                     Page 2
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The situation for traditional software companies is further complicated by the
limited availability of development monies within today's capital markets. This
has resulted in software companies being forced to delay product conversions to
SAAS models or to re-invest their earnings into efforts to re-tool for the
Internet--with neither being an attractive alternative for companies trying to
protect their bottom line in today's economy.

Products - US Based Only

      o     Benefits Accelerator Online Benefits Management for Brokers,
            Agencies & Employers The Benefits Accelerator product is a hosted
            application that optimizes and streamlines the benefits enrollment
            and administration process for employers, employees, brokers, agents
            and insurance carriers.

      o     FuelPilot Online Fuels Pricing Optimization for Fuel Buyers
            FuelPilot provides Fuel buyers with an application for optimizing,
            monitoring and managing fuels purchase decision making, including
            Supplier contract committments and compliance.

      o     OilPilot Online Data Management for Equipment Oil Analysis OilPilot
            is an Oil Analysis Data Management program that provides users with
            the tools and functionality for effectively managing equipment oil
            analysis online.

Products - Asia Pacific Region, India and Europe

      o     Tendercity Procurement management for Industrial, Institutional &
            Government Buyers Tendercity provides a comprehensive online
            platform for buyers to manage their procurement processes. The
            platform features eProcurement, eAuction (both forward & reverse),
            and eCatalog capabilities.

      o     FuelPilot Online Fuels Pricing Optimization for Fuel Buyers
            FuelPilot provides Fuel buyers with an application for optimizing,
            monitoring and managing fuels purchase decision making, including
            Supplier contract committments and compliance.

      o     OilPilot Online Data Management for Equipment Oil Analysis OilPilot
            is an Oil Analysis Data Management program that provides users with
            the tools and functionality for effectively managing equipment oil
            analysis online.

Services - Global

      o     Professional Services IT Design, Development & Implementation
            Services eNucleus provides clients with professional IT services
            that include Consulting, Application Development and Integration
            Services in a number of industry sectors such as oil and gas,
            petrochemical, maritime, heavy equipment manufacturing, insurance
            and telecommunications. Our services include system design and
            engineering, software customization, testing, implementation and
            maintenance support.

      o     BPO Services Business Process Outsourcing & Knowledge Worker
            Resources eNucleus offers offshore Business Process Outsourcing
            (BPO) services and manpower resources through its India offices for
            clients in the areas of application/product design, development,
            implementation and maintenance.

      o     Application Development - Analysts and developers work with clients
            to assist in determining specific business, technology and data
            communications requirements then design and develop
            customer-specific solution tailored to each platform deployment.

                                     Page 3
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Components of Products and Sevices

      o     Managed hosting -- We deliver full service solutions for
            establishing and maintaining the complex infrastructure necessary
            for a business to support eBusiness applications and delivery.
            State-of-the-art servers provide a solid platform for hosting
            client's mission critical applications and data. eNucleus support
            provided by our managed hosting services include 24x7 network
            monitoring and support, system administration, server monitoring and
            testing, usage reporting, security services and protection. All the
            while, customers can still maintain control over the software and
            solutions housed on the servers, including their customized
            installed software and proprietary solutions.

      o     Data Storage - Our data storage services include high performance
            network backup and storage to cost-effective specific data tape
            backup services, offsite storage and data vaulting

Sales and Marketing

Our sales and marketing efforts are dedicated to increasing the awareness of our
Internet-based solution opportunity and the eNucleus brand. We are implementing
a brand development program designed to portray us as an international company
with a local presence.

Our sales and marketing group consists of sales professionals and technicians
teamed within our regional operations. We intend to add sales and marketing
personnel.

We intend to use a mix of programs to deliver our message and create a demand
for our products and services. Marketing programs will include:

      o     Focused Marketing -- eNucleus focuses its direct marketing efforts
            on prospects within its identified market verticals in the supply
            chain industries (products and services).

      o     Cross-selling strategies - eNucleus intends to capitalize on
            cross-selling opportunities generated by its acquisitions.

      o     Personal Contact - eNucleus direct sales staff concentrates its
            efforts on contacting potential customers within each market
            vertical that have had no previous experience with earlier software
            releases or web-enabled software in general.

      o     Industry Specific Advertising - eNucleus complements each
            application division's sales efforts with general advertising in
            trade publications of specific industry verticals that eNucleus or
            its subsidiaries service.

Competition

The company has positioned itself in the "Tier I & II" applications industry. We
are selling software and services at costs that are generally below the large
systems integrators and above the "shrink-wrapped" software providers.

Management believes that eNucleus has a competitive advantage over its
competitors who typically charge considerable professional service fees to
customize pre-packaged solutions. The company is competitive in its market based
upon the following:

*     Early Mover - By acquiring industry leading applications and enhancing
      them with managed services, eNucleus continually stays ahead of its
      competition.

*     Niche Market Leader - eNucleus' embedded customer base provides ample
      opportunity for growth and longevity.

*     Offshore Technology and BPO - eNucleus' offshore programming and back
      office support staff provide a 70% cost savings over domestic equivalents.

*     Internet Standards Based Approach - eNucleus continues to deploy its
      applications via Internet driven protocols to provide an open environment
      that can integrate with the multitude of client architectures.

*     Significant Barriers to Entry - The two-year timeline to replicate
      eNucleus' proprietary industry specific applications provides a
      considerable barrier to entry. This is additionally enhanced by eNucleus'
      inherent ability to integrate its applications with the new Internet
      economy.

                                     Page 4
<PAGE>

While management believes the company is well positioned, the reader should
recognize that the market for Internet-based technology solutions is intensely
competitive, rapidly evolving and subject to technological change. We expect
competition to persist, intensify and increase in the future. We believe that
the principal competitive factors in our market are

      o     single source provider solutions,
      o     strategic expertise,
      o     technical knowledge,
      o     best of breed products and services,
      o     reliability,
      o     client service, and
      o     price.

Most of our current and potential competitors have longer operating histories,
larger installed client bases, longer relationships with customers and
significantly greater financial, technical, marketing and public relations
resources that could decide at any time to increase their resource commitments

to our market. In addition, the market for Internet solutions is relatively new
and subject to continuing definition, and, as a result, the core business of
certain of our competitors may better position them to compete in this market as
it matures. Competition of the type described above could materially adversely
affect our ability to realize our goals.

There are relatively low barriers to entry into our business. There can be no
assurance that existing or future competitors will not develop or offer services
that provide significant performance, price, creative or other advantages over
those offered by us, which could have a material adverse effect on our business,
results of operations and financial condition.

History

eNucleus began business operations in 1984 in Colorado Springs, Colorado, as a
provider of computer systems and components. The Company adopted the name
Nucleus, Inc. in December 1998 and reorganized in April 1999 when eNucleus
merged with Nucleus Holding Corporation, a privately held Illinois corporation
based in Chicago. In July 2000, eNucleus shareholders approved the
re-incorporation in Delaware from Nevada and changed the name to eNucleus, Inc.
The common stock was traded on the OTC (Over the Counter) market under the
symbol ENCS.OB, our stock is now traded under the symbol ENUI.OB

On May 10, 2001, eNucleus filed a voluntary petition for reorganization under
Chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for
the Northern District of Illinois, Eastern Division. The action was a direct
result of the continued difficulties in the Internet industry and related
financing markets that resulted in difficulties in restructuring the Company's
debt.

The company continued operations as a debtor-in-possession under the supervision
of the Bankruptcy Court and on November 6, 2003, the Court confirmed our Plan of
Reorganization and allowed the Company to successfully emerge from its Chapter
11 reorganization. In accordance with the plan, holders of certain allowed
claims received 1 share of common stock for every $3.00 of debt and the
Company's common stock underwent a 1 for 6 reverse stock split. In March of
2004, the Company underwent an additional 1 for 10 reverse stock split upon its
emergence from bankruptcy.

On February 9, 2004, we completed an asset purchase of PrimeWire, Inc.
("PrimeWire"). PrimeWire's operations primarily focus on providing third party
employee benefits administration via the Internet. PrimeWire received $50,000
upon closing and a three year earn out provision that provides for (i) quarterly
cash payments of 10% of the net revenues generated by the PrimeWire assets and
(ii) quarterly stock payments of 15% of the net revenues generated by the
PrimeWire assets (shares to be determined based upon the average closing price
of the 20 day period prior to the end of each quarter). Additionally, PrimeWire
has the ability to earn an additional 7% of Net Revenues generated by large
license deals (license agreements in excess of $200,000 in the first 12 months
of the contract) during the first year. To date, we have not made any payments
of common stock to PrimeWire because we are disputing the accuracy of the
representations and warranties made to us.

In May of 2004, eNucleus notified Primewire of its' intent to set-off amounts
against its' purchase price of the Primewire assets pursuant to several alleged
breaches of the contract. As a direct result of Primewire's alleged defaults
under the Agreement, eNucleus and Financial ASPx filed for arbitration to
mitigate damages and attempt to reduce the purchase price of the acquired
assets. Under the terms of settlement reached in December 2004, eNucleus has
agreed to pay Primewire $400,000, assign certain accounts receivable and return
certain customer contracts. This combination of consideration represents the
final amounts due under the asset purchase agreement and eliminates any adverse
security interest in Primewire's assets. By December 31, 2005 eNucleus completed
the transfer of all recievables and the final payment of $400,000.

                                     Page 5
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In June 2004, we acquired TAK Acquisition Co., a privately held internet-enabled
petroleum supply chain network ("TAKGroup"). TAKGroup provides comprehensive
"value-chain" automation solutions for the petroleum industry and its technology
suite provides software solutions through the Internet to manage the
distribution functions for suppliers, marketers and end-users in the petroleum
industry. TAKGroup eliminates inefficiencies in product sales, value-added
service delivery, promotional information communication, and other
labor-intensive customer support processes. TAKGroup's technology solutions can
be deployed in whole or in parts across the petroleum supply chain, leveraging
existing relationships and established behaviors. Under the terms of the
acquisition agreement, TAKGroup received 650,000 shares of eNucleus common
stock, 150,000 of which are subject to forfeiture if the TAKGroup business unit
fails to generate a minimum of $1.25 million in annualized revenue in the first
12 months following the closing. In addition, members of the management team of
TAKGroup received 150,000 shares of our common stock subject to vesting over a
one-year period and 250,000 options were issued to employees, which are subject
to vesting over a two-year period. TAKGrOUP hit its revenue goal of $1.25
million in the first 12 months of operation and has recieved all shares and
consideration pursuant to its purchase agreement.

On August 1, 2004 the Company acquired all the outstanding stock of Frontier
Technologies, a Singapore based company. The purchase price was the assumption
of certain debts and common stock to be issued over a twelve-month period based
on 3.5 times 2005 calendar year net earnings. Because Frontier Technologies
incurred a loss in 2005 no additional consideration was paid.

On October 1, 2004 the Company acquired certain contract rights for the
continued servicing of Applitech Solutions, an India-based company. Under the
asset purchase agreement eNucleus would maintain monthly client contracts
producing $500,000 to $700,000 of revenue for 50% of the net income on a
collected basis. Under the contract eNucleus was to service Applitech's clients
for a two year period.

In 2004 the Company entered into negotiations to acquire the customer contracts,
accounts receivable and the software of Tender City, a business to government
portal, from Applitech Solution, Ltd. in exchange for 250,000 shares of the
Company's common stock. As the asset transfer could not be completed on a timely
basis, the Company entered into a preliminary agreement October 1, 2004 in which
Applitech continued to operate Tender City using its' own resources and had
agreed to remit the net income of Tender City to the Company less one half of
any such net income (which was retained by Applitech Solution, Ltd.) to a
maximum of $2,000,000. No payments are due to the Company until January 31,
2006, however, as at December 31, 2004 the reported net income of Tender City
was $489,904 and the amount due to the Company was $242,352.

On May 4, 2005 the Company, through its wholly owned subsidiary eNucleus India
Solutions Pte., entered into an asset purchase agreement with Applitech
Solutions, Ltd. This agreement supplemented the October 2004 Tender City
agreement (see above) with additional assets from Applitech Solutions Ltd.,
including customer contracts, accounts receivable and software. The results of
operations for eNucleus India Solutions Pte. have been included in the financial
statements of the Company from the date of acquisition. Purchase consideration
consists of one million shares of common stock (500,000 common shares due at
close of agreement and the remaining shares are unvested contingent upon
achievement of certain revenue achievement), a payment equal to one half the net
earnings collected in 2005 up to $2.5 million (calculated and payable after the
2005 10-KSB is filed in 2006), and 350,000 warrants.

On May 10,2005, eNucleus has agreed to amend its purchase agreement with
Applitech Solutions in that Applitech received an amended amount of Three
Million 3,000,000 shares of eNucleus Common Stock, all cash previously paid
pursuant to the purchase agreement and a transfer of receivables less any
amounts owed by eNucleus to Applitech as final payment due under the Purchase
and Sale Agreement.

On May 18, 2005, the Company, through its wholly owned subsidiary Education
ASPx, Inc., acquired certain software and related assets from Acrux LLC, a
Chicago-based technology company with software assets designed for the
educational industry to assist with financial and student management. The
results of operations for Education ASPx, Inc. have been included in the
financial statements of the Company from the date of acquisition. The purchase
price included 350,000 shares of our common stock plus a 10% earn out payment
based upon the gross revenue from the purchased assets for a two year period (up
to a maximum of $2,500,000).

                                     Page 6
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Employees

As of May 19, 2006 we employed 162 full time personnel in the United States and
our Asia Pacific operations (Singapore and India). We also contract with several
outside parties to provide certain engineering, sales and administrative
services on an as needed basis. Our employees are not subject to collective
bargaining agreements and we consider our relationships with our employees to be
good.

ITEM 2.  DESCRIPTION OF PROPERTIES

eNucleus' maintains its executive office at 2850 Golf Road, Rolling Meadows, IL
60008. We also lease and own certain operating facilities in Vancouver,
Washington, Singapore, and multiple locations in India.

ITEM 3.  LEGAL PROCEEDINGS

We are from time to time a party to various legal actions arising in the normal
course of business. Prior to our filing for protection under bankruptcy, we were
a party to several creditor collection actions. However, as a result of our
bankruptcy filing, these matters and many other threatening proceedings have
been resolved and terminated. We believe that there is no proceeding threatened
or pending against us which, if determined adversely, would have a material
adverse effect on the financial condition or results of operations of eNucleus.


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


The Board of Directors authorized and shareholders approved a one for ten
reverse stock split of all issued and outstanding common stock, effective
February 18, 2004. The par value of the common stock was maintained at the
pre-split amount of $.001 per share and the authorized capital was maintained at
100,000,000 shares of common stock, and the par value of the preferred stock was
maintained at the pre-split amount of $0.001 per share, and the authorized
capital was maintained at 20,000,000 shares of preferred stock. All references
to common shares and per share amounts in these consolidated financial
statements and notes to consolidated financial statements have been restated to
reflect this reverse stock split on a retroactive basis, exclusive of fractional
shares.

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS

Our common stock is traded on the NASDAQ OTC Bulletin Board (OTCBB) under the
symbol ENUI. As yet, our common stock has experienced limited trading activity.
A public trading market having the characteristics of depth, liquidity and
orderliness depends upon the existence of market makers as well as the presence
of willing
                                     Page 7
<PAGE>

buyers and sellers, which are circumstances over which we do not have control.
The following table sets forth, for the periods indicated, the range of high and
low bid quotations per share of common stock as reported by NASD on the OTC
Bulletin Board.

                                           Common Stock
                                           ------------
Period                                      Low Bid (1)           High Bid (1)
--------                                    -----------           ------------

2005
4th Quarter                                     $0.33                  $0.15
3rd Quarter                                     $0.28                  $0.14
2nd Quarter                                     $0.41                  $0.25
1st Quarter                                     $0.59                  $0.36

2004
4th Quarter                                     $0.30                  $0.53
3rd Quarter                                     $0.31                  $0.55
2nd Quarter                                     $0.25                  $0.45
1st Quarter                                     $0.28                  $0.51

2003
4th Quarter                                     $0.18                  $0.75
3rd Quarter                                     $0.17                  $0.68
2nd Quarter                                     $0.14                  $0.95
1st Quarter                                     $0.18                  $1.20


The approximate number of record holders of our common stock on May 4, 2006 was
500, as shown on the records of our transfer agent and registrar of the common
stock. Since many shares may be held by investors in nominee names, such as the
name of their broker or their broker's nominee, the number of record holders
often bears little relationship to the number of beneficial owners of our common
stock.

We have paid no dividends on our common stock. There are no contractual
restrictions on our ability to pay dividends. We have not had earnings that
indicate an ability to pay cash dividends. We have a Stock Purchase Plan for
non-qualified options and an Incentive Stock Option Plan for incentive stock
options. Under the plans, all our employees, together with other persons who
perform substantial services for us or on our behalf, will be eligible to
receive incentive and non-statutory options to purchase eNucleus common stock.
The plans are administered by the Board of Directors. Under the plans, the
exercise price at which the shares of eNucleus common stock covered by each
grant may be purchased will be determined on the date of grant by the committee,
but can be no less than the par value of such shares and, in the case of
incentive stock options, may not be less than the fair market value of such
shares on the date of grant. The number of shares covered under the options
granted under the plan is subject to adjustments for stock splits, mergers,
consolidations, combinations of shares, reorganizations and other
recapitalizations.

Recent Sales of Unregistered Securities.

Accredited Investor Stock Purchase -

In August 2004, Barron Partners LP ("Barron") purchased 2,500,000 shares of our
common stock, together with an A and B warrant for $1,000,000. The A warrant
granted Barron the right to purchase 2,500,000 shares of common stock at $.60
per share,. and a B warrant to purchase 1,000,000 shares of our common stock at
a price of $1.00 per share in a PIPE transaction. The A warrant in the
transaction is callable on April 1, 2005 requiring automatic exercise if the
Company's common stock price is $1.20 per share or higher for 20 consecutive
trading days and there is an effective registration statement covering the
shares subject to the warrant.

                                     Page 8
<PAGE>

On May 6, 2005, eNucleus, Inc. (the "Company") entered into a Stock Purchase
Agreement with Barron Partners for the sale of 8,000,000 shares of common stock
of the Company at $0.26 per share. Under this agreement, the investor also
received 2,000,000 warrants to purchase common stock of the Company at a strike
price of $0.35. Such warrants expire five years from the date of issuance.

On May 6, 2005, the Company entered into an Amendment to Common Stock Purchase
Warrants (with the purchaser of common stock pursuant to the above referenced
Stock Purchase Agreement). Pursuant to this agreement, the Company has reduced
the exercise price for a series of 3,500,000 warrants previously issued to the
investor to $0.35.

On May 6, 2005, the Company entered into a Registration Rights Agreement (with
the purchaser of the common stock pursuant to the above-referenced Stock
Purchase Agreement). Pursuant to this registration rights agreement, the Company
must prepare and file within 60 days a Registration Statement covering the
shares of common stock and shall use its best efforts to cause the Registration
Statement to become effective within a certain period of time. This agreement
includes other terms such as demand rights, "piggy back" registration rights,
and liquidated damages to the purchasers of the common stock of 25% of the
Purchase Price per annum payable on a monthly basis if the shares of common
stock are not registered pursuant to an effective Registration Statement within
a certain period of time.

On September 15, 2005, eNucleus, Inc. (the "Company") entered into a Stock
Purchase Agreement with Sigma Capital, an accredited investor for the sale of
2,000,000 shares of common stock of the Company at $0.26 per share. Under this
agreement, the investor also received 500,000 warrants to purchase common stock
of the Company at a strike price of $0.35. Such warrants expire five years from
the date of issuance.

                                     Page 9
<PAGE>

ITEM 6.  MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the financial
statements of eNucleus appearing later in this Form 10-KSB. This discussion and
analysis contains forward-looking statements that involve risks, uncertainties
and assumptions. Our actual results may differ materially from those anticipated
in these forward-looking statements as a result of certain factors, including,
but not limited to, those set forth under the caption "--Factors Affecting
Future Results."

Operationally, the Company provides proprietary supply chain software
applications, technologies and solutions to SME and Global 1000 companies. The
Company's current software and service applications span 22 countries in five
continents in multiple languages, and are used by over 50,000 individuals
worldwide.

For accelerated growth, eNucleus focuses on acquiring profitable supply chain
software applications that are demonstrated leaders in their vertical markets
and enjoy strong customer loyalty. We are particularly focused on products that
enjoy strong customer loyalty and can be enabled for delivery over the Internet
for a recurring monthly fee on either a managed hosting or pure ASP basis.

We earn revenues through the sale of software and related services including
customization, implementation, hosting, consulting and business process
outsourcing. Customers are billed for the services upon delivery of products and
services and over the course of an engagement at a measured rate or on a
recurring fixed-price basis. Operating expenses consist primarily of direct
labor and benefits, subcontracted labor or other outside services, commissions,
sales and support personnel advertising cost and depreciation and amortization
expense, which consists primarily of the depreciation of our intangible assets.
We expect these expenses to increase in the future due to the growth of the
company.

Business Strategy

Focus: Deliver applications that are concentrated on innovating and accelerating
the supply chain business process.

                                    Page 10
<PAGE>

Leverage and scale: The Company will rely on its global sales force for
exponential growth and its Far East operations for customer integrations,
managed services and product advancement to fully leverage the company's cost
structure.

Year Ended December 31, 2005 Compared to Year Ended December 31, 2004

Revenues

For 2005, revenues were $9,338,000 compared to $3,204,000 for 2004. We have
begun an aggressive strategy to increase our revenues and operations. In May
2005, we completed our Indian acquisition which accounted for $6.6 million in
the Company's 2005 revenues.

Cost of goods sold

For 2005, cost of goods sold related to the purchase and customization of
software sold. There was none in 2004.

Operating expenses

For 2005, operating expenses increased approximately $1,589,000 to $3,798,000
from $2,209,000 in 2004. The majority of the increase relates to the expansion
to a global market as well as the retooling our products for this expanded
market.

For 2005, stock options expense was $208,959 compared to $0 in 2004.

Depreciation and amortization expense increased $783,000 to $1,553,000 in 2004
as compared to $770,000 in 2004. The increase was primarily a result of
additional intangible assets acquired through our acquisitions.

Net income

Our net loss was $310,000 for 2005 compared to net income of
$445,000 in 2004. Excluding the impact of certain non-cash and non-recurring
expenses, including the write off of investment, stock options expense and
depreciation, net income was $1,651,000 in 2005 compared to net income of
$1,237,000 in 2004. This increase in profit is a result of the Company's
continued cost containment and reduction efforts, increased sales efforts of its
products and a result of profitable acquisitions.

Liquidity and Capital Resources

The satisfaction of the Company's cash requirements hereafter will depend in
large part on its ability to successfully generate revenues from operations and
raise capital to fund operations. There can, however, be no assurance that
sufficient cash will be generated from operations or that unanticipated events
requiring the expenditure of funds within its existing operations will not
occur. Management is aggressively pursuing additional sources of funds, the form
of which will vary depending upon prevailing market and other conditions and may
include high-yield financing vehicles, short or long-term borrowings or the
issuance of equity securities. Capital raising activities in 2005 totaled $2.7
million compared to $1.5 million in 2004. Working capital at the end of 2005
totaled $0.6 million compared to ($0.1) million in 2004.

                                    Page 11
<PAGE>

Recent Accounting Pronouncements

None currently noted that will have any significant impact on the Company's
current operations.

Critical Accounting Policies

Our consolidated financial statements are prepared in accordance with accounting
principles generally accepted in the United States. The preparation of these
consolidated financial statements requires us to make estimates and assumptions
that affect the reported amounts of assets, liabilities, revenues, costs and
expenses and related disclosures. On an ongoing basis, we evaluate our estimates
and assumptions. Our actual results may differ from these estimates under
different assumptions or conditions.

Revenue Recognition

Services

We recognize revenue upon providing service or delivery to our clients. Billings
made or payments received in advance of providing services are deferred until
the period in which the services are provided. Certain contracts with customers
may contain service level commitments, which may require us to provide credits
if required service level commitments are not met. These amounts, if any, are
accounted for in cost of sales. To date, credits issued under these arrangements
have been immaterial.

License Agreements and Sales of Source Code

We recognize revenue from license agreements each month over the term of the
agreements. Support revenues from customers who purchase our premium support
offerings are recognized ratably over the term of the support contract.
Consulting services and training revenues are accounted for separately from
license and support revenues because these services have value to the customer
on a standalone basis and there is objective and reliable evidence of the fair
value of the undelivered elements. Our arrangements do not contain general
rights of return. Consulting revenues are recognized upon completion of the
contracts that are of short duration (generally less than 60 days) and as the
services are rendered for contracts oflonger duration. Revenues from the sales
of our source codes, are recognized revenue in the period in which the
obligations relating to such transaction have been completed.

Multi-Year Licenses

Revenue from multi-year software licensing arrangements is accounted for as
subscriptions, with billings recorded as unearned revenue and recognized as
revenue ratably over the billing coverage period. Revenue for retail packaged
products, products licensed to original equipment manufacturers (OEMs), and
select sales of certain source codes of software products are generally
recognized as products are shipped, with a portion of the revenue recorded as
unearned related to undelivered elements recoreded as unearned. Unearned
elements can include free post-delivery telephone support or the right to
receive unspecified upgrades enhancements on a when-and-if-available basis for a
period of time. The amountof revenue allocated to undelivered elements is
recognized as revenue related to delivered elements. Unearned revenue due to
undelivered elements Is recognized ratably over the service period specified or
estimated product life.

                                    Page 12
<PAGE>

Multiple Deliverables and Extended Payment Contracts

The following accounting policies involve a greater degree of judgment and
complexity. Accordingly, these are the policies we believe are the most critical
to aid in fully understanding and evaluating our consolidated financial
condition and results of operations.

For these types of contracts, we recognize revenue when all of the following
conditions are satisfied: (1) there is persuasive evidence of an arrangement;
(2) the service or product has been provided to the customer; (3) the collection
of our fees is probable; and (4) the amount of fees to be paid by the customer
is fixed or determinable.

Accordingly, if a software transaction does not require significant production,
modification or customization, then the following criteria must be met before
revenue derived from each element of the transaction can be recognized.

Income Taxes

We have a history of losses. These losses generated sizeable federal net
operating loss ("NOL") carry forwards.

Generally accepted accounting principles require that we record a valuation
allowance against the deferred income tax asset associated with these NOL carry
forwards and other deferred tax assets if it is "more likely than not" that we
will not be able to utilize them to offset future income taxes. Due to our
history of unprofitable operations, we only recognize net deferred tax assets in
those subsidiaries in which we believe that it is "more likely than not" that we
will be able to utilize them to offset future income taxes in the future. We
currently provide for income taxes only to the extent that we expect to pay cash
taxes on current income.

It is possible, however, that we could be profitable in the future at levels
which cause management to conclude that it is more likely than not that we will
realize all or a portion of the NOL carry forwards and other deferred tax
assets. The net operating loss carry forwards may be limited in accordance with
Section 382 of the Internal Revenue Code of 1986, as amended, based on certain
changes in ownership that have occurred, or could occur in the future. Upon
being profitable, we would immediately record the estimated net realizable value
of the deferred tax assets at that time and would then provide for income taxes
at a rate equal to our combined federal and state effective rates. Subsequent
revisions to the estimated net realizable value of the deferred tax assets could
cause our provision for income taxes to vary significantly from period to
period.

Long-Lived Assets

We review the carrying value of our long-lived assets held for use whenever
circumstances indicate there may be an impairment. For all assets, the carrying
value of a long-lived asset is considered impaired if its fair value is less
than the carrying value of the asset. If this occurs, an impairment charge is
recorded for the amount by which the carrying value of the long-lived asset
exceeds its fair value. The fair value is determined by applying a market-rate
multiple to the estimated near-term future revenue stream expected to be
produced by the segment. We have adopted SFAS No. 142, "Goodwill and Other
Intangible Assets."

                                    Page 13
<PAGE>

Quantitative and Qualitative Disclosures about Market Risk

The Company does not have significant exposure to changing interest rates or
currency fluctuations. The Company does not undertake any specific actions to
cover its exposure to interest rate risk and the Company is not party to any
interest rate risk management transactions. The Company does not purchase or
hold any derivative financial instruments. The Company will continue to monitor
interest rate and currency fluctuation risks, and if it is deemed necessary it
will take appropriate measures to mitigate such risks.

Factors Affecting Future Results

General effects of a bankruptcy filing

The filing of our bankruptcy petition in May of 2001, and the publicity
attendant thereto, may adversely affect our business. Our competitive advantage
may also be hindered because of the taint and stigma associated with a
bankruptcy petition filing. We believe that such taint and stigma is especially
true for companies providing eBusiness infrastructure, including application
delivery and managed IT services, because of the fear from potential customers
that the Company will go out of business and not be able to provide valuable
services. Additionally, although we believe that we have good relationships with
our suppliers and vendors, there can be no assurance that such suppliers and
vendors will continue to provide such goods and services to us due to the
concerns regarding credit worthiness resulting from the Chapter 11 proceeding.
Also it may be difficult for us to obtain financing (whether debt or equity) as
we may require to fund operations and/or growth.

We will need to raise additional funds in the future to finance our operations.

We have always relied heavily on external financing to fund operations. We will
need to raise additional funds to finance continuing operations and acquisitions
until cash flows from operations are sufficient. We may seek such funding by
offerings of our equity securities, offerings of debt securities or obtaining
financing through a bank or other entity. We have not established a limit as to
the amount of debt we may incur nor have we adopted a ratio of our equity to a
debt allowance. There is no assurance that financing will be available from any
source, that it will be available on terms acceptable to us, or that any future
offering of securities will be successful. If additional funds are raised
through the issuance of equity securities, there may be a significant dilution
in the value of our outstanding common stock. We could suffer adverse
consequences if we are unable to obtain additional capital when needed.

We are uncertain as to sources of the additional financing we will need.

We may use our common stock to fully or partially finance future acquisitions.
In the event that our common stock does not maintain a sufficient market value,
or potential acquisition candidates are otherwise unwilling to accept our common
stock as part of the consideration for the sale of their businesses, we may be
required to utilize our cash resources, if available, in order to pursue
acquisitions. If we do not have sufficient cash resources, our growth may be
limited unless we are able to obtain additional capital through debt or equity
financings. We presently do not have any immediate source of cash. We may be
unable to obtain a working capital line of credit or other financing we may need
for acquisitions or to keep operating. If our financial resources are
inadequate, we may be unable to successfully implement our business strategy.

We may be unable to manage our growth effectively

                                    Page 14
<PAGE>

To manage our anticipated growth, we must be able to implement and improve our
operational and financial systems and train and manage an expanding employee
base. Further, we must be able to manage multiple relationships among various
financial institutions, investors, suppliers, strategic partners, technology
distributors and other third parties. Our management team may be unable to deal
with this expansion to achieve the rapid execution necessary to fully exploit
the opportunities we see in our targeted market. We also cannot assure you that
we will be able to successfully compete with the more extensive and well-funded
operations of our competitors. We may be unable to manage growth, integrate
operations effectively or achieve the rapid expansion necessary to fully exploit
the market window for our services in a timely and cost-effective manner.

Our quarterly operating results could vary dramatically

Our revenues, gross profit, operating income and net income are likely to vary
in the future from quarter to quarter, perhaps substantially. Factors that may
affect this quarter-to-quarter variability include:

      o     disruption or degradation of our network infrastructure and
            datacenters,

      o     the short-term nature of certain client commitments,

      o     fluctuations in Internet and IT spending and bandwidth used by
            customers,

      o     loss of a major client,

      o     seasonality that may accompany budget cycles,

      o     the timing, size and mix of service and product offerings,

      o     the timing and size of significant software sales,

      o     the timing and size of new projects,

      o     the timing and magnitude of required capital expenditures , pricing
            changes and increases in capital expenditures in response to various
            competitive factors,

      o     market factors affecting the availability of network
            interconnectivity and bandwidth for our customers and qualified
            technical personnel,

      o     timing and client acceptance of new service offerings,

      o     changes in the trends affecting the outsourcing of Internet-based IT
            services,

      o     additional selling, general and administrative expenses to acquire
            and support new business,

      o     increased levels of technological change in the industry, and

      o     general economic conditions.

Our operating results will be affected by changes in our network charges,
colocation charges and equipment costs.

Network and data center failures could lead to significant costs

                                    Page 15
<PAGE>

We must protect our network and data center infrastructure and equipment against
damage from human error, physical or electronic security breaches, power loss
and other facility failures, fire, earthquake, flood, telecommunications
failure, sabotage, vandalism and similar events. Despite precautions, a natural
disaster, security breach or other unanticipated problems at one or more of our
telecommunication switches, POP connections or data centers could result in
interruptions in our services or significant damage to our equipment. In
addition, failure of any of our telecommunication or data providers to provide
consistent communications and data capacity could result in interruptions in our
services. Any damage to or failure of our systems or service providers could
result in reductions in, or terminations of, services supplied to our customers,
which could have a material adverse effect on our business. We may experience
interruptions in specific circuits within our network resulting from events
outside our control, which could lead to short-term degradation in the level of
performance of our network.

Client satisfaction with our services is critical to our success

Our customers demand a very high level of service. Our customers generally
require service on a 24 hours per day, seven days per week basis. If we incur
significant service level commitment obligations in connection with system
downtime, our liability insurance may not be adequate to cover these expenses.
If we do not meet required service levels, we may have to provide credits to our
customers, which could significantly reduce our revenues. As customers outsource
more mission-critical operations to us, we are subject to increased liability
claims and client dissatisfaction if our systems fail or our customers otherwise
become unsatisfied. In the event of any resulting harm to customers, we could be
held liable for damages. Awards for such damages might exceed our liability
insurance by an unknown but significant amount and could seriously harm our
business.

Protection of our intellectual property and proprietary rights

Our ability to develop new technology and technology solutions will depend on
the continued innovation, technical expertise and know-how of our employees and
consultants. We intend to establish a policy of requiring our employees and
consultants to execute confidentiality agreements, however, there can be no
assurance that this procedure will be adequate to prevent misappropriation of
our technology nor can we be assured that our competitors will not independently
develop technologies that are substantially equivalent or superior to those of
ours.

Our ability to implement and expand our network is unproven and will require
substantial financial, operational and managerial resources

To satisfy client requirements, we must implement, expand and adapt our
infrastructure. We are dependent on service providers for our network capacity.
The expansion and adaptation of our infrastructure will require substantial
financial, operational and management resources. Our ability to connect and
manage a substantially larger number of customers is unknown. We have yet to
prove our infrastructure's ability to be scaled up to higher client levels while
maintaining superior performance. Furthermore, it may be difficult for us to
increase quickly our network capacity in light of current necessary lead times
within the industry to purchase circuits and other critical items. If we fail to
achieve or maintain high capacity data transmission circuits, client demand
could diminish because of possible degradation of service. In addition, as we
upgrade our infrastructure to increase bandwidth available to our customers, we
expect to encounter equipment or software incompatibility which may cause delays
in implementation.

We depend on network interconnections provided by third parties that may raise
their fees or deny access

                                    Page 16
<PAGE>

We rely on a number of public and private network interconnections to allow our
customers to connect to other networks. If the networks with which we
interconnect were to discontinue their interconnections, our ability to exchange
traffic would be significantly constrained. Furthermore, our business will be
harmed if these networks do not add more bandwidth to accommodate increased
traffic. Many of the companies with which we maintain interconnections are our
competitors. There is nothing to prevent any networks, many of which are
significantly larger than we are, from charging high usage fees or denying
access. In the future, networks could refuse to continue to interconnect
directly with us, might impose significant costs on us or limit our customers'
access to their networks. In this event, we may not be able to access
alternative networks to exchange our customers' traffic on a cost-effective
basis. In addition, we may not be able to pass through to our customers any
additional costs of utilizing these networks. In these cases, our business could
be harmed.

If we are unable to continue to receive cost-effective service from our
providers, we may not be able to provide our services on profitable terms

In delivering our services, we rely on network and services, which are built and
operated by others. In order to be able to provide optimal routing to our
customers through our infrastructure facilities, we must purchase connections
from several providers. We cannot assure you that these providers will continue
to provide service to us on a cost-effective basis, if at all, or that these
providers will provide us with additional capacity to adequately meet client
demand.

Our brand is relatively new, and failure to develop brand recognition could hurt
our ability to compete effectively

To successfully execute our strategy, we must create and strengthen our brand
awareness. If we do not build our brand awareness, our ability to realize our
strategic and financial objectives could be hurt. Many of our competitors have
well-established brands associated with the provision of Internet network
services. In order to build our brand awareness, we intend to significantly
increase our marketing efforts, which may not be successful, and we must
continue to provide high quality services. As part of our brand building
efforts, we expect to increase our marketing budget substantially as well as our
marketing activities, including advertising, tradeshows, direct response
programs and new switch and POP site launch events.

The work we perform for customers may expose us to liability

The nature of the services and products we offer expose us to risks. Many of our
engagements involve projects that are critical to the operations of our
customers' businesses. Our failure or inability to meet a client's needs or to
do so in the time frame required by such customers could result in a claim for
substantial damages against us, regardless of our responsibility for such
failure. Although we intend to obtain general liability and errors and omissions
insurance coverage, there can be no assurance that such coverage will be
available on reasonable terms or in sufficient amounts to cover one or more
large claims, or that the insurer will not disclaim coverage as to any future
claim. The successful assertion of one or more large claims against us that
exceed available insurance coverage or results in changes to our insurance
policies, including premium increases or the imposition of large deductible or
co-insurance requirements, could have a material adverse effect on our business.

We depend on our suppliers

Although we have not experienced significant problems with our suppliers of
services, hardware, software and components, there can be no assurance that such
relationships will continue or that, in the event of a termination of our
relationships with any given supplier, we would be able to obtain alternative
sources of supply without a material disruption in our ability to provide
products and services to our customers.

                                    Page 17
<PAGE>

We are uncertain as to sources of the additional financing we will need

We may use our common stock to fully or partially finance future acquisitions.
In the event that our common stock does not maintain a sufficient market value,
or potential acquisition candidates are otherwise unwilling to accept our common
stock as part of the consideration for the sale of their businesses, we may be
required to utilize our cash resources, if available, in order to pursue
acquisitions. If we do not have sufficient cash resources, our growth may be
limited unless we are able to obtain additional capital through debt or equity
financings. We presently do not have any immediate source of cash. We may be
unable to obtain a working capital line of credit or other financing we may need
for acquisitions or to keep operating. If our financial resources are
inadequate, we may be unable to successfully implement our business strategy.

We are dependent on our management team

We are dependent on the continued efforts of our executive officers, in
particular John C. Paulsen, our President and Chief Executive Officer. We do not
maintain key person life insurance on any of our executive officers. If any of
these people become unable to continue in his or her role with us, or if we are
unable to attract and retain other qualified employees, our financial
performance and business prospects will probably be negatively impacted.

We could be subject to claims of infringement by third parties

We rely upon a combination of nondisclosure and other contractual arrangements
and trade secret, copyright and trademark laws to protect our proprietary rights
and the proprietary rights of third parties from whom we license intellectual
property. We enter into confidentiality agreements with our employees and limit
distribution of proprietary information. There can be no assurance that these
steps will be adequate to deter misappropriation of proprietary information or
that we will be able to detect unauthorized use and take appropriate steps to
enforce our intellectual property rights.

We believe that our services do not infringe on the intellectual property rights
of others and that we have all rights necessary to utilize the intellectual
property employed in our business. However, we are subject to the risk of claims

alleging infringement of third-party intellectual property rights. Any such
claims could require us to spend significant sums in litigation, pay damages,
develop non-infringing intellectual property or acquire licenses to the
intellectual property that is the subject of asserted infringement.

We operate in a relatively new and evolving market with uncertain prospects for
growth.

The market for Internet networks and related services has only recently begun to
develop and is evolving rapidly. Although certain industry analysts project
significant growth for this market, their projections may not be realized. Our
future growth, if any, will depend on the continued trend of businesses
migrating toward use of the Internet and our ability to market our services
effectively. There can be no assurance that the market for our services will
grow, that our services will be adopted, or that businesses will use these
Internet-based services to the degree or in the manner that we expect. If we are
unable to react quickly to changes in the market, if the market fails to
develop, or develops more slowly than expected, or if our services do not
achieve market acceptance, then we are unlikely to become or remain profitable.

We face strong competition

                                    Page 18
<PAGE>

The market for the products and services we offer is highly competitive. Our
competitors vary in size and in the scope of the products and new services that
they offer. Primary competitors generally include:

      o     complete solution providers,

      o     ISPs (Internet service providers),

      o     web hosting firms,

      o     application hosting firms,

      o     strategic consulting firms,

      o     in-house IT departments of customers, and

      o     computer hardware and service vendors.

Traditionally, the largest service providers have principally focused on
providing solutions to international Fortune 500 companies. A large number of
smaller service companies and a growing number of larger companies compete in
the middle market segment.

There are relatively low barriers to entry into our target market. We expect to
face competition from established and new companies. Increased competition may
result in greater pricing pressure, which could adversely affect our gross
margins. In addition, many of our competitors have greater financial,
development, technical, marketing and sales resources than we do. As a result,
our competitors may be able to adapt more quickly to new or emerging
technologies and to changes in client requirements or to devote greater
resources than us for the development, promotion, sale and support of
Internet-based products and services. In addition, there is a risk that
customers may elect to increase their internal IT resources to satisfy their IT
solutions needs. We may also enter new markets and offer new services, and
expect to face intense competition from existing and new competitors,
particularly since barriers of entry in the IT service industry are relatively
low. We cannot assure you that we will continue to provide IT services and
products demanded by our target market or be able to compete successfully with
existing or new competitors. An inability to compete in our market effectively
would negatively impact our financial performance and business prospects.

We are dependent on hiring and retaining skilled personnel.

We must attract, hire and retain personnel who possess the skills and experience
necessary to operate our business and serve our customers. Competition for
individuals with proven skills is intense. In addition, the Internet-based IT
service industry in general experiences a high rate of turnover. We compete for
such individuals with Internet companies, systems integrators, providers of
outsourcing services, temporary personnel agencies, computer systems

consultants, customers and potential customers. Many large competitors have
extensive campaigns to hire additional technical personnel or have full time
recruiters on staff. Competition for quality technical personnel has continued
to intensify, resulting in increased personnel costs for many IT service
providers. There can be no assurance we will be able to recruit or retain the
technical personnel necessary to execute our strategy. Failure to do so would
have a material adverse effect on our financial performance and business.

Our industry is changing rapidly and new solutions are constantly being
introduced

                                    Page 19
<PAGE>

The Internet-based IT service and e-commerce industries are characterized by
rapid technological change, evolving industry standards, changing client
preferences and new product and service introductions. Our success will depend
in part on our ability to develop Internet-based IT solutions that keep pace
with continuing changes in the IT service and e-commerce industries. There can
be no assurance that we will be successful in adequately addressing these
developments on a timely basis or that, if these developments are addressed, we
will be successful in the marketplace. In addition, there can be no assurance
that products or technologies developed by others will not render our services
non-competitive or obsolete. Our failure to address these developments could
have a negative impact on our financial performance and business prospects.

Potential customers may not widely adopt Internet solutions, and, if they do,
may not outsource such projects

The market for our products and services will depend upon the adoption of
Internet, intranet, extranet and web site solutions by customers. If customers
and potential customers choose not to implement such solutions, we will address
a smaller market and our revenues could be adversely affected. Some critical
unresolved issues concerning the use of Internet solutions are security,
reliability, cost, ease of deployment and administration and bandwidth of the
Internet itself. These issues may affect the use of such technologies to solve
business problems. Some entities would have to change significantly the way they
do business to adapt to the Internet. Even if these issues are resolved,
businesses might not elect to outsource the design, development and maintenance
of their Internet, intranet, extranet and web site solutions to firms such as
eNucleus.

ITEM 7.  FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

The following financial statements for eNucleus and independent auditors' report
as of December 31, 2005 and 2004 and for the years then ended are filed as part
of this report on Form 10-KSB beginning on page F-1.

      o     Report of Independent Public Accountants

      o     Balance Sheets as of December 31, 2005 and 2004

      o     Statements of Operations for the years ended December 31, 2005 and
            2004

      o     Statements of Stockholders' Equity (Deficit) for the years ended
            December 31, 2005 and 2004

      o     Statements of Cash Flows for the years ended December 31, 2005 and
            2004 Notes to the Financial Statements

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

NONE

ITEM 8A. CONTROLS AND PROCEDURES

Within the 90 days prior to the date of this report, eNucleus management
(including our Chief Executive and Financial Officer), John Paulsen conducted an
evaluation of the effectiveness of the design and operation of the Company's
disclosure controls and procedures as defined in the Exchange Act Rule 13a-14.

                                    Page 20
<PAGE>

Based on that evaluation, Mr. Edgerton concluded that the Company's disclosure
controls and procedures were effective as of the date of the evaluation. There
have been no significant changes in internal controls, or in factors that could
significantly affect internal controls, subsequent to the date of the most
recent evaluation.

                                    PART III


ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS,
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Directors and Executive Officers

The following table contains certain information with respect to our directors
and executive officers:

----------------------   --------   -----------------------------------------
Name                      Age       Position as of the year ended 12/31/05
----------------------   --------   -----------------------------------------
Dhru Desai                44        Chairman of the Board/Director
----------------------   --------   -----------------------------------------
Randy Edgerton            51        President
----------------------   --------   -----------------------------------------

Dhru Desai, Mr. Desai has served as Chairman of the Board of eNucleus since
April 2005 Prior to joining eNucleus, Mr. Desai was the founder and CEO of
Cronus Technologies, Inc. He successfully built the IP signaling business to $25
million in revenues prior to divesting it to Cisco, FastCom and Advanced Fiber.
Mr. Desai has an MS in Computer Science from the Illinois Institute of
Technology

Randy Edgerton, has served as the President and CEO of eNucleus since April of
2005. Mr. Edgerton is responsible for the day to day management of eNucleus. Mr.
Edgerton has over 20 years of experience in sales and marketing in information
technology. His experience spans large complex computer and network solutions,
software development and support, and IT systems distribution, sales and support

Board of Directors

eNucleus board is comprised of Dhru Desai, Randy Edgerton, John Paulsen, Albert
Case, Ray Pirtle, Gus Esposito and Ed Skoldberg.

John C. Paulsen has served as Chairman of the Board and Chief Executive Officer
of eNucleus since April 1999. Prior thereto, Mr. Paulsen served as the President
of Nucleus Holding Company. From 1995 to 1997 Mr. Paulsen served as President
and CEO of MetroLink Communications, Inc. a long-distance carrier. From 1990 to
1995, Mr. Paulsen served as President and CEO of American Teletronics Long
Distance, Inc. a reseller of long-distance telecommunications services.

Add other Bios

                                    Page 21
<PAGE>

Section 16(A) Beneficial Ownership Reporting Compliance. Section 16(a) of the
Securities Exchange Act of 1934 requires our directors, executive officers, and
persons who own more than 10% of our equity securities, to file initial reports
of ownership and reports of changes in ownership of our common stock and other
equity securities with the Securities and Exchange Commission. Executive
officers, directors and 10% owners are required by SEC regulation to furnish us
with copies of all Section 16(a) forms they file. During the year, no reporting
was provided to eNucleus in accordance with this section.

ITEM 10.  EXECUTIVE COMPENSATION

The following table summarizes the compensation paid for the years ended
December 31, 2005, 2004 and 2003 to the individuals who served as our chief
executive officer during such periods and those serving as current executive
officers.

--------------------------------------------------------------------------------
Summary Compensation Table
--------------------------------------------------------------------------------
                                                               All Other
Name and Principal Position   Year    Salary ($)  Bonus ($)   Compensation ($)
--------------------------- ------- ------------ ----------- ------------------
John C. Paulsen,              2005      79,808           0            72,636
Previous CEO,                 2004      57,692
and  Secretary                2003           0
--------------------------- ------- ------------ ----------- ------------------
Dhru Desai, President,        2005      79,808           0            67,687
principal                     2004      57,692
--------------------------- ------- ------------ ----------- ------------------
Randy Edgerton CEO/President  2005     123,062
                              2004      69,231           0                  0
--------------------------- ------- ------------ ----------- -----------------

The following table summarizes the individual grants of stock options made
during the most recent fiscal year to the individuals who served as our named
executive officers.

Summary Option Grants in Last Fiscal Year Table

------------------- ------------- --------------- ---------
                      Date          Exercise        Total
                     Issued          Price          Shares
------------------- ------------- --------------- ---------
John Paulsen        5/1/2005       $   0.260        700,000
------------------- ------------- --------------- ---------
Dhru Desai          5/1/2005       $   0.260        700,000
------------------- ------------- --------------- ---------
Randy Edgerton      5/1/2005       $   0.300        300,000
------------------- ------------- --------------- ---------

                                                  1,700,000
------------------- ------------- --------------- ---------


Aggregate Option Exercises in Last Fiscal Year and Fiscal Year End Option Values

None

Compensation of Directors

Each outside board member of eNucleus received ___________________ as
compensation for serving as the Company's directors during the last fiscal year.

Employment Contracts

The Company is currently in the process of appointing and entering into
employment agreements with its executive officers.

                                    Page 22
<PAGE>

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

In January 2004, the Board of Directors authorized and shareholders approved a
one for ten reverse stock split of all issued and outstanding common stock,
effective February 18, 2004. The par value of the common stock was maintained at
the pre-split amount of $.001 per share and the authorized capital was
maintained at 100,000,000 shares of common stock, and the par value of the
preferred stock was maintained at the pre-split amount of $0.001 per share, and
the authorized capital was maintained at 20,000,000 shares of preferred stock.
All references to common shares and per share amounts have been restated to
reflect this reverse stock split on a retroactive basis, exclusive of fractional
shares.

Security Ownership of Certain Beneficial Officers

The following table sets forth the number of shares of common stock beneficially
owned as of May 4, 2006 by each person known by us to beneficially own more than
5% of the common stock of eNucleus. A beneficial owner of a security includes
any person who has the power to vote or sell the shares.

Name of Beneficial Owner (1)      Amount and Nature of      Percent of Class (3)
----------------------------      --------------------      --------------------
                                 Beneficial Ownership (3)
                                 ------------------------
Rotate Black                            8,856,955                   18.8%
Barron Partners                         8,000,000                   16.9%

Security Ownership of Directors and Executive Officers

The following table sets forth the number of shares of common stock beneficially
owned as of May 6, 2006 by (i) each of our directors, (ii) our executive
officers and (iii) all directors and executive officers as a group. A beneficial
owner of a security includes any person who has the power to vote or sell the
shares.

--------------------------     --------------------     ----------------
Name of Beneficial Owner       Amount and Nature of     Percent of Class
--------------------------     --------------------     ----------------
                               Beneficial Ownership
--------------------------     --------------------     ----------------
John C. Paulsen (1)             1,314,900 (2)               2.8%
--------------------------     --------------------     ----------------
Dhru Desai (1)                  1,873,883 (3)               4.0%
--------------------------     --------------------     ----------------
All directors and
executive  officers, as         3,188,783                   6.8%
a group
--------------------------     --------------------     ----------------

(1) The mailing address is c/o eNucleus 2850 Golf Road, Rolling Meadows, IL 6008

(2) Includes shares held directly by Mr. Paulsen and Kelly Paulsen JTE

(3) Includes shares controlled by Mr. Desai through Congruent Ventures


                                    Page 23
<PAGE>

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

During 2005, the Company entered into a transaction, whereby it sold two of
their subsidiaries Financial ASPx and Supply Chain ASPx, Inc., to Rotate Black
Investment Fund 1, LLC (Rotate Black) which agreed to assume liabilities to the
Internal Revenue Service and certain other state revenue agencies, in exchange
for a note from the Company. The Companies sold to Rotate Black had only
liabilities recorded, but had the right to enter into a long term license for
software applications, which had limited use and could be replicated for
approximately $75,000. These licenses were never issued to Rotate Black and the
application to the venture for which they were to be used, has been abandoned.

The amount of the note payable to Rotate Black totaling $822,376 as of December
31, 2005 accrues interest at 10% per annum and unpaid interest and principal are
due in November 2007.

Rotate Black is a shareholder of the Company and one of its owners is a director
and shareholder of the company.

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibit Index

See Exhibit Index beginning on page 25.

(b) Reports on Form 8-K

New Auditor -
On April 28, 2005, the Company filed a Current Report on Form 8-K relating to a
change in auditors. Effective December 15, 2004, the Company dismissed Bujan &
Associates ("Bujan"), which audited the Company's financial statements for the
fiscal year ended December 31, 2003, and retained Danziger & Hochman
("Danziger") to act as the Company's independent auditor.

Accredited Investor Stock Purchase -
On May 18, 2005 the Company filed a Current Report on Form 8-K relating to
several transactions with Barron Partners, which are summarized below.

o     On May 6, 2005, eNucleus, Inc. (the "Company") entered into a Stock
      Purchase Agreement with a certain accredited investor for the sale of
      8,000,000 shares of common stock of the Company at $0.26 per share. Under
      this agreement, the investor also received 2,000,000 warrants to purchase
      common stock of the Company at a strike price of $0.35. Such warrants
      expire five years from the date of issuance.

o     On May 6, 2005, the Company entered into an Amendment to Common Stock
      Purchase Warrants (with the purchaser of common stock pursuant to the
      above referenced Stock Purchase Agreement). Pursuant to this agreement,
      the Company has reduced the exercise price for a series of 3,500,000
      warrants previously issued to the investor to $0.35.

o     On May 6, 2005, the Company entered into a Registration Rights Agreement
      (with the purchaser of the common stock pursuant to the above-referenced
      Stock Purchase Agreement). Pursuant to this registration rights agreement,
      the Company must prepare and file within 60 days a Registration Statement
      covering the shares of common stock and shall use its best efforts to
      cause the Registration Statement to become effective within a certain
      period of time. This agreement includes other terms such as demand rights,
      "piggy back" registration rights, and liquidated damages to the purchasers
      of the common stock of 25% of the Purchase Price per annum payable on a
      monthly basis if the shares of common stock are not registered pursuant to
      an effective Registration Statement within a certain period of time.

o     On September 15, 2005, eNucleus, Inc. (the "Company") entered into a Stock
      Purchase Agreement with a certain accredited investor for the sale of
      2,000,000 shares of common stock of the Company at $0.26 per share. Under
      this agreement, the investor also received 500,000 warrants to purchase
      common stock of the Company at a strike price of $0.35. Such warrants
      expire five years from the date of issuance.

Applitech Asset Purchase -
On May 18, 2005 the Company filed a Current Report on Form 8-K announcing that
eNucleus, Inc. (the "Company") completed the purchase of certain assets of
Applitech Solution Limited ("Applitech"), a privately held software and services

On March 31, 2006 we filed an NT-10K seeking an extension of time to file our
2004 Form 10-KSB.

On May 15, 2005, we filed an amended extension NT-10K/A related to our 2004 Form
10-KSB filing.

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

The Company was billed for audit services rendered by the independent auditors
$60,000 and $50,000 during 2005 and 2004, respectively. No Audit-Related fees or
Tax fees were incurred by the Company. The Board of Directors reviewed and
discussed the Company's audited financial statements for the fiscal year ended
December 31, 2005, with management and the independent auditors.

                                    Page 24
<PAGE>

                                    SIGNATURE


In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed by the undersigned, thereunto duly authorized.


Date:  May 18, 2006

                                        By:  /s/  Randy Edgerton
                                           -------------------------------------
                                                  Randy Edgerton
                                                  Chief Executive Officer


                                        By:  /s/  John Paulsen
                                           -------------------------------------
                                                  John Paulsen
                                                  Principal Financial Officer


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


Signature                        Title                           Date
----------                       -----                           ----


/s/  Randy Edgerton              Chief Executive Officer,        May 19, 2006
-------------------------------  Chairman of the Board
     Randy Edgerton              and principal


/s/  John Paulsen                Financial and Accounting        May 19, 2006,
-------------------------------  Officer
     John Paulsen

                                    Page 25
<PAGE>


                                  EXHIBIT INDEX

Exhibit No.   Description
-----------   ------------

21            Subsidiaries of eNucleus, Inc.

23.1          Consent of Miller & Ellin

31            Certification of Chief Executive Officer and Principal
              Financial and Accounting Officer pursuant to Section 302 of
              the Sarbanes-Oxley Act of 2002.

32            Certification of Chief Executive Officer and Principal
              Financial and Accounting Officer pursuant to Section 906 of
              the Sarbanes-Oxley Act of 2002.


                                    Page 26
<PAGE>

                                 eNUCLEUS, INC.

                        CONSOLIDATED FINANCIAL STATEMENTS

                  FOR THE YEAR ENDED DECEMBER 31, 2005 AND 2004

                                                                        PAGE


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                 F2

CONSOLIDATED BALANCE SHEET                                              F3

CONSOLIDATED STATEMENTS OF OPERATIONS                                   F4

CONSOLIDATED STATEMENTS OF  SHAREHOLDERS' EQUITY
        (DEFICIT)                                                       F5 - F6

CONSOLIDATED STATEMENTS OF CASH FLOWS                                   F7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                              F8 - F21


<PAGE>


Board of Directors and Stockholders
eNucleus, Inc.


We have audited the consolidated balance sheet of eNucleus,  Inc. as of December
31, 2005,  and the related  combined  statements  of  operations,  shareholders'
equity, and cash flows for the year 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  audit.  The  financial
statements  of eNucleus,  Inc. as of December  31,  2004,  were audited by other
auditors  whose report,  dated April 13, 2005, on those  statements  included an
explanatory  paragraph that described their doubt about the Company's ability to
continue as a going concern.

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

In our opinion,  the 2005 financial statements referred to above present fairly,
in all  material  respects,  the  financial  position  of  eNucleus,  Inc. as of
December 31, 2005,  and the results of its operations and its cash flows for the
year then ended in conformity with accounting  principles  generally accepted in
the United States of America.



Miller Ellin & Company                              CERTIFIED PUBLIC ACCOUNTANTS

New York, New York
May 17, 2006

                                      F-2
<PAGE>

eNUCLEUS, INC.
Consolidated Balance Sheet
As of December 31, 2005

--------------------------------------------------------------------------------
ASSETS
    CURRENT
        Cash                                                   $    11,558
        Accounts receivable, net of allowance for doubtful
        accounts of $30,493                                      3,308,490
        Prepaid expenses                                            32,023
                                                               -----------
    Total Current Assets                                         3,352,071

    OTHER
        Due from Applitech Solution, Ltd.                          262,731
        Property and equipment, net                                 40,418
        Intangible assets                                        5,594,860
                                                               -----------

                                                               $ 9,250,080
-----------------------------------------------------------------------------

LIABILITIES
    CURRENT
        Accounts payable and accrued expenses                  $ 2,134,015
        Notes payable                                              181,951
        Deferred revenue                                           454,092
                                                               -----------
Total Current Liabilities                                        2,770,058

    LONG-TERM
        Notes payable - related party                              822,376
                                                               -----------

Total Liabilities                                                3,592,434
                                                               -----------

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY
Preferred stock 20,000,000 shares authorized, issued
and outstanding - none                                                --
Common stock authorized 100,000,000 shares $0.001 par value,
issued and outstanding - 44,008,545                                 44,009
Additional paid-in capital                                      14,891,036

Accumulated deficit                                              (9,277,399)
                                                               -----------

Total Shareholders' Equity                                       5,657,646
                                                               -----------

                                                               $ 9,250,080
-----------------------------------------------------------------------------


{See accompanying notes.}

                                      F-3
<PAGE>


eNUCLEUS, INC.
Consolidated Statements of Operations
For the years ended December 31, 2005 and 2004
--------------------------------------------------------------------------------

                                                      2005            2004
                                                  ------------    ------------

REVENUES                                          $  9,338,016    $  3,204,456

COST OF GOODS SOLD                                   3,889,154            --
                                                  ------------    ------------
GROSS PROFIT                                         5,448,862       3,204,456

OPERATING EXPENSES                                   5,559,228       3,001,508
                                                  ------------    ------------

INCOME (LOSS) FROM OPERATIONS                         (110,366)        202,948
                                                  ------------    ------------

OTHER INCOME (EXPENSE)
Income from Tendercity                                    --           242,352
Write off of investment                               (200,000)           --
                                                  ------------    ------------
                                                      (200,000)        242,352
                                                  ------------    ------------

INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES       (310,366)   $    445,300

PROVISON FOR INCOME TAXES                                 --              --
                                                  ------------    ------------
NET INCOME (LOSS)                                 $   (310,366)   $    445,300
                                                  ============    ============

BASIC NET INCOME (LOSS) PER COMMON
    SHARE                                         $      (0.01)   $       0.02
                                                  ============    ============

DILUTED NET INCOME (LOSS) PER COMMON SHARE        $      (0.01)   $       0.02
                                                  ============    ============

WEIGHTED AVERAGE COMMON
    SHARES OUTSTANDING  (BASIC)                     36,628,318      19,606,805
                                                  ============    ============

WEIGHTED AVERAGE COMMON
    SHARES OUTSTANDING (DILUTED)                    36,628,318      26,711,996
                                                  ============    ============


                                       F-4

{See accompanying notes.}

<PAGE>


eNUCLEUS, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
For the Year Ended December 31, 2005 and 2004

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                                                           ADDITIONAL
                                             PREFERRED STOCK          COMMON STOCK          PAID-IN     ACCUMULATED
                                            SHARES      AMOUNT     SHARES       AMOUNT      CAPITAL       DEFICIT          TOTAL
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                         <C>        <C>        <C>         <C>         <C>           <C>            <C>
BALANCE, January 1, 2004                    1,453,779  $  1,454   95,279,384  $   95,278  $  8,538,992  $(9,412,333)   $   (776,609)

Common share reverse stock split                 --        --    (85,751,445)    (85,751)       85,751         --              --
Issuance of shares for acquisitions              --        --        850,000         850       400,150         --           401,000
Issuance of common stock issued upon
    conversion of debt                           --        --          2,500           3        16,124         --            16,127
Common stock issued for employment
    services                                     --        --        466,400         467       109,533         --           110,000
Common stock issued for services provided        --        --        530,000         530       135,108         --           135,638
Preferred stock issued for cash               361,112       362         --          --         324,638         --           325,000
Preferred stock issued for services            90,000        90         --          --          89,910         --            90,000

Conversion of preferred shares to common
    shares                                 (1,904,891)   (1,906)  11,640,784      11,641        (8,166)        --             1,569
Warrants issued for cash                         --        --      1,203,705     119,167          --        120,370           1,203
Issuance of common shares for cash               --        --      2,777,777   1,006,782          --      1,009,560           2,778
Stock options issued for acquisitions            --        --           --          --          81,830         --            81,830
Net income                                       --        --           --          --            --        445,300         445,300
-----------------------------------------------------------------------------------------------------------------------------------

BALANCE, December 31, 2004                       --    $   --     26,999,105  $   26,999  $ 10,899,819  $(8,967,033)   $  1,959,785
===================================================================================================================================
</TABLE>

                                       F-5

{See accompanying notes.}

<PAGE>


eNUCLEUS, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
For the Year Ended December 31, 2005 and 2004
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                                                           ADDITIONAL
                                             PREFERRED STOCK          COMMON STOCK          PAID-IN     ACCUMULATED
                                            SHARES      AMOUNT     SHARES       AMOUNT      CAPITAL       DEFICIT          TOTAL
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                         <C>        <C>        <C>         <C>         <C>           <C>            <C>
BALANCE, January 1, 2005                         --    $   --     26,999,105   $  26,999  $ 10,899,819  $(8,967,033)   $  1,959,785

Issuance of shares for acquisitions              --        --      3,525,000       3,525     1,065,225        --          1,068,750
Common stock issued for services                                   2,559,664       2,560        57,917        --             60,477
Warrants issued for cash                         --        --        162,668         163         1,464        --              1,627
Issuance of common shares for cash               --        --     10,762,108      10,762     2,657,652        --          2,668,414
Stock options issued                             --        --           --          --         208,959        --            208,959
Net income                                       --        --           --          --            --       (310,366)       (310,366)
-----------------------------------------------------------------------------------------------------------------------------------

BALANCE, December 31, 2005                       --    $   --     44,008,545  $   44,009  $ 14,891,036  $(9,277,399)   $  5,657,646
===================================================================================================================================
</TABLE>


                                       F-6

{See accompanying notes.}

<PAGE>


eNUCLEUS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARS ENDING DECEMBER 31, 2005 AND 2004

<TABLE>
<CAPTION>
CASH FLOWS FROM OPERATING ACTIVITIES                                           2005           2004
                                                                            -----------    -----------
<S>                                                                         <C>            <C>
      Net income (loss) for the year                                        $  (310,366)   $   445,300
      Adjustments to reconcile net income (loss) to net cash
        used in operating activities
          Shares issued in consideration of services                             60,477        351,765
          Stock option compensation                                             208,959           --
          Loss on disposal of assets                                             12,147           --
          Write off of investment                                               200,000           --
          Provision for bad debts                                               181,295           --
          Accrued interest on notes payable                                      86,545           --
          Depreciation and amortization                                       1,552,500        770,319
          Changes in operating assets and liabilities:
               Deferred revenue                                                 415,460         38,632
               Due from Applitech Solution, Ltd.                                (20,379)      (242,352)
               Accounts receivable                                           (6,368,208)    (2,404,769)
               Prepaid expenses                                                 (18,925)         2,941
               Payables and accrued expenses                                  2,950,200        774,893
                                                                            -----------    -----------

Net cash used in operating activities                                        (1,050,295)      (263,271)
                                                                            -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES
      Purchase of intangible assets                                          (1,853,295)    (1,285,043)
      Purchase of property and equipment                                           --         (127,776)
                                                                            -----------    -----------
Net cash used in investing activities                                        (1,853,295)    (1,412,819)
                                                                            -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES
      Increase in notes payable                                                 467,446        266,882
      Payments of notes payable                                                (268,139)          --
      Proceeds from issuance of shares and exercise of warrants               2,670,041      1,454,930
                                                                            -----------    -----------
Net cash provided by financing activities                                     2,869,348      1,721,812
                                                                            -----------    -----------

NET INCREASE (DECREASE) IN CASH                                                 (34,242)        45,722
CASH, BEGINNING OF YEAR                                                          45,800             78
                                                                            -----------    -----------
CASH, END OF YEAR                                                           $    11,558         45,800
                                                                            ===========    ===========

NON-CASH FINANCING AND INVESTING ACTIVITIES
      Purchase of intangible assets                                         $       --      $   345,904
      Stock options issued for asset acquisition                                    --           81,830
      Shares issued for asset acquisition                                      1,068,750        401,000
      Transfer of accounts receivable and liabilities forgiven for assets
      acquired                                                                 1,765,559           --
</TABLE>

                                       F-7

{See accompanying notes.}

<PAGE>


eNUCLEUS, INC.
Notes to the Consolidated Financial Statements
December 31, 2005 and 2004
--------------------------------------------------------------------------------

1.    NATURE OF OPERATIONS

      eNucleus,  Inc.  ("eNucleus"  or the  "Company") is a software and managed
      hosting  company.  The Company provides  business  process  solutions that
      enable any organization to increase  productivity and reduce costs through
      its  suite  of  "off  the  shelf"  Internet-based  software  products  and
      services.  eNucleus'  business  strategy is to acquire companies that have
      proprietary  software  applications  that fulfill core and niche  business
      processes.

      The consolidated  financial  statements  present the accounts of eNucleus,
      Inc. and its  wholly-owned  subsidiaries.  All  significant  inter-company
      accounts and transactions have been eliminated.

      On November 6, 2003,  eNucleus  received  its final decree from the United
      States   Bankruptcy   Court  for  the   Northern   District  of  Illinois,
      successfully  concluding  the Company's  restructuring  and emergence from
      bankruptcy.  Amounts due to settle known claims  remaining  upon emergence
      from bankruptcy are included in notes payable.

2.    SIGNIFICANT ACCOUNTING POLICIES


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

      PROPERTY AND EQUIPMENT
      Property  and  equipment  are  stated  at  cost  and   depreciated   on  a
      straight-line   basis  over  their  respective   estimated  useful  lives.
      Maintenance  and repairs are  charged to expense as  incurred.

      INTANGIBLE ASSETS
      Intangible  assets  that  have a  finite  life  are  recorded  at cost and
      amortized over their estimated lives on a straight line basis.  Intangible
      assets  having lives that are not  estimatable  are reviewed  annually for
      impairment.  When evaluating  whether such an intangible is impaired,  the
      Company  compares  its fair  market  value  to its'  carrying  amount.  An
      impairment loss is recognized if the asset's  carrying amount exceeds its'
      fair value.

      FAIR VALUE OF FINANCIAL INSTRUMENTS
      The fair values of the Company's  financial  instruments  which consist of
      cash, accounts  receivable,  prepaid expenses,  notes and accounts payable
      and deferred revenue, approximate their carrying value.


                                      F-8
<PAGE>

eNUCLEUS, INC.
Notes to the Consolidated Financial Statements
December 31, 2005 and 2004
--------------------------------------------------------------------------------

2.    SIGNIFICANT ACCOUNTING POLICIES (CONT'D)

      CONCENTRATIONS OF CREDIT RISK

      Major Customers

      Two  customers  totaled  approximately  41% of sales  for the  year  ended
      December 31, 2005.  Approximately 71% of the total accounts  receivable at
      December  31,  2005  is  due  from  three  customers,  with  one  customer
      comprising 45% of the total.

      Cash

      The Company maintains cash balances in banks,  which, at times, may exceed
      the  limits  of the  amount  insured  by  the  Federal  Deposit  Insurance
      Corporation limit. The Company has not experienced any losses to date as a
      result of this policy,  and  management  believes  there is little risk of
      loss.

      Accounts Receivable

      Accounts  receivable  are  reported  net  of  an  allowance  for  doubtful
      accounts. The allowance is based on management's estimate of the amount of
      receivables that will actually be collected.  Management performs on-going
      credit  evaluations  of its customers  and provides an allowance  based on
      credit history and worthiness of its  customers.  Receivables  are written
      off when deemed uncollectible.

      INCOME TAXES

      Deferred tax assets and liabilities are determined based on the difference
      between the financial statement and tax bases of assets and liabilities as
      measured  by the enacted  tax rates  estimated  to be in effect when these
      differences  reverse.  Deferred  tax  expense  is the result of changes in
      deferred tax assets and liabilities.

      STOCK OPTION PLANS

      Stock-based  compensation to employees and  non-employees is accounted for
      using a fair value method of  accounting.  Under this method the estimated
      fair value of the  stock-based  compensation is recognized in earnings and
      compensation  expense is calculated on the date that an option is granted,
      and recorded as an expense over the vesting period

      FOREIGN CURRENCY TRANSLATION

      Foreign  entities whose  functional  currency is the United States dollar,
      translate  monetary assets and liabilities at year-end exchange rates, and
      non-monetary items are translated at historical rates.  Income and expense
      accounts are  translated  at the average  rates in effect during the year,
      except for depreciation,  cost of product sales and revenue,  and expenses
      associated with non-monetary balance sheet accounts,  which are translated
      at historical  rates.  Gains or losses from changes in exchange  rates are
      recognized  in  consolidated  income  in the year of  occurrence.  Foreign
      entities  whose  functional  currency  is not  the  United  States  dollar
      translate net assets at year-end rates and income and expense  accounts at
      average exchange rates.  Adjustments resulting from these translations are
      reflected  in the  consolidated  statements  of  shareholders'  equity  as
      cumulative  translation  adjustments.  No  adjustments  were  made  as the
      adjustments were not material.


                                      F-9
<PAGE>


eNUCLEUS, INC.
Notes to the Consolidated Financial Statements
December 31, 2005 and 2004
--------------------------------------------------------------------------------

2.    SIGNIFICANT ACCOUNTING POLICIES (CONT'D)

      REVENUE RECOGNITION

      Services

      The Company recognizes revenue upon providing a service or making delivery
      to its clients.  Revenues related to billings made or payments received in
      advance of providing  services are deferred  until the period in which the
      services  are  provided.  Certain  contracts  with  customers  may contain
      service  level  commitments,  which may  require  the  Company  to provide
      credits if required service level  commitments are not met. These amounts,
      if any, are accounted for in cost of sales.

      License Agreements and Sales of Source Code

      The Company recognizes revenue from license agreements each month over the
      term of the  agreements.  Support  revenues  from  customers  who purchase
      premium  support  offerings  are  recognized  ratably over the term of the
      support contract.  Consulting services and training revenues are accounted
      for separately  from license and support  revenues  because these services
      have value to the  customer on a  standalone  basis and there is objective
      and  reliable  evidence  of the fair  value of the  undelivered  elements.
      Consulting  revenues are recognized  upon completion of the contracts that
      are of short  duration  (generally  less than 60 days) and as the services
      are  rendered  for  contracts  of longer  duration.  Revenue from sales of
      source codes is recognized in the period in which the obligations relating
      to the sale have been completed.

      Multi-Year Licenses

      Revenue from multi-year  software licensing  arrangements is accounted for
      as   subscriptions,   with  billings  recorded  as  unearned  revenue  and
      recognized as revenue ratably over the license  coverage  period.  Revenue
      for retail  packaged  products,  products  licensed to original  equipment
      manufacturers (OEMs), and select sales of certain source codes of software
      products are generally  recognized  as products are shipped.  A portion of
      the  revenue  recorded as unearned  are related to  undelivered  elements.
      Undelivered  elements can include free post-delivery  telephone support or
      the   right   to   receive   unspecified    upgrades/enhancements   on   a
      when-and-if-available  basis for a period of time. Unearned revenue due to
      undelivered  elements  is  recognized  ratably  over  the  service  period
      specified or estimated product life.

      Multiple Deliverables and Extended Payment Contracts

      Revenue  is  recognized  only  when all of the  following  conditions  are
      satisfied:  (1)  there  is  persuasive  evidence  of  an  arrangement,  as
      demonstrated  by a signed  agreement.  Or by the  existence  of a purchase
      order or similar  document  related to the  software;  (2) the  service or
      product has been provided to the customer.  (3) The  collection of fees is
      probable;  and (4) the amount of fees to be paid by the  customer is fixed
      or determinable.


                                      F-10
<PAGE>


eNUCLEUS, INC.
Notes to the Consolidated Financial Statements
December 31, 2005 and 2004
--------------------------------------------------------------------------------

2.    SIGNIFICANT ACCOUNTING POLICIES (CONT'D)

      Reclassifications

      Certain amounts in the 2004 financial statements have been reclassified to
      conform with the current year's basis of presentation.

3.    ACQUISITIONS

      On  February  9,  2004,  the  Company,  completed  an  asset  purchase  of
      PrimeWire, Inc. ("PrimeWire"). PrimeWire's operations primarily focused on
      providing third party employee benefits  administration  via the Internet.
      The  shareholders of PrimeWire  received  $50,000 upon closing and were to
      receive  a three  year  earn  out that  provided  for (i)  quarterly  cash
      payments of 10% of the net revenues  generated by the PrimeWire assets and
      (ii) quarterly stock payments of 15% of the net revenues  generated by the
      PrimeWire assets with the number of shares to be determined based upon the
      average  closing  price  of the 20 day  period  prior  to the  end of each
      quarter. Additionally,  PrimeWire had the ability to earn an additional 7%
      of Net Revenues  generated by large license deals  (license  agreements in
      excess of  $200,000  in the first 12 months of the  contract)  during  the
      first year.  Primewire  results of  operations  have been  included in the
      financial statements of the Company from the date of acquisition.

      The  acquisition  has been  accounted  for  using the  purchase  method as
      follows:

         Intangible assets (customers contracts)        $   792,893
         Software                                           801,774
         Accounts receivable                                 29,529
         Accounts payable                                   (32,124)
         Deferred revenue                                  (176,437)
                                                        -----------
                                                        $ 1,415,635
                                                        ===========

      The Company  never made any payments of common stock to PrimeWire  because
      it disputed the accuracy of the  representations and warranties made to it
      by PrimeWire. In May of 2004, the Company notified PrimeWire of its intent
      to set-off  amounts  against the purchase  price of the  PrimeWire  assets
      pursuant to several alleged breaches of the purchase agreement. On May 31,
      2005, the Company  settled all claims with  PrimeWire.  Under the terms of
      the settlement,  the Company paid PrimeWire  $400,000 and assigned certain
      accounts  receivable,  totaling  $707,625 to  PrimeWire  as full and final
      payment.

      On May 28, 2004, the Company acquired the operating assets and assumed the
      operating  liabilities  of TAK  Acquisition  Co.  ("TAK") a  company  that
      provides internet enabled solutions to suppliers,  marketers and customers
      in the petroleum business. TAK results of operations have been included in
      the financial statements of the Company from the date of acquisition.


                                      F-11
<PAGE>


eNUCLEUS, INC.
Notes to the Consolidated Financial Statements
December 31, 2005 and 2004
--------------------------------------------------------------------------------

3.    ACQUISITIONS (CONT'D)

      The  acquisition  has been  accounted  for  using the  purchase  method as
      follows:

         Software                                       $  352,005
         Equipment                                          52,423
         Accounts receivable                                79,241
         Accounts payable and deferred salaries           (102,839)
                                                        ----------
                                                        $ 380,830
                                                        ==========

The Company paid for this acquisition by issuing to the vendor, common stock and
common stock options having a fair value of $380,830. In addition, TAK earned an
additional  150,000  shares  valued  at  $67,500  as  the  company  met  certain
milestones within the first twelve months which was included in software.

On July 1, 2004 the company created a software and professional services company
operating in India. This is a wholly owned subsidiary named eNucleus India, Inc.
Pursuant  to an  asset  acquisition,  eNucleus  India  acquired  an  eGovernance
software suite designed to meet the management and accounting  requirements  for
government  entities.  Consideration paid consisted of 50,000 shares of eNucleus
common  stock  valued at $25,000  and the  assignment  of the  Genesis  Software
contract, estimated at $450,000.

On August 1, 2004, the Company purchased all of the issued and outstanding stock
of Frontier  Technologies  Inc., a Singapore-based  company,  formerly owned and
operated  by  Applitech  Solution,   Ltd.  Frontier   Technologies  provides  IT
professional services and solutions for business.  The results of operations for
Frontier  Technologies  (since renamed to eNucleus Pte. Ltd.) have been included
in the  financial  statements of the Company from the date of  acquisition.  The
acquisition has been accounted for using the purchase method as follows:

Property & Equipment                                 $   19,534
Intangible assets                                       447,904
Accounts Payable                                       (365,438)
                                                     ----------
                                                     $  102,000
                                                     ==========

The Company  paid for this  acquisition  by issuing  common  stock having a fair
market value of $102,000.  Frontier  shareholders  are also  entitled to receive
additional stock or cash, at the Company's option, based on an earn-out of three
and a half  times the 2005 net  income  of  eNucleus  Pte.  Ltd.  There  were no
additional amounts due as eNucleus Pte. Ltd, incurred a loss in 2005.

In 2004 the Company entered into negotiations to acquire the customer contracts,
accounts  receivable  and the software of Tender City, a business to  government
Internet-based  procurement solution, from Applitech Solution, Ltd. (Applitech),
an Indian based company,  in exchange for 250,000 shares of the Company's common
stock.  As the asset  transfer  could not be  completed on a timely  basis,  the
Company  entered  into a  preliminary  agreement  October  1, 2004  under  which
Applitech  continued to operate  Tender City using its' own resources and agreed
to remit the net income of Tender City to the Company  less one half of any such
net income  (which was  retained by  Applitech  Solution,  Ltd.) to a maximum of
$2,000,000.  No payments were due to the Company until January 31, 2006. For the
year ended December 31, 2004 the reported net income of Tender City was $489,904
and the amount due to the Company was $242,352.  The  arrangement was terminated
as of April 30, 2005. As of December 31, 2005 Applitech owed eNucleus $262,731.

                                      F-12
<PAGE>


eNUCLEUS, INC.
Notes to the Consolidated Financial Statements
December 31, 2005 and 2004
--------------------------------------------------------------------------------

3.    ACQUISITIONS (CONT'D)

On May 4,  2005 the  Company,  entered  into an asset  purchase  agreement  with
Applitech  Solutions,  Ltd. This agreement  supplemented the October 2004 Tender
City agreement (see above) with additional assets from Applitech Solutions Pte.,
Ltd., including customer contracts,  accounts receivable and software. Applitech
Solutions Pte Ltd's  results of  operations  have been included in the financial
statements of the Company from the date of acquisition.  Purchase  consideration
consists of one million  shares of common stock  (500,000  common  shares due at
close of  agreement  and the  remaining  shares  are  unvested  contingent  upon
achievement  of  certain  revenue  goals),  a payment  equal to one half the net
earnings collected in 2005 up to $2.5 million  (calculated and payable after the
2005 10-KSB is filed with the Securities and Exchange  Commission in 2006),  and
350,000 warrants.

In December of 2005,  the Company  agreed to amend its purchase  agreement  with
Applitech  Solutions in that  Applitech  received an amended amount of 3,000,000
shares of eNucleus  common stock valued at $870,000,  all cash  previously  paid
pursuant to the purchase  agreement  and the transfer of roughly  three  million
dollars  in  receivables,  which  were  offset by amounts  due to  Applitech  of
approximately  $1,952,000 as final payment due under the purchase agreement. The
total  cost  to  acquire  Applitech  was  $4,191,000  which  was  attributed  to
intangible software costs.

eNucleus  consolidated  proforma  statements of operations as if the acquisition
had taken place at the beginning of each of the years ended December 31,


                                                   2005           2004
                                                   ----           ----

Revenue                                        $ 12,042,509   $   8,678,494
                                               ============   =============
Net income                                     $    803,251   $   2,169,710
                                               ============   =============

Basic net  income per common share             $       0.02   $        0.11
                                               ============   =============
Diluted net income per common share            $       0.02   $        0.08
                                               ============   =============



                                      F-13
<PAGE>


eNUCLEUS, INC.
Notes to the Consolidated Financial Statements
December 31, 2005 and 2004
--------------------------------------------------------------------------------

On May 18, 2005, the Company  acquired  certain software and related assets from
Acrux LLC, a Chicago-based  technology company with software assets designed for
the educational industry to assist with financial and student management. Acrux,
LLC's  results of operations  have been included in the financial  statements of
the Company from the date of  acquisition.  The purchase price included  375,000
shares of the  Company's  common  stock  valued at $131,250  plus a 10% earn out
payment based upon the gross  revenue from the  purchased  assets for a two year
period (up to a maximum of  $2,500,000).  As of December 31, 2005,  eNucleus was
not liable to Acrux, LLC pursuant to the earn-out provision.

4.    INTANGIBLE ASSETS

      The  intangible  assets were comprised of the following as of December 31,
      2005:

            Software (Useful life of 5 years)                    $ 6,402,151
            Customer list and contracts (Useful life 2 years)        570,549
                                                                  ----------
                                                                   6,972,700

             Less: Accumulated amortization                       (1,377,840)
                                                                  ----------
                                                                  $5,594,860

      Total  amortization  expense  for the  years  2005  and 2004  amounted  to
      $1,528,108 and $584,115, respectively.

5.    NOTES PAYABLE

      As of December 31, 2005 the Company's total long-term debt outstanding was
      as follows:

        Rotate Black - related party (a)                         $   822,376
        Duke-Weeks Realty (b)                                        141,951
        Other notes payable (c)                                       40,000
                                                                 -----------
                                                                   1,004,327
        Less:  Current portion                                      (181,951)
                                                                 -----------

                                                                 $   822,376
                                                                 ===========

      (a)   The Company  entered into a note payable with Rotate  Black,  LLC (a
            related  party).  Principal and unpaid  interest are due in November
            2007.  Interest accrues  bi-annually at 10% per annum. This note was
            entered into as a part of an agreement  whereby  Rotate  Black,  LLC
            agreed to assume  liabilities  to the Internal  Revenue  Service and
            other State revenue agencies.

      (b)   In November 2003,  the Company  entered into a 3 year note agreement
            with Duke Realty Limited  Partnership,  the previous landlord of the
            Company  (when the Company was in  bankruptcy)  in the amount of its
            total  allowed  claim  of  approximately  $142,000,  due in  monthly
            payments of $1,000  except for the first  payment in each year which
            is $10,000. The final payment will include the remaining outstanding
            principal  plus  accrued  interest  at a rate of 10% per  annum.  No
            payments have been made against this note.


                                      F-14
<PAGE>


eNUCLEUS, INC.
Notes to the Consolidated Financial Statements
December 31, 2005 and 2004
--------------------------------------------------------------------------------

5.    NOTES PAYABLE (CONT'D)

      (c)   This note payable is to an unsecured claimant prior to the Company's
            filing  of   bankruptcy,   who  in  accordance   with  the  Plan  of
            Reorganization, elected to take a Junior Secured Note on the portion
            of the unsecured claim. Such note is payable in $10,000 installments
            and accrues interest at 12% per annum.  First payment of $10,000 was
            made in 2005.  Final  payment is due in May 2006. As of December 31,
            2005  principal  payments due on the Company's  notes payable are as
            follows:

              2006           $  181,951
              2007              822,376
                             ----------
                             $1,004,327
                             ==========

6.    EQUITY

      COMMON STOCK
      The Board of Directors authorized and shareholders  approved a one for ten
      reverse stock split of all issued and outstanding common stock,  effective
      February 18, 2004. The par value of the common stock was maintained at the
      pre-split  amount  of $.001  per  share  and the  authorized  capital  was
      maintained at 100,000,000 shares of common stock, and the par value of the
      preferred  stock was  maintained  at the  pre-split  amount of $0.001  per
      share, and the authorized  capital was maintained at 20,000,000  shares of
      preferred  stock. All references to common shares and per share amounts in
      these  consolidated   financial   statements  and  notes  to  consolidated
      financial  statements  have been  restated to reflect this  reverse  stock
      split on a retroactive basis, exclusive of fractional shares.

      STOCK OPTIONS

      The following table  represents our stock options  granted,  exercised and
      forfeited during the past three years.


<TABLE>
<CAPTION>
                                                                        Weighted Average
                                                        Exercise Price   Exercise Price
                                      Number of Shares     Per Share       Per Share
                                      ----------------  --------------  ----------------
<S>                                      <C>                <C>              <C>
 Outstanding at December 31, 2002            -
          Granted                        3,500,000          $ 0.19           $ 0.19
         Exercised                           -                 -                -
         Forfeited                           -                 -                -
                                      ----------------  --------------  ----------------
 Outstanding at December 31, 2003        3,500,000          $ 0.19           $ 0.19
                                      ----------------  --------------  ----------------
          Granted                          250,000          $ 0.54           $ 0.54
         Exercised                           -                 -                -
         Forfeited                           -                 -                -
                                      ----------------  --------------  ----------------
 Outstanding at December 31, 2004        3,750,000          $ 0.54           $ 0.21
                                      ----------------  --------------  ----------------
          Granted                        1,700,000        $0.26-$0.30        $ 0.27
         Exercised                           -                 -                -
         Forfeited                           -                 -                -
                                      ----------------  --------------  ----------------
 Outstanding at December 31, 2005        5,450,000        $0.26-$0.30        $ 0.23
                                      ----------------  --------------  ----------------
</TABLE>


                                      F-15
<PAGE>


eNUCLEUS, INC.
Notes to the Consolidated Financial Statements
December 31, 2005 and 2004
--------------------------------------------------------------------------------

6.    EQUITY (CONT'D)

      The fair  value of options  at the date of grant was  estimated  using the
      Black-Scholes  option pricing model. The weighted average  assumptions and
      resulting fair values of options granted are as follows:

                                Assumptions
              ------------------------------------------------
              Risk free     Expected    Expected               Weighted average
              interest     dividend    life (in     Expected    fair value of
                 rate        yield       years)    Volatility  options granted
                 ----        -----       ------    ----------  ---------------

    2005        3.60%          -           2        88.90%          $0.20
    2004        2.80%          -           2        80.10%          $0.24
    2003        2.50%          -           3         0.00%          $0.01


      Options outstanding at December 31, 2005 were composed of the following:

<TABLE>
<CAPTION>
                                             Outstanding
                          ---------------------------------------------------
                                                                                       Exercisable
                                                                              ------------------------------
                                                    Weighted
                                                     Average      Weighted                      Weighted
                                                    Remaining      Average                      Average
        Range of                Number of          Contractual    Exercise      Number of       Exercise
     Exercise Price               Shares              Life          Price        Shares          Price
------------------------- ----------------------- -------------- ------------ -------------- ---------------
<S>                       <C>                          <C>          <C>       <C>                 <C>
          $.19            3,500,000                    2.8          $.19      2,325,000           $.19

          $.54            250,000                      3.4          $.54      125,000             $.54

       $.26-$.30          1,700,000                    4.3          $.27      666,668             $.27
------------------------- ----------------------- -------------- ------------ -------------- ---------------

       $.19-$.30          5,450,000                    3.5          $.23      3,116,668           $.22
------------------------- ----------------------- -------------- ------------ -------------- ---------------
</TABLE>

      WARRANTS

      The  following  represents  our warrants  issued,  exercised and forfeited
      during the past three years.


<TABLE>
<CAPTION>
                                                                                  Weighted Average
                                                      Expiration    Strike Price  Strike Price
                                   Number of Shares      Date         Per Share     Per Share
<S>                                <C>                <C>           <C>           <C>
Outstanding at December 31, 2002          -                -              -             -
  Granted                             2,500,000         Aug-08         $ 0.20        $ 0.20

  Exercised                               -                -              -             -

  Forfeited                               -                -              -             -
                                   ----------------  -------------  ------------  ----------------
Outstanding at December 31, 2003      2,500,000            -            $ 0.20       $ 0.20
                                   ----------------  -------------  ------------  ----------------
  Granted                             3,500,000         Aug-09          $ 0.35       $ 0.35

  Exercised                               -                -              -             -

  Forfeited                               -                -              -             -
                                   ----------------  -------------  ------------  ----------------
Outstanding at December 31, 2004      6,000,000            -            $ 0.35       $ 0.29
                                   ----------------  -------------  ------------  ----------------
  Granted                             2,480,000      Nov 08 to May   $0.20-$0.35     $ 0.34
                                                          10
  Exercised                            (370,000)           -            $ 0.20       $ 0.20

  Forfeited                               -                -              -             -
                                   ----------------  -------------  ------------  ----------------
Outstanding at December 31, 2005      8,110,000            -         $0.20-$0.35     $ 0.31
                                   ----------------  -------------  ------------  ----------------
</TABLE>


                                      F-16
<PAGE>


eNUCLEUS, INC.
Notes to the Consolidated Financial Statements
December 31, 2005 and 2004
--------------------------------------------------------------------------------

7.    NET INCOME (LOSS) PER SHARE

      Basic income  (loss) per share is based on the weighted  average of common
      shares  outstanding  during the period.  Diluted  income  (loss) per share
      includes  additional  common  shares that would have been  outstanding  if
      potential  common  shares  with a  dilutive  effect  had  been  issued.  A
      reconciliation  of the  number  of shares  used for the basic and  diluted
      income (loss) per share calculation is as follows:

<TABLE>
<CAPTION>
                                                   For the years ended December 31,

                                                          2005         2004
                                                          ----         ----
<S>                                                    <C>           <C>
  Numerator for net income (loss) per share:

  Net income (loss)                                    $ (310,366)   $445,300
                                                       ==========    ========
  Denominator:
  Millions of shares

  Basic weighted average common shares outstanding             37          20
  Dilutive effect of:

    Stock options                                              --           4

    Warrants                                                   --           3

  Diluted weighted average common shares outstanding           37          27
  -----------------------------------------------------------------------------

  Basic and diluted income (loss) per share:

  Basic income (loss) per share:                       $    (0.01)   $   0.02
                                                       ==========    ========

  Diluted income per share                             $    (0.01)   $   0.02
                                                       ==========    ========
</TABLE>


Due to their  anti-dilutive  effect, the following  potential common shares have
been excluded from the computation of diluted earning per share:


                                                   2005             2004
                                                   ----             ----

               Warrants                          8,110,000           -

               Stock Options                     5,450,000           -


8.    INCOME TAXES

      The  Company  accounts  for income  taxes  using the  liability  method in
      accordance  with SFAS No.  109,  Accounting  for Income  Taxes.  Under the
      liability method, a deferred tax asset or liability is determined based on
      the difference between the financial statement and tax basis of assets and
      liabilities,  as measured by the enacted tax rates assumed to be in effect
      when these  differences are expected to reverse.  Currently the Company is
      undergoing an analysis of its net operating  loss carry forwards and is in
      the  process of filing  its tax  returns  for the years  2000 to 2004.  No
      income taxes were provided for 2005 and 2004.

                                      F-17
<PAGE>


eNUCLEUS, INC.
Notes to the Consolidated Financial Statements
December 31, 2005 and 2004
--------------------------------------------------------------------------------

8.    INCOME TAXES (CONT'D)

      In assessing the realizability of future tax assets,  management considers
      whether it is more likely than not that some  portion or all of the future
      tax assets will not be realized.  The ultimate  realization  of future tax
      assets is dependent  upon the  generation of future  taxable income during
      the  periods  in which  those  temporary  differences  become  deductible.
      Management  considers  the scheduled  reversal of future tax  liabilities,
      projected future taxable income and tax planning strategies in making this
      assessment.  Management  has provided for a valuation  allowance on all of
      its deferred tax assets as there is no assurance  that future tax benefits
      will be realized.

      The components of the provision for income taxes on continuing  operations
      were:

                                                 Years ending December 31,
                                                  2005               2004
       Current income taxes:
  Federal                                           -                 -
  Foreign                                           -                 -
  State                                             -                 -
                                              --------------    ---------------
     Total current                                  -                 -
                                              --------------    ---------------
       Deferred income taxes
  Federal                                           -                 -
  Foreign                                           -                 -
  State                                             -                 -
                                              --------------    ---------------
     Total deferred                                 -                 -
                                              --------------    ---------------
     Provision for income taxes                     -                 -
                                              --------------    ---------------


      The  United  States  and  foreign  components  of income  from  continuing
      operations  before  income  taxes,   minority  interest,   and  change  in
      accounting principals were as follows:

                                          Years ended December 31,
                                                  (in 000's)
                                              2005               2004
                                              ----               ----

United States                           $       (3,114)         $   441

Foreign                                          2,804                4
                                       --------------------    ---------
Total                                   $          310          $   445
                                       --------------------    ---------



                                      F-18
<PAGE>


eNUCLEUS, INC.
Notes to the Consolidated Financial Statements
December 31, 2005 and 2004
--------------------------------------------------------------------------------

8.    INCOME TAXES (CONT'D)

      The  reconciliations  between  the actual  provision  for income  taxes on
      continuing  operations  and that  computed by applying  the United  States
      statutory rate from continuing  operations  before income taxes,  minority
      interest, and change in accounting principals were as follows:

<TABLE>
<CAPTION>
                                                         Years ended December 31,
                                                          2005              2004
                                                          ----              ----
<S>                                                      <C>                <C>
United States statutory rate                             (35.0%)            35.0%
State income taxes, net of federal income tax benefit     (4.0)              4.0
Tax loss carryforwards                                      --             (39.0)
Valuation allowance                                       39.0                --
                                                        ---------        ---------

Total effective tax rate                                     0%                0%
                                                        ---------        ---------
</TABLE>


      We generally  do not provide  income  taxes on  undistributed  earnings of
      non-United  States  subsidiaries  because such earnings are intended to be
      reinvested indefinitely to finance foreign activities.

      Deferred taxes consist primarily of net operating loss carryforwards.  The
      deferred  taxes are  approximately  $4,700,000 and $3,500,000 for 2005 and
      2004, respectively.  A full valuation allowance was provided to offset the
      deferred taxes. Net operating loss  carryforwards  expire at various dates
      through 2020.

9.    RELATED PARTY TRANSACTION

      During 2005, the Company  entered into a transaction,  whereby it sold two
      of their subsidiaries Financial ASPx, Inc. and Supply Chain ASPx, Inc., to
      Rotate  Black  Investment  Fund 1, LLC  ("Rotate  Black")  which agreed to
      assume liabilities to the Internal Revenue Service and certain other state
      revenue agencies,  in exchange for a note from the Company.  The Companies
      sold to Rotate Black had only liabilities  recorded,  but had the right to
      enter  into a long  term  license  for  software  applications,  which had
      limited  use and could be  replicated  for  approximately  $75,000.  These
      licenses  were never  issued to Rotate  Black and the  application  to the
      venture for which they were to be used, has been abandoned.

      The amount of the note  payable to Rotate  Black  totaling  $822,376 as of
      December  31, 2005 accrues  interest at 10% per annum and unpaid  interest
      and principal are due in November 2007.

      Rotate Black is a  shareholder  of the Company and one of its members is a
      director and shareholder of the Company and the spouse of the other member
      is also a director and shareholder of the Company.

10.   COMMITMENTS AND CONTINGENCIES

      LONG-TERM LEASES

      The Company  leases its corporate  office  facilities in Rolling  Meadows,
      Illinois  under a  non-cancelable  operating sub lease at a rate of $9,000
      per month which expires in December 2006.


                                      F-19
<PAGE>


eNUCLEUS, INC.
Notes to the Consolidated Financial Statements
December 31, 2005 and 2004
--------------------------------------------------------------------------------

10.   COMMITMENTS AND CONTINGENCIES (CONT'D)

      LAWSUITS

      We are from time to time a party to various legal  actions  arising in the
      normal  course of  business.  Prior to our  filing  for  protection  under
      bankruptcy,  we were a  party  to  several  creditor  collection  actions.
      However,  as a result of our  bankruptcy  filing,  these  matters and many
      other  threatening  proceedings  have been  resolved  and  terminated.  We
      believe  that there is no  proceeding  threatened  or  pending  against us
      which, if determined  adversely,  would have a material  adverse effect on
      the financial condition or results of operations of eNucleus.

      PAYROLL TAXES

      As  referenced  in  Note  5,  Rotate  Black,  LLC  has  agreed  to  assume
      liabilities  to the  Internal  Revenue  Service  and other  state  revenue
      agencies,  in exchange for a note from the Company.  The Internal  Revenue
      Service has agreed to pursue  Rotate Black,  LLC for these taxes,  however
      the Company remains primarily liable.

11.   SEGMENT INFORMATION

      The following  shows the  information  by reportable  segment for the year
      ended December 31, 2005:

                      United States      India       Singapore     Consolidated
Revenues               $ 1,428,314    $ 6,220,466   $ 1,689,236    $ 9,338,016

Interest expense            72,567           --           2,817         75,384

Depreciation and
amortization               915,951        363,075       273,474      1,552,500

Segment income(loss)    (3,114,148)     3,038,715      (234,933)      (310,366)

Segment assets           4,682,674      3,038,715     1,528,691      9,250,080

Expenditures for
segment assets           1,969,927      2,723,065          --        4,692,992

      Segment information for 2004 was not material.

12.   WRITE OFF OF INVESTMENT

      eNucleus  provided  software  and a website for  Consolidated  Gulfside in
      exchange  for  $200,000 in stock of  Consolidated  Gulfside.  Consolidated
      Gulfside's business effort failed and eNucleus  subsequently wrote off the
      investment.


                                      F-20
<PAGE>


eNUCLEUS, INC.
Notes to the Consolidated Financial Statements
December 31, 2005 and 2004
--------------------------------------------------------------------------------

13.   SUBSEQUENT EVENTS

      FINANCING OBTAINED

      On  February  7,  2006 the  Company  entered  into a  Promissory  Note for
      $300,000 with Sigma  Opportunity  Fund,  LLC. The lender has the option to
      purchase  325,000 warrants at an exercise price of $0.26. The lender has a
      lien and security interest that is junior to two senior lenders.

      On April 4, 2006 the Company  entered into an additional  Promissory  Note
      for $350,000 with Sigma  Opportunity  Fund,  LLC. and the J Roebling Fund.
      The  lenders  have an option to purchase  400,000  warrants at an exercise
      price of $0.26.  The lenders  have a lien and  security  interest  that is
      junior to two other senior lenders.


                                      F-21