SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                               ------------------
                                   FORM 10-KSB

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


                   For the fiscal year ended December 31, 2004

                                       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.)

                               139 East Bay Street
                            Harbor Springs, Michigan              49740
                     --------------------------------------     --------
                    (Address of principal executive offices)   (Zip Code)

                                 (231) 242-1126
                ------------------------------------------------
               (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 $3,204,000 for the year ended December
31, 2004.

As of March 31, 2005, the market value of the issuer's common stock held by
non-affiliates was approximately $9,000,000.


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 April 19, 2005, the number of common stock shares outstanding is
approximately 28,000,000 shares.


                       DOCUMENTS INCORPORATED BY REFERENCE

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

<PAGE>


                                 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


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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."

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<PAGE>


                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

General

Operationally, the company provides proprietary supply chain software
applications, technologies and solutions to the Global 1000.. The Company's
current software and service applications span 22 countries in five continents
in multiple languages.

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.


Strategy

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

Acquisitions: The Company intends on aggressively acquiring supply chain
applications that are already specifically customized for a certain market
vertical.

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.


eNucleus generally follows these principles:

     o    Acquire best-of-breed applications - Our focus is on acquiring niche
          software applications that serve defined supply chain market segments,
          enjoy widespread industry support and can be readily enabled for
          deployment over the Internet through our software application network.


     o    Acquire well-managed companies - eNucleus concentrates on acquiring
          well-managed organizations that demonstrate a potential for
          significant cash flow growth as a result of product enhancements and
          improved marketing. Our strategy is to oversee already existing,
          strong management teams and to enhance those acquired companies with
          capital, national presence, consolidated operating costs, strategic
          marketing and the technical expertise for migrating their products to
          an Internet-based delivery system.


     o    Leverage operating costs - Each software acquisition presents an
          opportunity for creating operating savings through the consolidation
          of duplicate business functions. Labor costs can be further reduced by
          bringing a seasoned international programming team with proven
          methodology to each newly acquired software application. This
          experienced team skill set should result in quicker times to market
          when enabling new software applications for delivery over the Internet
          than could be achieved by less experienced service providers.

     o    Recurring monthly revenue streams - eNucleus employs several pricing
          strategies that focus on developing long-term recurring monthly
          revenue streams rather than high upfront purchase prices. Lower
          upfront costs make it easier for customers to transition into a new
          business model. As their future needs grow with business demand, we
          believe that customers which have transferred critical business
          operations into the eNucleus network are more like to maintain their
          services with eNucleus.

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<PAGE>


     o    World Class Customer Service - eNucleus supports its products and
          services by world-class customer care personnel who monitor, manage
          and deploy our services.

Market Environment

Software industry experts have most recently stated that they anticipate
Internet-based models of software delivery will be the migration path for most
software applications in the foreseeable future due to the cost savings and
broader accessibility of critical business information that these methods
provide. The convergence of these factors suggests that the next major shift in
how computer based technology is utilized in business will focus on the
reduction of capital expenditures on costly internal IT infrastructure in favor
of accessing critical applications and essential business processes solely
through the Internet. As a next generation business process hosting company with
a scalable worldwide infrastructure available, we believe eNucleus is positioned
to provide critical Internet based business processes to companies that want to
reduce their IT infrastructure.

This current market environment would appear to have created opportunities
within the software industry in which numerous software products currently enjoy
market favor and a loyal customer base; however, many previously successful
applications are not presently delivered over the Internet and many vendors lack
the technical skill set or necessary Internet network infrastructure to enable
and deliver their software applications in this manner. Their situation 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 web-based platforms 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 and Services

     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    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    eComSupplier Communications Management for Oil & Gas Suppliers
          eComSupplier provides an Enterprise level, data-hosting technology
          platform for powering private trading hubs to eConnect suppliers with
          downstream petroleum trading partners.

     o    eComDistributor Communications Management for Oil & Gas Distributors
          eComDistributor is a robust web-based eBusiness management tool
          designed specifically to manage all aspects of fuel and lubricant
          product sales and services.

     o    FuelPilot Online Fuels Management for Commercial & Retail Industries
          FuelPilot provides commercial industrial and large retail industries
          with a streamlined, consolidated solution to manage all activities
          associated with purchasing, storing and delivering fuel.

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

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     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 Delivery - We deliver and manage applications and computer
          services from a centralized location to multiple users over the
          Internet and/or a private network. This provides our customers with
          the ability to access software applications anywhere, anytime via the
          Internet. Applications are accessed just as if they were installed on
          the local system. Within this environment, we provide our customers
          with the ability to access their applications as well as our other
          products.

     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


     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.

     o    Business Process Outsourcing (BPO) - Manpower resources through its
          India offices for clients in the areas of application/product design,
          development, implementation and maintenance.



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.

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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:

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

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

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

          |X|  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.

          |X|  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.

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

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<PAGE>


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.

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. No payments have yet been made against
this amount and management is still negotiating the final settlement. Collected
receivables to be assigned to Primewire are being held in trust by the Company's
solicitors.

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

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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.

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.

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. On October 1, 2004 the Company
acquired certain assets of Applitech Solutions an India-based company. Both
companies are engaged in the business of IT professional services and solutions
sales.

Employees

As of April 19, 2005 we employed 164 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 139 East Bay Street, Harbor Springs,
MI 49740. We also lease and own certain operating facilities in Chicago,
Illinois, Atlanta, Georgia, Vancouver, WA, Singapore, and multiple locations in
India. We are currently evaluating our options on existing and new office space.


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. Prior to December 2003, our stock was traded under the symbol ENCU.
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

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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)
------                                    -----------           ------------

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

2002
4th Quarter                                     $3.00                $ 18.00
3rd Quarter                                     $2.00                $ 35.00
2nd Quarter                                     $1.00                $ 60.00
1st Quarter                                     $1.00                $ 30.00


The approximate number of record holders of our common stock on April 12, 2004
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.

Pursuant to the Plan of Reorganization, we filed an Amended and Restated
Certificate of Incorporation with the Delaware Secretary of State. In accordance
with the Plan, all outstanding shares of old common stock (ENCS) and warrants
and options to purchase old common stock were cancelled. As part of the
distribution of the New Common Stock under the Plan of Reorganization,
shareholders were to tender their Old Common Stock to the Reorganized Company's
designated Stock Transfer Agent no later than October 15, 2002, in accordance
with written instructions provided to such holders, and in exchange would
receive one share of new common stock for every six shares of old common stock
previously owned. Any shareholder who did not submit its certificates for
exchange prior to October 15, 2002 had its claim or interest and its
distribution pursuant to the Plan of Reorganization on account of such Old
Common Stock discharged and shall be forever barred from asserting any such
claim or interest against the Reorganized Company or their respective property.
Approximately 180,000 shares of new common stock were issued under this
exchange. Additionally, approximately 280,000 shares were issued in exchange for
holders of certain allowed claims under the Plan of Reorganization. Such holders
of allowed claims received 1 share of common stock for every $30.00 of debt
claim approved. Any creditor who did not submit its appropriate paperwork for
the stock exchange prior to December 23, 2003 had its claim or interest and its
distribution pursuant to the Plan of Reorganization on account of such claim
discharged and shall be forever barred from asserting any such claim or interest
against the Reorganized Company or their respective property. Pursuant to
Company's final restructuring, we filed an Amended and Restated Certificate of
Incorporation with the Delaware Secretary of State. In accordance with the
restructuring, all outstanding shares of old common stock (ENCU) under went a
One for Ten reverse split and the new common stock trades under the symbol ENUI.

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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.

In accordance with the Plan of Reorganization, we agreed to issue warrants to
purchase 100,000 shares of post split common stock to certain unsecured
creditors (those creditors who appropriately completed and submitted the
required paperwork for the exchange of stock for their debt in accordance with
the Plan of Reorganization) pro rata in accordance with the amount of their
allowed claims. The Warrants give the holders thereof the right to purchase, at
any time for a period of seven years from the date of issuance (i.e., the
effective date of the Plan), one share of the New Common Stock at a price of Two
Dollars ($2.00) per share. The Warrants also contain a "Cashless Exercise"
provision which provide that in the event the stock has traded at an average
price in excess of $20.00 per share for at least 30 days preceding an exercise
of any warrants, the holders thereof may elect to exercise the Warrants in whole
or in part and instruct the Company to withhold from the securities issuable
upon exercise, a number of securities, valued at the current fair market value
on the date of exercise, as the payment of the exercise price. The Company has
not yet issued these warrants.

Recent Sales of Unregistered Securities.

During 2003, the Company has issued approximately 100,000 shares of common stock
subject to an investment banking and acquisition support consulting agreement,
170,000 shares pursuant to a financing arrangements, 200,000 shares for investor
relations and marketing support, 750,000 shares pursuant to debt conversion
agreements and 340,000 shares to certain employees pursuant to their employment
agreements and/or in lieu of cash compensation during the period. As part of the
Company's emergence from bankruptcy in November 2003, the Company reached
agreement with certain note holders and creditors for the agreement to convert
approximately $2 million of outstanding and contingent obligations into 4.7
million shares of common stock and 1.5 million shares of Series A Convertible
Preferred Stock, which have a conversion rate of 5 shares of common stock for
each share of Series A Preferred Stock.

In 2004, the Company privately sold 277,778 shares of Series B Preferred stock
along with a warrant to purchase 250,000 shares of Series B preferred stock at
the face value of $1.00 per share for the consideration of $250,000 in funding.

The Company has issued approximately 500,000 shares of common stock, including
440,000 shares pursuant to a financing arrangement, 55,000 shares subject to a
settlement and conversion of certain liabilities outstanding.

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.

The Company issued 10,900,000 shares of common stock pursuant to the Company's
emergence from bankruptcy reorganization in November of 2003.

As a result of the reverse split approved on February 18, 2004, the Series A
Preferred Stock shares issued were converted into approximately 7.3 million
shares of common stock in accordance with its mandatory conversion feature.

                                       9

<PAGE>


During the first quarter 2004, the Company also issued approximately 700,000
shares of common stock for settlement and conversion of certain liabilities
outstanding.

During the first quarter 2004 and subject to certain contingencies, Congruent
Ventures has agreed to transfer up to 394,777 of their eNucleus preferred stock
holdings (prior to the mandatory conversion) and 206,000 warrants to John
Paulsen in consideration of among other things Mr. Paulsen agreeing to serve as
Chairman & CEO for a period of no less than 12 months.

During the first quarter 2004, the Company privately sold 277,778 shares of
Series B Preferred stock along with a warrant to purchase 250,000 shares of
Series B preferred stock at the face value of $1.00 per share for the
consideration of $250,000 in funding.

During the second quarter 2004, 357,602 shares of Series A preferred stock was
converted into 1,805,509 shares of common stock pursuant to a mandatory
conversion feature. During the second quarter 2004, 363,334 shares of Series B
preferred stock was converted into 1,311,113 shares of common stock pursuant to
a mandatory conversion feature.

During the second quarter 2004, the Company privately sold 83,334 shares of
Series B preferred stock at a price of $0.90 per share along with a warrant to
purchase 277,778 shares of common stock at an exercise price of $0.30 per share.

During the second quarter 2004, the Company received $111,111 as consideration
for the exercise of warrants to acquire 1,111,113 shares of eNucleus common
stock.

On May 28, 2004 eNucleus, Inc. through one of its subsidiaries Supply Chain
ASPx, Inc. (collectively the "Company") purchased substantially all the assets
of Tak Group, Inc. ("Tak Group"). The Acquisition was effected pursuant to an
Asset Purchase Agreement between the Company, Tak Group and the holders of the
capital stock of Tak Group (the "Shareholders") dated May 28, 2004 (the
"Purchase Agreement"). Subject to the terms and conditions of the Purchase
Agreement, Tak Group received 650,000 shares of eNucleus common stock.
Additionally, Tak Group has the ability to earn an additional 150,000 shares if
they meet certain milestones within 12 months of the close of the transaction.

During the third quarter 50,000 shares were issued to facilitate the acquisition
of software; 2,777,777 shares were issued to common stock purchasers; and
772,500 shares were issued pursuant to the company's reorganization plan.

During the third quarter the company sold to Barron Partners 2.5 million shares
of common stock at $0.40 per share with warrants to purchase 2.5 million shares
of common stock at $0.60 per share and 1.0 million shares at $1.00 per share in
a PIPE transaction. The company obtained gross proceeds of $1,000,000 in cash in
the initial closing.

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,

                                       10

<PAGE>
<TABLE>
<CAPTION>

sales and support personnel and advertising costs. Depreciation and amortization
expense consists primarily of the depreciation of our fixed assets. We expect
these expenses to increase in the future due to the growth of the company.

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. Although the Plan
resulted in a substantial reduction in debt, further improvements in our
liquidity position will be subject to the success of initiatives we are
undertaking to increase sales, reduce operating expenses and the effects on our
liquidity of market conditions in the industry. Our uses of capital are expected
to include working capital for operating expenses and satisfaction of current
liabilities, capital expenditures and payments on outstanding debt facilities.

During 2003 and 2004, as a result of the emergence from bankruptcy, the Company
incurred significant reorganization and restructuring expenses, including
additional expenses incurred in settling outstanding liabilities of $280,000,
professional fees of $290,000 and a write-off of fixed assets of $330,000 due to
the devaluation and disposal of equipment. Also, $274,500 of legal indebtedness
was settled in exchange for company stock. Reorganization costs recognized
during 2003 include $900,000 related to the buyout of our lease, write-off of
$1.1 million of fixed assets associated with the build-out of the data center
and a $2.5 million charge for the impairment of intangible assets.


Business Strategy


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

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.

Operating Results 2004 to 2003


The financial statements after the Confirmation Date are those of a new
reporting entity (the "Reorganized Company") and are not comparable to the
pre-confirmation periods of the old reporting entity (the "Predecessor Company".
The following table sets forth our results of operations for the periods
indicated.

                                            Year ended December 31,
                                                    2004                              2003
                                              Amount           Percent            Amount            Percent
                                            ----------       ----------         ----------        ----------

<S>                                           <C>               <C>               <C>               <C>
Revenue                                     $3,204,456          100.0%            $577,574          100.0%

Operating expenses                           2,209,394           69.0%           1,022,313          177.0%
Interest and other income                         --              --                10,305            1.8%
Depreciation and
amortization expense                           770,319           24.0%             150,965           26.1%
--------------------                        ----------        ----------        ----------        ----------

Net gain (loss) from operations                224,743            7.0%            (606,009)        -104.9%

Net reorganization expense                      21,795            0.7%           1,171,680         1581.3%
Net income from TenderCity                    (242,352)          -7.6%                --              --
Write off of goodwill                             --              --             1,674,622          289.9%

Net income (loss)                              445,300           13.9%         ($3,452,311)        -597.7%
                                            ==========        ==========        ==========        ==========

Basic and diluted net loss per
common share                                    ($0.02)                             ($0.07)
                                               =======                             =======

Weighted average shares
outstanding -                               19,606,805                          51,687,983
 basic and diluted                          ==========                          ==========

                                                      11
</TABLE>

<PAGE>


Year Ended December 31, 2004 Compared to Year Ended December 31, 2003

Revenue. For 2004, revenues were $3,204,000 compared to $578,000 for 2003. We
have begun an aggressive strategy to increase our revenues and operations. In
February and May 2004, we completed our first acquisitions since reorganization
which accounted for the majority of the growth from 2004.

Operating expenses. For 2004, operating expenses increased approximately
$1,187,000 to $2,209,000 from $1,022,000 in 2003. The majority of the increase
relates to the expansion of our business from acquisitions.

Depreciation and amortization expense. Depreciation and amortization expense
increased $619,000 to $770,000 in 2004 as compared to $151,000 in 2003. The
increase was primarily a result of additional assets acquired through our
acquisitions.

Net reorganization expenses. Costs incurred by the company include professional
fees, court costs and other expenses associated with the Chapter 11 proceedings
as well as fees incurred in its restructuring of its business. During 2004 and
as a result of the emergence from bankruptcy, the Company incurred
reorganization and restructuring expenses. Net expenses totalling $22,000
includes additional professional fees and a write-off of fixed assets offset by
adjustments in settline outstanding liabilities.

Net income. Our net Income was $445,000 for 2004 compared to a loss of
$3,542,000 in 2003. Excluding the impact of certain non-cash and non-recurring
expenses, including the bankruptcy related expenses and depreciation net income
was $1,237,000 in 2004 compared to a net loss of $445,000 in 2003. This
reduction of loss 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.


For the year ended December 31, 2003

Revenues. Revenues were $578,000 in 2003 representing operations from our
managed services and consulting services.

                                       12

<PAGE>


Operating expenses. Operating expenses were $1,022,000 in 2003. Operating
expenses consist primarily of direct labor and benefits of our technicians and
administration, subcontracted labor or other outside services, commissions,
sales and support personnel and advertising costs.

Interest and Other Expense. Interest expense was $22,000 in 2003.

Depreciation and amortization expense. Depreciation and amortization expense was
$151,000 in 2003 primarily resulting from the write off of $1.1 million of fixed
assets in conjunction with the close of our Atlanta data center facility in the
fourth quarter 2002.

Net reorganization expenses. The Company incurred significant reorganization and
restructuring expenses, including additional expenses incurred in settling
outstanding liabilities of $280,000, professional fees of $290,000 and a
write-off of fixed assets of $330,000 due to the devaluation and disposal of
equipment. Also, $274,500 of legal indebtedness was settled in exchange for
company stock.


Liquidity and Capital Resources

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. Although the Plan
resulted in a substantial reduction in debt, further improvements in our
liquidity position will be subject to the success of initiatives we are
undertaking to increase sales and reduce operating expenses.


As shown in our results of operations, we had net income of $0.445 million, of
which approximately $0.792 million, relates to non-cash charges for stock based
compensation and expenses, bankruptcy related expenses and depreciation and
amortization charges. During 2003, we incurred a net loss of $3.5 million for
the year ending December 31, 2003, of which $3.05 million was related to our
restructuring and closing of our data center.


The Company's continued existence is dependent on its ability to achieve future
profitable operations and its ability to obtain financial support. 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. There can be no assurances that management's
efforts in these regards will be successful. Under any of these scenarios,
management believes that the Company's common stock would likely be subject to
substantial dilution to existing shareholders. The uncertainty related to these
matters and the Company's bankruptcy status raise substantial doubt about its
ability to continue as a going concern. The financial statements do not include
adjustments that might result from the outcome of this uncertainty.

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.

                                       13

<PAGE>


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 these services are provided. Certain of our contracts
include up-front charges for installation or other set up services. We defer
such revenue and recognize revenue ratably over the contract terms. 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 revenues from license
agreements each month over the term of the license 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 of
longer duration. In the case of sales of our source code, we recognize revenue
in the period in which the transaction occurred as long as all our obligations
relating to such transaction have been completed in such period.

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 code of a software product is
generally recognized as products are shipped, with a portion of the revenue
recorded as unearned due to undelivered elements including, in some cases, 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 amount
of 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.

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:

1. Persuasive evidence that the software transaction exists - this criterion can
be demonstrated by a signed agreement, or by the existence of a purchase order
or similar document related to the software.

2. The software has actually been delivered - this factor is satisfied if the
agreement provides an acceptance period of less than 30 days. Where software is
delivered electronically, delivery occurs when the customer either actually
downloads the software, or has been provided access that would allow it to
immediately access the software.

3. The cost of the software is fixed or determinable - this criterion is met if
(a) the fees due under the agreement are to be paid in less than twelve months
and the warranties are routine, short-term and relatively minor; or (b) the
transaction involves a "Large License Deal" (priced at or over $200,000) where
we regularly use extended-payment contracts with payments beyond 12 months and
we have a demonstrated history of successfully collecting the full amount of
these types of contracts without making additional concessions.

4. It is likely that the fees will be collected - this element is satisfied
unless the purchaser's cancellation or refund rights extend beyond thirty days
or if fee is paid for partial performance are refundable if the contract is not
fully performed.

                                       14

<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

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

                                       15

<PAGE>


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    loss of significant strategic alliances, such as with InterNAP and
          Intel,

     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

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.

                                       16

<PAGE>


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

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.

                                       17

<PAGE>


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.

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

                                       18

<PAGE>


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

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

                                       19

<PAGE>


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

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, 2004 and 2003 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, 2004 and 2003

     o    Statements of Operations for the years ended December 31, 2004 and
          2003

     o    Statements of Stockholders' Equity (Deficit) for the years ended
          December 31, 2004 and 2003

     o    Statements of Cash Flows for the years ended December 31, 2004and 2003
          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), Harley Luplow 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.

                                       20

<PAGE>


Based on that evaluation, Mr. Paulsen 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 12/31/04
-------------------- -------- -----------------------------------------
John C. Paulsen         42    Officer, Chief Financial Officer and
Chairman of the               Secretary
Board/Director,
Chief Executive
-------------------- -------- -----------------------------------------
Dhru Desai              43    President/Director
-------------------- -------- -----------------------------------------
Harley Luplow           48    Chief Financial Officer
-------------------- -------- -----------------------------------------
Randy Edgerton          51    Executive Vice President
-------------------- -------- -----------------------------------------


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.


Dhru Desai, Mr. Desai is responsible for the Company's day-to-day operations and
individual unit growth. 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


Harley Luplow, Mr. Luplow is responsible for assessing and controlling the
financial aspects of the company's activities and the allocation of its
financial resources. Mr. Luplow has over twenty years of experience with public
and private companies in various roles including finance, marketing, information
technology and law. Mr. Luplow is an attorney with an MBA from Georgetown
University.


Randy Edgerton, Mr. Edgerton is responsible for the management of eNucleus'
sales and marketing. 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


Currently, John Paulsen and Dhru Desai are the Company's sole directors. As soon
as practicably, the Company is in the process of filling its three vacancies on
the Board of Directors resulting from the previous resignations of the Company's
other directors prior to reorganization.

                                       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, 2004, 2003 and 2002 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,              2004      57,692           0                  0
Chief Executive Officer,      2003           0
and  Secretary                2002      98,000
--------------------------- ------- ------------ ----------- ------------------
Dhru Desai, President,        2004      57,692           0                  0
principal
--------------------------- ------- ------------ ----------- ------------------
Harley Luplow,                2004      31,538           0                  0
Financial Officer
--------------------------- ------- ------------ ----------- ------------------
Randy Edgerton, Executive     2004      69,231           0                  0
Vice President
--------------------------- ------- ------------ ----------- ------------------
Scott Voss, President(1)      2003           0           0                  0
--------------------------- ------- ------------ ----------- ------------------
                              2002      36,000           0                  0
--------------------------- ------- ------------ ----------- ------------------
(1) President until October, 2003.


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
----------------- ------------- --------------- -------------
TAK
----------------- ------------- --------------- -------------
Jeff Batie          6/7/2004       $   0.540        30,000
----------------- ------------- --------------- -------------
Geri Carlson        6/7/2004       $   0.540        15,000
----------------- ------------- --------------- -------------
Brad Edgerton       6/7/2004       $   0.540        20,000
----------------- ------------- --------------- -------------
Randy Edgerton      6/7/2004       $   0.540       100,000
----------------- ------------- --------------- -------------
John Hughes         6/7/2004       $   0.540        20,000
----------------- ------------- --------------- -------------
Huan Le             6/7/2004       $   0.540        15,000
----------------- ------------- --------------- -------------
Binh Quan           6/7/2004       $   0.540        30,000
----------------- ------------- --------------- -------------
Malala Pou          6/7/2004       $   0.540        20,000
----------------- ------------- --------------- -------------
                                                   250,000
----------------- ------------- --------------- -------------

                                       22

<PAGE>


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

None

Compensation of Directors

Currently, John Paulsen and Dhru Desai are the Company's sole directors. As soon
as practicably, Mr. Paulsen, intends to fill the vacancies on the Board of
Directors resulting from the previous resignations of the Company's other
directors. Mr. Paulsen and Mr. Desai were not compensated for serving as the
Company's directors during the last fiscal year. Upon the reconstitution of the
Board of Directors, the Company anticipates compensatory arrangements to be made
to those serving and participating in the growth and development of the Company,
including stock based arrangements.

Employment Contracts

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

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

Subsequent to year-end 2003, 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 April 14, 2004, 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)
                                 ------------------------
Barron Partners                         2,500,000                   8.8%
Congruent Ventures, LLC                 1,873,883                   6.6%
Monte Carlo Funding                     2,450,000                   8.6%



Security Ownership of Directors and Executive Officers


The following table sets forth the number of shares of common stock beneficially
owned as of April 14, 2004 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.

                                       23

<PAGE>


------------------------     --------------------     ----------------
Name of Beneficial Owner     Amount and Nature of     Percent of Class
------------------------     --------------------     ----------------
                             Beneficial Ownership
                             --------------------
------------------------     --------------------     ----------------
John C. Paulsen (1)             1,314,900 (2)               4.6%
------------------------     --------------------     ----------------
Dhru Desai (1)                  1,873,883 (3)               6.6%
------------------------     --------------------     ----------------
All directors and
executive  officers, as         3,188,783                  11.2%
a group
------------------------     --------------------     ----------------

(1)  The mailing address is c/o eNucleus 139 E. Bay Street, Harbor Springs, MI
     49740.

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

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


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Company licensed a software product, eLube Port, to Centerspan, Inc. in the
amount of $500,000 in December of 2004.


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

On February 19, 2004, we filed a Current Report on Form 8-K relating to the
entering into an Asset Purchase Agreement to purchase substantially all the
assets of PrimeWire, Inc.

October 27, 2004, we filed a Current Report on Form 8-K relating to a Stock
Purchase Agreement with a certain accredited investor for the sale of 2,500,000
shares of common stock of eNucleus, Inc. (the "Company") at $0.40 per share.

On March 18, 2005, we filed a Current Report on Form 8-K relating to a change in
auditors. Effective December 15, 2004, the Company decided to replace Bujan &
Associates ("Bujan"), which audited the Company's financial statements for the
fiscal year ended December 31, 2003, with Danziger & Hochman ("Danzinger") to
act as the Company's independent auditors.

On March 31, 2005 we filed an NT-10K seeking an extension of time to file our
2004 Form 10-KSB.

On April 8, 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
$50,000 and $22,500 during 2004 and 2003, 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, 2004, with management and the independent auditors.

                                       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:  April 19, 2005

                                         By:  /s/  John C. Paulsen
                                            --------------------------------
                                                   John C. Paulsen
                                                   Chief Executive Officer



                                         By:  /s/  Harley Luplow
                                            --------------------------------
                                                   Harley Luplow
                                                   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/  John C. Paulsen              Chief Executive Officer,        April 19, 2005
-----------------------------     Chairman of the Board
     John C. Paulsen              and principal


/s/  Harley Luplow                Financial and Accounting        April 19, 2005
-----------------------------     Officer
     Harley Luplow


                                       25

<PAGE>


                                 EXHIBIT INDEX


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

21                  Subsidiaries of eNucleus, Inc.

23.1                Consent of Danziger & Hochman.

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.


                                       26

<PAGE>


                                 eNUCLEUS, INC.
                        Consolidated Financial Statements
                        (Stated in United States Dollars)

                                December 31, 2004



<PAGE>


                                 eNUCLEUS, INC.

                                      INDEX

                                December 31, 2004



                                                                        PAGE


2004 INDEPENDENT AUDITORS' REPORT                                        F-1

2002 INDEPENDENT PUBLIC ACCOUNTANTS' REPORT                              F-2


CONSOLIDATED FINANCIAL STATEMENTS

         Consolidated Balance Sheets - Statement I                       F-3

         Consolidated Statements of  Shareholders' Equity
             (Deficit)- Statement II                                  F-4 - F-5

         Consolidated Statements of Operations - Statement III           F-6

         Consolidated Statements of Cash Flows - Statement IV            F-7


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                            F-8 - F-17

                                       i

<PAGE>


                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholders of:
eNUCLEUS, INC.

We have audited the accompanying consolidated balance sheets of eNUCLEUS, INC.
as at December 31, 2004 and 2003, and the consolidated statements of operations,
shareholders' equity , and cash flows for the years ended December 31, 2004 and
2003. These consolidated financial statements are the responsibility of the
company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits. The Company's
consolidated financial statements for the year ended December 31, 2002 were
audited by other auditors whose report dated March 28, 2003 is attached.

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

In our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of the company as at December 31, 2004
and 2003, and the results of its operations and their cash flows for the years
ended December 31, 2004 and 2003, in conformity with accounting principles
generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As more fully discussed in
note 2 to the consolidated financial statements, the Company continues to incur
negative cash flow from operations and must continue to fund their working
capital needs. Additionally, the Company will need to negotiate payment terms
with some if its creditors. There can be no assurance that the Company will
reach agreement with these parties or be able to satisfy their indebtedness in a
timely manner acceptable to them. These conditions raise substantial doubt about
the Company's ability to continue as a going concern. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.


Toronto, Ontario
April 13, 2005                                            Chartered Accountants

                                                                             F-1

<PAGE>


REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To the Board of Directors and Stockholders of eNucleus, Inc.


We have audited the accompanying consolidated balance sheet of eNUCLEUS, INC. (a
Delaware corporation) (the Company) as at December 31, 2002 and 2001, and the
related statements of operations, stockholders' (deficit) equity , and cash
flows for the year ended December 31, 2002, two month period ended December 31,
2001 and the ten month period ended October 31, 2001. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audit in accordance with auditing standards generally accepted
in the 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 audits provide a reasonable basis for our
opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of eNucleus, Inc. as of
December 31, 2002 and 2001, and the results of their operations and cash flows
for the year ended December 31, 2002, two month period ended December 31, 2001
and ten month period ended October 31, 2001, in conformity with accounting
principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As more fully discussed in
note 2 to the financial statements, the Company continues to incur operating
losses and must continue to fund negative working capital needs. Additionally,
the Company will need to negotiate payment terms with some of its administrative
claim holders. There can be no assurance that the Company will reach agreement
with these parties or be able to satisfy their indebtedness in a timely manner
acceptable to them. These conditions raise substantial doubt about the Company's
ability to continue as a going concern. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.



Palos Heights, Illinois
March 28, 2003                                          Bujan & Associates, Ltd.

                                                                             F-2

<PAGE>
<TABLE>
<CAPTION>




eNUCLEUS, INC.                                                                 Statement I
Consolidated Balance Sheets
(Stated in United States Dollars)
As at December 31, 2004
==========================================================================================

                                                                    2004          2003
                                                                 -----------   -----------
<S>                                                              <C>           <C>
ASSETS
    Current
        Cash                                                     $    45,800   $        78
        Accounts receivable                                        1,039,133          --
        Prepaid expenses                                              13,098        16,039
                                                                 -----------   -----------

                                                                   1,098,031        16,117
                                                                 -----------   -----------
    Other
        Due from Applitech Solution, Ltd. (note 3c and note 4)       242,352          --
        Property and equipment (note 5)                            1,615,203        19,786
        Intangible assets (note 6)                                   897,118          --
                                                                 -----------   -----------

                                                                 $ 3,852,704   $    35,903
                                                                 ===========   ===========

LIABILITIES
    Current
        Accounts payable and accrued expenses                    $ 1,085,298   $   310,405
        Notes payable (note 7)                                        70,957       156,861
        Deferred revenue                                              38,632          --
                                                                 -----------   -----------

                                                                   1,194,887       467,266
                                                                 -----------   -----------
    Long-term
        Notes payable (note 7)                                       698,032       345,246
                                                                 -----------   -----------

                                                                   1,892,919       812,512
                                                                 -----------   -----------


SHAREHOLDERS' EQUITY (DEFICIT) - Statement II
    Common stock (note 8)                                             26,999        95,278
    Preferred stock (note 8)                                            --           1,454
    Additional paid-in capital                                    10,899,819     8,538,992
                                                                 -----------   -----------

                                                                  10,926,818     8,635,724

DEFICIT                                                          ( 8,967,033)  ( 9,412,333)
                                                                 -----------   -----------

                                                                   1,959,785   (  776,609)
                                                                 -----------   -----------

                                                                 $ 3,852,704   $    35,903
                                                                 ===========   ===========


{See accompanying notes.}                                                              F-3

</TABLE>

<PAGE>
<TABLE>
<CAPTION>


eNUCLEUS, INC.                                                                        Statement II
Consolidated Statements of Shareholders' Equity (Deficit)
(Stated in United States Dollars)
For the Year Ended December 31, 2004
===================================================================================================



                                                    Preferred Stock              Common Stock
                                                 Shares        Amount        Shares        Amount
                                              -----------   -----------   -----------   -----------
<S>                                           <C>           <C>           <C>           <C>
Balance, December 31, 2001                           --     $      --            --     $      --

Issuance of common stock through the
exchange of old common stock (per Plan)              --            --       1,749,925         1,750
Issuance of common stock through
the exchange of creditor claims (per Plan)           --            --       2,764,114         2,764
Contributed capital from the
unexchanged stock and debt                           --            --            --            --
Issuance of common stock in
conjunction with debt financings                     --            --       5,542,400         5,542
Common stock issued upon
conversion of debt                                   --            --      12,046,433        12,047
Common stock issued for employment services          --            --       2,400,000         2,400
Common stock issued upon
exercise of options                                  --            --       7,000,000         7,000
Common stock issued for services provided            --            --       1,710,000         1,710
Issuance of common stock for acquisitions            --            --          50,000            50
Net loss                                             --            --            --            --
                                              -----------   -----------   -----------   -----------
Balance, December 31, 2002                           --            --      33,262,872        33,263

Issuance of common stock in
conjunction with debt financing                      --            --       1,687,512         1,690
Common stock issued for
employment services                                  --            --       3,425,000         3,425
Common stock issued for services provided            --            --       2,950,000         2,950
Common stock issued upon
conversion of debt                                   --            --      53,954,000        53,950
Preferred stock issued upon
conversion of debt                              1,453,779         1,454          --            --
Net loss                                             --            --            --            --
                                              -----------   -----------   -----------   -----------
BALANCE, December 31, 2003                      1,453,779   $     1,454    95,279,384   $    95,278
                                              ===========   ===========   ===========   ===========

                                                                                                F-4
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


eNUCLEUS, INC.                                                                          Statement II
Consolidated Statements of Shareholders' Equity (Deficit)
(Stated in United States Dollars)
For the Year Ended December 31, 2004  (Continued)
=====================================================================================================



                                                                 New        Additional
                                                 Equity        Paid-In     Accumulated
                                                Issuable       Capital       Deficit         Total
                                               ----------    -----------   -----------    -----------
<S>                                           <C>              <C>         <C>            <C>
Balance, December 31, 2001                      3,671,934           --     ($  202,394)   $ 3,469,540

Issuance of common stock through the
exchange of old common stock (per Plan)        (  874,963)       873,213          --             --
Issuance of common stock through
the exchange of creditor claims (per Plan)     (1,382,057)     1,379,293          --             --
Contributed capital from the
unexchanged stock and debt                     (1,414,914)     1,414,914          --             --
Issuance of common stock in
conjunction with debt financings                     --             --            --            5,542
Common stock issued upon
conversion of debt                                   --        2,556,514          --        2,568,561
Common stock issued for employment services          --             --            --            2,400
Common stock issued upon
exercise of options                                  --           25,000          --           32,000
Common stock issued for services provided            --           12,690          --           14,400
Issuance of common stock for acquisitions            --            7,450          --            7,500
Net loss                                             --             --      (5,757,628)    (5,757,628)
                                              -----------    -----------   -----------    -----------
Balance, December 31, 2002                           --        6,269,074    (5,960,022)       342,315


Issuance of common stock in
conjunction with debt financing                      --           71,310        73,000
Common stock issued for
employment services                                  --           70,525          --           73,950
Common stock issued for services provided            --          149,800          --          152,750
Common stock issued upon
conversion of debt                                   --          659,922          --          713,872
Preferred stock issued upon
conversion of debt                                   --        1,318,361          --        1,319,815
Net loss                                             --             --      (3,452,311)    (3,452,311)
                                              -----------    -----------   -----------    -----------
BALANCE, December 31, 2003                    $      --      $ 8,538,992   ($9,412,333)   ($  776,609)
                                              ===========    ===========   ===========    ===========


(See accompanying notes)                                                                   F-4 (Con't)

</TABLE>

<PAGE>
<TABLE>
<CAPTION>


eNUCLEUS, INC.                                                                          Statement III
Consolidated Statements of Shareholders' Equity (Deficit)
(Stated in United States Dollars)
For the Year Ended December 31, 2004
=====================================================================================================



                                                    Preferred Stock               Common Stock
                                                 Shares         Amount        Shares        Amount
                                              -----------    -----------    ----------    -----------
<S>                                            <C>          <C>            <C>           <C>
Balance, January 1, 2004                        1,453,779    $     1,454    95,279,384    $    95,278

Common share reverse stock split                     --             --     (85,751,445)  (     85,751)
Issuance of shares for Frontier acquisition          --             --         200,000            200
Issuance of shares for TAK acquisition               --             --         650,000            650
Issuance of common stock issued upon
    conversion of debt                               --             --           2,500              3
Common stock issued for employment
    services                                         --             --         466,400            467
Common stock issued for services provided            --             --         530,000            530
Preferred stock issued for cash                   361,112            362          --             --
Preferred stock issued for services                90,000             90          --             --
Conversion of preferred shares to common
    shares                                     (1,904,891)   (     1,906)   11,640,784         11,641
Warrants issued for cash                             --             --       1,203,705          1,203
Issue of common shares for cash                      --             --       2,777,777          2,778
Stock options issued                                 --             --            --             --
Net income                                           --             --            --             --
                                              -----------    -----------    ----------    -----------

BALANCE, December 31, 2004                           --      $      --      26,999,105    $    26,999
                                              ===========    ===========    ==========    ===========

                                                                                                  F-5

</TABLE>

<PAGE>
<TABLE>
<CAPTION>


eNUCLEUS, INC.                                                                        Statement III
Consolidated Statements of Shareholders' Equity (Deficit)
(Stated in United States Dollars)
For the Year Ended December 31, 2004  (Continued)
====================================================================================================



                                                 New        Additional
                                                Equity        Paid-In     Accumulated
                                               Issuable       Capital       Deficit         Total
                                              -----------   -----------   -----------    -----------
<S>                                           <C>           <C>           <C>            <C>
Balance, January 1, 2004                      $      --     $ 8,538,992   ($9,412,333)   ($  776,609)

Common share reverse stock split                     --          85,751          --             --
Issuance of shares for Frontier acquisition          --         101,800          --          102,000
Issuance of shares for TAK acquisition               --         298,350          --          299,000
Issuance of common stock issued upon
    conversion of debt                               --          16,124          --           16,127
Common stock issued for employment
    services                                         --         109,533          --          110,000
Common stock issued for services provided            --         135,108          --          135,638
Preferred stock issued for cash                      --         324,638          --          325,000
Preferred stock issued for services                  --          89,910          --           90,000
Conversion of preferred shares to common
    shares                                           --     (     8,166)         --            1,569
Warrants issued for cash                             --         119,167          --          120,370
Issue of common shares for cash                      --       1,006,782          --        1,009,560
Stock options issued                                 --          81,830          --           81,830
Net income                                           --            --         445,300        445,300
                                              -----------   -----------   -----------    -----------

BALANCE, December 31, 2004                    $      --     $10,899,819   ($8,967,033)   $ 1,959,785
                                              ===========   ===========   ===========    ===========

(See accompanying notes)                                                                 F-5 (Con't)

</TABLE>

<PAGE>
<TABLE>
<CAPTION>


eNUCLEUS, INC.                                                             Statement III
Consolidated Statement of Operations
(Stated in United States Dollars)
For the Year Ended December 31, 2004
========================================================================================


                                                 2004           2003            2002
                                             ------------    ------------   ------------
<S>                                          <C>             <C>            <C>
REVENUE
    Licences and servicing fees (note 2)     $  3,204,456    $    577,574   $    285,687
                                             ------------    ------------   ------------

OPERATING EXPENSES                              2,209,394       1,032,618      1,150,115
                                             ------------    ------------   ------------

INCOME (LOSS) BEFORE THE UNDERNOTED               995,062    (    455,044)  (    864,428)
                                             ------------    ------------   ------------

Depreciation and amortization expense             770,319         150,965        375,621
Net reorganization expense                         21,795       1,171,680      4,517,579
Net income from Tendercity (notes 2 and 4)  (     242,352)           --             --
Write off of goodwill                                --         1,674,622           --
                                             ------------    ------------   ------------


NET INCOME (LOSS) FOR THE YEAR               $    445,300    ($ 3,452,311)  ($ 5,757,628)
                                             ============    ============   ============

BASIC AND DILUTED
NET INCOME (LOSS) PER COMMON SHARE           $       0.02    ($      0.07)  ($       .25)
                                             ============    ============   ============


WEIGHTED AVERAGE OF COMMON
SHARES OUTSTANDING - BASIC
AND DILUTED                                    19,606,805     51,687,983      23,006,248
                                             ============    ===========    ============

                                                                                     F-6
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


eNUCLEUS, INC.                                                                          Statement IV
Consolidated Statement of Cash Flows
(Stated in United States Dollars)
For the Year Ended December 31, 2004
=====================================================================================================

                                                                2004          2003           2002
                                                             -----------   -----------    -----------
<S>                                                          <C>           <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
    Net income (loss) for the year - Statement III           $   445,300   ($3,452,311)   ($5,757,628)
    Adjustments to reconcile net income (loss) to net cash
        provided by (used in) operating activities
            Transfer of accounts receivable for assets      (  1,365,636)         --             --
            Non-cash reorganization expense                         --       1,171,680      4,517,579
            Shares issued in consideration of services           335,638        73,950           --
            Write off of goodwill                                   --       1,674,622           --
            Depreciation and amortization                        770,319       150,965        375,624
        Changes in operating assets and liabilities
            Changes in deferred revenue                           38,632          --             --
            Change in due from Applitech Solution, Ltd.      (   242,352)         --             --
            Changes in accounts receivable                   ( 1,039,133)       54,893         14,154
            Changes in prepaid expenses                            2,941        21,935    (   113,374)
            Changes in payables and accrued expenses             774,893   (   414,554)       368,041
                                                             -----------   -----------    -----------

Net cash from (used in) operating activities                 (   279,398)  (   718,820)   (   595,604)
                                                             -----------   -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES
    Purchase of intangible assets                            (   640,436)         --            --
    Purchase of property and equipment                       (   772,383)  (     8,883)         --
                                                             -----------   -----------    -----------
Net cash from (used in) investing activities                 ( 1,412,819)  (     8,883)         --
                                                             -----------   -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES
    Changes in notes payable                                     266,882   (   791,122)       567,728
    Share issue in consideration for debt conversion              16,127     1,513,971         32,000
    Shares and warrants for cash                               1,454,930          --             --
                                                             -----------   -----------    -----------
Net cash from (used in) financing activities                   1,737,939       722,849        599,728
                                                             -----------   -----------    -----------


NET INCREASE (DECREASE) IN CASH                                   45,722   (     4,854)         4,124

CASH, BEGINNING OF YEAR                                               78         4,932            808

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

CASH, END OF YEAR                                            $    45,800   $        78    $     4,932
                                                             ===========   ===========    ===========


Non-cash activities
    Purchase of intangible assets                            $   345,904
    Stock options issued for asset acquisition                    81,830
    Shares for asset acquisition                                 401,000

                                                                                                 F-7

</TABLE>

<PAGE>


eNUCLEUS, INC.
Notes to the Consolidated Financial Statements
(Stated in United States Dollars)
December 31, 2004
================================================================================

1.   NATURE OF OPERATIONS
     --------------------

     eNucleus, Inc. ("eNucleus" or the "Company") is a next generation software
     and managed hosting company. 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, Financial ASPx, Inc., Supply Chain
     ASPx, Inc., Alliance Net, Inc. and Frontier Technologies, Inc. The
     consolidated entities will hereinafter be referred to as the Company. All
     significant intercompany 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. The
     final balance of liabilities and debt the Company will assume has not been
     determined.

2.   SIGNIFICANT ACCOUNTING POLICIES
     -------------------------------

     Going Concern Issue

     These consolidated financial statements have been prepared on a going
     concern basis and do not include any adjustments to the measurement and
     classification of the recorded asset amounts and classification of
     liabilities that might be necessary should the Company be unable to
     continue as a going concern. The Company, in 2004, showed an operating
     profit after several years of operating losses. The Company's ability to
     realize its assets and discharge its liabilities in the normal course of
     business is dependent upon continued profitability. The Company is also
     dependent on an infusion of equity from potential shareholders. The Company
     is currently attempting to obtain additional financing from its existing
     shareholders and other strategic investors to continue its operations.
     However, there can be no assurance that the Company will obtain sufficient
     additional funds from these sources.

     These conditions cause substantial doubt about the Company's ability to
     continue as a going concern. A failure to continue, as a going concern,
     would require that stated amounts of assets and liabilities be reflected on
     a liquidation basis that could differ from the going concern basis.

     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.

                                                                             F-8

<PAGE>


eNUCLEUS, INC.
Notes to the Consolidated Financial Statements
(Stated in United States Dollars)
December 31, 2004
================================================================================


2.   SIGNIFICANT ACCOUNTING POLICIES, (continued)
     --------------------------------

     Property and Equipment

     Property and equipment are stated at cost and depreciated on a declining
     balance basis over their respective estimated useful lives. Maintenance and
     repairs are charged to expense as incurred. Intangible Assets- Defined Life
     Client lists and customer contracts are recorded at cost. Amortization is
     provided over a two year term on a straight line basis. Client lists are
     reviewed annually for impairment. When evaluating whether or not a client
     list is impaired, the Company compares the fair market value of the
     reporting unit to which the asset is assigned to its' carrying amount. If
     the carrying amount exceeds its' fair value, then the amount of the
     impaired loss must be measured. The impairment loss would be calculated by
     comparing the implied fair value of the reporting unit to its' carrying
     amount. The client list was evaluated as at December 31, 2004 and the
     Company determined that there was no impairment.

     Fair Value of Financial Instruments

     The Company's estimate of cash, accounts receivable, prepaid expenses, note
     and accounts payable and deferred revenue approximates the carrying value.
     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 which will 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 are accounted for
     using a fair value method of accounting. This method requires the estimated
     fair value of the stock-based compensation to be recognized in earnings. As
     such, compensation expense is recorded on the date of grant based on the
     fair market value of the stock and expensed in the period which the option
     was granted.

                                                                             F-9

<PAGE>


eNUCLEUS, INC.
Notes to the Consolidated Financial Statements
(Stated in United States Dollars)
December 31, 2004
================================================================================


2.   SIGNIFICANT ACCOUNTING POLICIES, (continued)
     --------------------------------

     Revenue Recognition

     Services
     --------

     The Company recognizes revenue upon providing a service or making delivery
     to its' clients. Billings made or payments received in advance of providing
     services are deferred until the period those services are provided. Certain
     contracts include up-front charges for installation or other set up
     services. These are deferred and recognized ratably over the contract
     terms. 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 revenues from license agreements each month over the
     term of the license 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
     contacts that are of short duration (generally less than 60 days) and as
     the services are rendered for contracts of longer duration. In the case of
     sales of source codes, revenue is recognized in the period in which the
     transactions occurred as long as all of the obligations relating to such
     transaction have been completed in such period.

     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 code of a software product is
     generally recognized as products are shipped, with a portion of the revenue
     recorded as unearned due to undelivered elements including, in some cases,
     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.

                                                                            F-10

<PAGE>


eNUCLEUS, INC.
Notes to the Consolidated Financial Statements
(Stated in United States Dollars)
December 31, 2004
================================================================================


2.   SIGNIFICANT ACCOUNTING POLICIES, (continued)
     --------------------------------

     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. This
     criterion can be 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. This criterion is
     satisfied if the agreement provides an acceptance period of less than 30
     days. Where software is delivered electronically, delivery occurs when the
     customer either actually downloads the software, or has been provided
     access that would allow it to immediately access the software; (3) The
     collection of fees is probable. This element is generally satisfied unless
     the purchaser's cancellation or refund rights extend beyond thirty days;
     and (4) The amount of fees to be paid by the customer is fixed or
     determinable. This criterion is met if (a) the fees due under the agreement
     are to be paid in less than twelve months and the warranties are routine,
     short-term and relatively minor; or (b) the transaction involves a "Large
     License Deal" (priced at or over $200,000) where extended-payment contracts
     are used for beyond a 12 month period.


3.   ACQUISITIONS
     ------------

     a)   On January 21, 2004 the Company, through its' wholly-owned subsidiary,
          Financial ASPx, Inc., acquired the operating assets and assumed the
          operating liabilities of Primewire Inc., a company that provides
          internet solutions in the area of employee benefits and
          administration. The results of operations for Primewire Inc. 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 paid for this acquisition by transferring $915,635 in
          accounts receivable (as described below) and by payment of the sum of
          $100,000 to Primewire Inc..

                                                                            F-11

<PAGE>


eNUCLEUS, INC.
Notes to the Consolidated Financial Statements
(Stated in United States Dollars)
December 31, 2004
================================================================================

3.   ACQUISITIONS, (continued)
     -------------

          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. No
          payments have yet been made against this amount and management is
          still negotiating the final settlement. Collected receivables to be
          assigned to Primewire are being held in trust by the Company's
          solicitors.

     b)   On May 28, 2004, the Company, through its' wholly-owned subsidiary,
          Supply Chain ASPx, Inc., acquired the operating assets and assumed the
          operating liabilities of TAK Acquisition Co. a company that provides
          internet enabled solutions to suppliers, marketers and customers in
          the petroleum business. The results of operations for TAK Acquisition
          Co. 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:

          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 in the total amount of $380,830. In
          addition, the TAK Group has the ability to earn an additional 150,000
          shares if they meet certain milestones within the first twelve months.

     c)   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., that
          provides IT professional services and solutions for business. The
          results of operations for Frontier Technologies 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 and equipment                 $  19,534
                   Intangible assets                        447,904
                   Accounts payable                      (  365,438)
                                                          ---------

                                                          $ 102,000
                                                          =========

                                                                            F-12

<PAGE>


eNUCLEUS, INC.
Notes to the Consolidated Financial Statements
(Stated in United States Dollars)
December 31, 2004
================================================================================


3.   ACQUISITIONS (continued)
     ------------

          The Company paid for this acquisition by issuing to the vendor, common
          stock in the amount of $102,000. Frontier is also entitled to receive
          additional stock based on an earn-out of three and a half times the
          2005 net income.


4.   DUE FROM APPLITECH SOLUTION, LTD.
     ---------------------------------

     During the year, the Company entered into negotiations to acquire the
     customer contracts, accounts receivable and the software of Tendercity, 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 in which Applitech continues to operate Tendercity
     using its' own resources and has agreed to remit the net income of
     Tendercity to the Company less one half of any such net income (which will
     be 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 Tendercity was $489,904 and
     the amount due to the Company was $242,352.

5.   PROPERTY AND EQUIPMENT
     ----------------------

     Property and equipment consist of the following:

                                           Accumulated        Net Book Value
                                  Cost     Depreciation     2004         2003
                                  ----      ----------      ----         ----
     Computer equipment        $  151,689   $   43,145   $  108,544   $   19,786
     Software                   1,636,362      163,634    1,472,728         --
     Furniture and fixtures        40,976        9,223       31,753         --
     Leaseholds                     9,866        7,688        2,178
                               ----------   ----------   ----------   ----------

                               $1,838,893   $  223,690   $1,615,203   $   19,786
                               ==========   ==========   ==========   ==========

                                                                            F-13

<PAGE>


eNUCLEUS, INC.
Notes to the Consolidated Financial Statements
(Stated in United States Dollars)
December 31, 2004
================================================================================


6.   INTANGIBLE ASSETS
     -----------------

     The intangible assets include client lists and customer contracts.

     Opening balance                                   2004            2003
                                                       ----            ----

     Acquisition during the year
         Frontier Technologies (note 3(c))         $   447,904      $      --
         Primewire Inc. (note 3(a))                    792,893             --
         Acquisition costs                             240,436             --
                                                   -----------      -----------

                                                     1,481,233             --
     Amortization                                      584,115             --
                                                   -----------      -----------

                                                   $   897,118      $      --
                                                   ===========      ===========


7.   NOTES PAYABLE
     -------------

     As of December 31, 2004 the Company's total long-term debt outstanding was
     as follows:


                                                        2004          2003
                                                        ----          ----
     Congruent Ventures LLC (a)                      $    --          90,681
     I.R.S. and other state tax departments (b)        577,037       219,474
     Duke-Weeks Realty (c)                             141,952       141,952
     Other notes payable (d)                            50,000        50,000
                                                      --------      --------
                                                       768,989       502,107
     Less:  Current portion                          (  70,957)    ( 156,861)
                                                      --------      --------

                                                      $698,032      $345,246
                                                      ========      ========

     (a)  Congruent Ventures LLC is owed $90,681 relating to the Bank of America
          loan settlement through the plan of reorganization which it paid on
          behalf of eNucleus, Inc. This loan is senior secured debt and was
          repaid during the year.

     (b)  Holders of allowed tax claims, including the Internal Revenue Service
          and certain state revenue agencies, received in full satisfaction,
          settlement of and in exchange for its tax claim, a six year 6.5%
          promissory note in an amount equal to the principal amount of its tax
          claims, payments of principal and interest due monthly. The Company is
          currently restructuring its payment plan associated with the terms of
          the agreements. No payments have been made against this note.

                                                                            F-14

<PAGE>


eNUCLEUS, INC.
Notes to the Consolidated Financial Statements
(Stated in United States Dollars)
December 31, 2004
================================================================================


7.   NOTES PAYABLE (continued)
     -------------

     (c)  Duke Realty Limited Partnership is a 3-year note payable with the
          previous landlord of the Company in the amount of its total allowed
          claim of approximately $142,000. Monthly payments of $1,000 are due
          with the first payment in each year due of $10,000. The final payment
          will include the remaining outstanding principal plus accrued
          interest. No payments have been made against this note.

     (d)  A note payable 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 accrues interest at 12% per annum with principal and
          interest due in twenty-four months from the date of issuance. No
          payments have been made against this note.

8.   STOCKHOLDERS' EQUITY
     --------------------

     Authorized
         100,000,000 common shares with a par value of $0.001
           20,000,000 preferred stock with a par value of $0.001
     Issued                                                        2004    2003
                                                                   ----    ----
           26,999,105 common shares (2003 - 95,279,384)           26,999  95,278
                 Nil preferred stock (2003 - 1,453,779)             --     1,454

9.   STOCK OPTIONS
     -------------

     The Company has adopted a stock option plan accounted for under SFAS No.
     123 and related interpretations. The Company expenses the difference
     between the fair market value of the shares on the option date and the
     option price.

     On November 6, 2003 the Company granted 3,500,000 options to the following:

     a)   Director, for future services at $.019 which equal the fair market
          value of the shares at November 6, 2003 and expire 1 year after they
          have vested. The shares vest as follows:

                  November 6, 2004              500,000
                  November 6, 2005              500,000
                  November 6, 2006              500,000
                                              ---------
                                              1,500,000
                                              =========

                                                                            F-15

<PAGE>


eNUCLEUS, INC.
Notes to the Consolidated Financial Statements
(Stated in United States Dollars)
December 31, 2004
================================================================================

9.   STOCK OPTIONS (continued)
     -------------

     b)   Management, for future services at $.019 which equals the fair market
          value of the shares at November 6, 2003 and expire 1 year after they
          have vested. The shares vest as follows:

                  November 6, 2004              500,000
                  November 6, 2005              500,000
                  November 6, 2006              500,000
                                              ---------
                                              1,500,000
                                              =========

     c)   Management, for future services at $.019 which equals the fair market
          value of the shares at November 6, 2003 and expire 1 year after they
          have vested. The shares vest as follows:

                  November 6, 2004              150,000
                  November 6, 2005              175,000
                  November 6, 2006              175,000
                                                -------
                                                500,000
                                                =======

10.  WARRANTS
     --------

     During the year, 4,703,706 warrants were issued and the total warrants at
     December 31, 2004 were 6,000,000 (2003 - 2,500,000). The warrants expire
     between August 2008 and July 2009 and the strike price is between $0.20 to
     $1.00.


11.  BASIC LOSS PER SHARE
     --------------------

     Basis net loss per share figures are calculated using the weighted average
     number of common shares outstanding computed on a daily basis.


12.  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.

                                                                            F-16

<PAGE>


eNUCLEUS, INC.
Notes to the Consolidated Financial Statements
(Stated in United States Dollars)
December 31, 2004
================================================================================


12.  INCOME TAXES (continued)
     ------------

     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' losses as there is no assurance that future tax benefits will be
     realized.


13.  COMPARTIVE FIGURES
     ------------------

     Certain amounts in the 2003 and 2002 financial statements have been
     reclassified to conform with the basis of presentation in 2004.

                                                                            F-17