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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                                    FORM 10-K

[X]  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___________

                                    011-15489
                             ----------------------
                             Commission file number

                                  EPIXTAR CORP.
                ------------------------------------------------
                (Name of Registrant as specified in Its Charter)

                 FLORIDA                                     65-0722193
     -------------------------------                    -------------------
     (State or other jurisdiction of                      (I.R.S. Employer
      incorporation or organization)                    Identification No.)

            11900 BISCAYNE BOULEVARD
                    SUITE 700
                 MIAMI, FLORIDA                                33181
     ----------------------------------------                ---------
     (Address of principal executive offices)                (Zip Code)

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (305) 503-8600

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

Title of Each Class                    Name of Each Exchange on Which Registered
-------------------                    -----------------------------------------
   Not Applicable                                  Not Applicable

Securities registered under Section 12(g) of the Act:

        COMMON STOCK, PAR VALUE $0.001 PER SHARE

        Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to filed such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] , No[ ].

        Indicate by check mark if disclosure of delinquent filers in response to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. Yes [ ] , No [X].

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

        The aggregate market value of the voting and non-voting common equity
held by non-affiliates of the Registrant as of June 30, 2004, based on the last
sales price for such shares on such date, was $10,502,183.

        The number of shares outstanding of the Registrant's Common Stock, as of
March 31 2005 was 12,150,356.

                       DOCUMENTS INCORPORATED BY REFERENCE

Not Applicable

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                                TABLE OF CONTENTS

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PART I

Item 1.  Business                                                                                   1
Item 2.  Properties                                                                                21

Item 3.  Legal Proceedings                                                                         22

Item 4.  Submission of Matters to a Vote of Security Holders                                       24

PART II

Item 5.  Market for Registrant's Common Equity, Related Stockholder Matters and Issuer
          Purchases of Equity Securities                                                           24
Item 6.  Selected Financial Data                                                                   26

Item 7.  Management's Discussion and Analysis of Financial Condition and Results of Operation.     27
Item 7A  Quantitative and Qualitative Disclosures About Market Risk                                37
Item 8.  Financial Statements and Supplementary Data
Item 9   Changes in and Disagreements With Accountants on Accounting and Financial Disclosure      38
Item 9A. Controls and Procedures                                                                   38
Item 9B. Other Information                                                                         38

PART III

Item 10. Directors and Executive Officers of the Registrant                                        39
Item 11. Executive Compensation.                                                                   42
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
         Matters                                                                                   44
Item 13. Certain Relationships and Related Transactions                                            45
Item 14. Principal Accountant Fees and Services                                                    46

PART IV

Item 15. Exhibits, Financial Statement Schedules.                                                  47
</TABLE>

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                           FORWARD-LOOKING STATEMENTS

Certain statements contained herein may constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward looking statements are subject to various known and unknown risks and
uncertainties and we caution you that any forward-looking information provided
by or on behalf of us is not a guarantee of future performance. Our actual
results could differ from those anticipated by such forward-looking statements
due to a number of factors, some of which are beyond our control. All
forward-looking statements which may be contained in this Annual Report on Form
10-K., are made as of the date that such statements are originally published or
made, and we undertake no obligation to update any such forward-looking
statements. For those statements, we claim the protection of the safe harbor for
forward-looking statements contained in Section 27A of the Securities Act,
Section 21E of the Exchange Act, and the Private Securities Litigation Reform
Act of 1995.

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                                     PART I

ITEM 1.     BUSINESS

All references to "we," "our" and "us" in this Annual Report on Form 10-K refer
to Epixtar Corp. and its subsidiaries.

INTRODUCTION

We engage in two primary lines of business: Business Process Outsourcing (BPO)
and Internet Service Provider (ISP). Until 2004, our revenues were mainly
derived from the ISP business, which provides Internet services, including
unlimited Internet access and email, to small business subscribers. In the
fiscal year ended December 31, 2004, our ISP business generated approximately
88% of our revenues. As a result of ongoing interaction with the BPO and contact
center industry in connection with our ISP business, combined with extensive
analysis of the contact center industry, we made the strategic decision to focus
our energies and resources on developing and operating offshore contact center
services in our BPO line of business. As a result of this decision, we intend to
maintain rather than expand our ISP business to concentrate our efforts in the
offshore contact center services area.

To facilitate this decision, we recently reorganized and transferred our wholly
owned subsidiary (Epixtar BPO Services Corp, renamed Epixtar International
Contact Center Group, Inc. effective January 5, 2005) to a newly formed, wholly
owned subsidiary, Voxx Corporation. Epixtar International Contact Center Group,
Inc. is the owner of our existing contact center subsidiaries and is expected to
be the contracting party for service agreements, which will be performed by
Epixtar Philippines IT Enabled Services Corporation and any other subsidiary
that may operate a contact center. Voxx Corporation is the holding company for
all of our contact center business and is the indirect owner of Epixtar
Philippines IT Enabled Services Corporation. Voxx or one of its subsidiaries
will be the owner of any new subsidiaries formed for our contact center
business.

National Online Services, Inc., Liberty Online Services, Inc., Ameripages, Inc.,
and B2B Advantage, Inc. are the subsidiaries engaged in our ISP business. These
four subsidiaries are wholly-owned by NOL Group, Inc., one of our wholly-owned
subsidiaries, and are entirely distinct from our BPO and contact center
businesses. NOL Group, Inc. is the holding company for our ISP business.

Our revenues and net loss for the year ended December 31, 2004 were $17.7
million and $9.7 million, respectively. Substantially all of our revenues in
2004 were derived from our ISP business.

All of our revenues for each of the fiscal years ended December 31, 2004,
December 31, 2003 and December 31, 2002 were derived from U.S. customers. Our
long-lived assets located in the United States in the fiscal years ended
December 31, 2004, December 31, 2003 and December 31, 2002 were $1.3 million,
$986,000 and $407,000 respectively. All our other long-lived assets were located
in the Philippines for those periods, which were $3.8 million in 2004, $278,000
in 2003 and $0 in 2002.

CORPORATE BACKGROUND AND HISTORY

We were incorporated as a Florida corporation in 1994 under the name PastaBella,
Inc. In 1997, we changed our name to Global Asset Holdings, Inc. We adopted our
current name, Epixtar Corp., in 2002. We had no business until November 14,
2000, when we acquired an 80% membership interest in SavOnCalling.com, L.L.C.
for 2,000,000 shares of our common stock. SavOn was engaged in the marketing and
resale of domestic and international telecommunications services. SavOn is no
longer in business and in 2003 was reorganized under the federal bankruptcy
laws. We acquired NOL Group, Inc. in March 2001 from Transvoice Investments,
Ltd., an affiliated party, and Mr. Sheldon Goldstein for 2,000,000 shares of our
common stock. In January 2005, we acquired all of the shares of Innovative
Marketing Strategies, Inc. (IMS) for a purchase price of $7,500,000 plus the
substitution of our guarantee of IMS debt previously guaranteed by of the
shareholders.

BUSINESS PROCESS OUTSOURCING (BPO) BUSINESS

OVERVIEW

Since the third quarter of 2003, we have placed our resources and energies into
developing our BPO and contact center business rather than expanding our ISP
business, which we no longer actively market.

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We believe we have developed a desirable and efficient model for BPO services in
our overseas operations and we intend to take advantage of the growing market
trend for United States enterprises to outsource marketing and other functions
to overseas entities. We currently operate approximately 1,400 contact center
seats and have plans for development of 4,000 additional contact center seats.
Our plan for growth and development is focused on gaining talent to develop,
acquire and operate our contact centers, building contact center seats through
organic growth and acquisition, and expanding existing client relationships.

Our BPO services concentrate on contact center activities from our facilities in
the United States and the Philippines. From our Philippine facilities, we
provide customer management services for U.S.-based clients who wish to
outsource this function to a high quality, lower cost provider. Our facilities
in the Philippines include call centers in Metro Manila,including Alabang,
Makati, and Eastwood City and newly-leased facilities on the site of the United
States' former Clark Air Force Base and in the Aseana area of Manila for the
development of additional contact center seats. Our facilities in the United
States include three contact centers and a network operations center, which are
used to source, test and transition business to our Philippine facilities, and
our headquarters in Miami. We currently service ___ U.S.-based clients in a
variety of industries, including financial services, media and
telecommunications. Our services involve marketing campaigns, inbound services
for customer care, and outbound services such as data collection and customer
acquisition for clients. Our market approach particularly emphasizes outbound
services through which we help clients secure new customers through direct
sales, lead generation and appointment setting. We work closely with our client
organizations to understand their business objectives and develop detailed plans
for their outbound campaigns. Three of our customers in 2004 accounted for
approximately 85% of our 2004 revenues.

Our revenues and net loss for the BPO and contact center segment of our business
for the year ended December 31, 2004 were $2.1 million, and $13.0 million,
respectively. We acquired our domestic call center operations and one facility
in the Philippines in a transaction that closed in January 2005.

Through our operations in the Philippines, we believe we provide significant
value to our clients by offering services at a substantially lower cost than
U.S. outsourcing centers and at a quality level that is often higher than other
offshore locations. The Philippines has a substantial complement of
English-speaking, computer and internet-savvy college graduates who view contact
center work as a suitable entry-level position for beginning their business
careers. While there is a substantial pool of qualified workers who meet our
criteria, there is increasing competition for these workers. We believe our
employment conditions and opportunities for advancement within our organization
provide us with an advantage in competing for the services of these employees.
The economics of local labor rates and the strong affinity for U.S. culture are
other advantages of operating in the Philippines.

BPO AND CONTACT CENTER INDUSTRY BACKGROUND

        OVERVIEW

        Business Process Outsourcing (BPO) involves contracting with an external
organization to take primary responsibility for providing a particular business
process or function. Companies initially used BPO to achieve cost savings in
transaction-intensive, back office business processes. Beyond cost savings, BPO
adoption is driven by opportunities to qualitatively improve a wide range of
business processes and a desire to outsource certain activities so that
management can focus on its core products and services. Call center services,
also known as tele-services, are enabled on a global basis by the availability
of quality communications bandwidth at reasonable costs to such English speaking
countries as the Philippines.

        The BPO market includes several functionally specific submarkets, such
as human resources, procurement, logistics, sales and marketing, finance and
accounting, customer management, engineering, facilities management and
training. Demand for BPO services has experienced strong growth in recent years.
Presently, our efforts are directed toward the contact center portion of this
market.

        CURRENT TRENDS IN BPO SERVICES

        The scope of outsourced customer interaction has expanded from outbound
telemarketing calls to a broad spectrum of customer management services,
including customer care, technical support and sales and marketing, including
in-bound sales (direct response) and Internet based interaction via e-mail and
chat. The delivery platform has evolved from single facility, low technology
call centers to large, high volume customer care centers that use

        increasingly sophisticated networking, telephony and Customer
Relationship Management (CRM) technologies.

                                        2
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        Companies now concentrate on brand building through improved customer
care and increasing customer relationship value by encouraging the purchase of
higher value, additional or complementary products and services. At the same
time, global competition, downward pricing pressures and rapid changes in
technology make it increasingly difficult for companies to cost-effectively
maintain the in-house personnel and infrastructure necessary to handle all of
their customer management needs. We believe these trends, combined with rapidly
expanding consumer use of alternative communications, such as the Internet and
e-mail, have resulted in increased demand for outsourced customer management
services.

        We believe the factors that influence companies to outsource customer
management services include:

        o   significant cost benefits;

        o   the importance of professionally managed customer communications to
            retain and grow customer relationships;

        o   the ability to free available resources and management to focus on
            developing core products and services;

        o   increasing capital requirements for sophisticated communications
            technology needed to provide timely technical support and customer
            care; and

        o   extensive and ongoing staff training and associated costs required
            for maintaining in-house technical support and customer care
            solutions.

        We expect the market for outsourced customer management services to
benefit as corporations continue to shift business processes from internal
operations to outsourced partners.

        TREND TOWARD OFFSHORE DELIVERY OF BPO SERVICES

        We believe that, to achieve improved BPO services at a reduced cost,
many companies are moving selected front and back office processes to providers
with offshore delivery capabilities. In recent years, fiber optic transport and
Voice over Internet Protocol (VoIP) telecommunications services have become
widely available at affordable rates. We also believe offshore providers have
become more accepted by businesses and continue to grow in recognition and
sophistication. Consequently, BPO services companies have established offshore
operations or operate exclusively offshore.

        India currently accounts for the largest share of the offshore BPO
services market. However, offshore capacity is expanding beyond India to
countries such as China, Russia and the Philippines. Several high profile U.S.
companies have reduced or discontinued their use of offshore customer management
services in India due to dissatisfaction with the quality of service. We believe
the Philippines is emerging as an attractive alternative to India as a
destination for offshore outsourcing services, particularly in BPO services that
require complex voice interaction in English.

OUR COMPETITIVE STRENGTHS

        We believe our competitive strengths will allow us to successfully
create a sustainable position as a leading offshore outsourced services
provider, including:

        PHILIPPINE-BASED DELIVERY MODEL. The Philippines is a growing market for
outsourced service providers and we are one of the market leaders in the
Philippines. We believe the English speaking workforce and modern
telecommunications infrastructure in the Philippines enable us to provide
consistently high quality services at costs generally comparable to other
offshore locations and substantially lower than the United States.

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        STRONG INDUSTRY EXPERTISE. We have particular expertise in several
industries that have a high demand for complex customer management services,
such as financial services, telecommunications and publishing. With
substantially all of our revenues derived from these industries, we have gained
a deep understanding of each of

        them. This expertise has enabled us to provide customized, high quality
services in these industries quickly and efficiently and we believe it enhances
our ability to attract major clients.

        ATTRACTIVE EMPLOYMENT CULTURE. We have established a corporate culture
that enables us to attract and retain talented, educated professionals. We have
a solid base of training supported by continuous improvement through coaching,
mentoring and supplemental training. Our organization is highly structured with
clear paths for career advancement. Within each of our facilities, we maintain a
career center housing our recruiting staff and information explaining
opportunities for advancement and edification while employed with us. We offer
state-of-the-art facilities in which our employees work. We believe that our
employee retention enables us to lower our recruiting costs and provide
consistent quality to our clients.

        ROBUST INFRASTRUCTURE THAT CAN BE READILY EXPANDED TO MEET THE NEEDS OF
OUR CLIENTS. We have built a state-of-the-art technological and
telecommunications infrastructure, and have invested in employee recruitment,
training and retention, which enables us to consistently meet or exceed the
growing needs of our clients.

OUR COMPETITIVE CHALLENGES

We face challenges as our business evolves, including those discussed below.

        NEGATIVE PUBLIC PERCEPTION. Offshore outsourcing has become a
politically sensitive topic in the United States. Organizations and public
figures have publicly expressed concerns about a perceived association between
offshore outsourcing providers and the loss of jobs in the United States, and
various state and federal legislation is pending that could affect us.

        LOW-PRICED PROVIDERS IN INDIA. Many companies compete with us primarily
on price and may be able to offer lower prices to potential clients. Outsourcing
providers located in India, in particular, offer customer management services at
prices that are often lower than the prices we offer.

        IN-HOUSE CUSTOMER MANAGEMENT GROUPS. We face the challenge that clients
and potential clients may choose to perform some or all of their customer care,
technical support, collections and back office processes internally.

OUR GROWTH STRATEGY

In order to build a leading position in the offshore BPO services market, we are
focusing on the following strategies.

        PHILIPPINE-BASED DELIVERY MODEL. Based on extensive due diligence we
have elected to establish our contact centers primarily in the Philippines. The
Philippines is an attractive and growing destination for offshore BPO with the
third largest English speaking population in the world. The Philippines has a
large pool of skilled, college-educated professionals who speak fluent English
with minimal accents. Generally, Filipinos are familiar with Western business
practices and have an affinity for U.S. culture, offering advantages to
companies that provide services interacting with U.S. consumers and businesses
combined with greater facility in processing U.S. business transactions. In
addition, the Philippines has a well-developed telecommunications and utility
infrastructure as well as an attractive business environment for BPO companies.
We have leveraged the infrastructure via high-capacity fiber optic lines
provided through leading communications companies to all of our locations in the
Philippines.

        The Philippine government has encouraged foreign investment and provided
significant assistance to our industry through the abatement of corporate income
taxes, changes to the country's educational curriculum and relaxation of certain
regulatory restrictions. The personnel and infrastructure available in the
Philippines enables us to provide BPO services at a substantially lower cost
than U.S. outsourcing providers and, we believe, at comparable or superior
quality levels. We believe our educated, English-speaking workforce enables us
to provide consistently high quality BPO services at costs comparable to other
offshore locations and substantially lower than the United States.

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        CONTACT CENTER SEAT DEVELOPMENT. We plan to build contact center seats
through organic growth and acquisition. We are currently operating approximately
1,400 contact center seats and plan to develop an additional 4,000 contact
center seats, through the expansion of seats at our flagship facility in
Eastwood City, Manila and through the development of new facilities. We
anticipate that each contact center will have the capability to operate 24 hours
per day, seven days per week. Our contact centers are expected to have the
capability for a variety of outsourcing purposes, including data management,
business processing and fulfillment services, but will be primarily providing
inbound and outbound calling services for our clients.

        ACQUISITION OF ADDITIONAL CLIENTELE. We intend to attract additional
customers through strategic acquisitions and organic growth, including offering
broader services and marketing to new industries. We sell our contact center
services through a direct sales force focusing on large enterprise customers,
and via channel sales to develop relationships with outside agents and brokers
with direct entree into targeted enterprises and with the acquisition of IMS
through domestic contact centers intending to source programs offshore for
existing clients with an expressed desire to move through programs out of
domestic facilities. We also focus on gaining market share through developing
business from potential new enterprise customers that are primarily within the
communications and financial services markets.

        BROADEN SERVICE OFFERINGS. We intend to optimize our platform by
providing additional BPO services that draw on our cost-effective, skilled
workforce. We currently provide the majority of our services during the
Philippine nighttime hours (U.S. daytime hours). We intend to use our existing
infrastructure to provide services during the daytime in the Philippines that do
not require live customer interaction, such as document processing, email
support and other back office services.

        EXPAND TO ADDITIONAL COUNTRIES. We will explore expanding our operations
into new countries to enhance geographic diversification, provide new services
and enter new markets. We believe that countries, both in Asia and in Latin
America, that have an educated, English and/or Spanish (for programs involving
Spanish speaking U.S. residents) speaking workforce at reasonable wage rates
would be the most likely areas for geographic diversification of our operations.
However, we are still assessing these opportunities and have not identified any
specific location for expanding our outsourcing operations.

        PURSUE SELECTIVE STRATEGIC ACQUISITIONS. We will consider acquiring
complementary BPO business or assets, such as companies focused on back office
services, companies located in new geographic regions, or client contracts of
distressed domestic outsourcing companies.

        LEVERAGING ISP EXPERIENCE. We have gained substantial expertise and
operations effectiveness from our ISP business in various aspects of our BPO
business, including product development, business development, fulfillment and
support, which we plan to use to expand and develop our existing client
relationships. We acquired IMS in a transaction that closed on January 7, 2005,
which has a complement of Fortune 500 clients in the financial services sector
whose contact center utilization is targeted to grow in the Philippines.

IMPLEMENTATION OF OUR CONTACT CENTER BUSINESS

Voxx Corporation is the wholly-owned subsidiary which operates and is the
holding company for our foreign contact center and BPO businesses. We have
aligned all of our call center assets under Voxx Corporation. We believe we have
developed a desirable and efficient model for BPO services in our offshore
operations, and we intend to take advantage of the growing market trend for
United States enterprises to outsource marketing and other functions to offshore
entities.

As part of our plan for success in this arena, we focus on gaining talent to
develop, acquire, and operate our contact centers; building contact center seats
through organic growth and acquisition; and expanding existing relationships. We
have also gained substantial expertise and operations effectiveness in various
aspects of our BPO business including product development, business development,
fulfillment, and support.

Prior to the third quarter of FY 2003, we did not operate contact center seats.
However, we trained contact center personnel, prepared scripts, and monitored
operations for compliance with Unites States law and our policies in connection
with customer acquisition campaigns for our own products and services sold
through third parties.

In Manila, Philippines, we currently operate approximately 1,000 contact center
seats and are targeted for development of approximately 5,500 total contact
center seats. One of the facilities is in Alabang, a suburb of Manila, which we
have been operating since September, 2003 and completed the acquisition of the
call center's assets in the first quarter of FY 2004. The Alabang center
currently has 150 operational seats. Our second center is in Eastwood City,
Manila, which currently operates 750 seats and we expect to develop this, our
flagship facility, to approximately 1,750 seats. Eastwood also serves as our
regional headquarters for the Philippines. With our IMS acquisition we operate
approximately 100 seats in a center in Makati, the central business district of
Manila. We have recently entered into an arrangement with another call center
operator to utilize the center at Alabang. Pursuant to this arrangement, this
operator will absorb all costs of operating this center and pay us an additional
$37,500 per month. The other operator has the right to acquire the seats at
Alabang from us for nominal consideration after two years.

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As we move forward with our seat development strategy, we plan to continue
hiring additional supervisory and staff personnel to support our facilities as
required. Additional capital equipment, by purchase or lease, in the Philippines
and Miami will also be required for this expansion.

Our development progress also includes the following:

        o   As set forth below in "Business Process Outsourcing Business -
            Recent Acquisition" we have acquired all the shares of IMS,
            including its operating subsidiary in Manila, with 100 operational
            seats. IMS has a complement of Fortune 500 clients in the financial
            services sector whose contact center utilization is targeted to grow
            in the Philippines. IMS operates approximately 400 seats across
            three U.S. contact centers in Kansas, Minnesota, and West Virginia.
            In addition, IMS operates a network operations center (NOC) in North
            Carolina. The U.S. centers will remain in operation to source, test,
            and transition business to our offshore facilities.

        o   We have signed five-year leases to occupy space in the Berthaphil
            Business Park located in the Clark Special Economic Zone (CSEZ), the
            former Clark Air Force base in the Philippines. The 31,280 square
            foot facility at the site of the former Base Exchange (BX), along
            with a newly constructed 21,011 square foot adjacent building, will
            be renamed Epixtar Plaza and have approximately 1,000 seats of
            contact center capacity when completed. We project to be fully
            operational at this site in the second quarter of 2005.

        o   We have signed a lease approximately 5,500 square meters (about
            59,201 sq. ft.) of new office space. The space represents the top
            level of a two-story building that should be ready for occupancy in
            the late second quarter of 2006. It is located in the Aseana area of
            Manila. We anticipate that the new facility, once completed, will
            add an additional approximately 1,250 contact center seats to our
            Philippine operations.

The following chart contains a summary of current off-shore seats in operation
and targeted for development:

                                          Additional        Total
                         Current       Seats Targeted     Projected
      Center           Operational     For Development      Seats
------------------     -----------     ---------------    ---------

Eastwood                       750               1,000        1,750
Alabang                        150                   0          150
Clark                            0               1,000        1,000
Makati                         125                (125)           0
Aseana                           0               1,250        1,250
Other                            0               1,000        1,000
                       -----------     ---------------    ---------
TOTAL SEATS                  1,025               4,125        5,150
                       ===========     ===============    =========

We anticipate that each contact center will have the capability to operate 24
hours per day, seven days per week. We are initially targeting full occupancy
with the goal of 1.4 shifts per day depending on availability of contracts. In
addition, each contact center will employ administration and supervisory staff.
Our contact centers are expected to have the capability for a variety of
outsourcing purposes but will be primarily providing in-bound and out-bound
voice services for our clients. Our contact centers are available to handle
various other outsourcing services for clients, including data management,
business processing, and fulfillment services.

The above description represents our present plans and is subject to change
based upon the availability of financing and other factors. The absence of
funds, construction and/or equipment delivery delays, and other factors could
prevent us from fulfilling all our plans and/or prolong the timetable.

OUR SERVICES

We specialize in providing high quality, inbound customer management services to
companies that seek to enhance customer satisfaction and loyalty and reduce
costs. We combine our industry expertise and advanced technology to provide a
range of integrated and seamless customer management services.

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        CUSTOMER MANAGEMENT SERVICES

        We offer a wide range of customer management services to our clients and
their customers. We have a client services group dedicated to designing and
customizing these services for each client. Our client services group
collaborates with each client on an ongoing basis and coordinates our internal
resources to design, deploy and maintain efficient, integrated services between
our technology infrastructure and our clients' systems. We address our clients'
service strategies, anticipated volume and service levels, reporting and
analytical requirements, networking and security, back-end system integration,
and training and staffing needs.

        Our fee arrangements are generally customized for each client on a
case-by-case basis. Our fee arrangements depend on a variety of factors,
including the types and complexity of services we render for the client, service
level requirements, the number of personnel assigned to provide the services,
the complexity of training our personnel to provide the services, and the
information technology and telecommunications requirements necessary to render
the services. Our customer management fees generally consist of time-delineated
or session-based fees, including hourly or per-minute charges and charges per
interaction, and implementation fees, including charges for installing and
integrating new clients into our telecommunications, information technology and
client reporting structure.

        We provide the following types of customer management services through
multiple integrated communications channels, including telephone and e-mail.

        o   OUTBOUND SALES AND SUPPORT. We help client organizations secure new
            customers through direct sales, lead generation and appointment
            setting. We work closely with client organizations to understand
            their business objectives and develop detailed plans for their
            outbound campaigns. We also provide outbound call services in
            connection with customer retention efforts for our clients.

        o   INBOUND SALES. We handle inbound calls from customers purchasing
            products and services from our clients, including telecommunications
            services, Internet services and consumer products and services. Our
            professionals are specifically trained to identify opportunities to
            sell other products and services offered by our clients. For some
            clients, an important aspect of our sales activity includes seeking
            to retain customers who call to cancel our clients' services.

        o   CUSTOMER CARE. Our customer care services are initiated by inbound
            calls from customers with a wide range of questions regarding their
            account billing, changes in services, reservation changes, delivery
            updates on goods or services, complaint and issue resolution and
            general product or services inquiries.

        o   DIRECT RESPONSE SALES SERVICES. Our direct response services involve
            handling inbound telephone orders or inquiries for clients in the
            direct marketing industry, including those calls received in
            response to print advertisements, infomercials and other electronic
            media. Our professionals answer questions and process orders for the
            purchase of our clients' products or services and identify
            opportunities to sell other products and services.

        Our reporting and analytical systems also play an important role in the
customer management services we provide. Our system captures and analyzes data
received through our multiple communications channels and generates
client-specific interaction reports. The system also provides historical trend
information to help clients monitor the volume and effectiveness of our
interactions with their customers, including revenue generation.

        BPO SERVICES

        Our centers are designed primarily to deliver teleservices -- services
delivered through telephone or Internet. Although we are concentrating on
developing processes and infrastructure for teleservices, our contact centers
have the capability to deliver various other outsourcing services for clients.
These services would be performed during hours of operation when calling to
areas within the continental United States would not be feasible. These services
would include, but are not limited to:

        o   Transcription

        o   Data Entry

        o   Accounting

        o   Fulfillment Services

        o   Data Analysis

        o   Programming

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OUR DELIVERY PLATFORM

We have developed and deployed a customized information technology
infrastructure to efficiently and securely deliver our services. Our redundant
systems reduce the risk of data loss and transmission failure and allow us to
quickly scale to meet increased demand. Key components of our infrastructure
include the following:

        o   "HUB AND SPOKE" ARCHITECTURE. Our data centers located in the United
            States and the Philippines use a technical infrastructure designed
            to facilitate rapid expansion and consistency in delivering services
            to and from any of our outsourcing centers. Our data centers are
            connected to each other using multiple, redundant communication
            lines. Our "hub and spoke" operating model allows us to provide
            consistent and scalable business processes across multiple
            outsourcing centers. Applications and data are stored at our
            redundant "hub" in Miami and deployed at our "spokes" in the United
            States and the Philippines. This allows us to quickly and
            efficiently handle additional volume and services for our new and
            existing clients and to expand our outsourcing network by
            establishing new "spokes" virtually anywhere in the world that is
            accessible by fiber optic networks.

        o   DEDICATED TELECOMMUNICATIONS NETWORK. We have designed and deployed
            a secure, dedicated telecommunications system that allows us to
            securely route multi-channel communications between the United
            States and our outsourcing centers in the Philippines. Our system,
            which is redundant and highly scalable, transmits communications
            traffic with negligible delay and high transmission quality over a
            private network leased from major telecommunications providers. Our
            lease agreements with these providers generally provide for annual
            terms and fixed fees based on the levels of capacity dedicated to
            us. Customer traffic is initially received by our redundant data
            center in Miami where we apply voice compression technologies and
            then seamlessly route calls to the optimal location in the
            Philippines based on our professionals' skill sets and availability.
            In most cases, these communications between the United States and
            the Philippines are indistinguishable from domestic communications
            between points within the United States.

        o   ROBUST DATA SECURITY. We use several layers of information security
            protection, including applications and devices designed to prevent
            unauthorized access to data residing in our systems and aggressive
            monitoring of audit trails at application and network layers. All
            outside connections to our network must pass through a sophisticated
            security system that is supported by multiple firewalls. Data access
            to client back-end systems is also protected by these security
            measures. We constantly monitor the network for attacks by potential
            hackers. As required by our clients, we prevent our professionals
            from copying or transmitting customer data.

        o   24/7 CLIENT HELPDESK. We have a helpdesk staffed 24/7, which offers
            our clients complete coverage in the event of any system issues. We
            have established standardized procedures to identify and track
            inquiries, and we categorize and prioritize inquiries by order of
            importance to our clients. We also operate an information technology
            calling tree which allows us to escalate issues up the personnel
            chain of command as the situation warrants.

        o   QUALITY ASSURANCE. Our quality assurance analysts use our quality
            management software to monitor service level compliance and randomly
            sample customer interactions. The system is configured for voice,
            data and computer screen capture to record the total customer
            experience and provide live monitoring and playback via a web
            browser from any location.

HIRING AND RECRUITING

We recognize that our professionals are critical to the success of our business
as a majority of our support and service efforts involve direct interaction with
customers. We believe the tenure and productivity of our professionals are
directly related. Attracting, hiring, training and retaining our professionals
is one of our major areas of focus. All of our Philippine-based professionals
are college educated. The Philippines has a substantial complement of
English-speaking, computer and internet-savvy college graduates who view contact
center work as a suitable entry-level position for beginning their business
careers. While there is a substantial pool of qualified workers who meet

                                        8
<PAGE>

our criteria, there is increasing competition for these workers. We believe our
employment conditions and opportunities for advancement within our organization
provide us with an advantage in competing for the services of these employees.
We have established a corporate culture that enables us to attract and retain
talented, educated professionals. We believe that our employee retention enables
us to lower our recruiting costs and provide consistent quality to our clients.

We have a selective, CRM-oriented recruiting program. Recruiting demands driven
by sales growth have resulted in the addition of approximately 800 new personnel
over the last year. Personnel requirements, one of the most challenging aspects
of contact center operations, are supported by our highly sophisticated approach
to recruiting and retention, including the use of local celebrity MTV VJs and
retail-style career centers strategically placed throughout the Philippines. We
have state-of-the-art production facilities located in Class-A office buildings
that dedicate a significant portion of the floor space to recreation and
training activities.

        TRAINING AND DEVELOPMENT

        We have developed a solid base of training supported by continuous
improvement through coaching, mentoring and supplemental training. Our
organization is highly structured with clear paths for career achievement.
Within each of our facilities, we maintain a career center housing our
recruiting staff and information explaining opportunities for advancement and
edification while employed with us. We have developed agent training and
coaching programs, and we have compensation plans that incorporate monetary and
recognition-based awards.

        Candidate agents receive an extensive orientation designed to impart our
culture of success, teach American culture and geography, as well as to refine
and improve their accent quality. Agents are further educated on the specifics
of sales and customer relationship management based on their campaign assignment
and professional track. Once our agents have successfully mastered the basic
induction curriculum, they graduate to comprehensive, campaign-specific training
where they become familiar with the client's product or service. These courses
are conducted by our trainers who have hands-on campaign experience and subject
matter expertise.

COMPETITION

We believe that the principal competitive factors in our business include the
ability to:

        o   Provide high quality professionals with strong customer interaction
            skills, including English language fluency with neutral accents

        o   Offer cost-effective pricing of services

        o   Deliver value-added and reliable solutions to clients

        o   Provide industry specific knowledge and expertise

        o   Generate revenues and/or savings for clients

        o   Provide a technology platform that offers a seamless experience to
            our clients and their customers

While we recently commenced our contact center business, we believe that we can
compete effectively on all of the above factors.

The global BPO services companies with whom we compete include offshore BPO
companies and U.S. based outsourcing companies. There are numerous BPO companies
based offshore in locations such as India, the Philippines, China, Latin
America, the Caribbean, Africa, and Eastern Europe. Our contact centers will
face competition from established firms in the Philippines such as
PeopleSupport, eTelecare, Ambergris, Contact World, and GlobalStride. Further,
certain larger US based contact center companies have entered the Philippine
local market. These companies also may have greater financial, personnel and
other resources, including longer operating histories, more recognizable brand
names and more established client relationships. Most of these companies compete
with us primarily on price and are often able to offer lower costs to potential
clients. We seek to position ourselves as a service-focused company, with a
workforce attuned to U.S. culture and a focus on revenue generation for our
clients.

                                        9
<PAGE>

In addition to our direct competitors, many companies choose to perform some or
all of their own outsourcing services. Their employees provide these services as
part of their regular business operations. Some companies have moved portions of
their in house customer management functions offshore, including to offshore
affiliates. We believe our key advantage over in-house business processes is
that we give companies the opportunity to focus on their core products and
services while we focus on the specialized function of managing their customer
relationships.

SALES AND MARKETING

We sell our contact center services through a direct sales force that focuses on
large enterprise customers, and via channel sales develop relationships with
outside agents and brokers with direct entree into targeted enterprises that the
acquisition of IMS and its domestic contact centers we intend to source programs
offshore for existing clients that have expressed desire to move their programs
out of domestic facilities.

The direct sales model targets the overall total lifetime value of our
customers. This approach leverages existing client relationships by expanding
campaigns and providing capacity to scale. This recognizes the tendency of large
enterprises to run multiple campaigns concurrently and their willingness to
patronize a vendor that has a pre-existing relationship with the organization.
We also focus on gaining market share through developing business from potential
new enterprise customers that are primarily within the communications and
financial services markets.

We sell and market our clients' services while lowering their cost of customer
acquisition, customer retention, and customer win-back. While our competitors
focus on cost reduction and the benefits of labor arbitrage, we believe our
strategy and competencies give us an advantage over other Philippines-focused
players.

We offer our services at a far lower cost compared to U.S. service bureau
prices, with the ability to provide comparable services at a 30-50% discount.
These services will be continually developed and refined as market conditions
dictate. This approach differs from the majority of our competitors that offer
services based on operational efficiencies. This reflects our overall strategy
of customer alignment and extensive consultation to deliver services to meet
each client's objectives.

We have created performance-based recruitment, training, and coaching programs
to support our agents' understanding of client objectives. This is another
source of differentiation in a market where the focus is generally on
technology, rather than agent development.

Another point of differentiation is an aggressive expansion plan to provide our
clients with access to significant seat capacity to:

        o   Address the needs of large corporations and enable them to transfer
            offshore, new and mature programs currently operating in the U.S.

        o   Establish and reestablish previously non-economically feasible
            sales, marketing and other outbound campaigns.

Our economy of scale is an important factor, which we believe will lead to
steadily improved margins. We will capitalize on our scale and internal seat
capacity to achieve improved margins and reduce our per seat capital
investments. We will concentrate our communication of these points of
differentiation on industries with the highest spending rates on teleservices.
These industries include telecommunications, information technology (Internet
services), financial services, and direct response. These industries
historically represent large consumers of contact center services and are
represented in our current sales pipeline.

REGULATION

Federal, state and international laws and regulations impose a number of
requirements and restrictions on our BPO business. There are state and federal
consumer protection laws that apply to our business, such as laws limiting
telephonic sales or mandating special disclosures, and laws that apply to
information that may be captured, used, shared and/or retained when sales are
made and/or collections are attempted. State and federal laws also impose limits
on credit account interest rates and fees, and their disclosure, as well as the
time frame in which judicial actions may be initiated to enforce the collection
of consumer accounts. There are numerous other federal, state, local and even
international laws and regulations related to, among other things, privacy,
identity theft, telephonic and electronic communications, sharing and use of
consumer information, that apply to our BPO business and to our employee's
interactions and communications with others. For example, the Federal Trade
Commission's Telemarketing Sales Rule applies a number of limitations and
restrictions on our ability to make outbound calls on behalf of our clients and
our ability to encourage customers to purchase higher value products and
services on inbound calls. Similarly, the Telephone Consumer Protection Act of
1991, which among other things governs the use of certain automated calling
technology, applies to calls to customers. Many states also have telemarketing
laws that may apply to our BPO business, even if the call originates from
outside the state.

                                       10
<PAGE>

Federal and state regulators are empowered to examine and take enforcement
actions for violations of these laws and regulations or for practices, policies
or procedures they deem non-compliant, unfair, unsafe or unsound. Moreover,
lawsuits may be brought by appropriate regulatory agencies, attorney generals
and private parties for non-compliance with these laws and regulations.
Accordingly, a failure to comply with the laws and regulations applicable to our
BPO business could have a material adverse effect on us.

Depending on the nature of our telemarketing engagement, we may be subject to
regulations governing communications with consumers including regulations
prohibiting misrepresentations in telephone sales. Since we are dealing with
United States consumers, we are subject to the various do not call regulations.
In addition, limits on the transport of personal information across
international borders such as those now in place in the European Union (and
proposed elsewhere) may limit our ability to obtain customer data. Additional
federal, state, local or international legislation, or changes in regulatory
implementation, could further limit our activities or those of our clients in
the future or significantly increase the cost of regulatory compliance.

A variety of federal and state legislation has been proposed that could restrict
or discourage U.S. companies from outsourcing their services to companies
outside the United States. For example, legislation has been proposed that would
require offshore providers to identify where they are located, and in certain
cases to obtain consent to handling calls or sending customer information
offshore. It is also possible that legislation could be adopted that would
restrict U.S. private sector companies that have federal or state government
contracts from outsourcing their services to offshore service providers. In
addition, various federal tax changes that could adversely impact the
competitive position of offshore outsourcing services are also under
consideration. Any expansion of existing laws or the enactment of new
legislation directly or indirectly restricting offshore outsourcing may
adversely impact our ability to do business with U.S. clients, particularly if
these changes are widespread.

TECHNOLOGY

Our primary Network Operation Center (NOC) is housed in a collocation facility
in Miami, Florida. This collocation facility is a secured, fully monitored,
communications center that has redundant fiber optic lines, and multiple service
and communication provider facilities. The NOC is the central point of our
technology for our contact center business. It is the destination of all inbound
calls, the originating point to the domestic phone network for outbound calls
and the point of control for the CTI, or computer telephony integration. The NOC
is our hub for our technology enabling monitoring of activities, calls, and
network quality. The NOC is where the predictive dialer/ACD (automatic call
distribution) technology resides. As we continue to develop multiple centers the
NOC will act as the hub for all global centers, enabling the operation of each
center as part of a global virtual center. Such a virtual center allows for more
efficient capacity management by directing spikes in utilization to any center
connected on the network that has excess capacity. Calls are transmitted to and
from the centers and agents via VoIP on leased broadband telecommunications
lines to each center.

In addition, IMS operates a network operations center in North Carolina. This
NOC complements our current NOC in Miami and provides additional facilities and
personnel.

Every agent at each contact center location will be utilizing a personal
computer and either an IP enabled phone, an analog or traditional phone or
communicate directly through the personal computer enabled as an IP phone,
depending upon the specific technology implemented in each case.

RECENT ACQUISITION

As of January 7, 2005 we completed the acquisition of all the shares of common
stock of Innovative Marketing Strategies, Inc., a Florida corporation.

The acquisition was made pursuant to an Acquisition Agreement entered into on
November 29, 2004 between Epixtar Corp. and the shareholders of IMS. The
consideration paid by Epixtar Corp. to the shareholders of IMS for the
acquisition was $7,500,000 and the substitution of our guarantee of IMS debt for
the guarantee previously made by the shareholders. The amount of the purchase
price payable at the closing was approximately $5,100,000, after deducting
advances previously made by us and agreed upon adjustments. We gave the
shareholders of IMS a non-interest bearing note payable in 24 equal monthly
installments commencing February 7, 2005. The note is secured by a pledge of the
shares of IMS acquired by us and a subordinated security interest in our assets.
We anticipate that this note and a separate installment obligation to a finder
in the amount of $275,000 will be paid from operating revenues.

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<PAGE>

IMS has six years experience in providing contact center services to the
financial services market. This expertise has yielded contracts with banking,
credit card, and mortgage companies. These services are currently delivered from
approximately 400 workstations at facilities located in Duluth, Minnesota;
Wheeling, West Virginia; and Pittsburg, Kansas. Its wholly owned subsidiary, IMS
International, Inc. (International), operated an additional 100 workstations
located in a contact center in the Philippines. Information technology, client
services, and select executive functions are conducted from a network operations
center (NOC) in North Carolina. The U.S. centers provide us with operations
expertise and geographic diversity for domain (financial services) knowledge and
redundancy. We believe that this will enhance our competitiveness.

Two of IMS' shareholders have been engaged as consultants to a subsidiary of
Voxx Corporation. The third shareholder has entered into an employment agreement
with a subsidiary of Voxx Corporation. Epixtar Corp. has agreed to guaranty or
satisfy existing indebtedness of IMS to one of the shareholders through a cash
payment and issuance of 550,290 shares of Epixtar Common stock.

INTERNET SERVICE PROVIDER BUSINESS

OVERVIEW

Our ISP services are provided by National Online Services, Inc., Liberty Online
Services, Inc., Ameripages, Inc. and B2B Advantage, Inc., each of which is a
wholly-owned subsidiary of our wholly-owned subsidiary NOL Group, Inc. Each of
the operating subsidiaries was originally incorporated in Florida and
subsequently reincorporated in Delaware. Each of these subsidiaries provides
similar services such as access to the Internet through dial-up networks of
third parties Qwest, and UUNet, though each subsidiary also offers a service
unique to the other subsidiaries. B2B Advantage Inc., is an Internet service
provider that combines an ISP service with portal access to a third party
service which provides extensive accounting and legal resources, including legal
forms. National Online Services, Inc., Liberty Online, Inc. and Ameripages, Inc.
provide online yellow page listings and customizable websites. Due to our
decision in late 2003 to focus our attention and resources on the BPO portion of
our business, we no longer actively market the ISP services we provide, but
continue to service existing customers.

Our ISP subsidiaries provide their services generally to small business
subscribers. We believe our subsidiaries meet the needs of this class of small
business by providing nationwide, unlimited Internet access and e-mail service,
developing uniquely branded and customized web sites and hosting services that
feature the business prominently in the online True Yellow Pages directory,
registering the member-business in several major search engines, and delivering
simple online solutions for several areas of the member's business. The value of
the services is that they can be administered as one service for one monthly
fee. The monthly fee covers the Internet provider services, yellow page listing
and software and other valued-added services or products. The fee is billed to
the customer's telephone bill and remitted to us by billing houses. Each of the
local exchange carriers ("LECs") and billing houses charge us a fee for billing
and collection.

Our revenues, and net income for the ISP segment of our business for the year
ended December 31, 2004 were $15.6 million and $5.9 million, respectively. Our
revenues and net income for the ISP segment of our business for the year ended
December 31, 2003 were $35.7 million, and $5.4 million, respectively. Our
revenues, and net loss for the ISP segment of our business for the year ended
December 31, 2002 were $26.0 million, and $1.9 million, respectively.

THIRD-PARTY BILLING COMPANIES FOR ISP

We utilize the services of independent third party billing houses to perform
several significant functions, including the processing of billing and
collections for our ISP subsidiaries. We submit our ISP billing to one or more
billing companies on a weekly basis. These bills are screened to eliminate
customers who are not served with an LEC that accepts billing or otherwise does
not qualify. The bills are then submitted to the respective LEC, which in turn
bills the customer. Collected funds are typically remitted to us within 60 to 90
days. The billing agent may also have contact with the customer when questions
arise concerning the bill. Some billing companies offer advance funding
arrangements with the availability and extent of funding differing greatly.
These arrangements are generally in the nature of a factoring arrangement. The
billing house purchases the receivable due us giving us a percentage of the
amount. The balances less fees and charges are paid upon collection.

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<PAGE>

ISP CUSTOMER CARE

We have transitioned our operation to our Miami office after attempting to
outsource our customer service operations in Manila. Customers might call
customer care for a variety of reasons including technical questions about the
Internet access, e-mail configuration or website editing; service questions such
as what is their billing date or end of trial date, questions regarding phone
card usage, premium redemption requests, cancellations, or other issues
regarding the service or billing. We have a trained staff of full time customer
care specialists who are subject to continuing formal and informal training.

Each customer care specialist has real time computer access to relevant customer
data including direct access to a customer's website and account configuration
to provide technical assistance and a chronological history of events including
sales, fulfillment, billing and inquiries. Calls arrive at the center either
directly from calling customers or are transferred from the relevant billing
companies whose 800 numbers generally appear on the customers' phone bill. The
customer care specialists are also engaged in our retention policy and are
advised of regulatory issues and compliance matters.

ISP REGULATORY AND COMPLIANCE MATTERS

We devote significant effort to complying with local state, federal and
international regulations governing the free to pay conversion program we offer.
In order to maintain our ability to serve customers and collect revenue while
remaining in compliance with all applicable law, we have taken a proactive
approach to resolving regulatory complaints or inquiries in each of our lines of
business. Our ISP Customer Care department has initial responsibility for
inquiries followed if necessary, by consideration by our compliance department
for those of our ISP subsidiaries.

Most of the regulatory and compliance issues for the ISP subsidiaries revolve
around allegations of unauthorized LEC billing arising from violations of the
free to pay conversion rules. State Public Service Commissions, State Attorney
General Offices, and the FTC attempt to prevent "cramming" or the addition of a
specific charge or charges to a customer's local telephone bill without the
proper authorization. We do not approve, or participate in, cramming. Our
internal procedures reflected an absolute prohibition and zero tolerance for
cramming. Through our billing agreements we have agreed to adhere to the highest
disclosure standards. Our compliance policy included the requirement that the
telemarketer, among other things, use an approved sales script and follows a
prescribed verification procedure. We record each customer authorization and
store the digital file for retrieval if needed to show compliance with the law.

In 2003, inquiries were made based upon alleged violations of state restrictions
on calling residences, popularly known as "do not call" lists. Our target market
for our ISP business has been solely businesses. These "do not call"
restrictions do not apply to business telephone numbers. These complaints mainly
have originated from individuals conducting their businesses at home who had
improperly placed their numbers on these lists. We have procedures in place to
suppress non-business phone numbers.

Despite our substantial compliance efforts, we have received numerous complaints
from governmental agencies and the Better Business Bureau. While complaints may
be received informally, we are subject to formal regulatory inquires as well as
formal proceedings in several states. We experienced a significant drop in
complaints in 2004 when we ceased actively marketing ISP services.

In July 2004, we settled an action in Missouri and investigative proceedings in
Kansas and Florida. We settled these proceedings to avoid the projected
litigation costs and diversion from our core business. There was no finding of
wrongdoing in any settlement, and we paid no fines or penalties, other than
those investigative costs and expenses set forth below. In connection with the
injunctive action brought by the state of Missouri, we entered into a
Stipulation for Consent Judgment and Permanent Injunction. Pursuant to the
stipulation, we paid $7,500 for attorney's fees and costs incurred by the State
of Missouri, and $1,770 for restitution for a total of $9,270. In Kansas, we
entered into a Consent Judgment which prohibits deceptive acts and practices in
connection with consumer transactions as prohibited by the Kansas Consumer
Protection Act, details that the defendants deny committing unfair and deceptive
practices, and calls for the payment of a total of $10,000 for investigative
fees and expenses. We entered into an agreement with Florida which contained
similar terms and conditions as the FTC preliminary agreement. A monetary
settlement of $100,000 for investigative costs with no finding of wrongdoing has
been reached.

On October 30, 2003, we and our subsidiaries, and an officer, William Rhodes,
were sued and served with an ex parte temporary restraining order, asset freeze,
order permitting expedited discovery, order appointing temporary receiver, and
an order to show cause in an action commenced by the FTC in the United States
District Court for the Southern District of New York. The order covers each of
these entities, as well as their parents, subsidiaries, and affiliates. The
proceeding arose out of alleged failures of our subsidiaries to comply with
regulations relating to the conversion of a trial customer to a paying customer.
We vigorously deny any wrongdoing and believe that our business practices are in
compliance with all applicable laws. As of November 19, 2003, without any
finding of wrongdoing, we agreed to enter into a preliminary injunction with the
FTC. As a result, we were able to resume our ISP business subject to the
oversight of a monitor. See " Item 3 - Legal Proceedings" in Part I, below for
additional information concerning this matter.

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<PAGE>

ISP COMPETITION

Our Internet provider service subsidiaries face competition from other larger
and more established providers such as AOL and Earthlink. In each case, many of
the competitors are well established, have reputations for success in the
development and sale of services and products and have significantly greater
financial, marketing, distribution, personnel, and other resources than us.
These resources permit these companies to implement extensive advertising and
promotional campaigns, both generally and in response to efforts by additional
competitors to enter into new markets and introduce new services and products.

ISP INTERNET TECHNOLOGY

Our ISP subsidiaries utilize the underlying dial-up network services of Qwest
and UUNet as resold to us through other suppliers. Customers receive
customizable web sites, dial-up Internet access and up to six e-mail accounts.
Our core customer network infrastructure is maintained in collocation facilities
in Florida. The web, e-mail, database and authentication servers are comprised
of Microsoft based systems. All management of the systems of our present
business takes place from offices in Florida.

OTHER INFORMATION

EMPLOYEES

        At March 31, 2005, we had a total of 1,632 employees, with 52 employees
at our headquarters in Miami, Florida, 17 U.S. employees that work as
expatriates in the Philippines as trainers and program managers and 999
employees in the Philippines. We had 1040 employees in operations, 399 employees
in sales and marketing, 48 employees in information technology, and 152
employees in administration and executive management. None of our employees are
covered by a collective bargaining agreement. All of our employees sign
confidentiality agreements with non-compete provisions. In addition, all U.S.
employees that work as expatriates in the Philippines sign employment agreements
that contain non-compete provisions. We consider our relations with our
employees to be good.

        Hiring and Recruiting

        We recognize that our professionals are critical to the success of our
business as a majority of our support and service efforts involve direct
interaction with customers. We believe the tenure and productivity of our
professionals are directly related. Attracting, hiring, training, and retaining
our professionals is one of our major areas of focus. All of our
Philippine-based professionals are college educated. We pay our professionals
competitive wages and offer a benefits program which includes comprehensive
medical, dental and life insurance, meal allowance, and overteime pay and a
thirteenth bonus month, as well as a variety of employees incentives. In 2004,
we achieved an annual turnover rate of our Philippine employees of 14.42%. This
figure includes employees that either left voluntarily or who were managed out.

        We believe we have developed effective strategies, resulting in a very
positive record, in our recruiting program. We created a comprehensive web site,
known as Call Center Career.com, to provide information about us to prospective
candidates, to furnish and accept employment applications through the Internet
and to track the progress of those applicants. Successful candidates must
undergo multiple interviews and some testing before we extend offers of
employment. We have an active employee referral program that has proven to be a
cost effective means of accessing qualified potential employees.

AVAILABLE INFORMATION

        Copies of this Annual Report on Form 10-K and each of our other periodic
and current reports, and amendments to all such reports, that we file or furnish
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are
available free of charge on our website (www.epixtar.com) as soon as reasonably
practicable after the material is electronically filed with, or furnished to,
the Securities and Exchange Commission, or SEC. The information contained on our
website is not incorporated by reference into this Annual Report on Form 10-K
and should not be considered part of this Annual Report on Form 10-K.

        In addition, you may read and copy any document we file with the SEC at
the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C.
20549. Please call the SEC at 1-800-SEC-0330 for further information on the
Public Reference Room. Our SEC filings are also available to the public at the
SEC's web site at http://www.sec.gov.

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                                  RISK FACTORS

You should carefully consider the following risk factors and all other
information contained in this report. Any of the following risks could adversely
affect our business, financial condition and results of operations.

WE HAVE EXPERIENCED LOSSES FROM OPERATIONS AND MAY HAVE LOSSES IN THE FUTURE. We
had no operations prior to November 2000 and incurred losses in 2001 and 2002
including a loss of $11.9 million for 2002. Although we had net income of $4.4
million in 2003, we sustained a loss of $9.6 million for the year ended December
31 2004. There is no assurance that we will be able to operate profitably in the
future.

THE ESTABLISHMENT OF OUR CONTACT CENTER BUSINESS HAS RESULTED IN LOSSES OR
REDUCTION OF INCOME AND MAY RESULT IN FURTHER LOSSES. We have only recently
commenced our contact center business. While we have extensive experience
supervising contact centers for our ISP business, we had no direct operating
experience prior to September 2003. Therefore, our business and future prospects
are difficult to evaluate. You should consider the challenges, risks and
uncertainties frequently encountered by early-stage companies using new and
unproven business models in rapidly evolving markets. These include significant
start-up expenses, obtaining and performing contracts with clients, hiring and
retaining qualified personnel, establishing a reputation in the industry and
acquiring, developing and managing contact centers, managing growth, and
obtaining additional capital if required. Moreover, as we transition to our new
business we will devote fewer resources to our continuing ISP business. There is
no assurance we will be able to enter into substantial arrangements with clients
for our contact center business or that we can develop call centers on terms
favorable to us or at all. Moreover, even if we enter into any such arrangements
or succeed in the development or acquisition of call center assets, there is no
assurance that such arrangements with clients or any development or acquisition
of contact center assets will be profitable.

IF WE DO NOT SUCCESSFULLY IMPLEMENT OUR CONTACT CENTER BUSINESS OUR SOLE REVENUE
SOURCE WILL BE FROM OUR ISP BUSINESS, WHICH IS ATTRITING. While we are
continuing to provide services to existing ISP customers we will concentrate our
resources on our new business. Therefore, we are not actively marketing the ISP
business and, as a result, we will not be able to grow or maintain it. If we do
not successfully implement our new business our only source of revenues would be
derived from a declining base of customers.

WE REQUIRE ADDITIONAL CAPITAL FOR OUR CONTACT CENTER BUSINESS AND THE FAILURE TO
OBTAIN ADDITIONAL CAPITAL MAY RESULT IN OUR INABILITY TO IMPLEMENT OUR BUSINESS
PLAN ON A TIMELY BASIS OR AT ALL. Our contact center business requires:
additional personnel; the acquisition and construction of facilities for
telemarketing and other operations; the purchase of additional equipment and
operating capital for our contact center business while obtaining and
implementing service agreements. We have devoted our resources to establishing
and expanding our contact centers and financing has been slower than expected.
While we have over 1,400 seats at our existing facilities, we are experiencing
negative cash flow and need additional financing for working capital and to
develop additional planned contact centers. Moreover, we will require additional
capital to complete any acquisitions. In addition, we have experienced a general
working capital shortage. Consequently, we require immediate financing.

Aside from these capital requirements we may also need additional funds in the
future based upon:

        o   The timing of offshore BPO services contracts

        o   Required enhancements to operating infrastructure

        o   Upgrades and refreshes to keep pace with technological change

        o   Increasing costs

        o   New technologies

        o   Additional capacity

        o   Introduction of new services

        o   Increased competition and competitive pressures

                                       15
<PAGE>

We intend to seek additional equity or debt financing. The sale of additional
equity securities or convertible debt securities will result in additional
dilution to our stockholders and may increase the amount of our indebtedness. We
may be unable to secure financing in sufficient amounts or on terms acceptable
to us, if at all, in which case we may not have the funds necessary to finance
our ongoing capital requirements or execute our business strategy or meet future
needs.

WE HAVE DEBT OUTSTANDING THAT COULD ADVERSELY AFFECT OUR ABILITY TO OBTAIN
FUTURE FINANCING AND NEGATIVELY AFFECT OUR BUSINESS. We are obligated pursuant
for borrowings in the aggregate principal amount of over $10,000,000, which are
secured by all of our assets and/or contain restrictions on our future activity,
including the declaration of dividends and the incurrence of additional
indebtedness. These security interests and/or restrictions reduce our ability to
obtain future financing and enter into acquisitions and other transactions. To
obtain the release of funds held as security pursuant to these loans we were
required to modify the conversion and exercise prices of existing securities and
issue additional warrants. We may have to obtain additional waivers from these
note holders in the future and may be required to issue additional securities or
other consideration in return for such a waiver.

Our outstanding debt is approximately $17.5 million, exclusive of accounts
payable, accrued expenses and other operating liabilities could:

        o   require us to dedicate a substantial portion of our cash flows from
            operations to pay debt service costs, thereby reducing the
            availability of cash to fund working capital and capital
            expenditures and for other general corporate purposes;

        o   make us more vulnerable to economic downturns and fluctuations in
            interest rates, less able to withstand competitive pressures and
            less flexible in reacting to changes in our industry and general
            economic conditions; and

        o   place us at a competitive disadvantage as compared to less leveraged
            companies.

A REVERSAL OF INDUSTRY TRENDS TOWARD OFFSHORE OUTSOURCING DUE TO NEGATIVE PUBLIC
REACTION IN THE UNITED STATES AND RECENTLY PROPOSED LEGISLATION MAY ADVERSELY
AFFECT DEMAND FOR OUR SERVICES.

Our business depends in large part on U.S. industry trends towards outsourcing
business processes offshore. The trend to outsource business processes may not
continue and could reverse. Offshore outsourcing has become a politically
sensitive topic in the United States, particularly in the recent Presidential
election. Many organizations and public figures have publicly expressed concerns
about a perceived association between offshore outsourcing providers and the
loss of jobs in the United States. In addition, there has been recent publicity
about the negative experience of certain companies that use offshore
outsourcing. Current or prospective clients may elect to perform such services
themselves or may be discouraged from transferring these services to offshore
providers to avoid any negative perception that may be associated with using an
offshore provider.

A variety of federal and state legislation has been proposed that, if enacted,
could restrict or discourage U.S. companies from outsourcing their services to
companies outside the United States. For example, legislation has been proposed
that would require offshore providers to identify where they are located. In
addition, it is possible that legislation could be adopted that would restrict
U.S. private sector companies that have federal or state government contracts
from outsourcing their services to offshore service providers. Any expansion of
existing laws or the enactment of new legislation restricting offshore
outsourcing may adversely impact our ability to do business with U.S. clients,
particularly if these changes are widespread.

OUR CLIENTS MAY ADOPT TECHNOLOGIES THAT DECREASE THE DEMAND FOR OUR SERVICES,
WHICH COULD REDUCE OUR REVENUES AND SERIOUSLY HARM OUR BUSINESS. We target
clients with a need for our customer management services and we depend on their
continued need of our services, especially our major clients who generate the
substantial majority of our revenues. However, over time, our clients may adopt
new technologies that decrease the need for live customer interactions, such as
interactive voice response, web based self-help and other technologies used to
automate interactions with customers. The adoption of such technologies could
reduce the demand for our services, pressure our pricing, cause a reduction in
our revenue and harm our business.

OUR OPERATING RESULTS MAY FLUCTUATE SIGNIFICANTLY AND COULD CAUSE THE MARKET
PRICE OF OUR COMMON STOCK TO FALL RAPIDLY.

                                       16
<PAGE>

Our revenues and operating results are difficult to predict and may fluctuate
significantly from quarter to quarter due to a number of factors, including:

        o   The addition or loss of clients

        o   Fluctuations in service volume

        o   The introduction of new or enhanced services

        o   Long sales cycles and fluctuations in sales cycles

        o   Changes in our pricing policies or those of our competitors

        o   Increased price competition in general

WE ARE SUBJECT TO RISKS ARISING FROM OUR OPERATIONS IN THE PHILIPPINES.

We anticipate that substantially all of our contact center operations will be in
the Philippines. We are exposed to a number of significant risks associated with
our operations in the Philippines, including the following:

        o   Wages for employees in the Philippines are increasing at a faster
            rate than for our U.S. employees, which could result in increased
            costs to employ local talent.

        o   We face competition in the Philippines for outsourcing center
            professionals, and we expect this to increase as additional BPO
            companies enter the market and expand their operations. In
            particular, there may be limited availability of qualified middle
            and upper management candidates. This could increase our costs and
            turnover rates.

        o   The Philippines continues to experience low growth in its gross
            domestic product, significant inflation, currency declines, and
            shortages of foreign exchange. These conditions could create
            economic instability that could harm businesses operating in the
            Philippines.

        o   We have benefited from an excess of supply versus demand for college
            graduates in the Philippines. If this favorable imbalance changes,
            it could affect the availability or cost of qualified professionals,
            who are critical to our performance.

        o   Our revenues are denominated in U.S. dollars, and a substantial
            portion of our costs are incurred and paid in Philippine pesos. We
            are therefore exposed to the risk of an increase in the value of the
            Philippine peso relative to the U.S. dollar, which would increase
            our expenses. We do not currently engage in any transactions as a
            hedge against risk of loss due to foreign currency fluctuations.

        o   We are exposed to the risk of rental and other cost increases due to
            inflation in the Philippines, which has historically been at a much
            higher rate than in the U.S..

        o   The Philippines periodically experiences civil unrest and terrorism.
            U.S. companies in particular may experience greater risk. We are not
            insured against terrorism risks.

        o   An unfavorable business climate in the Philippines could result in
            adverse changes to tax, regulatory and other legal requirements.
            This could increase our operating costs and our exposure to legal
            and business risks.

        o   We have benefited from significant government assistance in the
            Philippines, including the grant of income tax holidays and
            preferential tax treatments under our registrations with the
            Philippine Board of Investments, or BOI, and Philippine Economic
            Zone Authority, or PEZA, and changes to the country's educational
            curriculum in order to attract foreign investment in specified
            sectors including the outsourcing industry. Despite these benefits,
            the Philippine national and local governments could alter one or
            more of these beneficial policies and the Philippine legislature
            could amend the laws granting preferential tax treatment. The
            elimination of any of the benefits realized by us from our
            Philippine operations, including tax incentives, could result in
            increased operating expenses and impair our competitive advantages
            over BPO companies based outside of the Philippines.

                                       17
<PAGE>

        o   Even if the Philippine laws granting the preferential tax treatment
            are not amended, our benefits under these laws will expire within
            the next several years. We currently benefit from income tax holiday
            investments and Philippine Economic Zone Authority, which provide
            that we pay no income tax in the Philippines for four years pursuant
            to our Board of Investments non-pioneer status and Philippine
            registration. Our current income tax holidays expire at staggered
            dates beginning in 2006 and ending in 2008, and we intend to apply
            for extensions. However, these tax holidays may or may not be
            extended. We believe that as our Philippine tax holidays expire, (i)
            gross income (defined for this purpose to mean the amount of our
            cost-plus transfer payments to our Philippine subsidiary in excess
            of certain allowable deductions) attributable to activities covered
            by our Philippine Economic Zone Authority registrations will be
            taxed at 5% preferential rate, and (ii) our Philippine net income
            attributable to all other activities (including activities
            previously covered by our Board of Investments registrations) will
            be taxed at the regular Philippine corporate income tax rates of
            32%. Our effective overall Philippine income tax rate will vary as
            the revenue generating activity at each outsourcing center becomes
            taxable upon expiration of the income tax holiday applicable to that
            center.

WE MAY CHOOSE TO EXPAND OPERATIONS OUTSIDE OF THE PHILIPPINES AND MAY NOT BE
SUCCESSFUL.

We may consider expanding to countries other than the Philippines. We cannot
predict the extent of government support, availability of qualified workers, or
monetary and economic conditions in other countries. Although some of these
factors may influence our decision to establish operations in another country,
there are inherent risks beyond our control, including exposure to currency
fluctuations, political uncertainties, foreign exchange restrictions and foreign
regulatory restrictions. One or more of these factors or other factors relating
to international operations could result in increased operating expenses and
make it more difficult for us to manage our costs and operations, which could
harm our business and negatively impact our operating results.

WE ANTICIPATE THAT WE WILL ENCOUNTER A LONG SALES AND IMPLEMENTATION CYCLE
REQUIRING SIGNIFICANT RESOURCE COMMITMENTS BY OUR CLIENTS, WHICH THEY MAY BE
UNWILLING OR UNABLE TO MAKE.

Our service delivery involves significant resource commitments by both our
clients and ourselves. Potential clients' senior management and a significant
number of our clients' personnel must evaluate our proposals in various
functional areas, each having specific and often conflicting requirements.
Despite the significant expenditures of funds and management resources, the
potential client may not engage our services. Our sales cycle generally ranges
up to six to twelve months or longer. Failure to close may have a negative
impact on revenue and income as these resources could otherwise be used for a
paying client. We believe the following factors enter into a client's decision:

        o   The clients' alternatives to our services, including willingness to
            replace their internal solutions or existing vendors;

        o   The clients' budgetary constraints, and the timing of budget cycles
            and approval processes;

        o   The clients' willingness to expend the time and resources necessary
            to integrate their systems with our systems and network; and

        o   The timing and expiration of our clients' current outsourcing
            agreements for similar services.

Once a client engages us at the conclusion of the sales process, it usually
takes from four to six weeks to integrate the client's systems with ours. It may
take as long as three months thereafter to ramp-up our services, including
training, to satisfy the client's requirements.

WE MAY NOT BE ABLE TO MANAGE OUR GROWTH EFFECTIVELY.

        Since we commenced our contact center business, we have expanded rapidly
        and intend to continue expansion. Continued growth could place a strain
        on our management, operations and financial resources. Our
        infrastructure, facilities and personnel may not be adequate to support
        our future operation or to adapt effectively to future growth. As a
        result, we may be unable to manage our growth effectively, in which case
        our operating costs may increase at a faster rate than the growth in our
        revenues, our margins may decline and we may incur losses.

                                       18
<PAGE>

WE MAY EXPERIENCE SIGNIFICANT EMPLOYEE TURNOVER RATES IN THE FUTURE AND WE MAY
BE UNABLE TO HIRE AND RETAIN ENOUGH ADEQUATELY TRAINED EMPLOYEES TO SUPPORT OUR
OPERATIONS.

The BPO industry is labor intensive and our success depends on our ability to
attract, hire, and retain qualified employees. We compete for qualified
personnel with companies in our industry and in other industries and this
competition is increasing in the Philippines as the BPO industry expands. Our
growth requires that we continually hire and train new personnel. The BPO
industry, including the customer management services industry, has traditionally
experienced high employee turnover. A significant increase in the turnover rate
among our employees would increase our recruiting and training costs and
decrease operating efficiency and productivity, and could lead to a decline in
demand for our services. If this were to occur, we would be unable to service
our clients effectively and this would reduce our ability to continue our growth
and operate profitably. We may be unable to continue to recruit, hire, train and
retain a sufficient labor force of qualified employees to execute our growth
strategy or meet the needs of our business.

OUR OPERATIONS COULD SUFFER FROM TELECOMMUNICATIONS OR TECHNOLOGY DOWNTIME,
DISRUPTIONS OR INCREASED COSTS.

We are highly dependent on our computer and telecommunications equipment and
software systems. In the normal course of our business, we must record and
process significant amounts of data quickly and accurately to access, maintain
and expand the databases we use for our services. We are also dependent on
continuous availability of voice and electronic communication with customers. If
we experience interruption on our telecommunications network, we may experience
data loss or a reduction in revenues. These disruptions could be the result of
errors by our vendors, clients or third parties or electronic or physical
attacks by persons seeking to disrupt our operations, or the operations of our
vendors, clients or others. For example, we currently depend on two significant
vendors for facility storage and related maintenance of our main technology
equipment and data at our U.S. data centers. Any failure of these vendors to
perform these services could result in business disruptions and impede our
ability to provide services to our clients. A significant interruption of
service could have a negative impact on our reputation and could lead our
present and potential clients not to use our services. The temporary or
permanent loss of equipment or systems through casualty or operating malfunction
could reduce our revenues and harm our business.

FAILURE TO PERFORM MAY RESULT IN REDUCED REVENUES OR CLAIMS FOR DAMAGES.

Failures to meet service requirements of a client could disrupt the client's
business and result in a reduction in revenues or a claim for substantial
damages against us. For example, some of our agreements may have standards for
service that, if not met by us, may result in reduced payments. In addition,
because many of our projects are business-critical projects for our clients, a
failure or inability to meet a client's expectations could seriously damage our
reputation and affect our ability to attract new business. To the extent that
our contracts contain limitations on liability, such contracts may be
unenforceable or otherwise may not protect us from liability for damages.

UNAUTHORIZED DISCLOSURE OF SENSITIVE OR CONFIDENTIAL CLIENT AND CUSTOMER DATA,
WHETHER THROUGH BREACH OF OUR COMPUTER SYSTEMS OR OTHERWISE, COULD EXPOSE US TO
PROTRACTED AND COSTLY LITIGATION AND CAUSE US TO LOSE CLIENTS.

We may be required to collect and store sensitive data in connection with our
services, including names, addresses, social security numbers, credit card
account numbers, checking and savings account numbers and payment history
records, such as account closures and returned checks. If any person, including
any of our employees, penetrates our network security or otherwise
misappropriates sensitive data, we could be subject to liability for breaching
contractual confidentiality provisions and/or privacy laws. Penetration of the
network security of our data centers could have a negative impact on our
reputation and could lead our present and potential clients to choose other
service providers.

WE MAY MAKE ACQUISITIONS THAT PROVE UNSUCCESSFUL OR DIVERT OUR RESOURCES.

We completed the acquisition of a domestic contact center company with a
facility in the Philippines in January, 2005. We may also consider acquisitions
of other complementary companies in our industry. We have no substantial
experience in completing acquisitions of other businesses, and we may be unable
to successfully complete this or future acquisitions. As we acquire other
businesses, we may be unable to successfully integrate these businesses with our
own and maintain our standards, controls and policies. Acquisitions will place
additional constraints on our resources by diverting the attention of our
management from existing operations. Through acquisitions, we may enter markets
in which we have little or no experience. Any acquisition may result in a
potentially dilutive issuance of equity securities, the incurrence of debt and
amortization of expenses related to intangible assets, all of which could lower
our margins and harm our business. We may also require the approval of our note
holders which they may not agree to give.

                                       19
<PAGE>

OUR INDEPENDENT AUDITOR'S REPORT WITH RESPECT TO OUR 2004 CONSOLIDATED FINANCIAL
STATEMENTS.

The independent auditor's report for our 2004 financial statements contains a
"going concern qualification". We cannot give assurance that possible adverse
financial consequences will not continue.

WE SERVE MARKETS THAT ARE HIGHLY COMPETITIVE AND WE MAY BE UNABLE TO COMPETE
WITH BUSINESSES THAT HAVE GREATER RESOURCES THAN WE DO.

We face significant competition for outsourced business process services and
expect that competition will increase. We believe that, in addition to prices,
the principal competitive factors in our markets are service quality, sales and
marketing skills, the ability to develop customized solutions and technological
and industry expertise. While numerous companies provide a range of outsourced
business process services, we believe our principal competitors include our
clients' own in-house customer service groups, including, in some cases,
in-house groups operating offshore, offshore outsourcing companies and
U.S.-based outsourcing companies. The trend toward offshore outsourcing,
international expansion by foreign and domestic competitors and continuing
technological changes will result in new and different competitors entering our
markets. These competitors may include entrants from the communications,
software and data networking industries or entrants in geographic locations with
lower costs than those in which we operate.

We have existing competitors for our BPO business, and may in the future have
new competitors, with greater financial, personnel and other resources, longer
operating histories, more technological expertise, more recognizable names and
more established relationships in industries that we currently serve or may
serve in the future. Increased competition, our inability to compete
successfully against current or future competitors, pricing pressures or loss of
market share could result in increased costs and reduced operating margins,
which could harm our business, operating results, financial condition and future
prospects.

WE HAVE A SUBSTANTIAL NUMBER OF SHARES THAT MAY BECOME FREELY TRADABLE AND COULD
THEREFORE RESULT IN A REDUCED MARKET PRICE.

As of March 31, 2005, we had an aggregate of 12,150,356 shares of our common
stock issued and outstanding, of which approximately 7,693,000 are "restricted
securities". These shares may be sold only in compliance with Rule 144 under the
Securities Act 1933, as amended, or other exemptions from the registration
requirements of the Securities Act. Rule 144 provides, in essence, that a person
holding restricted securities for a period of one year may sell, in brokers'
transactions or to market makers, an amount not exceeding 1% of the outstanding
class of securities being sold, or the average weekly reported volume of trading
of the class of securities being sold over a four-week period, whichever is
greater, during any three-month period. Persons who are not our affiliates and
who have held their restricted securities for at least two years are not subject
to the volume or transaction limitations. Substantially all of our presently
issued shares as well as over 800,000 shares issuable upon conversion of our
preferred stock are presently eligible for sale pursuant to Rule 144 subject to
the foregoing limitations. The sale of a significant number of these shares or
the shares eligible for resale under Rule 144 in the public market may adversely
affect prevailing market prices of our shares.

IF OUR SHARES ARE NOT LISTED ON A STOCK EXCHANGE, THE TRADING OF OUR SECURITIES
MAY BE SUBJECT TO RESTRICTION.

Our stock is currently traded on the OTC Bulletin Board. Trading volume of OTC
Bulletin Board stocks has been historically lower and more volatile than stocks
traded on an exchange. In addition we may be subject to rules of the Securities
and Exchange Commission that impose additional requirements on broker-dealers
when selling penny stocks to persons other than established customers and
accredited investors. The relevant Securities and Exchange Commission
regulations generally define penny stocks to include any equity security not
traded on an exchange with a market price (as defined in the regulations) of
less than $5 per share. Under the penny stock regulations, a broker-dealer must
make a special suitability determination as to the purchaser and must have the
purchaser's prior written consent to the transaction. Prior to any transaction
in a penny stock covered by these rules, a broker-dealer must deliver a
disclosure schedule about the penny stock market prepared by the Securities and
Exchange Commission. Broker-dealers must also make disclosure concerning
commissions payable to both the broker-dealer and any registered representative
and provide current quotations for the securities. Finally, broker-dealers are
required to send monthly statements disclosing recent price information for the
penny stock held in an account and information on the limited market in penny
stocks.

                                       20
<PAGE>

WE DO NOT INTEND TO NOR CAN WE PAY DIVIDENDS ON OUR COMMON STOCK.

We have not paid any dividends on our common stock. Our notes and preferred
stock prohibit the payment of dividends. There are no plans to declare dividends
in the immediate future. Our Series A Convertible Preferred Stock provides for
8% cumulative dividends to be paid annually. We have not paid cash dividends
called for under our Preferred Stock. An amount equal to "accrued" dividends is
added to the stated value of the preferred stock and upon conversion of the
stated value may also be converted into common shares.

OUR STOCK PRICE, LIKE THAT OF MANY SMALL COMPANIES, HAS BEEN AND MAY CONTINUE TO
BE VOLATILE.

We expect that the market price of our common stock will fluctuate as a result
of variations in our quarterly operating results and other factors beyond our
control. These fluctuations may be exaggerated if the trading volume of our
common stock is low.

ITEM 2.     PROPERTIES

UNITED STATES

Miami, Florida
Our domestic corporate headquarters is located at 11900 Biscayne Boulevard,
Suite 700, Miami, Florida 33138, where we lease approximately 16,810 square feet
on floors three and seven. This lease will expire on April 1st, 2008.

In addition to the Miami office, we also lease approximately 1,300 square feet
of space at 100 North Biscayne Blvd., Miami, Florida 33132, in downtown Miami.
This lease expires on June 30th, 2009. This office is used primarily as a base
for our IT operations and employees. In the same building, we also house our
network operations center. For this purpose, we occupy a 200 square foot "cage"
pursuant to a Building Access License Agreement expiring in 2006.

West Virginia
We have a call center operating out of Wheeling, West Virginia, which is an
office containing approximately 9,000 square feet. The lease term ends October
14, 2006 and there is an option to renew for an additional five (5) year period.

North Carolina
In Concord, North Carolina, we have a network operations/sales verification
office on the third floor of a building containing approximately 5,275 square
feet. The original term of the lease ended on February 28, 2005 and has been
extended pursuant to the contractual option for an additional three (3) year
period.

Kansas
We lease a facility in Pittsburg, Kansas consisting of approximately 20,000
square feet, used primarily for call center purposes. The lease term is for five
(5) years ending in May 2005. There is an option to renew for successive one (1)
year periods.

Minnesota
We lease premises consisting of 12,600 square feet in Duluth, Minnesota for the
purpose of general offices/call center operations. The lease terminates on March
9, 2007 with an option to extend for an additional five (5) year period.

PHILIPPINES

Eastwood
Our Philippine headquarters, located in Manila, consists of eleven floors and
approximately 94,100 square feet, with approximately 42,000 square feet reserved
for parking. From a separate landlord, we also lease the twelfth floor
consisting of 5,651 square feet for executive offices and meeting and conference
space.

Alabang
In connection with the acquisition of contact center assets in Alabang,
Philippines, we received an assignment of a lease for the facility where the
acquired assets are located. The assigned lease expires in 2006. The premises
consist of two floors for a total of approximately 14,000 square feet. We have
recently entered into an arrangement with a domestic contact center company to
operate the Alabang facility.

                                       21
<PAGE>

Clark
We have entered into a sublease for two buildings located at the Clark Special
Economic Zone in Clark Field, Philippines. Both will be used to house call
center operations. One building consists of approximately 40,000 square feet
with 11,000 square feet of parking area; the other building consists of about
21,000 square feet with 6,000 square feet of parking area. The leases are
coterminous and expire on December 31, 2009.

Aseana
We have entered into a ten year renewable lease for approximately 65,000 square
feet. The space is the top level of a two-story building that should be ready
for occupancy in the late second quarter of 2006. It is located in the Aseana
area of Manila.

Makati City
In connection with the acquisition of a domestic call center company, Innovative
Marketing Strategies, Inc., we have obtained a leased call center facility
located in Makati City, Philippines. The center is the eighth floor of the
building, consisting of approximately 15,000 square feet. The lease expires on
October 31, 2005.

We believe that the facilities and additional or alternative space available to
us will be adequate to meet our needs in the near term.

ITEM 3. LEGAL PROCEEDINGS

All our current legal proceedings arise out of our ISP business. We recently
settled several governmental proceedings and investigations. We believe the
proceedings and their settlement will not have a significant effect on our
operations since we no longer actively market our ISP business and in any event
we believe we are in substantial compliance with applicable law.

GOVERNMENT ACTIONS RELATING TO ISP BUSINESS
On October 30, 2003 we and our subsidiaries, and an officer, William Rhodes,
were sued and served with an ex parte temporary restraining order, asset freeze,
order permitting expedited discovery, order appointing temporary receiver, and
an order to show cause in an action commenced by the Federal Trade Commission in
the United States District Court for the Southern District of New York. The
order covered each of these entities, as well as their parents, subsidiaries,
and affiliates. The proceeding arises out of alleged failures of our
subsidiaries to comply with regulations relating to the conversion of trial
customers to paying customers (the "free to pay" rules). We vigorously deny any
wrongdoing and believe that our business practices are in compliance with all
applicable laws. As of November 19th, 2003 without any finding of wrongdoing, we
agreed to enter into a preliminary injunction with the Federal Trade Commission.
As a result of the above action, we experienced substantial business disruption,
incurred significant expense and reduction of our working capital.

In July 2004 we executed a Stipulated Final Judgment for Permanent Injunction in
our FTC Proceeding. This stipulation was prepared by the Northeast Region staff
of the FTC and sent for approval by the Commission as required by the rules of
the Commission. The Stipulation specifically noted that there was no finding of
wrong doing on our part. Under the terms of the Stipulation we are required not
to violate the free to pay conversion rules and to adhere to specific procedures
to insure compliance including specific script requirements. We must record each
call in its entirety. For a two-year period we must continue to refund all
amounts to customers who were billed improperly. We have deposited $175,000 in
escrow with our counsel to insure payment. The former monitor will continue to
serve as a referee to insure compliance with the stipulation and to resolve
disputes over refunds. The Stipulated Final Judgment for Permanent Injunction
was rejected by the Interim Board of the FTC and sent back to the Northeast
Regional Office for minor changes in language. The Northeast Regional Office
drafted additional language in keeping with the Interim Board's recommendations;
specifically, among other things, the additional language called for the
escrowed funds to be kept in an interest-bearing account and for the FTC to
retain any escrowed funds after the escrow account is terminated in accordance
with the Stipulated Final Judgment for Permanent Injunction. Such funds are to
be transferred to the FTC to be used for equitable relief, such as consumer
redress and administrative expenses associated with any redress. We signed the
revised Stipulated Final Judgment for Permanent Injunction in late January 2005,
and returned the document to the Northeast Regional Office for approval by the
FTC.

                                       22
<PAGE>

On January 17, 2003, the Attorney General of Missouri filed an application for a
temporary restraining order and preliminary injunction against certain of our
subsidiaries alleging "cramming." We entered into a negotiated consent to the
entry of a temporary restraining order and preliminary injunction because the
consent did not hinder the way our subsidiaries conduct their business. We filed
an answer that vigorously denies any wrongdoing and argues that the allegations
against us are without any basis in fact and without merit. In July 2004, we
entered into a Stipulation for Consent Judgment and Permanent Injunction to
settle this proceeding. Pursuant to the stipulation we paid $7,500 for
attorney's fees and costs incurred by the state of Missouri, and $1,770 for
restitution for a total of $9,270. The provisions of the preliminary injunction
continue.

On May 22, 2003, the Attorney General of North Carolina filed a complaint
alleging "cramming" against certain of our subsidiaries, as well as a motion for
temporary restraining order and preliminary injunction. As in the case with the
Missouri action and for the same reasons, we entered into a negotiated consent
to the entry of a temporary restraining order and preliminary injunction. With
this Consent Order there is no adjudication of any issue of law or fact, and we
do not admit liability for any of the matters alleged within the Complaint. In
January 2005, a draft Permanent Consent Order was submitted to us for
consideration. The matter is continuing as of March 31, 2005.

GOVERNMENT INVESTIGATIONS RELATING TO OUR ISP BUSINESS
From time to time, we also have received investigative process from various
other states. In 2003, Attorney Generals of Florida, Texas, Minnesota and Kansas
issued process requesting certain information and documentary material
concerning the operations of our ISP subsidiaries.

We recently settled the investigations in Florida and Kansas. In Kansas, we
entered into a consent judgment that requires compliance with the Kansas
Consumer Protection Act, contains a denial that we committed unfair and
deceptive practices, and provides for payment of $10,000 for investigative fees
and expenses. We entered into an agreement with Florida that contained similar
terms and conditions as the FTC preliminary agreement and provided for a payment
of $100,000 for investigative costs, with no finding of wrongdoing.

PRIVATE ACTION
On January 30, 2004 Dixon Aviation, Inc. commenced an action in the Circuit
Court of Alabama for Barbour County against an officer, NOL, Liberty, a billing
house, a LEC and us. This litigation was brought as a class action complaint for
declaratory and injunctive relief, alleging that the Defendants engaged in
cramming. We deny all liability and believe we have valid defenses to these
claims (including recorded verifications). Our motion to remove the action to
federal court has been denied. Pursuant to our arrangement with the LEC and
billing house defendant we are obligated to indemnify the LEC and billing
company defendants for their legal costs and any liability. On November 10,
2004, the Court issued a Scheduling order that directed that only discovery
pertinent to class certification be conducted, and that discovery related solely
to the merits of the claims be stayed. The Order defined the issues and laid out
the time scheduling for each phase of pre-certification discovery. In February
2005, Plaintiff's Counsel asked our Counsel to refrain from taking depositions
and incurring costs until such time as Plaintiff's Counsel could speak to his
client, Dixon Aviation. The Company is unable to determine the likelihood of an
unfavorable outcome or estimate the amount or range of a potential loss.

We are unable to determine the likelihood of an unfavorable outcome or estimate
the amount of range of a potential loss.

On November 1, 2004, one of our subsidiaries, Epixtar International Contact
Center Group, Ltd., filed a Complaint in the United States District Court
Southern District of Florida against Krane Products Corp. ("Krane"), claiming
breach of contract and demanding payment for telecommunications services
rendered. Our subsidiary had entered into an agreement with Krane, effective
March 1, 2004, to provide contact or "call" center services to Krane. Five
months later, Krane notified our subsidiary that the program of services was to
be halted immediately. There were outstanding invoices for the services rendered
by the our subsidiary and demand was made by our subsidiary for immediate
payment. No payment was made. Our subsidiary is seeking relief in the form of
actual damages and contactual termination damages, together totaling $1,263,706,
plus attorney's fees. Krane filed a Motion to Dismiss, which was denied by the
Court on January 5, 2005. Krane has since answered the Complaint and has
countered-claimed for damages (amount not specified other than jurisdictional
amount), fees and costs, and alleging that we failed to perform and deliver the
services as set forth in the Agreement. At the present time we are unable to
predict the outcome of this matter or estimate the value of a recovery or the
amount of a potential loss.

SETTLED ARBITRATION PROCEEDINGS
ETelecare International commenced an arbitration proceeding pursuant to an
agreement to provide call center services to us. ETelecare had claimed that we
had failed to pay for the service rendered. We denied liability and filed a
counterclaim for the return of $3,293,038 paid to eTelecare alleging eTelecare
engaged in systemic fraudulent activity that caused us damage. This proceeding
was settled by our payment of $85,000 on December 9, 2004

LAWSTAR, INC. commenced an arbitration proceeding to recover $1,000,000 in
connection with an agreement to provide a legal service access plan, marketed in
a private label environment to B2B Advantage, Inc.'s small business customer.
Lawstar has claimed that B2B has breached the contract and failed to pay for the
services rendered. B2B denies liability because the contract was terminated and
claimant was fully paid pursuant to the terms of the contract settlement. We
have agreed to settle the action for $225,000 payable in installments.

                                       23
<PAGE>

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

At the Company's Special Meeting in lieu of an Annual Meeting for 2004 held on
February 15, 2005, the following persons were elected as directors by the
following vote:

                          For      Against   Abstain
                       ---------   -------   -------
Ilene Kaminsky         6,406,000      0         0
David Srour            6,406,000      0         0
Irving Greenman        6,406,000      0         0
David Berman           6,406,000      0         0
John W. Cooney         6,406,000      0         0
Kenneth Elan           6,406,000      0         0
Sheldon Goldstein      6,406,000      0         0
Robert Palmer          6,406,000      0         0

Further, the shareholders ratified an amendment to the Company's 2001 Stock
Option Plan to change the number of shares subject to the Plan from 4,000,000
shares of the Company's common stock to 6,000,000 shares by the following vote:

                          For      Against   Abstain
                       ---------   -------   -------
                       6,406,000      0         0

                                     PART II

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

Market Information.

Our Common Stock is presently quoted under the symbol "EPXR," on the OTC
Bulletin Board. Prior to January 2003, our symbol was "GAHI". In January 2003,
the symbol was changed as a result of our name change. Set forth below are the
high and low closing bid quotations for our common stock for each quarter of the
last two full fiscal years as reflected on the OTC Bulletin Board. The
quotations listed below represent prices between dealers and do not include
retail mark-up, markdown or commission, and there can be no assurance that they
represent actual transactions.

                                FISCAL YEAR 2004

                       Quarter      High        Low
                       -------    --------    --------
                         1st      $   5.20    $   2.85
                         2nd      $   5.29    $   1.95
                         3rd      $   2.30    $    .80
                         4th      $   1.24    $    .52

                                FISCAL YEAR 2003

                       Quarter      High        Low
                       -------    --------    --------
                         1st      $   4.15    $   1.75
                         2nd      $   8.85    $   2.75
                         3rd      $   6.45    $   3.55
                         4th      $   6.40    $   2.75

RECENT SALES OF UNREGISTERED SECURITIES.

 We have previously reported sales of substantially all unregistered securities
issued by us during 2004 in our Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K filed in 2004. Additional sales are described below.

Preferred Stock Conversions

During 2004, holders of our convertible preferred stock elected to convert 7,010
shares of preferred stock into 443,773 shares of our common stock, of which
55,847 shares were issued in 2005. The issuance of these securities was exempt
from the registrations requirements of the Securities Act pursuant to the
provisions of Section 3(a)(9) thereof.

                                       24
<PAGE>

Joint Notes

In 2004 we sold $2,947,500 principal amount of Joint 5% Unsecured Subordinated
Convertible Promissory Notes due May 2007 and related securities sold in units
pursuant to a private placement by us and our wholly subsidiary Voxx
Corporation.

The securities sold have not been registered under the Securities Act of 1933
nor will the securities offered be registered These securities may not be
offered or sold in the United States by the Investors absent registration under
the Securities Act of 1933 or an applicable exemption from registration
requirements.

The sale of these securities were made solely to accredited investors without
any general advertisement or solicitation and all of the securities issued or
issuable therein have contained an appropriate restrictive legend. The
securities were issued pursuant to an exemption from registration under Section
4(2) of the Securities Act of 1933, as amended, and as provided under Regulation
D promulgated thereunder.

Security Holders

As of December 31, 2004, there were approximately 60 holders of record of our
common stock. Because a substantial portion of our shares are held by a
depository company in nominee name, we believe the number of beneficial owners
of the securities is substantially greater than 60.

Dividends

We have not paid any dividends on our common stock. Our lenders prohibit the
payment of dividends. There are no plans to declare dividends in the immediate
future. Our Series A Convertible Preferred Stock provides for 8% cumulative
dividends to be paid annually. Upon conversion, an amount equal to that accrued
dividend is added to the stated value of the preferred stock and may be
converted into shares of common stock.

                      EQUITY COMPENSATION PLAN INFORMATION

<TABLE>
<CAPTION>
                                                                                 NUMBER OF SECURITIES
                                                                                REMAINING AVAILABLE FOR
                                                                                 FUTURE ISSUANCE UNDER
                              NUMBER OF SECURITIES TO      WEIGHTED-AVERAGE       EQUITY COMPENSATION
                              BE ISSUED UPON EXERCISE      EXERCISE PRICE OF       PLANS (EXCLUDING
                              OF OUTSTANDING OPTIONS,    OUTSTANDING OPTIONS,   SECURITIES REFLECTED IN
PLAN CATEGORY                   WARRANTS AND RIGHTS       WARRANTS AND RIGHTS         COLUMN (A))
-------------------------     -----------------------    --------------------   -----------------------
<S>                                  <C>                         <C>                    <C>
Equity compensation plans
approved by security
holders(1)                           4,190,667                   $ 3.37                 1,809,333

Equity compensation plans
not approved by security                     -                        -                         -
holders(1)

TOTAL                                4,190,667                   $ 3.37                 1,809,333
</TABLE>

(1)  At December 31, 2004, there were 1,983,333 exercisable stock options under
the 2001 Plan with a weighted average price of $3.08.

                                       25
<PAGE>

ITEM 6.     SELECTED FINANCIAL DATA

The following table sets forth our selected financial and operating information
as of and for each of the years ended December 31, 2001 through 2004, which has
been derived from our audited consolidated financial statements.

<TABLE>
<CAPTION>
                                                                    AT OR FOR THE YEARS ENDED DECEMBER 31,
                                                       ----------------------------------------------------------------
                                                           2004             2003             2002             2001
                                                       -------------    -------------    -------------    -------------
<S>                                                    <C>              <C>              <C>              <C>
RESULTS OF OPERATIONS
  Operating revenue                                    $  17,734,867    $  36,404,803    $  26,250,851    $   1,189,723
  Cost of revenue                                          5,770,011       16,725,774       17,781,967        1,684,615
                                                       -------------    -------------    -------------    -------------
    Gross profit
                                                          11,964,855       19,679,029        8,468,884         (494,892)
  Operating expenses                                      18,755,924       15,083,441       10,332,086
                                                       -------------    -------------    -------------    -------------
  Operating income (loss)                                 (6,791,069)       4,595,588       (1,863,202)        (494,892)
  Non operating
      Gain (loss) on extinguishment of debt                1,140,537                -       (9,550,700)      (2,304,865)
      Amortization, beneficial conversion feature
       of convertible debt                                (1,873,968)               -                -                -
  Factoring fees on accounts receivable                     (371,003)        (311,346)         (75,402)               -
      Interest expense                                      (625,102)        (189,268)        (422,300)         (90,597)
      Other financing expenses                            (1,588,939)         (41,666)               -
      Amortization of purchased intangibles                        -                -                -       (1,950,241)
      Other non operating income (expense)                   380,616          325,852                -
                                                       -------------    -------------    -------------    -------------
  Income (loss) from continuing operations
                                                          (9,728,927)       4,379,160      (11,911,604)      (4,840,595)
  Loss from discontinued operations and write-off
   of related goodwill                                             -                -          (43,318)     (11,678,492)
                                                       -------------    -------------    -------------    -------------
  Net income (loss)
                                                          (9,728,927)       4,379,160      (11,954,922)     (16,519,087)
  Cumulative dividends and beneficial conversion
   feature of preferred stock                               (176,792)      (2,072,455)               -                -
                                                       -------------    -------------    -------------    -------------
  Net income available to common shareholders          $  (9,905,719)   $   2,306,705    $ (11,954,922)   $ (16,519,087)
                                                       -------------    -------------    -------------    -------------
PER SHARE DATA
  Net income (loss)  per share from continuing
   operations (diluted)                                $       (0.89)   $        0.16    $       (1.14)   $       (2.13)
  Net income (loss) per share (diluted)                        (0.89)            0.16            (1.14)           (2.13)
AVERAGE COMMON SHARES OUTSTANDING
    Basic                                                 11,140,814       10,554,450       10,503,000        7,758,693
    Diluted                                               11,140,814       14,721,639       10,503,000        7,758,693
FINANCIAL POSITION
    Accounts receivable                                $   4,454,152    $   5,609,675    $   3,802,326    $     731,511
    Capital assets                                         5,103,409        1,263,844          406,971          201,466
    Total assets                                          18,048,715       12,982,794        8,583,145       17,879,381
    Total debt                                            12,680,228        2,514,466        2,836,937                -
    Stockholders' equity (deficit)                     $    (733,223)   $   5,397,988    $  (2,147,484)   $  13,488,525
    Common shares outstanding                             11,544,219       10,643,734       10,503,000       10,503,000
</TABLE>

                                       26
<PAGE>

ITEM 7.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS

SAFE HARBOR STATEMENT  - FUTURE UNCERTAINTIES

The following discussion should be read in conjunction with the "Selected
Financial Data" and the Company's consolidated financial statements and
accompanying notes, which appear elsewhere in this Annual Report on Form 10-K.
The following discussion contains forward-looking statements that involve risks
and uncertainties. The Company's actual results could differ materially from
those anticipated in these forward-looking statements as a result of various
factors, including those discussed below and elsewhere in this Annual Report on
Form 10-K, particularly under the heading "Risk Factors."

OVERVIEW OF SOURCES OF REVENUES AND COSTS

The Company engages in two primary lines of business: Business Process
Outsourcing (BPO) concentrating on contact center activities and Internet
Service Provider (ISP). Through December 31, 2003, the Company's revenues were
mainly derived from the ISP business, which provides Internet services,
including unlimited Internet access and email, to small business subscribers. As
a result of ongoing interaction with the contact center industry as a result of
our ISP business, combined with extensive analysis of the contact center
industry, we made the strategic decision to focus our energies and resources
into developing and operating offshore contact center services. Consequently, we
continue to maintain rather than expand our ISP business and are concentrating
the Company's efforts in the offshore contact center services area.

In 2004, the Company reorganized and transferred the wholly owned subsidiary
(Epixtar BPO Services Corp). to a newly formed, wholly owned subsidiary, Voxx
Corporation. Epixtar BPO is the owner of our existing contact center
subsidiaries and is expected to be the contracting party for service agreements,
which are being performed by Epixtar Philippines IT Enabled Services Corporation
and any other subsidiary that may operate a contact center. Voxx Corporation is
the holding Company for our contact center business Voxx or one of its
subsidiaries will be the owner of any new subsidiaries formed for the Company's
contact center business.

We presently derive our revenues from our contact center business and our ISP
business. Our recent and immediate financial condition and prospects have been
and will be affected by three significant factors:

        o   Our decision to concentrate our focus and resources on our contact
            center business
        o   The suspension of marketing of our ISP Services
        o   The FTC Proceeding

                                       27
<PAGE>

Contact Center Business

We began developing our contact center business in late 2003 and now have
approximately 1,400 operational seats in the Philippines and the United states
supporting several major clients. We are actively marketing our contact center
services and, depending on financing, will continue to build out infrastructure
and hire additional personnel.

In connection with our transition to a contact center business we hired
additional executives and personnel with expertise in the development and
management of contact centers. We have also hired business development personnel
in support of these efforts. We also incurred costs for due diligence, as well
as professional fees and travel in conjunction with the establishment of these
contact centers prior to operations. During a substantial portion of this start
up period, our revenues were interrupted or declining.

We began operations at two facilities in the Philippines in the spring of 2004
and now have 1000 operational contact center seats. These activities required
substantial funds for infrastructure, acquisition costs, and facilities
development. We will incur similar costs and use significant funds as we
endeavor to open additional facilities. Some of our capital expenditures may be
satisfied with equipment leases and financing arrangements with landlords. The
amortization of these build out costs will be included in future rental
payments. In addition to these capital expenses, we are incurring and will
continue to incur increased operation expenses such as rent, licenses, payroll
and other administrative expenses.

With our sales efforts beginning to yield new service contracts, integration and
training considerations mean significant contact center revenue will not be
forthcoming until these contracts have somewhat matured. While we may control
some associated ramping costs (managing payroll costs as by only hiring as
required, for example), we anticipate losses during this period. This is due to
the initial investment requirements and timeline required to realize significant
revenue.

The revenues for our contact center business rely upon several factors
including:

o       Sales activities culminating in client contracts
o       The associated ramp time to fulfill these contracts
o       The rate of compensation
o       Operational efficiencies
o       The pace of capacity expansion
o       Our contact center market may be affected by general economic
        conditions, business requirements for telemarketing programs and the
        effect of any future governmental regulations.

Revenues from contact center operations are derived from telemarketing,
televerification, and customer support services provided to clients based on
individual business requirements. Depending on the contract under which services
are provided, the company may earn revenues on a commission basis, a performance
basis, an hourly basis, or a blend of the three.

Cost of sales consists of direct payroll costs, recruitment and training of
personnel and communication costs.

On an ongoing basis, the most significant expense of our contact center business
will be labor costs for agents, supervisors and administrators as well as
commission paid to brokers. As indicated above, direct labor costs are part of
cost of sales and other labor costs will be expensed under selling, general and
administrative expenses. We also incur substantial rental payments for our
leased facilities. Depreciation expenses will continue to increase because of
increased equipment purchases. Equipment lease payments will also increase for
the same reason as well as amortization of landlord financed facility
improvements. Because of increased borrowing for our facilities and equipment,
interest expenses should also increase.

ISP Business

While we are not presently marketing our ISP business, we are continuing to
service our existing customer base. Our ISP business essentially consisted of
the marketing of value-added ISP services primarily through third party
facilities. We do not operate our own network but use third parties to obtain
access to the Internet for our clients. Prior to 2004 when we suspended
marketing efforts, the key to this business was the marketing effort to obtain
customers. The customer base grew as a direct result of the marketing efforts.
ISP revenues are derived from monthly fee charges obtained through local
exchange carriers (LECs) facilitated billing in the past. ISP revenues and cash
flow were affected by several factors:

        1)  Hold backs and reserves by our billing houses and LECs
        2)  Regulatory actions
        3)  Customer cancellations

Our cost of sales included: (1) the direct costs of customer acquisition:
telemarketing and fulfillment and (2) the costs of maintaining our customer base
including customer care and telecommunication costs for Internet access.

                                       28
<PAGE>

The telemarketing and fulfillment costs were incurred upfront at customer
activation. These expenses represented the majority of the cost of sales.
Conversely, the costs of maintaining our customer base represent a much smaller
proportion of the cost of sales. The latter represent the cost of our current
ISP business.

Historically, we experienced a high cancellation rate among our ISP customers.
This necessitated ongoing marketing efforts to replace and expand our base. The
size of our base was critical from a cash flow standpoint. The free trial
period, high cost of sales, and the length of the collection period, translated
to substantial outlays of cash for customer acquisition prior to the receipt of
associated revenues.

The efforts to increase our customer base were thwarted to a substantial extent
by regulatory action that prevented marketing in certain areas and, for a period
of time, prohibited all marketing activities. As previously discussed, on
October 30, 2003, the Federal Trade Commission enjoined us and certain of our
subsidiaries from marketing and billing our ISP services. In November 2003, we
were permitted to resume marketing efforts. We limited marketing of our ISP
services after November 2003, and in early 2004 elected to concentrate our
efforts on our contact center business. We are still servicing our existing
customer base for relatively nominal cost. Since our customer base now consists
of seasoned customers, both our rate of attrition and bad debt write-off are
lower. Based on current attrition rates we believe we will continue to derive
revenues on a declining basis for several years.

Because we are not marketing the ISP business, our cost of sales has and should
continue to decline, thereby increasing gross profit margins for this business.

FTC PROCEEDING

The proceeding, which commenced in October 2003, temporarily enjoining our ISP
operations, resulted in a reduction of our revenue and increased substantially
our legal expenses. This contributed to resulting losses and deprived us of cash
from operations. These effects were compounded by a temporary asset freeze and
escrow. The combined factors resulted in significantly reduced working capital
and delayed implementation of our new business direction compelling us to
initiate certain cost cutting measures in early 2004. The proceeding has no
additional long-term impact on our business operations because we are no longer
actively marketing ISP services.

CURRENT TRENDS

The trend of our revenue and income over the next several quarters depends upon
several variables, some of which cannot at this time be ascertained
definitively. Revenue from ISP sources will decline as a result of suspended ISP
marketing activity and a declining customer base. During our initial phase of
contact center operations we will incur development and startup associated
losses. Depending on obtaining new contracts and implementing existing ones, we
believe revenues from our contact centers will increase thereby offsetting lost
ISP revenues in the future. Because we have elected to proceed with the
expansion of our contact center business, we will have a need for substantial
capital (as discussed under "Liquidity").

Since we acquired the business of IMS in January 2005, our contact center
revenues and overall revenue has increased. Since the acquired company has been
incurring losses, there is no assurance we will be able to operate this new
subsidiary profitably.

RESULTS OF OPERATIONS

Set forth below are comparisons of financial results for the years ended
December 31, 2004 and 2003 and 2002. These comparisons are intended to aid in
the discussion that follows. This discussion and analysis should be read in
conjunction with the consolidated financial statements and accompanying notes,
which appear elsewhere in this Annual Report on Form 10-K.

                                       29
<PAGE>

YEAR ENDED DECEMBER 31, 2004 COMPARED WITH YEAR ENDED DECEMBER 31, 2003

<TABLE>
<CAPTION>
                                                Years Ended December 31,
                              ------------------------------------------------------------
                                                                        Variance
                                                              ----------------------------
                                  2004            2003             $               %
                              ------------    ------------    ------------    ------------
<S>                           <C>             <C>             <C>                   <C>
Revenue                       $ 17,734,867    $ 36,404,803    $(18,669,936)          (51.3)%
Cost of  revenue                 5,770,011      16,725,774     (10,955,763)          (65.5)
Gross profit                    11,964,856      19,679,029      (7,714,173)          (39.2)
Operating expenses
 (exclusive of depreciation)    17,387,261      14,869,142       2,518,119            16.9
Depreciation                     1,368,662         214,299       1,154,363           538.7
Gains on  extinguishment of
 debt and settlement of
 accounts payable                1,561,933         324,966       1,236,967           380.6
Other non operating
 expenses, net                  (4,499,792)       (541,394)     (3,958,398)          731.1
                              ------------    ------------    ------------
Net loss                      $ (9,728,926)   $  4,379,160    $(14,108,086)         (322.2)
                              ============    ============    ============
</TABLE>

Revenue for the year ended December 31, 2004 decreased from $ 36,404,803 in 2003
to $17,734,867 in 2004, or 51.3%. Since we determined to focus our resources
solely on our contact center business, we are no longer marketing our ISP
services, therefore no new ISP customers have been added. As a result, our ISP
revenue has been declining. We expect a gradual continued decline of revenues
from the ISP business and an increase in revenue from our contact center
business. Our decline in revenues occurred notwithstanding revenue was derived
from our contact center business for 2004.

Cost of revenue for 2004 includes the costs of providing ISP services to our
customer base consisting primarily of customer care costs and telecommunication
costs. Since we did not market ISP services in 2004 we did not incur ISP
telemarketing and fulfillment costs which accounted for a majority of these
costs. As a result, our cost-of-sales declined significantly in 2004 and were
$10,955,763 lower in 2004, compared with 2003. The forgoing decline occurred
notwithstanding an increase in our contact center business costs of sales,
consisting primarily of labor, telecommunication and commissions.

The gross profit for 2004 was $11,964,856 compared to $19,679,029 in 2003, or a
decline of 39.2%. The decrease in gross profit resulted from lower sales. Our
gross profit margins however increased substantially from 54.1% for the Twelve
month period in 2003 as compared to the Twelve month period for 2004 of 67.5%
resulting primarily from reduced ISP costs of sales as described above.

Depreciation expense for 2004 was $1,368,662 compared to $214,299 in 2003. The
increase in depreciation expense is due to depreciation of significant
acquisitions of property and equipment related to the development of call
centers in the Philippines in 2004.

Total operating expenses (exclusive of depreciation) for 2004 was $17,397,261 as
compared to $14,869,142 for 2003. Included in these expenses is an increase of
$3,854,165 in selling, general and administrative expenses resulting from
increased salary, travel and professional fees for our contact center business.
This was in part offset by a decline in bad debt expense due to a decrease in
the amount of billing houses as a result of decreased billings from our ISP
business.

Other non-operating expenses for 2004 were $4,499,792 compared to $541,394 in
2003. The increase in other non-operating expenses are due primarily to expenses
associated with the issuance of equity and debt securities during 2004.
Amortization of discounts and other financing expenses amounted to $2,214,041,
and $1,873,968 of amortization expense relating to the beneficial conversion
feature of convertible debt.due to the amortization of discounts on convertible
debt issued during the second quarter of 2004. $7,500,000 of convertible notes
with detachable warrants was issued during the second quarter of 2004. Fair
values assigned to the warrants and beneficial conversion features are charged
to interest expense over the lives of the notes. $1,500,000 of the notes were
repaid or converted in the second quarter, resulting in approximately $1,220,000
of interest related to the warrants and beneficial conversion features being
charged to expense in the second quarter of 2004.

During the third quarter of 2004, we had a gain on extinguishment of debt in the
amount of $859,287 as a result of the modification of the terms of $6,500,000 of
convertible debt. The modification was treated, in accordance with generally
accepted accounting purposes as an extinguishment of the old notes and the
re-issuance of new notes. See Note 6 to the financial statements included
herein. During the second quarter of 2004, we had a gain on extinguishment of
debt of $281,250 as a result of the repayment in cash of certain convertibles.

We did not have any provision for income taxes in 2004 because of the operating
losses and none in 2003 because of a net operating loss carryover from prior
years.

                                       30
<PAGE>

YEAR ENDED DECEMBER 31, 2003 COMPARED WITH YEAR ENDED DECEMBER 31, 2002

<TABLE>
<CAPTION>
                                                Years Ended December 31,
                              ------------------------------------------------------------
                                                                        Variance
                                                  2002        ----------------------------
                                  2003         (Restated)          $               %
                              ------------    ------------    ------------    ------------
<S>                           <C>             <C>             <C>                   <C>
Revenue                       $ 36,404,803    $ 26,250,851    $ 10,153,952            38.7%
Cost of revenue                 16,725,774      17,781,967      (1,056,193)           (5.9)
Gross profit                    19,679,029       8,468,884      11,210,145           132.4
Operating expenses
 (exclusive of
 depreciation)                  14,869,142      10,233,529       4,645,613            45.3
Depreciation                       214,299          98,557         115,742           117.4
Gain on settlement of
 accounts payable                  324,966               -         324,966           100.0
Other non operating
 expenses, net                    (541,394)       (497,702)         43,692             8.8
Loss on
 extinguishment of
 debt obligation                         -       9,550,700      (9,550,700)         (100.0)
Loss on discontinued
 operations                              -          43,318         (43,318)         (100.0)
                              ------------    ------------    ------------
Net income (loss)             $  4,379,160    $(11,954,922)   $ 16,334,082           100.0+
                              ============    ============    ============
</TABLE>

Revenue increased from $26,250,851 in 2002 to $36,404,803 in 2003. There is
generally a correlation between the marketing of our ISP services and future
revenues (after the trial period) for customers obtained during the marketing
effort. While our telemarketing efforts for the latter part of 2003 were reduced
(particularly after the FTC proceeding) we nevertheless increased our revenue.
This was because we had significant marketing campaigns in the latter part of
2002 and early 2003. In addition our customer base had grown substantially
during the year so that a high level of revenues were retained for a portion of
the year even when our marketing efforts were diminished. Our revenue grew even
though we could we could not bill our ISP customers for a portion of the year.

Our telemarketing and fulfillment costs are initial upfront charges incurred
when an ISP customer signs up and represent the most significant component of
cost of sales. Conversely, the costs of maintaining our customer base represent
a much smaller component of cost of sales. Our costs of sales in 2003 were
approximately $340,000 lower than costs for 2002 despite an increase in
revenues. During 2003, we had a significant decrease in ISP telemarketing
expenses. This decrease resulted from reduced costs from using lower cost
offshore facilities, a decline in telemarketing efforts due to our emphasis on
our new business directions as well as the effects of the FTC proceedings. The
cost of sales of 2002 also reflects high telemarketing costs resulting from
increased ISP market efforts in the third quarter of 2002.

Our gross profit was $19,679,029 in 2003 compared to $8,468,884 in 2002. The
increase in gross profit resulted from higher sales accompanied by reductions in
costs, all as discussed above.

Total operating expense (exclusive of depreciation) increased from $10,233,529
in 2002 to $14,869,142 in 2003. Included in these expenses is an increase of $
3,768,718 in selling, general and administrative expenses. This increase was the
result of the increased professional fees incurred in connection with our
defense of the FTC Proceeding and increased expenses incurred with our new
business consisting of increased salary, travel, and professional fees. Fees
paid to a related party increased by approximately $2,730,000. This was in part
a result of increased payments under the payment agreement with these parties
because of increased revenues of the ISP subsidiaries. The increase includes
$1,050,000 for subcontract services primarily for our new business, which was
not incurred in 2002.

As a result of the foregoing we had income from operations of $4,595,588 in 2003
compared to a loss of ($1,863,202) in 2002.

In 2002, we had a loss on debt extinguishment of $9,550,700. This arose with an
agreement of a note holder not to call the note for a fixed period. This
deferral of the right of demand was treated as an extinguishment of debt. The
amount of the loss represents the value of the consideration received from us
for this deferral. We also had a slight increase in interest in 2003, which was
more than offset by a gain of $324,966 on a settlement of debt in connection
with the reorganization of SavOn.

                                       31
<PAGE>

We did not have any tax expenses in 2003 because of the use of our net operating
loss carry forward.

As a result of all of the foregoing, we had net income of $4,379,160 for 2003
compared to a net loss of $11,944,922 in 2002.

LIQUIDITY AND CAPITAL RESOURCES

Historical Cause Of Liquidity Issues

At the inception of our ISP business we experienced substantial liquidity
problems due to the gap between the receipt of revenue and the payment of
expenses. This resulted from the long collection cycle of billing houses and the
free month service provided to the customer. In addition, the liquidity issue
was partly exacerbated by uncollectible receivables, which reduced the potential
cash available. The size of the customer base during the initial period was not
sufficient to overcome the foregoing gap. During 2002, the increase in the
ISP customer base overcame the gap

Prior to the FTC Proceeding in October 2003, we believed we would be able to
continue to meet our obligations arising from our existing ISP business through
cash flow from operations but would need additional financing to fund our entry
to the contact center business. As a result of the proceeding we were deprived
of substantial cash because of the asset freeze and escrow and incurred
substantial expenses and interruption of revenue and billing. As a consequence
we were unable to pay all of our expenses in the normal course of business. We
therefore were compelled to take several measures including the reduction of
personnel, temporary reduction of executive salaries, and postponement of most
activity relating to our new business initiative. Notwithstanding a resolution
of the FTC matter our liquidity problems continued particularly as we determined
to proceed with our new contact center business. This direction required
increased capital expenditures and operating expenses in excess of cash flow. In
2004 we received additional financing (see Financing Activities below) which
enabled us to begin implementation of our plans. We have proceeded with the next
level of plans in the belief that financing would be available and we have made
commitments based on that belief. Since some obligations were due ahead of
financing receipts we are experiencing significant cash flow problems.
Indebtedness aggregating approximately $4,400,000 is either due on demand or
will become due by April 30, 2005. This amount includes $950,000 due in December
2004 which is now in effect a demand obligation. There is no assurance we will
obtain adequate financing.

CASH SOURCES AND USES

The primary sources of cash for the Company have been proceeds from the issuance
of long-term debt and equity securities. The primary uses of cash have been
working capital, and capital expenditures..

Operations

Our cash and cash equivalents as of December 31, 2004 were $1,530,052 compared
to $1,342,186 as of December 31, 2003. Our working capital deficit was
approximately $8,033,988 on that date, compared with net working capital of
$2,954,188 at December 31, 2003. During 2004 we used $3,651,608 of cash for
operations compared with $472,464 used in 2003. The increase in negative cash
flow from operations for 2004 was primarily the result of a $6,791,067 loss from
operations compared with income of $4,595,588 in 2003, a change of $11,386,655,
non operating charges related to the amortization of the beneficial conversion
feature of convertible debt of $1,873,968, partially offset by a gain on
extinguishment of debt and settlement of accounts payable aggregating
$1,561,993. Contributing to the decrease in cash, was a decline of approximately
$1,081,388 in our accounts receivable, primarily ISP's, and lower deferred
revenues, which is indicative of a declining portfolio. Some of the reductions
in cash resources for operations was offset by an increase of $1,103,466 in
accounts payable.

FINANCING ACTIVITIES

Net cash provided by financing activities for the Twelve month period in 2004
was $8,384,953 compared to $2,576,279 in 2003. The increase in cash flows
provided by financing activities in 2004 is a result of the $9,665,995 of debt
financing, net including $2,947,500 from the issuance of convertible promissory
notes, net of loan costs. During 2004 we repaid $1,281,042 of debt and capital
lease financing. In 2003, the cash provided by financing activities was
primarily the result of the sale of preferred stock.

                                       32
<PAGE>

Loan Transaction 2001 - As of October 31, 2001 we entered into a Security
Agreement and issued a promissory note to Brookfield Investment Ltd. in the
amount of $2,474,000 to cover the prior advances made by Brookfield. The note
was to be increased to reflect any future advances which ultimately were never
made. The note is payable by us on demand and the principal amount (exclusive of
interest accrued prior to the date of the note) accrues interest at a rate of 7%
per year. The Security Agreement granted Brookfield a security interest in our
accounts receivable as well as those of all our subsidiaries. The parties agreed
in principle on November 2, 2002, to modify the Brookfield Agreement and related
note obligations to defer demand for payment (except on non payment defaults)
until January 2005. Brookfield also agreed to subordinate its security interest
to financing lenders. We agreed to pay accrued interest on the note by July 2003
and issued Brookfield a warrant to purchase 4,000,000 shares of our common stock
at an exercise price of $.50 per share. In 2003 Brookfield also surrendered its
entire security interest so that the note is presently unsecured.

Factoring Agreements - In 2003, two of our ISP subsidiaries entered into a
factoring and security agreement with Thermo Credit, L.L.C. We were able to sell
receivables for half of their face value with the balance paid upon collection.
We paid fees to the factor depending upon the length of collection of the
receivable sold. Upon completion of our note financing we terminated our
factoring arrangements and paid the factor approximately $708,600. One of our
ISP billing agents also continues to advance a portion of the amount billed on a
factoring basis.

Preferred Stock - In a June 2003 private placement, we sold 23,510 shares of our
convertible preferred stock for an aggregate gross consideration of $2,351,000.
For each share sold, the purchasers received five year warrants to purchase
fourteen shares of our common stock at an exercise price of $7.00 per share
(which has since been reduced to $3.46 pursuant to the terms of the Warrant).
The preferred shares were convertible at an initial conversion price of $3.50
which has been reduced to $2.00 pursuant to performance standards. The price is
subject to further anti-dilution provisions. Approximately 7,110 shares have
been converted (of which a portion of common stock was issued in 2005).

Convertible Debentures - In December 2003, we received $500,000 from a small
group of primarily institutional lenders. We issued to the lenders seven percent
one year secured notes convertible into shares of our Common Stock at $4.00 per
share. We also issued to the lenders five year warrants to purchase 62,500
shares of our common stock at an exercise price of $5.00 per share. Both the
notes and warrants are subject to anti-dilution provisions, including price
dilution, which as of September 30, 2004 have resulted in the reduction in the
conversion rates and exercise prices to $2.39 and $4.09, respectively. The
lenders have received a security interest but subject to certain conditions it
is second to existing and future security interests. We have the right to compel
conversion or exercise of a portion of the notes and warrants depending upon
market condition and other factors.

2004 Financings - We have received $7.5 million in new financings. Laurus Master
Fund, Ltd. provided $5 million of this financing to us pursuant to a secured
convertible term note, of which $1,930,000 was to be held in a restricted cash
account under the sole control of Laurus and may be released upon the
fulfillment of certain conditions. The term note matures in May 2007 and is
convertible at an initial fixed conversion price of $2.96. In connection with
the issuance of the convertible term note, we also issued to Laurus seven year
warrants to purchase up to 493,827 shares of our common stock at prices ranging
from $4.05 to $4.66. Of these warrants, warrants to purchase 197,531 shares were
originally non-exercisable until the cash in the restricted account was
released. The remaining $2,500,000 was raised through the private sale of
convertible notes and common stock purchase warrants to accredited investors.
Notes in the principal amount of $1,000,000 or "Bridge Notes" were convertible
at a price of $2.37 per share and are secured. The holders of the remaining $1.5
million of convertible notes had the right to convert their notes into shares of
our common stock at a price of $2.96 per share or receive the repayment of their
principal amount, plus interest. We have repaid $925,000 of the principal of
these notes with the balance converted into 195,552 shares of common stock. In
addition, the holders of the notes received five year warrants to purchase an
aggregate of 136,073 shares of our common stock at initial exercise prices of
between $5.05 and $4.66. The Bridge Notes and these warrants are required to be
converted or exercised in certain circumstances.

We also issued placement agent warrants in connection with each of the above
transactions. An aggregate of 254,316 shares of our common stock is subject to
these warrants of which warrants to purchase approximately 67,564 shares were
deferred until the restricted cash account referred to above is released. The
terms of the placement agent warrants are varied, as a portion of these warrants
were issued in connection with each transaction and the price and the number of
shares were determined in connection with each such transaction.

The exercise and conversion prices of all the above securities are subject to
price and other adjustment. Each of the Notes contain restrictions on certain
actions we may take, including restrictions on dividends, stock repurchases,
incurring indebtedness, creating security interests in our assets and changing
our business. All the above-described securities are restricted and we have
undertaken to file a registration statement covering the resale of shares of
Common Stock issuable upon conversion of these notes and exercise of these
warrants. Pursuant to a registration rights agreement entered into with the
holders of the above convertible notes, beginning in October 2004, we must pay
the holders of the notes $100,000 for every 30 days until such time that the
registration statement covering the resale of the common stock issuable upon
conversion of the notes and exercise of the warrants becomes effective.

                                       33
<PAGE>

Because of our continuing capital requirements, we were required to obtain
release of amounts from some of the restricted or secured accounts pursuant to
agreements with Laurus and / or the Bridge Note Holders. In August 2004, Laurus
agreed to release $1,000,000 of the original proceeds of the Laurus Note placed
in a restricted bank account for the reduction of both the conversion price of
the Laurus Note and the exercise price of all Laurus' warrants to $ 2.15. All of
Laurus' warrants were made immediately exercisable. We had also agreed to
similarly reduce the exercise price of the placement warrants associated with
the Laurus transaction. In September 2004, we received approximately $400,000
from Laurus previously held in a restricted reserve account securing in part
notes held by Laurus and Bridge Note Holders aggregating $6,000,000. In
consideration for the release, we (i) reduced the conversion price of these
notes to $2.10 per share and (ii) granted new warrants to purchase 600,000
shares of our common stock at an exercise price of $2.15. The Laurus Note is
convertible into 2,380,952 shares of our common stock. Laurus received 500,000
of the additional warrants. The Bridge Notes are now convertible into 476,190
shares of common stock and the holders received a pro rata amount of 100,000 of
the additional warrants.

In connection with the purchase of equipment for our contact center business, on
October 12, 2004, we borrowed $500,000 pursuant to a 6% note due December 15,
2004. We have reached an agreement in principle to extend this due date. We are
in discussions to finalize and document our agreement. In connection with the
loan, one of our stockholders agreed to transfer to the lenders warrants
currently held by such stockholder to purchase 200,000 shares of our Common
Stock at an exercise price of fifty cents per share. An additional $500,000 was
received from the same group of primarily institutional lenders that had
advanced us $500,000 in December 2003 for convertible notes. One note holder of
$50,000 was repaid.

Commencing October 15, 2004 we and our wholly owned subsidiary Voxx Corporation
sold an aggregate of $3,097,500 principal amount of a new Joint 5% Unsecured
Subordinated Convertible Promissory Note due May 2007. Voxx is the holding
company for our subsidiaries that are operating our contact center business.
Pursuant to the Note, in the event Voxx becomes a public company, the then
outstanding Notes are immediately converted into shares of Voxx common stock.
The rate of interest will be increased to 10% per annum if Voxx does not become
a public corporation after one year. Until Voxx is a public company the holder
may convert his entire Note into shares of our Common Stock for one year at a
fixed conversion price related to market but not less than $2.25. Thereafter the
exercise price will be $1.00 or the market price on the one year anniversary of
the Notes. The Notes are subordinate in all respects to the Senior Debt. The
notes are part of Units that are currently being offered in a private placement
in an effort to raise up to $ 13,800,000. In addition to the note each Unit also
consists of the right to receive in the future (i) warrants to purchase our
Common Stock and/or (ii) warrants to purchase Common Stock of Voxx. If Voxx
consummates a Voxx public transaction then any unexercised warrants to acquire
shares of our common stock expires and the number of Voxx warrants to each
holder may be adjusted to reflect any prior exercise of warrants to acquire our
common stock. The securities sold have not been registered under the Securities
Act of 1933 nor will the securities offered be registered. These securities may
not be offered or sold in the United States by the investors absent registration
under the Securities Act of 1933 or an applicable exemption from registration
requirements.

Other Financing -We have also financed our expansion with equipment leases and
landlord financing for facility improvements. The latter are repayable through
amortization payments added to or paid with the rent for the facility.

INVESTING ACTIVITIES

Net cash used for investing activities in 2004 was approximately $4,525,195
compared to $1,484,303 in 2003. The increase in capital spending is a result of
the development of the Company's contact center business in the Philippines

Additions to property, plant and equipment during 2004 were $5,209.749 compared
to $1,071,111 in 2003. Capital expenditures during 2004 were funded from
borrowings. Leasing is used for certain capital additions when considered cost
effective relative to other sources of capital. The Company currently leases its
corporate headquarters as well its facilities in the Philippines.

During 2005 and 2004, respectively, we acquired IMS and ICALL. Cash totaling
$1,170,000 was used in 2004 for these acquisitions. The company acquired
Innovative Marketing Strategies, Inc. in early January. We have an additional
500 seats of which 100 will be located on the Philippines with the balance at
three domestic locations. As a result of the acquisition we will require funds
for the acquisition and working capital after the acquisition.

 At the end of 2004, the Company had no material commitments for the purchase of
capital assets other than those reported in its consolidated financial
statements at December 31, 2004. The Company anticipates that the purchase of
additional capital assets in 2005 will be funded through cash flows from
operations and its borrowings.

                                       34
<PAGE>

Depending on financing and other factors we intend to add approximately 4,200
additional seats in the Philippines over the next four quarters. The following
discussion sets forth our anticipated milestones, a two-phase plan for achieving
our goals together with the required funds, beyond receipts from our service
contracts.

Phase 1, to be completed in the Q2 2005, begins with the completion of the
balance of approximately 1,750 seats at our flagship center, Epixtar House,
located in Manila as well as the completion of 1,000 seats at the newly leased
Epixtar Plaza on the site of the former Clark Air Force Base. The total cash
outlay to complete this phase is forecast at approximately is $5,000,000.

Phase 2, contemplates the completion of (a) Epixtar Centre, a 1,250 seat center
located in Aseana Business Park in the Makati section. The lease negotiations
for Epixtar Centre will be complete in early January. Development will begin
soon after with completion expected in Q2 2006. The total cash outlay to
complete Phase 2 is projected at $8,500,000.

The total cash outlay for both phases is expected to be $13,500,000

OFF-BALANCE SHEET ARRANGEMENTS

The Company does not have any off-balance sheet arrangements, investments in
special purpose entities or undisclosed borrowings or debt. In addition, the
Company has not entered into any derivative contracts.

CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

The following table summarizes the Company's contractual obligations at December
31, 2004:

<TABLE>
<CAPTION>
                                                                                Payments Due by Period
                                                     -----------------------------------------------------------------------------
                                                                     Less Than One                                   More Than 5
                                                         Total           Year          1-3 Years       4-5 Years         Years
                                                     -------------   -------------   -------------   -------------   -------------
<S>                                                  <C>             <C>             <C>             <C>             <C>
Long-term debt obligations                           $  13,170,910   $   9,340,050   $   3,830,860   $           -   $           -
Capital leases obligations                                 214,708         152,100          62,608
Operating lease obligations, net of subleases           16,738,368       1,713,842       4,575,490       4,634,429       5,814,607
  Interest commitments under interest bearing debt       1,600,999         816,785         784,214
                                                     -------------   -------------   -------------   -------------   -------------
                                                     $  31,724,985   $  12,022,777   $   9,253,172   $   4,634,429   $   5,814,607
                                                     =============   =============   =============   =============   =============
</TABLE>

NEW ACCOUNTING PRONOUNCEMENTS

In December 2004, the FASB issued Statement of Financial Accounting Standards
No. 123, (revised 2004) (SFAS 123R) "Share-Based Compensation" revising SFAS
123, Accounting for Stock-Based Compensation and superseding APB 25, "Accounting
for Stock Issued to Employees". This SFAS eliminates the alternative to use APB
25's intrinsic value method of accounting that was provided in SFAS 123 as
originally issued. SFAS 123R establishes standards for the accounting of
transactions in which a company exchanges its equity instruments for goods or
services or incurs liabilities in exchange for goods or services that are based
on the fair value of the company' equity instruments or that may be settled by
the issuance of equity instruments. This SFAS focuses primarily on accounting
for transactions in which a company obtains employee services in share-based
payment transactions, and does not change the accounting guidance for
share-based payment transactions with parties other than employees. This SFAS
requires a public company to measure the cost of employee services received in
exchange for an award of equity instruments based on the grant-date fair value
of the award (with limited exceptions). That cost will be recognized over the
period during which an employee is required to provide service in exchange for
the award, usually the vesting period. The grant-date fair value of employee
share options and similar instruments will be estimated using option-pricing
models. If an equity award is modified after the grant date, incremental
compensation cost will be recognized in an amount equal to the excess of the
fair value of the modified award over the fair value of the original award
immediately before the modification. SFAS 123R becomes effective as of the
beginning of the first interim or annual reporting period that begins after June
15, 2005. The Company is currently assessing the impact of this SFAS on the
Company's results of operations or financial position.

                                       35
<PAGE>

In December 2004, the FASB issued Statement of Financial Accounting Standards
No. 153, (SFAS 153) "Exchanges of Nonmonetary Assets - an amendment of APB
Opinion No. 29". Opinion 29 provided an exception to the basic measurement
principle (fair value) for exchanges of similar productive assets. That
exception required that some nonmonetary exchanges, although commercially
substantive, be recorded on a carryover basis. SFAS 153 eliminates the exception
to fair value for exchanges of similar productive assets and replaces it with a
general exception for exchange transactions that do not have commercial
substance. The Company expects that the adoption of SFAS 153 will not have a
material effect on the Company's financial position, results of operations or
cash flows.

FASB Staff Position No. 109-2 (FSP 109-2), "Accounting and Disclosure Guidance
for the Foreign Earnings Repatriation Provision within the American Jobs
Creation Act of 2004", provides guidance under SFAS 109, "Accounting for Income
Taxes," with respect to recording the potential impact of the repatriation
provisions of the American Jobs Creation Act of 2004 (the "Jobs Act") on
enterprises' income tax expense and deferred tax liability. The Jobs Act was
enacted on October 22, 2004. FSP 109-2 states that an enterprise is allowed time
beyond the financial reporting period of enactment to evaluate the effect of the
Jobs Act on its plan for reinvestment or repatriation of foreign earnings for
purposes of applying SFAS 109. The Company has not yet completed evaluating the
impact of the repatriation provisions. Accordingly, as provided for in FSP
109-2, the Company has not adjusted its tax expense or deferred tax liability to
reflect the repatriation provisions of the Jobs Act.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The Company's accounting policies are more fully described in Note 1 of the
notes to our consolidated financial statements. As discussed in Note 1, the
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions about future events that affect the amounts reported
in our consolidated financial statements and accompanying notes. Future events
and their effects cannot be determined with absolute certainty. Therefore, the
determination of estimates requires the exercise of judgment. Actual results
could differ from those estimates, and such differences may be material to the
Company's consolidated financial statements. Listed below are those policies and
estimates that the Company believe are critical and require the use of
significant judgment in their application.

    Credit Risks

Financial instruments that potentially subject the Company to significant
concentrations of credit risk consist primarily of cash, cash equivalents and
accounts receivable. The Company's investment policy is to invest in low risk,
highly liquid investments. The Company maintains its cash balances with high
quality financial institutions and at times such balances are in excess of FDIC
insurance limits. The Company believes no significant concentration of credit
risk exists with respect to the Company's cash balances.

The Company utilizes the services of outside third-party billing houses. Since
the Company's receivables collected by clearing agents are not segregated, there
is a concentration risk and possible loss upon the bankruptcy or defalcation of
any clearing agent. There is no substantial dependency on any billing house as
they are utilized for better cash flow management and compliance issues.

Historically, the Company has depended on third-party vendors for its
telemarketing and fulfillment operations for its ISP business. Substantially,
all of the Company's telemarketing vendors operated their facilities outside the
United States. As of December 31, 2004, no third-party telemarketers were being
utilized as the Company has ceased marketing ISP services.

The Company has significant operations in the Philippines, and is subject to
risks associated with operating in the Philippines, including political, social,
economic instability, increased security concerns, fluctuation in currency
exchange rates and exposure to different legal standards. Total amount of assets
included in the accompanying consolidated statements and used in the Company's
Philippines operations were approximately $5,454,000 at December 31, 2004.

    Goodwill Valuation

Goodwill represents the excess of the purchase price over the fair market value
of net assets acquired. The process of determining goodwill requires judgment.
Evaluating goodwill for impairment involves the determination of the fair market
value of our reporting units. Inherent in such fair market value determinations
are certain judgments and estimates, including the interpretation of current
economic indicators and market valuations, and our strategic plans

                                       36
<PAGE>

with regard to our operations. To the extent additional information arises or
our strategies change, it is possible that our conclusion regarding goodwill
impairment could change, which could have a material effect on our financial
position and results of operations. For those reasons, we believe that the
accounting estimate related to goodwill impairment is a critical accounting
estimate.

The Company reviews goodwill annually (or more frequently under certain
conditions) for impairment in accordance with SFAS No. 142, Goodwill and Other
Intangible Assets. The Company performed its annual impairment test of goodwill
as of December 31, 2004 and determined that goodwill was not impaired. At
December 31, 2004, goodwill was approximately $3,360,272. While the Company
believes that no impairment existed as of December 31, 2004, there can be no
assurances that future economic or financial developments might not lead to an
impairment of goodwill.

    Stock-Based Compensation

With the approval of the Company's Board of Directors (Board), it issues to
employees options to purchase our common stock. The Board approves grants only
from amounts remaining available for grant that were formally authorized by the
Company's stockholders. The Company grants approved options with an exercise
price not less than the market price of the common stock on the date of the
option grant. The Company accounts for options under the provisions of
Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to
Employees, and, accordingly, recognizes no compensation expense for the grants.
SFAS No. 123 Accounting for Stock-Based Compensation, and SFAS No. 148,
Accounting for Stock-Based Compensation--Transition and Disclosure, an amendment
of FASB Statement No. 123, require us to disclose the effects on net earnings
and basic and diluted earnings per share had we recorded compensation expense in
accordance with SFAS No. 123.

In December 2004, the FASB issued SFAS No. 123(R). SFAS No. 123(R) establishes
accounting standards for transactions in which a company exchanges its equity
instruments for goods or services. In particular, this Statement would require
companies to record compensation expense for all share-based payments, such as
employee stock options, at fair market value. This Statement is effective as of
the beginning of the first interim or annual reporting period that begins after
June 15, 2005 (our fiscal period beginning July 1, 2005). The Company is
currently reviewing the effect of SFAS No. 123(R) on our consolidated financial
statements. The Company's believe that the accounting estimate for the valuation
of share-based payment is a critical accounting estimate because judgment is
required in determining the valuation of the stock options granted to employees.

ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The Company is exposed to certain market risks that arise in the ordinary course
of business. A discussion of the Company's primary market risk exposure and
interest rate risk is presented below.

Interest Rate Sensitivity - At December 31, 2004, the Company had cash, cash
equivalents and restricted cash equivalents totaling $1,530,052. These amounts
were invested primarily in money market funds, certificates of deposit,
municipal bonds and federal agency securities. The unrestricted cash and cash
equivalents are held for working capital requirements, general corporate
purposes and potential acquisition of assets. The Company does not enter into
financial instrument transactions for trading or speculative purposes. Some of
our borrowings are through floating rate debt, subject to changes in the prime
rate. Accordingly, the Company's interest expense will increase with any future
increase in prime rates. The Company however, believes that it has no material
exposure to changes in interest rates.

Effect of Changing Prices - The principal effect of inflation on the Company's
operating results is to increase costs. Subject to normal competitive market
conditions, the Company believes it has the ability to raise selling prices to
offset these cost increases over time. In recent years the general rate of
inflation has not had a significant adverse impact on the Company.

Foreign Currency Exchange Risk - The Company's results of operations and cash
flows are subject to fluctuations due to changes in foreign currency exchange
rates, particularly changes in the Philippine peso. The Company generates
expenses in the Philippines, primarily in Philippine pesos and derives all of
its revenues in U.S. dollars. An increase in the value of the U.S. dollar
relative to the Philippine peso would reduce the expenses associated with the
Company's Philippine operations, and conversely a decrease in the relative value
of the U.S. dollar would increase the cost associated with these operations.
Expenses relating to our operations outside the United States increased for the
year ended December 31, 2004 when compared with the year ended December 31, 2003
due to increased costs associated with higher revenue generation and customer
management services. The Company funds its Philippine operations through U.S.
dollar denominated accounts held in the Philippines. Payments for
employee-related costs, facilities management, other operational expenses and
capital expenditures are converted into Philippine pesos on an as-needed basis.
To date, we have not entered into any hedging contracts. Historically, we have
benefited from the ongoing decline in the Philippine peso against the U.S.
dollar.

                                       37
<PAGE>

Seasonality -Generally, our operations are not subject to seasonal factors.
However, in in the past, during December we reduced our marketing activities
because we believed potential customers would be preoccupied with holiday
activities.

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

None

ITEM 9A.    CONTROLS AND PROCEDURES.

a.  Conclusion Regarding Disclosure Controls and Procedures

The Company maintains "disclosure controls and procedures," as such term is as
defined in Rule 13a-15(e) of the Securities Exchange Act of 1934 (the Exchange
Act) pursuant to Rule 13a-15 of the Exchange Act that are designed to ensure
that information required to be disclosed in reports that are filed or submitted
under the Exchange Act are recorded, processed, summarized, and reported within
the time periods specified by the SEC rules and forms, and that such information
is accumulated and communicated to the Company's management, including the Chief
Executive Officer (CEO) and Chief Financial Officer (CFO), as appropriate, to
allow timely decisions regarding required disclosure.

The Company's internal control over financial reporting is a process designed
under the supervision of the Company's principal executive and principal
financial officers to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of the Company's consolidated financial
statements for external purposes in accordance with accounting principles
generally accepted in the United States of America.

In designing internal control over financial reporting and evaluating the
Company's disclosure controls and procedures, management recognizes that
disclosure controls and procedures, no matter how well conceived and operated,
can provide only reasonable, not absolute, assurance that the objectives of the
disclosure controls and procedures are met. Because of its inherent limitations,
internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate due to
changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.

Management of the Company carried out an evaluation, with the participation of
the Company's CEO and CFO, of the effectiveness of the design and operation of
the Company's disclosure controls and procedures (within the meaning of Rule
13a-15(e) of the Exchange Act) as of the end of the period covered by this
Annual Report on Form 10-K. Based upon that evaluation, the Company's CEO and
CFO concluded that, as of the end of the period covered by this Annual Report on
Form 10-K, the Company's disclosure controls and procedures (within the meaning
of Rule 13a-15(e) of the Exchange Act) are effective at a reasonable assurance
level.

b. Changes in Internal Control Over Financial Reporting

There has been no change in the Company's internal control over financial
reporting during the quarter ended December 31, 2004, that materially affected,
or is reasonably likely to materially affect, the Company's internal control
over financial reporting.

 ITEM 9B.   OTHER INFORMATION

Not applicable.

                                       38
<PAGE>

PART III

ITEM 10.    DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
            COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.

                       MANAGEMENT, OFFICERS, AND DIRECTORS

NAME                  AGE    POSITION
-------------------   ---    -----------------------------------------------
Ilene Kaminsky         39    Chief Executive Officer, Director

David Srour            43    Chief Operations Officer, President and Director

Irving Greenman        69    Chief Financial Officer, Chief Accounting Officer,
                             Director

Todd Fisch             43    Chief Corporate Strategist, President - IMS
                             International, Inc.

William D. Rhodes      56    Chief Executive Officer and President
                             NOL Group, Inc.,

Gerry M. Dunne, Jr.    42    Executive Vice President, Sales

Ken Van Vranken        50    Chief Operations Officer - Voxx Corporation

David Berman           58    Director

John W. Cooney         69    Director

Kenneth Elan           52    Director

Sheldon Goldstein      65    Director

Robert Palmer          79    Director

ILENE KAMINSKY has served as Chief Executive Officer of Epixtar since November
2004. Prior to joining Epixtar, Ms. Kaminsky spent four years with Cisco Systems
driving business strategy both within Cisco and to its customers in the
telecommunications service provider market. Preceding her tenure at Cisco, she
spent 10 years focused on business development, corporate strategy, marketing,
business planning, and raising capital in the public and private markets. Prior
to Cisco, she served as Vice President of Marketing for HTE8 from 1999 to 2000,
a fixed wireless broadband service provider. Ms. Kaminsky consulted for a number
of service provider start-up companies where, in addition to developing
corporate strategies and raising capital with venture capital firms and other
investors, she also served as Chief Marketing Officer at yourorg.com, an
affinity portal company, and as Senior Vice President of Marketing and Founder
at The Intelesis Group/ FreeCaller Communications, a long distance and telephony
provider. She served as Vice President of Marketing at Equalnet Communications
in Houston, a facilities-based voice local and long distance provider marketing
voice solutions to SMBs and Enterprises. There she played a primary role in
diligence and acquisition of several ISPs and IT integration companies. Ms.
Kaminsky holds a dual BA from University of Florida in English and Philosophy.

DAVID SROUR has served as our President since June 2003 and is now Chief
Operating Officer. On April 16, 2004, he became our Chief Executive Officer and
on August 16, 2004 he became our Chairman of the Board. He served as Chief
Executive Officer until November 2004 and as our Chairman of the Board until
February 2005. He previously served as our Vice President and Chief Operating
Officer from November 2001 to June 2003. Prior to joining us, Mr. Srour was
Senior Director of Information Service of Carr America Realty, a former client
of his at KPMG Consulting in McLean, Virginia, where he was a Senior Manager
from 2000 to 2001. At KPMG, Mr. Srour specialized in eCommerce, project
management and process improvement consulting services. Beginning in 1997, he
spent four years at Ernst and Young LLP, providing information systems and
process improvement consulting services including back office and eCommerce
implementations for such clients as General Motors, Lehman Brothers and Simon
Property Group. Mr. Srour also has significant telecommunications experience,
including roles as COO of Interactive Telecard Services, Inc. and SmarTel
Communications. Mr. Srour holds a dual BS in Information Systems and Marketing
from the Syracuse School of Management.

                                       39
<PAGE>

IRVING GREENMAN has, since June 2000, served in various executive positions for
us, including our Chief Financial Officer and Chief Executive Officer. From 1998
through 1999, he was Chief Financial Officer for Kaleidoscope Media Group, Inc.,
an entertainment company. Prior to that, he was the Chief Financial Officer for
Medica Media and Healthcare International, both of which were engaged in the
healthcare industry. Mr. Greenman is a Certified Public Accountant licensed in
New York and in Florida. Mr. Greenman graduated with a B.B.A. from City College
of New York, which is now the Bernard Baruch School of Business.

TODD FISCH is our Chief Corporate Strategist and is currently President of IMS
International, Inc. As Chief Corporate Strategist, Mr. Fisch's duties include
designing our overall business strategy and then instituting that strategy
(which necessarily encompasses both business development and presentation), as
well as supervising the operational and managerial processes that underlie the
Company's businesses. Mr. Fisch is largely responsible for the quick and
efficient mobilization and conversion of our off-shore resources into modern,
responsive contact centers that offer comprehensive, turnkey solutions for
teleservices initiatives. Mr. Fisch was president of Epixtar Philippines IT
Enabled Services Corporation from 2004 to March 2005, our subsidiary that owns
and operates our flagship contact center in the Republic of the Philippines.
From 2000 through 2004, Mr. Fisch was a consultant to the company, either
directly or through entities, for various business, telecommunications and call
center matters. Mr. Fisch also owns the entire beneficial interest in the firm
that provides us with advice and services relating to the establishment of our
contact center business and other business and administrative activities.

WILLIAM D. RHODES served as our President from January 2002 through June 2003
and is now President of our ISP subsidiaries. In February 2001, Mr. Rhodes was
also the founding President of NOL Group, which is now one of our subsidiaries,
establishing corporate infrastructure for this new Internet service provider of
"B-to-B". He remains the current President of NOL Group and has been employed by
us since our acquisition of NOL Group in March 2001. Mr. Rhodes performed
consulting services for us from September 2000 until February 2001. From
February 1999 through July 2000, Mr. Rhodes served as Chief Operating Officer of
Equalnet Communications Corp. in Houston, Texas with responsibility for all
company operations including customer care, billing, provisioning and networks.
From 1996 until 1999, Mr. Rhodes served as President and Chief Operating Officer
of Valu-Line Communications in Longview, Texas. Mr. Rhodes has an MSEE and BSEE
from the University of Missouri at Columbia and has been involved in
state-of-the-art electronics, navigation and communication projects throughout
his career, including 20 years with Rockwell International.

GERALD M. DUNNE, JR. has been our Executive Vice President in charge of Sales
and Marketing since 2000. He was formerly the Chairman and Chief Executive
Officer of Group Long Distance Inc., a NASDAQ traded long distance reseller from
1988 through 1999. Mr. Dunne led that company to over 200,000 residential and
small business subscribers before leaving to become Chief Executive of our
subsidiary, One World Public Communications Corp.

KEN VAN VRANKEN is Chief Operations Officer of Voxx Corporation and President of
Epixtar Philippines IT-Enabled Services Corporation. From 2003 to January 2005,
Mr. Van Vranken was President and Chief Executive Officer of Krane Products,
Inc. in Boca Raton, Florida, with his chief responsibility being strategic
direction and the reorganization and repositioning of call centers, inside sales
and company teleservices. From 2001 to 2003, Mr. Van Vranken served as General
Manager-Philippines for e-Performax Contact Centers located in Makati City,
Philippines, where he supervised the general management of the multi-site
off-shore operations of the company's call centers, including physical
operations, staff selection and client services. From 2000 to 2001, Mr. Van
Vranken was Vice President of Operations/Client Services for Center Partners,
Inc. of Fort Collins, Colorado. Prior to that position, Mr. Van Vranken owned
and operated his own business, VVD Inc., a company that specialized in providing
inbound and outbound sales as well as concierge level customer service for
Fortune 500 companies. Mr. Van Vranken has a B.A. in Business Administration
from the University of Heidelberg in West Germany.

DAVID BERMAN is a practicing attorney in Miami, Florida and has been a director
since 2002. Since 1983, Mr. Berman has been a partner in Berman & Berman, a
partnership in Miami, Florida specializing in tax law and business planning.
Prior to 1983, he was a member of the firm of Bedzow & Korn of Miami.

KENNETH ELAN has been a director since June 2003. He has been a practicing
attorney in New York City for over twenty-five years. He specializes in
litigation, concentrating in corporate and commercial litigation.

JOHN W. COONEY has been a director since July 2003. Since 2000, Mr. Cooney has
been a Vice President for Lionstone Group, Inc., owner of the Seville and the
Ritz-Carlton Hotels on Miami Beach, DuPont Plaza in Miami, Sheraton Curacao
Resort, Princess Beach Resort Curacao, and Holiday Inn Aruba. From 1987 through
2000, he was President of Westbourne, Inc., an import-export company. He retired
in 1997 from Coopers & Lybrand's Miami office where he served as Senior Tax
Partner. While with Coopers & Lybrand, he served on several committees in the
firm, having responsibility for review of all real estate tax oriented
investments in which the firm was involved.

                                       40
<PAGE>

Mr. Cooney provides tax and financial consulting services specializing in
taxation, including foreign taxation, real estate and partnerships.

SHELDON GOLDSTEIN has been a director since February 2005. Mr. Goldstein is
presently a consultant for companies dealing in the transportation of documents.
Previously, Mr. Goldstein was president of a company that operated a
restaurant-nightclub for 14 years and before that he was a revenue examiner for
the city of Philadelphia for 21 years. Mr. Goldstein graduated from Temple
University in Philadelphia, Pennsylvania in 1962 with a B.S. degree in
accounting.

ROBERT PALMER has been a director since February 2005. Mr. Palmer has been a
practicing attorney for over forty-eight years. In 2002, Mr. Palmer joined the
law firm of Aviation Legal Group, P.A., and is currently associated with this
firm. From 2000 to 2002, Mr. Palmer operated a law office in Boca Raton,
Florida, representing both national and international business entities and
private interests. From 1975 to 1995, Mr. Palmer formed and maintained the law
firm of Palmer & Lazer in Miami, Florida. During this same time period, from
1988 through 1989, Mr. Palmer was Vice President of Templehoff Airways, an
airline based in Berlin, Germany. Mr. Palmer attended Saint John's University
School of Commerce and Saint John's University School of Law.

Executive officers are elected annually by the our Board of Directors to hold
office until the first meeting of our Board of Directors following the next
annual meeting of shareholders and until their successors are chosen and
qualified.

STAFF RELATIONSHIPS
There are no family relationships among our executive officers or directors.
Nevertheless, certain relationships exist between directors, executive officers
or significant stockholders and certain U.S. based management and staff
employees. A son of David Berman, a director, is an employee. Two children and a
daughter-in-law of Stanley Myatt, an affiliate, are employees. A stepson of
Martin Miller, an affiliate, is an employee. Messrs. Myatt and Miller are both
employees. The mother and spouse of Mr. Todd Fisch are also our employees. His
spouse is our Vice President of Human Resources.

AUDIT COMMITTEE
Prior to August 14, 2003, the Board of Directors acted as the Audit Committee as
permitted by the rules of the Securities and Exchange Commission. Effective
August 14, 2003, however, we established an Audit Committee consisting of three
independent directors. John Cooney is chairman of the audit committee and our
financial expert under the rules of the Securities & Exchange Commission. Mr.
Cooney has over thirty years experience as a partner of a leading public
accounting firm. He does not have, nor does any other director member of the
committee, have, a prior relationship with us and each is independent.

CODE OF ETHICS
We have a Code of Ethics which is applicable to all of our senior officers,
including the principal executive officer, the principal financial officer and
the principal accounting officer. The Code of Ethics is included as an exhibit
filled with our Annual Report on Form 10-KSB for 2002.

Our Code of Ethics is posted, and any amendment to, or waiver of that code that
applies to our principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, will be posted on, our website (www.epixtar.com). We will also
provide, without charge, a copy of our Code of Ethics upon written request
addressed to us at 11900 Biscayne Blvd., Suite 700, Miami, FL 33181, Attn:
General Counsel.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

        Section 16(a) of the Exchange Act requires certain of our officers, our
directors and persons who beneficially own more than 10% of our common stock to
file initial reports of ownership on Form 3 and changes in ownership on Form 4
or Form 5 with the Securities and Exchange Commission, and to provide us with
copies of all forms filed.

        We believe, based upon the our review of Forms 3, 4 and 5, and
amendments thereto, if any, furnished to the us during or with respect to fiscal
year 2004 (or upon written representations that such forms were not required to
be filed), that no person who, at any time during the fiscal year 2004, was an
officer, director or beneficial owner of more than 10 percent of the our common
stock, failed to file, on a timely basis, any reports required by Section 16(a)
of the Exchange Act during fiscal 2004 or during prior fiscal years, except
that, other than Irving Greenman, none of the persons listed as directors, or
executive officers under this Item 10 filed a Form 3 upon becoming subject to
reporting obligations under Section 16(a) of the Exchange Act nor have any of
such persons filed any required reports on Forms 4 or 5.

                                       41
<PAGE>

        We are in the process of assisting the foregoing persons in making these
filings. We are also establishing procedures to coordinate and facilitate
filings by our officers and directors who are subject to reporting obligations
under Section 16(a) of the Exchange Act to assist them in making timely filings
in the future.

ITEM 11.    EXECUTIVE COMPENSATION.

The following table sets forth information concerning compensation paid or
accrued by us or any of our subsidiaries for services rendered during the fiscal
year ended December 31, 2004 by all persons who acted as a Chief Executive
Officer and for the four highest paid officers earning in excess of $100,000
during 2004.

                           SUMMARY COMPENSATION TABLE

                              ANNUAL COMPENSATION       AWARDS
                             ---------------------   ------------
    NAME AND                                          SECURITIES
   PRINCIPAL                  SALARY        BONUS     UNDERLYING
    POSITION        YEAR        ($)          ($)     OPTIONS/SARS
----------------    ----     ---------      ------   ------------
Ilene Kaminsky - Chief Executive Officer

                    2004(1)     15,000           -              -
                    2003             -           -              -
                    2002             -           -              -

David Srour - Chief Executive Officer

                    2004(1)    331,000           -              -
                    2003       222,500           -        300,000(2)
                    2002       186,969      50,000              -

Martin Miller - Chief Executive Officer

                    2004(1)    280,024           -              -
                    2003             -           -              -
                    2002             -           -              -

Todd Fisch

                    2004     1,180,000(3)        -              -
                    2003     1,047,500(3)        -              -
                    2002       458,428           -              -

Irving Greenman

                    2004       313,000           -              -
                    2003       285,000           -        200,000(2)
                    2002       300,000      75,000              -
Gerald M. Dunne, Jr.
                    2004       247,150           -              -
                    2003       193,750           -        300,000(2)
                    2002       146,315      50,000              -

William D. Rhodes

                    2004       173,625           -              -
                    2003       173,252           -        200,000(2)
                    2002       151,629           -              -

                                       42
<PAGE>

NOTES TO SUMMARY COMPENSATION TABLE

(1)     Ms. Kaminsky has served as our Chief Executive Officer since November,
        2004. Mr. Srour served as our Chief Executive Officer from April 2004
        until November, 2004. Mr. Miller served as our Chief Executive Officer
        from October 2002 until April 2004.

        Our Chief Executive Officer, Ms. Ilene Kaminsky, has an at will
        Employment Agreement with us that provides for a severance benefit equal
        to 6 months of her then current salary in the event that she is
        terminated without cause and a severance benefit of up to $1,000,000 in
        the event of a change of control of the Company. None of our other
        executive officers have employment agreements with us.

(2)     All stock options were granted with a strike price of $3.50 per share.

(3)     Includes amounts paid to Mr. Fisch as a consultant. See "Certain
        Relationships and Related Transactions," below.

        OPTION/SAR GRANTS IN LAST FISCAL YEAR

        NONE

        AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
        OPTION/SAR VALUES

                                   NUMBER OF UNEXERCISED
                                   OPTIONS/SARS AT FY-END
                                            (#)
                               -----------------------------
        NAME                    EXERCISABLE    UNEXERCISABLE
        --------------------   -------------   -------------
        Ilene Kaminsky                     -               -
        David Srour                  140,000         200,000
        Martin Miller                      -               -
        Todd Fisch                   200,000               -
        Irving Greenman              266,667         133,333
        Gerald M. Dunne, Jr          150,000         100,000
        William D. Rhodes            166,667         133,333

LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR

        NONE

DIRECTORS' COMPENSATION

Prior to 2004 we paid our outside directors $500 per meeting. In July 2002, we
granted a stock option to David Berman pursuant to our Stock Option Plan to
purchase 100,000 shares of our common stock at forty-two cents ($0.42) per
share. In 2003, we issued options to purchase 50,000 shares to each of John
Cooney and Kenneth Elan at exercise prices of $4.50 and $3.50, respectively. All
of the foregoing options described in this paragraph are substantially similar
to the options granted executive officers described above. We recently initiated
a new independent director compensation package. Each will receive $10,000 per
annum and $5,000 for the audit committee.

                                       43
<PAGE>

ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding beneficial
ownership of our common stock as of March 31, 2005 by,

o       each stockholder known by us to be the beneficial owner of more than 5%
        of the outstanding common stock,

o       each director,

o       each named officer,

o       and all directors and executive officers as a group.

Except as otherwise indicated, we believe that the beneficial owners of the
common stock listed below, based on information furnished by such owners, have
sole investment and voting power with respect to such shares, subject to
community property laws where applicable.

Name and Address of                                 Approximate
                                                     Number of
                                                       Shares
                                                    Beneficially
Beneficial Owner                                       Owned       Percentage
--------------------------------------------------  ------------   -----------
Trans Voice Investments Inc. (1) .................     5,556,000          45.7%
Trans Voice L.L.C. (1) ...........................     5,556,000          45.7%
Martin Miller (1)(2) .............................     5,651,921          46.5%
Stanley Myatt (1) ................................     5,556,000          45.7%
Sheldon Goldstein ................................       900,000           7.4%
Todd Fisch .......................................       200,000           1.6%
David Srour (3) ..................................       206,817           1.7%
Irving Greenman (3) ..............................       300,000           2.4%
David Berman (3) .................................        51,667              *
Gerald M. Dunne, Jr. (3) .........................       216,667           1.8%
William D. Rhodes ................................       200,000           1.6%
Robert Palmer ....................................             0              *
John W. Cooney (3) ...............................        33,334              *
Kenneth Elan (3) .................................        33,334              *
Directors & Executive Officers as a group(1)(3) ..     2,141,819          16.0%
*Less than 1%

Name and address of Beneficial Owner

The address of each person is c/o Epixtar Corp. 11900 Biscayne Boulevard, Miami,
Florida 33181.

(1) Including shares registered in the name of Trans Voice L.L.C. Each of
Messrs. Miller and Myatt is deemed to beneficially own this percentage of shares
of common stock owned by Trans Voice by virtue of their or their affiliate's 50%
ownership of Trans Voice Investments Inc. which owns 98% of Trans Voice L.L.C.

(2) Includes 95,921 shares owned by Mr. Miller and his spouse. It does not
include 122,500 shares owned by his spouse with respect to which Mr. Miller
disclaims any beneficial ownership.

(3) Includes shares underlying options exercisable within 60 days of March 31,
2005. In addition to these options additional shares are subject to options not
exercisable within 60 days as follows:

            Irving Greenman........................................     100,000
            David Berman...........................................      33,334
            Kenneth Elan...........................................      16,666
            David Srour............................................     133,333
            John Cooney............................................      16,666
            Gerald M. Dunne, Jr....................................     133,333
            William P. Rhodes......................................     100,000
            All executive officers and directors as a group........     533,332

                                       44
<PAGE>

NON BENEFICIAL HOLDERS

Brookfield Investments Ltd. is the record owner of more than five percent of our
common stock. Brookfield owns of record 770,000 shares and has warrants to
purchase 3,550,000 shares of our common stock. We have been advised by
Brookfield that all of our securities held by it are held as nominee for
unrelated third parties none of whom have an interest equal to five percent.
Laurus owns a $5,000,000 principal amount Secured Convertible Term Note which is
convertible into 2,380,952 shares of our common stock. It owns warrants to
purchase 2,893,827 shares of our common stock. Both the note and warrant contain
a provision that prohibits conversion or exercise, if upon such conversion or
exercise Laurus would own 4.99% or more of the outstanding shares of common
stock. This provision does not apply to defaults and may be waived by Laurus
upon 75 days prior notice. Because of this prohibition, Laurus is not deemed to
beneficially own more than 5% of our common stock.

ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On November 14, 2000 we acquired the entire interest of Trans Voice Investment
Ltd. in SavOn, a Florida limited liability company. Trans Voice Investment, Ltd.
owned an 80% interest in SavOn. The consideration for Trans Voice Investment
Ltd.'s entire interest in SavOn was 2,000,000 shares of our common stock. The
original agreement provided for the issuance of additional shares if during the
six-month period from January 1, 2001 to June 30, 2001, the accumulated net
after tax income of SavOn was greater than $1,200,000. For each $1.00 of any
such excess of net after tax income, Trans Voice Investment Ltd. was to receive
additional shares having a market value of $10.00. Due to the cancellation of
SavOn's agreement with Global Crossing, SavOn discontinued its
telecommunications business. Trans Voice Investment Ltd. claimed that it was
deprived of its potential right to receive additional shares as SavOn would have
no earnings. In lieu of all claims of Trans Voice Investment, Ltd. against us,
we paid an additional $225,000 that was treated as part of the purchase price.

On March 31, 2001, we acquired all the shares of NOL Group, Inc. (""NOL Group" )
in exchange for 2,000,000 of our shares. Trans Voice Investment Ltd. owned 80%
of the shares of NOL Group with the balance owned by Sheldon Goldstein. Prior to
the transaction, Trans Voice Investment, Ltd. was our principal stockholder and
held 2,000,000 shares, or one-third, of our stock. As part of the transaction,
we agreed to pay additional contingent consideration to the former shareholders
of NOL Group. If, during the eighteen month period between April 1, 2001 and
September 30, 2002, the accumulated net after tax income of NOL Group exceeded
$1,200,000, then additional shares of our stock would be issued to the former
shareholders of NOL Group, equal to any excess divided by ten. During 2001 the
former owners of NOL Group claimed that we failed to commence NOL Group's
operations timely and adequately fund it. As of November 30, 2001, we agreed
with the shareholders to eliminate the contingent right and settle all claims in
consideration for an additional 2,500,000 shares of our common stock. The value
of the stock was $5,750,000 based on the market price at the time.

In April 2001, NOL Group,. entered into an oral agreement to pay Trans Voice
Inc. a monthly fee of $4.00 for each of its customers. Trans Voice Investment
Inc., which was owned by Messrs. Stanley Myatt and Martin Miller, or their
affiliates, was unaffiliated with Trans Voice Investment Ltd at that time. On
October 1, 2001, the agreement was modified and reduced to writing because the
parties agreed that the payments would become excessive and burdensome. Pursuant
to the Payment Agreement, as amended, NOL Group and other subsidiaries were
obligated to pay Trans Voice Investment Inc $150,000 per month as long as NOL
Group and other subsidiaries operated their ISP programs. In addition, Trans
Voice Investment Inc. was to receive $1.00 for each additional customer in
excess of 100,000 customers in any given month. NOL Group is also obligated to
provide office space and services to Trans Voice Investment, Inc. The agreement
constitutes consideration for services including services as a finder provided
in connection with the organization of NOL Group. Subsequent to the execution of
this agreement, Trans Voice L.L.C acquired all our shares owned by Trans Voice
Investment Ltd and became our principal shareholder. Trans Voice Investments
Inc., together with Messrs. Miller and Myatt, individually own the entire
interest of Trans Voice L.L.C.. Mr. Miller was our chief executive officer prior
to the execution of the Payment Agreement and again thereafter from September
2002 to April 2004. The parties to the Payment Agreement agreed to limit the
payment obligation to $4,200,000 payable in monthly installments of $300,000 per
month from November 2004 through December 2005. Trans Voice L.L.C. has also
entered into an agreement pursuant to which it will be compensated for any
clients and acquisition candidates it introduces to us with whom we consummate a
transaction.

As of April 2003, we determined to outsource many aspects of the development of
our new business plan. We entered into an agreement with Trans Voice L.L.C., our
principal stockholder, to find, contract with, pay and supervise an entity to
assist in the development of our new business, including assisting us in:

                                       45
<PAGE>

o       Managing existing vendor relationships for sales campaigns and growth to
        meet and liven up new business needs.

o       Managing site selection, lease negotiations, design, and build-out of
        our offshore call centers.

o       Negotiating incentive and financial assistance packages with government
        ministries and agencies on our behalf.

o       Identifying commercial opportunities for us to sell new services and
        developing new products for us to market.

o       Identifying and negotiating merger and acquisition situations for us.

The above described arrangement involving three parties was structured to enable
Transvoice to supervise the subcontractor. As it turned out, the amount of time
required for supervision was negligible. As the amount of time necessary for the
supervision was minimal we determined the value of Trans Voice's services was de
minimus.

Mr. Todd Fisch, who is now one of our executive officers, owns the entire equity
interest, in this subcontractor consulting firm. For Mr. Fisch's recent
employment history and compensation, reference is made to ITEMS 10 and 11,
above.

In the third quarter of 2002, we repaid loans aggregating $175,000 to Trans
Voice Investment Inc. and Stanley Myatt. The loans bore interest at seven
percent per annum.

Commencing in 2004, Messrs. Miller and Myatt each received annual salaries of
$300,000 as our employees The annual salary to each of them has been reduced to
$150,000 beginning January 2005. A portion of the salary paid to Mr. Miller in
2004 was received by him while he was our chief executive officer. There are no
employment agreements between us and either Mr. Miller or Mr. Myatt.

We entered into an agreement on December 6, 2002, which was amended in March
2003, relating to our demand note payable to Brookfield Investments
Ltd.("Brookfield") in the amount of approximately $2,454,000 The agreement
provided that Brookfield would not make any demand for payment until January
2005, and for Brookfield to subordinate its security interest in our and our
subsidiaries' accounts receivable to certain types of lenders.. We retained the
right to prepay the loan without any penalty at any time. In consideration of
the foregoing, we issued warrants to Brookfield to purchase 4,000,000 shares of
our common stock at an exercise price of $.50 per share The warrants are
exercisable during the period from May 31, 2003 until May 31, 2006. Subsequent
to March 2003, Brookfield voluntarily agreed to surrender its security interest.

While we believe the transactions referred to above were fair, they were not
negotiated at arms length. Transactions with any of our principal stockholders,
officers or directors must now be approved by a majority of our independent
directors.

ITEM 14.    PRINCIPAL ACCOUNTANT FEES AND SERVICES.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. Rachlin Cohen & Holtz audited our
financial statements for the years ended December 31, 2004 and 2003. Rachlin
Cohen & Holtz has been our independent registered public accounting firm since
our fiscal year 2003.

Audit Fees

The fees billed by Rachlin Cohen & Holtz for various types of professional
services and related expenses during the years ended December 31, 2004 and 2003
were as follows:

                                       46
<PAGE>

TYPE OF SERVICE                      2004              2003
-------------------------------   ------------   ------------
Fees for audit services           $    236,717   $     60,879
Fees for audit related services          9,766              -
Fees for tax services                   62,309          3,850
Fees for all other services              1,105              -
                                  ------------   ------------
Total                             $    309,897   $     64,729
                                  ============   ============

Audit services include the audit of our annual financial statements, reviews of
our quarterly financial information and consents and comfort letters related to
our issuances of debt securities. Audit-related services include the audits of
our employee benefit plans, assistance in understanding and applying financial
accounting and reporting standards, accounting assistance with proposed
transactions and other services related to our compliance with Section 404 of
the Sarbanes-Oxley Act. Tax services are primarily tax planning, tax compliance
services and tax return preparation.

Audit Services Pre-Approval Policy

The Audit Committee Charter requires that the Audit Committee pre-approve all
auditing services (including providing comfort letters in connection with
securities offerings) and non-audit services (including tax services) provided
to us or our subsidiaries by our independent registered public accounting firm,
except for non-audit services covered by the de minimus exception in Section 10A
of the Securities Exchange Act of 1934. During fiscal 2004, the Audit Committee
pre-approved all services provided by Rachlin Cohen & Holtz.

Auditor Independence

Our Audit Committee has been informed of the types of services that Rachlin
Cohen & Holtz has provided to us and has determined that Rachlin Cohen & Holtz
providing those services to us is compatible with Rachlin Cohen & Holtz
maintaining its independence from us.

ITEM 15.    EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) List of documents filed as part of this report.

    (1)  Financial Statements

         The consolidated financial statements required in Item 8 are submitted
         in a separate section beginning on page F-1 of this Annual Report of
         Form 10-K.

         Reports of Independent Registered Public Accounting Firms
         Consolidated Balance Sheets
         Consolidated Statements of Operations
         Consolidated Statements of Cash Flows
         Consolidated Statements of Changes in Stockholders' Equity
         Notes to Consolidated Financial Statements

    (2)  Financial Statement Schedule

         Schedule II---Valuation and Qualifying Accounts and Reserves is a
         part of this Form 10-K and should be read in conjunction with our
         consolidated financial statements. This schedule is included
         following the Company's Financial Statements. All other financial
         statements and schedules not listed have been omitted because the
         required information is included in the consolidated financial
         statements or the notes thereto, or is not applicable or
         required.

         Schedule II--Valuation and Qualifying Accounts and Reserves

                                       47
<PAGE>

    (3)  Listing of Exhibits

Exhibit No.   Description of Document
-----------   ------------------------------------------------------------------
2.1           Exchange Agreement for the Purchase of Part of SavOnCalling.com,
              LLC between Global Asset Holdings, Inc. and Transvoice
              Investments, Ltd. Dated November 14, 2000.(1)

2.2           Exchange Agreement by and between Transvoice Investments Ltd.,
              Sheldon Goldstein & Global Asset Holdings, Inc. for National
              Online Services, Inc. Dated March 31, 2001(3)

2.3           Acquisition Agreement made as of November 29, 2004 between the
              Company and the Shareholders of IMS.(10)

3.1(a)        Certificate of Incorporation(2)

3.1(b)        Amendments to Certificate of Incorporation(2)

3.1(c)        Amendment to Certificate of Incorporation(4)

3.1(d)        Amendment to Cert. of Incorporation dated June 11, 2003(5)

3.2           By-laws(1)

4.1           2001 Stock Option Plan(3)

4.2.1         Warrants issued to Brookfield Investments Ltd.(4)

4.3           Securities Purchase Agreement dated as of June 11, 2003 (5)

4.4           Form of Warrant issued in connection with June 11, 2003 Private
              Placement(5)

4.4.1         Form of warrant issued to third parties in June Private
              Placement(6)

4.5           Registration Rights Agreement with private placement investor(6)
              dated as of June 11, 2003(5)

4.6           Warrant issued to Alpine Capital Partners July 2003(6)

                                       48
<PAGE>

4.6.1         Warrant issued to investment advisor September 2003 (6)

4.7           Note Purchase Agreement dated December 9, 2003 between Epixtar,
              Subsidiaries and Note Investors (6)

4.8.1         Epixtar Corp. 7% Secured convertible note due December 9, 2004 (6)

4.8.2         Security Agreement between Epixtar Corp. and Subsidiaries and Note
              Investor (6)

4.8.3         Warrant granted December 9, 2003 issued to Noteholders
              Investor (6)

4.8.4         Registration Rights Agreement and Note Investor dated December 9,
              2003 (6)

4.9.1         Subscription Agreement dated April 22,2004 between the Company and
              Bridge Investors(7)

4.9.2         Form of convertible note dated April 22, 2004(7)

4.9.3         Form of Warrant issued in connection with Bridge Investor
              Financing (7)

4.10.1        Subscription Agreement dated May, 2004 between the Company and
              Wedge Investors (7)

4.10.2        Form of 7% convertible note dated May 7, 2004 Form of Warrant
              Issued in connection with Wedge Investor financing (7)

4.11.1        Securities Purchase Agreement dated May 14, 2004 between Epixtar,
              Subsidiaries and Note Investor (7)

4.11.2        Form of Laurus secured convertible term note (7)

4.11.3        Master Security Agreement between the Company, certain
              subsidiaries and Laurus Funds (7)

4.11.4        Form of Warrant I issued in connection with Laurus financing(7)

4.11.4.1      Warrant II (7)

4.11.5        Restrictive Account Agreement (7)

4.11.5.1      Letter relating to Restricted Account Agreement (7)

4.12.1        Form of Joint 5% Unsecured Subordinated Convertible Promissory
              Note (9)

4.12.2        Form of Subscription Agreement for Joint Note Offering (9)

10.1          Agreement and release by and among Trans Voice Investments, Ltd.,
              Sheldon Goldstein and Global Asset Holdings, Inc. dated November
              30, 2001 (3)

10.2          Brookfield Security Agreement dated as of October 31, 2001 (4)

10.2.1        Letter of Brookfield (4)

10.3          Payment agreement entered into as of October 31, 2001 between
              National Online Services, Inc. and Trans Voice Investments, Inc.
              (3)

                                       49
<PAGE>

10.3.1        Amendment to restated payment agreement (4)

10.4          Code of ethics (4)

10.5          Standard Office Building Lease between Epixtar Management Corp.
              and Biscayne Center LLC. (6)

10.6          Agreement of lease between Megaworld and Epixtar Philippines IT
              Enabled Services Corp. (6)

10.7          Reimbursement Agreement between Trans Voice L.L.C. and Epixtar
              Corp. dated as of April 1, 2003 (6)

10.8          Master Service Agreement - Payment one corporation and the Company
              subsidiary (8)

10.8.1        Amendments to Master Service Agreement (8)

10.9          Service Bureau Agreement between ACI Billing Services and Epixtar
              Financial Corp. (8)

10.10         Consultant Services Agreement between Epixtar BPO Services Corp.
              and DDM Consulting, Inc.

10.11         Consultant Services Agreement between Epixtar BPO Services Corp.
              and Steven Rasmussen

10.12         Employment Agreement of Bradley Yeater

10.13         Employment Agreement of Ms. Ilene Kaminsky

10.14         Agreement of Lease for Aseana Property in the Philippines.

21            List of Subsidiaries (6)

23.1          Consents of Independent Certified Public Accountants

31.1          Certification of Chief Executive Officer

31.2          Certification of Chief Financial Officer

32.1          Certification  of Chief Executive Officer Pursuant to 18 U.S.C.
              Section 1350 as Adopted Pursuant to Section 906 of the
              Sarbanes-Oxley Act of 2002

32.2          Certification of Chief Financial Officer Pursuant to 18 U.S.C.
              Section 1350 as Adopted Pursuant to Section 906 of the
              Sarbanes-Oxley Act of 2002

1-   Filed with our Form 8K on November 11, 2000

2-   Filed with our form 10SB on November 26, 1999

3-   Filed with our form SB2 on June 30, 2003

4-   Filed with our annual report on Form 10-K SB on April 11, 2003

5-   Filed with our form 10SB on November 26, 1999

6-   Filed with our form 10KSB on April 14, 2004

7-   Filed with our Form 8K dated May 20, 2004

8-   Filed with our form SB2 on June 18, 2004

9-   Filed with our Form 8K dated, October 15 2004

10- Filed with our Form 8K dated, January 7 2005

                                       50
<PAGE>
                         EPIXTAR CORP. AND SUBSIDIARIES
                                    FORMERLY
              GLOBAL ASSET HOLDINGS, INCORPORATED AND SUBSIDIARIES

                              FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2004,2003, AND 2002

                                      WITH

              REPORT OF INDEPENDENT REGISTER ACCOUNTING FIRM REPORT
<PAGE>

                         EPIXTAR CORP. AND SUBSIDIARIES

                          INDEX TO FINANCIAL STATEMENTS

                                                                 PAGE
                                                              ----------
REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS     F-1 - F-2

EPIXTAR CORP. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

   Balance Sheets                                                F-3
   Statements of Operations                                      F-4
   Statements of Cash Flows                                      F-5
   Statements of Stockholders' Equity (Deficiency)               F-6
   Notes to Financial Statements                              F-7 - F-46

(Continued)


<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders
Epixtar Corp. and Subsidiaries
Miami, Florida

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

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the 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 consolidated financial position of Epixtar
Corp. and Subsidiaries as of December 31, 2004 and 2003, and the consolidated
results of their operations and their cash flows for the years then ended, in
conformity with accounting principles generally accepted in the United States.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 3 to the
consolidated financial statements, as of December 31, 2004 the Company has a
working capital deficiency and a stockholders' deficiency. These factors raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans with regards to these matters are also described in Note 3.
The consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

We have also audited the financial statement Schedule II for the years ended
December 31, 2004 and 2003. In our opinion, this schedule presents fairly, in
all material respects, the information required to be set forth therein.

                            RACHLIN COHEN & HOLTZ LLP

Miami, Florida
March 25, 2005

                                       F-1
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors
Epixtar Corp. and Subsidiaries
Formerly Global Asset Holdings, Incorporated and Subsidiaries
Miami, Florida

We have audited the accompanying consolidated statements of operations,
stockholders' equity, and cash flows of Epixtar Corp. and Subsidiaries formerly
Global Asset Holdings, Incorporated and Subsidiaries for the year ended December
31, 2002. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated results of operations and cash flows of
Epixtar Corp. and Subsidiaries for the year ended December 31, 2002, in
conformity with accounting principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has suffered recurring losses from operations
and has a negative working capital, which raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans regarding
those matters are partially discussed in the Notes to financial statements.

The accompanying financial statements for the year ended December 31, 2002 have
been restated as discussed in Note 2.

Liebman Goldberg & Drogin, LLP

Garden City, New York
March 11, 2003, except for Note 2 as to which
          the date is April 5, 2004

                                       F-2
<PAGE>

                         EPIXTAR CORP. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                December 31,
                                                                       ----------------------------
                                                                           2004            2003
                                                                       ------------    ------------
<S>                                                                    <C>             <C>
                               ASSETS
Current Assets:
  Cash and cash equivalents (includes amounts held in escrow  of
   $1,110,000 in 2004 and $856,000 in 2003)                            $  1,530,052    $  1,342,186
  Restricted cash                                                           175,000         416,721
  Accounts receivable, net                                                4,454,152       5,609,675
  Deferred loan costs, current portion                                      423,777               -
  Prepaid expenses and other current assets                                 201,045         227,203
  Deferred billing costs                                                     70,454         271,256
                                                                       ------------    ------------
    Total current assets
                                                                          6,854,480       7,867,041
  Property and Equipment, net                                             5,103,409       1,263,844
  Other Assets:
  Note receivable                                                           900,000               -
  Goodwill                                                                3,360,272       3,360,272
  Deferred loan costs, net of current portion                               540,886               -
  Deposits and other                                                      1,289,668         491,637
                                                                       ------------    ------------
    Total other assets                                                    6,090,826       3,851,909
                                                                       ------------    ------------
    Total assets                                                       $ 18,048,715    $ 12,982,794
                                                                       ============    ============
          LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current Liabilities:
  Accounts payable, trade                                              $  2,666,713    $  3,009,932
  Accounts payable, related                                                       -         975,000
  Deferred revenue                                                          722,328       1,459,657
  Accrued expenses and other liabilities                                  1,277,565         146,566
  Accrued interest                                                          460,104         175,185
  Current portion of borrowings                                           6,312,758         121,513
  Note payable, stockholder                                               2,474,000               -
                                                                       ------------    ------------
    Total current liabilities                                            14,888,468       4,912,853
Long-Term Liabilities:
  Borrowings, net of current portion                                      3,893,470          23,603
  Note payable, stockholder                                                       -       2,369,350
  Common stock to be issued                                                       -         279,000
                                                                       ------------    ------------
    Total long-term liabilities                                           3,893,470       2,671,953
                                                                       ------------    ------------
Total  liabitilities                                                     18,781,938       7,584,806
                                                                       ------------    ------------
Commitments and Contingencies                                                     -               -
Stockholders' Equity (Deficiency):
  Convertible preferred stock, $.001 par value;
   10,000,000 shares authorized; 16,500 and 23,510 shares issued and
   outstanding (liquidation preference of $3,300,000 and $4,702,000)             17              24
  Common stock, $.001 par value, 50,000,000 shares authorized;
   11,544,219 and 10,643,734 shares issued and outstanding                   11,544          10,644
  Additional paid-in capital                                             22,114,353      18,442,395
  Accumulated deficiency                                                (22,838,853)    (13,055,075)
  Accumulated other comprehensive loss                                      (20,284)              -
                                                                       ------------    ------------
    Total stockholders' equity (deficiency)                                (733,223)      5,397,988
                                                                       ------------    ------------
    Total liabilities and stockholders' equity (deficit)               $ 18,048,715    $ 12,982,794
                                                                       ============    ============
</TABLE>

See Notes to Consolidated Financial Statements.

                                       F-3
<PAGE>

                         EPIXTAR CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                            Years Ended December 31,
                                                                  --------------------------------------------
                                                                      2004            2003            2002
                                                                  ------------    ------------    ------------
<S>                                                               <C>             <C>             <C>
Revenues                                                          $ 17,734,867    $ 36,404,803      26,250,851
Billing cost                                                         2,363,136       6,453,969       3,478,914
Other costs of revenue                                               3,406,875      10,271,805      14,303,053
                                                                  ------------    ------------    ------------
    Total costs of revenue                                           5,770,011      16,725,774      17,781,967
                                                                  ------------    ------------    ------------
Gross profit                                                        11,964,856      19,679,029       8,468,884
                                                                  ------------    ------------    ------------
Expenses:
    Selling, general and administrative                             14,313,126       9,797,541       6,038,823
    Consulting fees and reimbursements - related party               3,000,000       3,537,618       2,111,438
    Provision for doubtful accounts                                     74,135       1,533,983       2,083,268
    Depreciation and amortization                                    1,368,662         214,299          98,557
                                                                  ------------    ------------    ------------
    Total operating expenses                                        18,755,923      15,083,441      10,332,086
                                                                  ------------    ------------    ------------
Income (loss) from operations                                       (6,791,067)      4,595,588      (1,863,202)
Other Income (Expense):
    Gain on settlement of accounts payable                             421,396         324,966               -
    Other income (expense)                                              (6,450)            886               -
    Factoring fees on accounts receivable                             (371,003)       (311,346)        (75,402)
    Interest expense                                                  (625,102)       (189,268)       (422,300)
    Amortization, debt discounts                                      (717,832)        (27,218)              -
    Amortization, cost of borrowings                                  (490,660)        (14,448)              -
    Amortization, beneficial conversion feature of convertible
     debt                                                           (1,873,968)              -               -
    Other finance charges                                             (380,447)              -               -
    Write off of intangible assets                                     (34,330)              -               -
    Gain (loss) on debt extinguishment                               1,140,537               -      (9,550,700)
                                                                  ------------    ------------    ------------
Other income (expense), net                                         (2,937,859)       (216,428)    (10,048,402)
                                                                  ------------    ------------    ------------
Income (loss) from continuing operations                            (9,728,926)      4,379,160     (11,911,604)
Loss from discontinued operations                                            -               -         (43,318)
                                                                  ------------    ------------    ------------
Income (loss) before income taxes (benefit)                         (9,728,926)      4,379,160     (11,954,922)
Provision for income taxes (benefit)                                         -               -               -
                                                                  ------------    ------------    ------------
Net income (loss)                                                 $ (9,728,926)   $  4,379,160    $(11,954,922)
Cumulative dividends on preferred stock                               (176,792)       (188,080)              -
Beneficial conversion feature of preferred stock                             -      (1,884,375)              -
                                                                  ------------    ------------    ------------
Income (Loss) Available to Common Stockholders                    $ (9,905,718)   $  2,306,705    $(11,954,922)
                                                                  ============    ============    ============
Net income (loss) per common share:
    Basic                                                         $      (0.89)   $       0.22    $      (1.14)
                                                                  ============    ============    ============
    Diluted                                                       $      (0.89)   $       0.16    $      (1.14)
                                                                  ============    ============    ============
</TABLE>

See Notes to Consolidated Financial Statements.

                                       F-4
<PAGE>

                         EPIXTAR CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                             Years Ended December 31,
                                                                  --------------------------------------------
                                                                      2004            2003            2002
                                                                  ------------    ------------    ------------
<S>                                                               <C>             <C>             <C>
OPERATING ACTIVITIES:
Net income (loss)                                                 $ (9,728,926)   $  4,379,160    $(11,954,922)
Adjustments to reconcile net income (loss) to net cash and
cash equivalents provided by (used in) operating activities:
  Depreciation and amortization                                      1,368,662         219,209         140,224
  Provision for doubtful accounts                                       74,135       1,533,983       2,083,268
  (Gain) loss on extinguishment of debt                             (1,140,537)              -       9,550,700
  (Gain) on settlement of accounts payable                            (421,396)       (324,966)              -
  Stock-based compensation                                             154,375         260,000               -
  Interest paid with issuance of common stock                            3,833          40,446               -
  Amortization of beneficial conversion feature of
   convertible debt                                                  1,873,968          27,218               -
  Amortization of discount on convertible debt                         717,832          14,448               -
  Amortization of cost of borrowings                                   490,660               -               -
  Amortization of discount on stockholder loan                         104,650         104,650               -
  Write-off of intangibles                                              34,330               -               -
Changes in assets and liabilities:
 (Increase) decrease in:
    Accounts receivable                                              1,081,388      (3,281,101)     (5,154,083)
    Prepaid expenses and other                                          37,658        (158,740)        (58,274)
    Deferred billing costs                                             200,803        (117,010)       (118,746)
    Deposits and other                                                (285,079)       (366,611)        (42,720)
  Increase (decrease) in:
    Accounts payable                                                 1,103,446      (1,304,679)      3,306,330
    Accounts payable - subject to compromise                                 -         (60,435)        385,401
    Accrued expenses and other liabilities                           1,415,914               -               -
    Deferred revenues                                                 (737,329)     (1,438,036)      2,542,692
                                                                  ------------    ------------    ------------
      Net cash and cash equivalents used in
       operating activities                                         (3,651,608)       (472,464)        679,870
                                                                  ------------    ------------    ------------
INVESTING ACTIVITIES:
    Cash released (restricted) by governmental agency                  241,721        (416,721)              -
    Cash paid for acquisition of Phoneboy, net of cash acquired              -          (8,768)              -
    Cash paid for acquisition of  Philippines call center             (269,745)              -               -
    Cash paid for acquisition of property and equipment             (3,597,171)     (1,058,814)       (304,062)
    Note receivable                                                   (900,000)              -               -
                                                                  ------------    ------------    ------------
      Net cash and cash equivalents used in
       investing activities                                         (4,525,195)     (1,484,303)       (304,062)
                                                                  ------------    ------------    ------------
</TABLE>

(CONTINUED)

                                       F-5
<PAGE>

                         EPIXTAR CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                        For the Years Ended December 31,
                                                                  --------------------------------------------
                                                                      2004            2003            2002
                                                                  ------------    ------------    ------------
<S>                                                               <C>             <C>             <C>
FINANCING ACTIVITIES:
  Proceeds from issuance of preferred stock, net                             -       2,136,400               -
  Proceeds from the issuance of debt, net of loan costs              9,665,995         500,000         624,282
  Repayment of notes payable and capital lease obligations          (1,281,042)        (74,121)       (351,299)
  Proceeds from exercise of stock options                                    -          14,000               -
                                                                  ------------    ------------    ------------
    Net cash and cash equivalents provided by
     financing activities                                            8,384,953       2,576,279         272,983
                                                                  ------------    ------------    ------------
Net effect of exchange rates on cash                                   (20,284)              -               -
                                                                  ------------    ------------    ------------
Net Increase in Cash and Cash Equivalents                              187,866         619,512         648,791
Cash and Cash Equivalents, beginning of year                         1,342,186         722,674          73,883
                                                                  ------------    ------------    ------------
Cash and Cash Equivalents, ending of year                         $  1,530,052    $  1,342,186    $    722,674
                                                                  ============    ============    ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Income Tax Paid                                                 $          -    $          -    $          -
                                                                  ============    ============    ============
  Interest Paid                                                   $    183,984    $    355,518    $    497,702
                                                                  ============    ============    ============
NON CASH TRANSACTIONS
  Equipment purchased under capital leases                        $  1,502,000
  Accounts payable settled with issuance of note payable               191,230
</TABLE>

See Notes to Consolidated Financial Statements.

                                       F-6
<PAGE>

                         EPIXTAR CORP. AND SUBSIDIARIES
          CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002

<TABLE>
<CAPTION>
                                                                 Preferred Stock               Common Stock           Additional
                                                           ---------------------------   --------------------------    Paid-in
                                                              Shares         Amount          Shares       Amount       Capital
                                                           ------------   ------------   ------------  ------------  ------------
<S>                                                          <C>          <C>              <C>         <C>           <C>
Balance, January 1, 2002 (Restated)                                   -   $          -     10,503,000  $     10,503  $  3,631,873
  Warrants issued in connection with debt
   extinguishment                                                     -              -              -             -     9,760,000
  Net loss                                                            -              -              -             -             -
                                                           ------------   ------------   ------------  ------------  ------------
Balance, December 31, 2002 (Restated)                                 -              -     10,503,000        10,503    13,391,873
  Issuance of common stock for services                               -              -         13,617            14        84,986
  Issuance of common stock in settlement of
     liabilities                                                      -              -        127,117           127       444,785
  Issuance of preferred stock, net of offering costs             23,510             24              -             -     2,136,376
  Beneficial conversion feature of convertible debt                   -              -              -             -       326,619
  Warrants issued with convertible debt                               -              -              -             -       173,381
  Beneficial conversion feature of preferred stock                    -              -              -             -     1,884,375
  Net income                                                          -              -              -             -             -
                                                           ------------   ------------   ------------  ------------  ------------
Balance, December 31, 2003                                       23,510             24     10,643,734        10,644    18,442,395
  Exercise of stock options                                           -              -         33,333            33         8,967
  Issuance of common stock                                            -              -        125,000           125       334,250
  Issuance of shares in acquisition                                   -              -        168,664           169       743,439
  Conversion of convertible debt                                      -              -        195,552           195       578,637
  Conversion of preferred shares into common stock               (7,010)            (7)       377,936           378        54,481
  Beneficial conversion feature of convertible debt                   -              -              -             -     1,686,466
  Warrants issued with convertible debt                               -              -              -             -     1,152,390
  Warrants issued for loan costs                                      -              -              -             -       253,865
  Gain on extinguishment of convertible debt                          -              -              -             -    (1,140,537)
  Comprehensive loss                                                  -              -              -             -             -
    Net loss                                                          -              -              -             -             -
    Other comprehensive loss
      Foreign currency translation adjustment, net of
       taxes
  Total comprehensive loss
                                                           ------------   ------------   ------------  ------------  ------------
Balance, December 31, 2004                                       16,500   $         17     11,544,219  $     11,544  $ 22,114,353
                                                           ============   ============   ============  ============  ============
</TABLE>

(Continued)
See Notes to Consolidated Financial Statements.

                                       F-7
<PAGE>

                         EPIXTAR CORP. AND SUBSIDIARIES
          CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002

<TABLE>
<CAPTION>
                                                                                  Accumulated
                                                                                    Other
                                                                  Accumulated     Comprehensive
                                                                   Deficiency         Loss           Total
                                                                  ------------    -------------   ------------
<S>                                                               <C>             <C>             <C>
Balance, January 1, 2002 (Restated)                               $ (3,594,938)   $           -   $     47,438
  Warrants issued in connection with debt
   Extinguishment                                                         -                   -      9,760,000
  Net loss                                                         (11,954,922)               -    (11,954,922)
                                                                  ------------    -------------   ------------
Balance, December 31, 2002 (Restated)                              (15,549,860)               -     (2,147,484)
  Issuance of common stock for services                                      -                -         85,000
  Issuance of common stock in settlement of
   Liabilities                                                               -                -        444,912
  Issuance of preferred stock, net of offering costs                         -                -      2,136,400
  Beneficial conversion feature of convertible debt                          -                -        326,619
  Warrants issued with convertible debt                                      -                -        173,381
  Beneficial conversion feature of preferred stock                  (1,884,375)               -              -
  Net income                                                         4,379,160                -      4,379,160
                                                                  ------------    -------------   ------------
Balance, December 31, 2003                                         (13,055,075)               -      5,397,988
  Exercise of stock options                                                  -                -          9,000
  Issuance of common stock                                                   -                -        334,375
  Issuance of shares in acquisitions                                         -                -        743,608
  Conversion of convertible debt                                             -                -        578,832
  Conversion of preferred shares into common stock                     (54,852)               -              -
  Beneficial conversion feature of convertible debt                          -                -      1,686,466
  Warrants issued with convertible debt                                      -                -      1,152,390
  Warrants issued for loan costs                                             -                -        253,865
  Gain on extinguishment of convertible debt                                 -                -     (1,140,537)
  Comprehensive Loss
    Net loss                                                        (9,728,926)               -     (9,728,926)
    Other comprehensive loss
      Foreign currency translation adjustment, net of taxes                  -          (20,284)       (20,284)
                                                                  ------------    -------------   ------------
  Total comprehensive loss                                          (9,728,926)         (20,284)     (9,749,210)
                                                                  ------------    -------------   ------------
Balance, December 31, 2004                                        $(22,838,853)   $     (20,284)  $   (733,223)
                                                                  ============    =============   ============
</TABLE>

See Notes to Consolidated Financial Statements.

                                       F-8
<PAGE>

                         EPIXTAR CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1      DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Epixtar Corp. (Epixtar) was incorporated in Florida in June 1994 and was
previously known as Global Asset Holdings (Global). Global was formerly known as
Pasta Bella, Inc. and changed its name to Global in 1997. Epixtar Corp. and its
subsidiaries are collectively known as the "Company".

DESCRIPTION OF THE BUSINESS

Epixtar, together with the subsidiaries through which the Company's business is
conducted, has operations in the following two business segments: business
process outsourcing and contact center operations (BPO) and internet service
provider services (ISP).

BUSINESS PROCESS OUTSOURCING SERVICES

On July 24, 2003, the Company formed Epixtar Philippines IT-Enabled Services
Corporation (EPITSC) as a wholly-owned subsidiary incorporated in the
Philippines. EPITSC was formed to engage in the business of operating contact
centers for the purpose of receiving and managing incoming calls related to
customer services, and making and managing outgoing calls for sales, customer
service, direct response, back office support, and other similar functions.

In the September 2003, the Company started its BPO operations and began
operating for the Company's benefit a call center for I-Call Global Services
Corporation (I-Call) located in the Philippines. In March 2004, the Company,
through its EPITSC subsidiary, acquired certain of the assets and liabilities of
I-Call.

In August 2004, the Company formed Voxx Corporation (Voxx), a Florida
corporation, as a wholly-owned subsidiary to be the holding company for the
Company's wholly-owned BPO subsidiaries.

On January 7, 2005, effective as of January 3, 2005, the Company acquired
Innovative Marketing Strategies, Inc. (IMS), a Florida corporation. IMS has six
years experience providing BPO services to the financial services market. IMS
has contracts with banks, credit card companies and mortgage companies. These
services are delivered from facilities located in Duluth, Minnesota; Wheeling,
West Virginia; and Pittsburg, Kansas in the United States, and from the
Philippines. Select operational functions are conducted from its network
operations center (NOC) in North Carolina. See Note 22.

INTERNET SERVICE PROVIDER SERVICES

The Company, through its subsidiaries, continues to offer current customers
diverse internet services including (1)small business solutions such as internet
access, web-site design and hosting, and telecommunication services to customers
and subscription based "yellow pages" internet directory services, ). ISP sales
were obtained by using direct customer contact. Through 2003, the Company
operated primarily in the ISP segment. As a result of a proceeding by the
Federal Trade Commission (FTC) in 2003, and the Company's focus in developing
its BPO business segment, it has ceased marketing ISP services to new customers
at the present time.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements of the Company include the accounts of
Epixtar Corp. and its subsidiaries after elimination of intercompany accounts
and transactions.

                                       F-9
<PAGE>

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and notes thereto. Actual results may differ from those estimates.

REVENUE RECOGNITION

Business Process Outsourcing Services - Revenues from this business segment are
derived from telemarketing and verification services provided to customers based
on customer-specific terms. Revenue is recognized when persuasive evidence of an
arrangement exists, delivery of services has occurred, the fee is fixed or
determinable, and collection of the resulting receivable is reasonably assured.
The Company recognizes revenues as services are provided, according to the terms
of the underlying agreement with its customers, which specify how the customer
will be charged, generally based on a commission, hourly, or per-call rate.
Certain of the Company's revenues are contingent upon the collectibility of
sales generated from its services and deferred until such time as collectibility
has been determined. Certain sales provide that payments received by the Company
from its customers are subject to refund depending on the actual level of
customer sales generated by the Company's services, compared to estimated sales
used to record revenue on a commission basis. In these cases, the portion of
revenue that is subject to be refunded to the customer is recorded as deferred
revenue.

Internet Service Provider Services - The Company obtained its customers
utilizing outside professional telemarketing call centers and in-house
telemarketers. The Company ceased marketing its ISP services in early 2004.. The
Company continues to service its current customers. Through 2003, each sale was
evidenced by a recorded acceptance, which was reviewed by a third party quality
control provider before the Company processed an order. Each customer was
entitled to a free thirty-day trial period, during which the customer could
cancel the service at no charge. Customers are billed monthly a predetermined
fixed amount, for one month in advance. Revenue is recognized during the period
in which services are provided and revenue is deferred for the portion of the
advance billings that is attributed to the following accounting period. . All
billing and collecting is done by third party billing services. Collections are
remitted on a weekly or monthly basis for billings that occurred approximately
sixty to ninety days prior.

Other. - The Company also provided low rate long distance international pay
phone service. The pay phone operators were billed monthly, based upon actual
usage at each pay phone. When a call was initiated, revenues were earned.
Revenue was based upon contracts with the pay phone operator at stated rates.
Revenues derived from these operations, which were commenced in October 2003 and
discontinued in May 2004, were immaterial to total consolidated revenues for
2004 and 2003.

COST OF REVENUES

Cost of revenue consists primarily of employee related costs relating to the
services rendered on behalf of clients, as well as telecommunication costs,
information technology costs associated with providing services, facilities
support and customer management support costs. Prior to 2004, ISP costs of
revenue also included third-party and in-house call center costs, and
fulfillment costs.

CREDIT RISKS

Financial instruments that potentially subject the Company to significant
concentrations of credit risk consist primarily of cash, cash equivalents and
accounts receivable. The Company's investment policy is to invest in low risk,
highly liquid investments. The Company maintains its cash balances with high
quality financial institutions and at times such balances are in excess of FDIC
insurance limits. The Company believes no significant concentration of credit
risk exists with respect to the Company's cash balances.

The Company utilizes the services of outside third-party billing houses. Since
the Company's receivables collected by clearing agents are not segregated, there
is a concentration risk and possible loss upon the bankruptcy or defalcation of
any clearing agent. There is no substantial dependency on any billing house as
they are utilized for better cash flow management and compliance issues.

                                      F-10
<PAGE>

The Company does business and extends credit to its call center customers based
on an evaluation of the customers' financial condition, generally without
requiring collateral. The Company does not evaluate customers of its ISP
business for creditworthiness. The third party billing companies holdback a
portion of billed ISP amounts, to which they apply future uncollectible amounts.
The Company maintains an allowance for doubtful accounts on ISP receivables
equal to 50% of amounts held by the third party billing companies. Exposure to
losses on receivables is expected to vary by customer due to the financial
condition of each customer. The Company monitors exposure to credit losses and
maintains allowances for anticipated losses considered necessary under the
circumstances.

ADVERTISING EXPENSE

The costs of advertising, promotion and marketing programs are charged to
operations in the period incurred. Expenses for these programs amounted to
$337,415, $70,686 and $4,744 during 2004, 2003 and 2002, respectively.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of cash on hand and marketable securities with
original maturities of three months or less.

PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost. Depreciation is computed
principally using the straight-line method for financial reporting purposes and
using accelerated methods for income tax purposes. Estimated useful lives for
financial reporting purposes range from three to five years. Leasehold
improvements are amortized over the useful life, or the remaining lease term,
whichever is shorter. Expenditures which significantly increase value or extend
useful asset lives are capitalized.

GOODWILL AND OTHER INTANGIBLE ASSETS

The Company adopted Statement of Financial Accounting Standards No. 142 (SFAS
142), Goodwill and Other Intangible Assets. Goodwill and other intangible assets
with indefinite lives must be tested for impairment on an annual basis. The
Company performs this annual impairment test at fiscal year end for goodwill and
other indefinite-lived intangible assets, which include non-compete agreements.

SFAS 142 requires the Company to compare the fair value of the reporting unit to
its carrying amount on an annual basis to determine if there is potential
goodwill impairment. If the fair value of the reporting unit is less than its
carrying value, an impairment loss is recorded to the extent that the fair value
of the goodwill within the reporting unit is less than its carrying value. SFAS
142 also requires the Company to compare the fair value of an intangible asset
to its carrying amount. If the carrying amount of the intangible asset exceeds
its fair value, an impairment loss is recognized. Fair values for goodwill and
other indefinite-lived intangible assets are determined based on discounted cash
flows, market multiples or appraised values as appropriate.

The Company's goodwill represents the excess acquisition cost over the fair
value of the tangible and identified intangible net assets of an ISP subsidiary
acquired in 2001. For the years ended December 31, 2004, 2003 and 2002, the
Company applied what it believes to be the most appropriate valuation
methodology for the reporting unit. If the Company had utilized different
valuation methodologies, the impairment test results could differ. There was no
impairment of goodwill for the years ended December 31, 2004, 2003 and 2002.

At December 31, 2003, the Company's intangible assets consisted of a non-compete
agreement entered into as part of its acquisition of a long distance
international pay phone service provider. The non-compete agreement was stated
at cost and was being amortized on a straight-line basis over two years. As a
result of the Company discontinuing the operations of the subsidiary in May
2004, it wrote-off to expense $34,330, the balance of this intangible asset. At
December 31, 2004, 2003 and 2002, there were no intangible assets with
indefinite lives. Intangible assets were included in "Deposits and Other" in the
accompanying consolidated financial statements.

                                      F-11
<PAGE>

FAIR VALUE OF FINANCIAL INSTRUMENTS

Statement of Financial Accounting Standards No 107 (SFAS 107), "Disclosures
About Fair Value of Financial Instruments", requires disclosure of fair value
information, whether or not recognized in the balance sheet, where it is
practicable to estimate that value. The amounts reported for cash, accounts
receivable, prepaid expenses, loans payable, accounts payable and accrued
expenses approximate their fair value because of their short maturities. The
amount of the note payable - stockholder has been presented at its estimated
fair value (see Note 10). Convertible debt is presented net of discount for
beneficial conversion feature on detachable warrants. Allocation of the debt
proceeds to the detachable warrants was based on the estimated fair value of the
warrants as calculated using the Black-Scholes valuation model.

INCOME TAXES

The Company accounts for income taxes under Statement of Financial Accounting
Standards No. 109 (SFAS 109), "Accounting for Income Taxes". SFAS 109 requires
an asset and liability approach for financial reporting for income taxes. Under
SFAS 109, deferred taxes are provided for temporary differences between the
carrying values of assets and liabilities for financial reporting and tax
purposes at the enacted rates at which these differences are expected to
reverse.

TRANSLATION POLICY

The local currency is the functional currency for the Company's international
operations. For local currency functional locations, assets and liabilities are
translated at end-of-period rates while revenues and expenses are translated at
average rates in effect during the period. Equity is translated at historical
rates and the resulting cumulative translation adjustments are included as a
component of accumulated other comprehensive income (AOCI) and presented as a
separate component of stockholders' deficit.

BUSINESS SEGMENTS

Statement of Financial Accounting Standards No. 131 (SFAS 131), "Disclosures
About Segments of an Enterprise and Related Information", establishes standards
for the way that public companies report information about operating segments in
annual financial statements and requires reporting of selected information about
operating segments in interim financial statements regarding products and
services, geographic areas, and major customers. SFAS No. 131 defines operating
segments as components of a company about which separate financial information
is available that is evaluated regularly by the chief operating decision maker
in deciding how to allocate resources and in assessing performance. The required
segment information is contained in Note 21.

EARNINGS (LOSS) PER SHARE

The Company has adopted Statement of Financial Accounting Standards No. 128
(SFAS 128) "Earnings per Share". SFAS 128 requires companies with complex
capital structures or common stock equivalents to present both basic and diluted
earnings per share (EPS).

The Company presents both basic and diluted EPS. Basic EPS is calculated by
dividing net income or loss by the weighted average number of common shares
outstanding during the year. Diluted EPS is based upon the weighted average
number of common and common equivalent shares outstanding during the year which
is calculated using the treasury stock method for stock options and warrants,
and assumes conversion of the Company's convertible notes (see Note19). Common
equivalent shares are excluded from the computation in periods in which they
have an anti-dilutive effect. Stock options for which the exercise price exceeds
the average market price over the period have an anti-dilutive effect on EPS
and, accordingly, are excluded from the calculation. Diluted EPS is not
presented for the years ended December 31, 2004 and 2002, as the effects of the
common stock options, warrants and convertible debt were anti-dilutive.
Preferred stock was antidilutive in 2003, and accordingly did not affect diluted
EPS.

                                      F-12
<PAGE>

STOCK-BASED COMPENSATION

Through December 31, 2004, the Company elected to follow Accounting Principles
Board Opinion No. 25 (APB 25), "Accounting for Stock Issued to Employees" and
related interpretations, in accounting for its employee and board of director
stock options rather than the alternative fair value accounting allowed by SFAS
123, "Accounting for Stock-Based Compensation" (SFAS 123). SFAS 123 required
companies that continued to follow APB 25 to provide a pro-forma disclosure of
the impact of applying the fair value method of SFAS 123. The Company follows
SFAS 123 in accounting for stock-based awards granted to non-employees.

APB No. 25 provided that the compensation expense relative to the Company's
employee stock options be measured based on the intrinsic value of the stock
option. Through December 31, 2004, the Company used the intrinsic value method
of accounting for stock-based awards granted to employees and, accordingly, did
not recognize compensation expense for its stock-based awards in the
Consolidated Statements of Operations since the options had no intrinsic value.
See Recent Accounting Pronouncements below and Note 18 for additional stock
option information.

The following table illustrates the effect on net income (loss) and net income
(loss) per share as if the Company had applied the fair value recognition
provisions of SFAS 123 during the years ended December 31, 2004, 2003 and 2002:

<TABLE>
<CAPTION>
                                                                                    Years Ended December 31,
                                                                       ------------------------------------------------
                                                                            2004             2003             2002
                                                                       --------------   --------------   --------------
                                                                                                           (Restated)
        <S>                                                            <C>              <C>              <C>
        Net income (loss) available to common shareholders             $   (9,905,718)  $    2,306,705   $  (11,954,922)

        Deduct: Total stock-based compensation expense
        determined  under fair value based method for  all
        awards, net of related tax effects                                 (3,707,950)      (2,527,813)        (815,629)
                                                                       --------------   --------------   --------------
        Pro forma net loss                                             $  (13,613,668)  $     (221,108)  $  (12,770,551)
                                                                       ==============   ==============   ==============
        Income (loss) per share:
          Basic:
            As reported                                                $        (0.89)  $         0.22   $        (1.14)
                                                                       ==============   ==============   ==============
            Pro forma                                                  $        (1.22)  $        (0.02)  $        (1.22)
                                                                       ==============   ==============   ==============
          Diluted:
            As reported                                                $        (0.89)  $         0.16   $        (1.14)
                                                                       ==============   ==============   ==============
            Pro forma                                                  $        (1.22)  $        (0.02)  $        (1.22)
                                                                       ==============   ==============   ==============
</TABLE>

COMPREHENSIVE INCOME

The Company follows the reporting and disclosure requirements of Statement of
Financial Accounting Standards No. 130 (SFAS 130) Reporting Comprehensive
Income". SFAS 130 requires the disclosure of total non-stockholder changes in
equity and its components, which include all changes in equity during a period
except those resulting from investments by and distributions to stockholders.
The Company's only component of other comprehensive income (loss) relates to
translations gains (losses) on foreign currency.

                                      F-13
<PAGE>

ACCOUNTING PRONOUNCEMENTS ADOPTED BY THE COMPANY IN 2004

In December 2003, the Securities and Exchange Commission issued Staff Accounting
Bulletin No. 104 (SAB 104), "Revenue Recognition," which codifies, revises and
rescinds certain sections of SAB 101, "Revenue Recognition," in order to make
this interpretive guidance consistent with current authoritative accounting and
auditing guidance and SEC rules and regulations. The adoption of SAB 104 had no
material effect on the Company's financial position, results of operations or
cash flows.

In December 2003, the FASB issued Interpretation No. 46 (FIN 46R),
"Consolidation of Variable Interest Entities (revised March 2005)". A variable
interest entity (VIE) is one where the contractual or ownership interests in an
entity change with changes in the entity's net asset value. FIN 46R clarifies
some of the provisions of FIN 46 and exempts certain entities from its
requirements. Application of FIN 46R was effective for periods ending after
December 31, 2003. The Company does not have VIEs; accordingly, the adoption of
FIN 46 had no impact on the Company's financial position, results of operations
or cash flows.

RECENT ACCOUNTING PRONOUNCEMENTS

In December 2004, the FASB issued Statement of Financial Accounting Standards
No. 123, (revised 2004) (SFAS 123R) "Share-Based Compensation" revising SFAS
123, Accounting for Stock-Based Compensation and superseding APB 25, "Accounting
for Stock Issued to Employees". This SFAS eliminates the alternative to use APB
25's intrinsic value method of accounting that was provided in SFAS 123 as
originally issued. SFAS 123R establishes standards for the accounting of
transactions in which a company exchanges its equity instruments for goods or
services or incurs liabilities in exchange for goods or services that are based
on the fair value of the company' equity instruments or that may be settled by
the issuance of equity instruments. This SFAS focuses primarily on accounting
for transactions in which a company obtains employee services in share-based
payment transactions, and does not change the accounting guidance for
share-based payment transactions with parties other than employees. This SFAS
requires a public company to measure the cost of employee services received in
exchange for an award of equity instruments based on the grant-date fair value
of the award (with limited exceptions). That cost will be recognized over the
period during which an employee is required to provide service in exchange for
the award, usually the vesting period. The grant-date fair value of employee
share options and similar instruments will be estimated using option-pricing
models. If an equity award is modified after the grant date, incremental
compensation cost will be recognized in an amount equal to the excess of the
fair value of the modified award over the fair value of the original award
immediately before the modification. SFAS 123R becomes effective as of the
beginning of the first interim or annual reporting period that begins after June
15, 2005. The Company is currently assessing the impact of this SFAS on the
Company's results of operations or financial position.

In December 2004, the FASB issued Statement of Financial Accounting Standards
No. 153, (SFAS 153) "Exchanges of Nonmonetary Assets - an amendment of APB
Opinion No. 29". Opinion 29 provided an exception to the basic measurement
principle (fair value) for exchanges of similar productive assets. That
exception required that some nonmonetary exchanges, although commercially
substantive, be recorded on a carryover basis. SFAS 153 eliminates the exception
to fair value for exchanges of similar productive assets and replaces it with a
general exception for exchange transactions that do not have commercial
substance. The Company expects that the adoption of SFAS 153 will not have a
material effect on the Company's financial position, results of operations or
cash flows.

FASB Staff Position No. 109-2 (FSP 109-2), "Accounting and Disclosure Guidance
for the Foreign Earnings Repatriation Provision within the American Jobs
Creation Act of 2004", provides guidance under SFAS 109, "Accounting for Income
Taxes," with respect to recording the potential impact of the repatriation
provisions of the American Jobs Creation Act of 2004 (the "Jobs Act") on
enterprises' income tax expense and deferred tax liability. The Jobs Act was
enacted on October 22, 2004. FSP 109-2 states that an enterprise is allowed time
beyond the financial reporting period of enactment to evaluate the effect of the
Jobs Act on its plan for reinvestment or repatriation of foreign earnings for
purposes of applying SFAS 109. The Company has not yet completed evaluating the
impact of the repatriation provisions. Accordingly, as provided for in FSP
109-2, the Company has not adjusted its tax expense or deferred tax liability to
reflect the repatriation provisions of the Jobs Act. The Company will reflect
the effects of the Jobs Act, if any, in 2005, as part of the income tax expense
in the period action is taken. The Company does, however, based upon the level
of foreign earnings for 2004, believe FSP No. 109-2 would not have a material
impact on its financial position, results of operations or cash flows.

                                      F-14
<PAGE>

RECLASSIFICATIONS

Certain reclassifications have been made in the 2003 and 2002 financial
statements to conform to the 2004 presentation.

NOTE 2.     RESTATEMENT OF 2002 CONSOLIDATED FINANCIAL STATEMENTS

The 2002 consolidated financial statements of the Company have been restated as
a result of management re-evaluating the accounting treatment of three
previously recorded transactions. Those transactions are as follows:

Savon LLC Acquisition. In November 2000, the Company exchanged 2,000,000 shares
of Company common stock for 80% of the outstanding member interests of Savon
LLC. Transvoice Investments Ltd., the seller, received 33% of the outstanding
common stock of the Company through this acquisition. Pursuant to SEC Staff
Accounting Bulletin No. 48, this acquisition should have been recorded at the
historical cost of Savon because of the significance of the ownership interest
that the Transvoice stockholder interests had following this acquisition.
However, the Company recorded the transaction at the fair value of the Company
common stock exchanged for the interest and, as a result, goodwill was recorded
in connection with this acquisition which should not have been recorded. The
Company has restated the prior consolidated financial statements to record this
acquisition at the historical cost of Savon at the date of purchase and,
consequently, removed all goodwill, goodwill amortization and impairment charges
previously recorded relating to this transaction.

National On Line Acquisition. On March 31, 2001, the Company acquired 100% of
the outstanding equity interests of National OnLine, in a transaction involving
two payments, for a total of 4,500,000 shares of the Company's common stock. Due
to the fact that Transvoice Investments Ltd. owned 80% of National OnLine prior
to the acquisition and 56% of the outstanding Company common stock following the
acquisition, the purchase of the 80% interest should have been recorded at the
historical cost of National OnLine, pursuant to the guidelines of SEC Staff
Accounting Bulletin No. 48. Rather than record the 20% interest at fair value
and the 80% interest at historical cost, the Company recorded the entire
acquisition at the fair value of the 4,500,000 shares of Company common stock
exchanged. As a result, goodwill was recorded in connection with the purchase of
the 80% which should not have been recorded. The Company has restated the prior
consolidated financial statements to reflect the acquisition of the 80% interest
at the historical cost of National OnLine at the date of purchase and,
consequently, removed the goodwill and goodwill amortization related thereto.

Loss on Extinguishment of Debt. On October 31, 2001, the Company entered into a
loan agreement to borrow up to $5,000,000 from a then unrelated entity. The note
provided for interest at 7%, was collateralized by accounts receivable and was
due on demand. In August and September 2002, the creditor became a stockholder
of the Company when the entity acquired a total of 770,000 common shares. In
November 2002, the Company entered into an agreement, which was executed on
December 6, 2002 and amended on March 3, 2003, whereby the creditor released the
collateral and agreed not to demand payment before January 2005 in exchange for
certain consideration. That consideration consisted of warrants to purchase
4,000,000 shares of Company common stock at an exercise price of $.50 per share
for a term of three years beginning in May 2003. Pursuant to EITF 96-19,
management has determined that the transaction should have been treated as an
extinguishment of the original instrument and an execution of a new note at
December 6, 2002. The fair value of the warrants, determined on the grant date
(March 3, 2003), should have been treated as a component of the calculation of
the loss associated with that extinguishment and should have been recognized in
the statement of operations in December 2002. In addition, the new note should
have been recorded at fair value on the date that it was entered into (December
6, 2002). In 2002, the Company recorded the fair value of the warrants at the
date the agreement was negotiated (November 2002) as deferred financing costs
and began amortizing those costs over the new life of the loan (two years). The
2002 consolidated financial statements have been restated to reflect the loss on
debt extinguishment in 2002, measured by the fair value of the warrants on the
date of grant, reduced by the discount on the note required to reflect that note
at fair value at the date it was executed. The discount was amortized over the
deferral period of the amended note note, approximately two years. The fair
value of both the warrants and the note payable was determined by appraisal.

                                      F-15
<PAGE>

Summary. As a result of the transactions described above, the previously
reported net loss for the year ended December 31, 2002 has increased by
approximately $9,509,000 to approximately $11,955,000. Net loss per share as
previously reported for 2002 ($0.23) was restated to a net loss per share of
$(1.14). In addition, stockholders' equity as of December 31, 2002 of
approximately $12,043,000, as previously reported, was reduced to a
stockholders' deficiency of approximately $2,147,000.

The restated balance sheet as of December 31, 2002 is as follows:

<TABLE>
<CAPTION>
                                                                As Previously
                                                                  Reported       Adjustments        Restated
                                                               --------------   --------------   --------------
<S>                                                            <C>              <C>              <C>
ASSETS
Debt restructuring costs - current portion                     $      500,000   $     (500,000)  $            -
Other current assets                                                4,739,186                -        4,739,186
Property and equipment, net                                           406,971                -          406,971
Debt restructuring costs - non-current portion                        458,333         (458,333)               -
Goodwill                                                           16,801,359      (13,441,087)       3,360,272
Other Assets                                                           76,716                -           76,716
                                                               --------------   --------------   --------------
         Total assets                                          $   22,982,565   $  (14,399,420)  $    8,583,145
                                                               ==============   ==============   ==============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current Liabilities                                            $    8,377,478         $      -   $    8,377,478
                                                               --------------   --------------   --------------
Long-Term Debt:
   Capital lease obligation                                            88,451                -           88,451
   Note payable                                                     2,474,000         (209,300)       2,264,700
                                                               --------------   --------------   --------------
        Total long-term debt                                        2,562,451         (209,300)       2,353,151
                                                               --------------   --------------   --------------
Stockholders' Equity (Deficiency):
   Common stock                                                        10,503                -           10,503
   Additional paid-in capital                                      31,757,997      (18,366,124)      13,391,873
   Accumulated deficit                                            (19,725,864)       4,176,004      (15,549,860)
                                                               --------------   --------------   --------------
     Total stockholders' equity (deficiency)                       12,042,636      (14,190,120)      (2,147,484)
                                                               --------------   --------------   --------------
Total liabilities and stockholders' equity (deficiency)        $   22,982,565   $  (14,399,420)  $    8,583,145
                                                               ==============   ==============   ==============
</TABLE>

                                      F-16
<PAGE>

The restated statement of operations for the year ended December 31, 2002 is as
follows:

<TABLE>
<CAPTION>
                                            As Previously
                                              Reported        Adjustments       Restated
                                           --------------   --------------   --------------
<S>                                        <C>              <C>              <C>
Revenues                                   $   26,250,851   $            -   $   26,250,851
Cost of sales                                  17,781,967                -       17,781,967
                                           --------------   --------------   --------------
Gross profit                                    8,468,884                         8,468,884
Selling, general and administrative            10,332,086                -       10,332,086
                                           --------------   --------------   --------------
Loss from operations                           (1,863,202)               -       (1,863,202)
                                           --------------   --------------   --------------
Other (expense):
  Interest expense                               (539,369)          41,667         (497,702)
  Loss on debt extinguishment                           -       (9,550,700)      (9,550,700)
                                           --------------   --------------   --------------
Loss from continuing operations                (2,402,571)      (9,509,033)     (11,911,604)
Loss from discontinued operations                 (43,318)               -          (43,318)
                                           --------------   --------------   --------------
Net Loss                                   $   (2,445,889)  $   (9,509,033)  $  (11,954,922)
                                           ==============   ==============   ==============
Net Loss Per Common Share
  Basic and Diluted:
    Continuing operations                  $        (0.23)  $        (0.91)  $        (1.14)
    Discontinued operations                         (0.00)           (0.00)           (0.00)
                                           --------------   --------------   --------------
    Net loss                               $        (0.23)  $        (0.91)  $        (1.14)
                                           ==============   ==============   ==============
Weighted Average Number of  Common
 Shares Outstanding                            10,503,000                -       10,503,000
                                           ==============   ==============   ==============

</TABLE>

NOTE 3.     GOING CONCERN CONSIDERATIONS

At December 31, 2004, the Company reflected an accumulated deficit of
approximately $22,838,853 as a result of net losses in each year of operation
except 2003. The Company had negative cash flows from operations for the years
ended December 31, 2004 and 2003, The Company reported a net loss of $9,728,926
for the year ended December 31, 2004. The Company continues to experience
certain liquidity issues primarily as a result of the Federal Trade Commission
(FTC) complaint in 2003 and the Company's costs in 2004 associated with the
execution of its BPO operations business plan.

In October 2003, the FTC served a complaint in which it alleged that the Company
and certain subsidiaries were misleading potential customers of the internet
service business. Specifically, the FTC alleged that the Company was signing
customers for a free thirty day trial period without appropriate consent and was
failing to inform those customers that unless the service was cancelled before
the end of the thirty day trial period the customer would be billed for the
service in future periods. At the same time it served the complaint, the Court
issued a temporary restraining order, asset freeze, order permitting expedited
discovery, order appointing a temporary receiver and an order to show cause in
an action temporary receiver and an order to show cause in an action commenced
by the FTC.

The action by the FTC, and the Company's resulting defense against such action,
caused the Company to experience business interruption and incur substantial
costs. Commencing on October 30, 2003, the Company was unable to market its
internet product and ultimately decided to discontinue the marketing of its
internet product indefinitely. All of this has had a significant negative impact
on the financial position and results of operations of the Company. Also,
although the Company believes that it has been operating its ISP business within
the current laws and regulations, there can be no assurance that there will be
no further action by the FTC or any other governmental agency in the future.

In November 2003, without any finding of wrongdoing, the Company agreed to enter
into a preliminary injunction with the FTC. As a result, the Company was allowed
to resume business and the asset freeze was lifted. As part of the agreement,
the Company was required to establish an escrow account for the payment of
future customer refunds

                                      F-17
<PAGE>

and other amounts subject to future resolution of the dispute with the FTC, into
which approximately $1,702,000 was deposited, with approximately $772,000
released by December 31, 2003. Additionally, during 2003, the Company paid
$75,000 in fees and fines. In July 2004 the Company executed a Stipulated Final
Judgment for Permanent Injunction in its FTC Proceeding. This stipulation was
prepared by the Northeast Region staff of the FTC and sent for approved by the
Commission as required by the rules of the Commission. See Note 21.

For a two-year period the Company must continue to refund all amounts to
customers who were allegedly billed improperly. As of December 31, 2004 and
2003, the amounts held in escrow were approximately $175,000 and $417,000,
respectively. This cash is reflected as restricted in the accompanying balance
sheet. See Note 21.

In part as a result of the actions of the FTC, the Company expedited the
implementation of its BPO business plan. In 2004 the Company effectively began
providing outsourcing services to customers through call centers which the
Company owns and operates. In addition to EPITSC, its wholly-owned subsidiary
formed in 2003, in 2004 the Company acquired certain assets of a call center
with operations primarily in the Philippines. This business expansion has
required substantial working capital commitments on the part of the Company for
the hiring of personnel and the development of call center locations in the
Philippines. In addition to the approximately $1,059,000 expended in 2003, in
2004, capital expenditures relating to this expansion amounted to approximately
$5,253,000, some of which were financed through capital leases.

The Company also continues to offer internet based services to its current
customers. The infrastructure supporting these services could be subject to
technological obsolescence in the future.

In order to achieve profitability, the Company needs to be able to retain its
ISP customers as well as continue to expand its customer base in its business
outsourcing and call center segment. Management believes that the steps it has
taken during 2004 to implement its BPO operations will allow the Company to
achieve profitability. During 2004 and continuing into 2005, the Company (1)
hired additional management personnel with call center experience, (2) entered
into agreements for outsourcing services and (3) obtained additional debt
financing.

The factors discussed above raise substantial doubt about the Company's ability
to continue as a going concern. The consolidated financial statements do not
include any adjustments that might result from the outcome of this uncertainty.

NOTE 4.     ACCOUNTS RECEIVABLE

                                                     December 31,
                                                2004             2003
                                           --------------   --------------
Accounts receivable - gross                $    2,786,953   $    3,316,806
Holdbacks and reserves, net of settlements      3,544,658        4,356,069
Unbilled receivables                                2,480          114,834
                                           --------------   --------------
Accounts receivable - total                     6,334,091        7,787,709
Allowance for doubtful accounts                (1,879,939)      (2,178,034)
                                           --------------   --------------
Accounts receivable - net                  $    4,454,152   $    5,609,675
                                           ==============   ==============

The Company's net accounts receivable include the estimated collectible portion
of receivables based upon reconciliation with the outside billing services and
local exchange carriers (LEC). Additionally, as is common business practice in
the telecommunications industry, the billing services retain a "holdback or
reserve". The holdback or reserve is used to absorb uncollectible billings,
disputed billings or adjustments to a customer's account and are included in
accounts receivable. While holdbacks and reserves are expected to be collected,
the Company has established an allowance of approximately fifty percent of such
amounts as of December 31, 2004 and 2003.

                                      F-18
<PAGE>

The Company writes off accounts considered uncollectible against the allowance
upon notification from the billing companies that amounts are uncollectible.
Based upon notification from the billing companies, the Company recorded
$1,761,775 and $1,485,377 during the years ended December 31, 2004 and 2003,
respectively, in adjustments or deductions of the holdback or reserves. Unbilled
receivables represent amounts billed subsequently for services provided in the
current period.

Provision for doubtful accounts amounted to $74,135, $1,553,983 and $2,083,268
during the years ended December 31, 2004, 2003 and 2002, respectively. The
decrease in provision for 2004 is primarily due to the settlement of a
significant portion of previously recorded holdback and reserves during 2004.
The holdback and reserve requirement due to these settlements decreased from 50%
to 30%, which was adjusted through provision.

The Company's accounts receivables serve as collateral for certain debt of the
Company (see Note 9).

FACTORING AGREEMENTS. In April 2003, a subsidiary of the Company entered into a
factoring and security agreement with a non-related party. Under the terms of
the agreement, a maximum of $2,000,000 of accounts receivable could be factored
at a 50% advance rate for an initial discount fee of 1.25% of the purchased
receivable. For accounts receivables uncollected after 30 days, the Company was
charged an additional 0.625% for every 15 day period up to 90 days. Thereafter,
for the next two 15-day periods, the Company was charged an additional 0.75%.
This agreement was terminated during 2004. Accounts receivable are also factored
through a billing company under similar terms with a maximum advance of
$500,000. The total amount of factored accounts receivable was $285,982 and
$1,001,752 as of December 31, 2004 and 2003, respectively. Factoring charges
amounted to $371,003, $311,346 and $75,402 during 2004, 2003 and 2002,
respectively. Accounts receivable are presented net of factored amounts.

DEFERRED REVENUE. The Company's ISP customers are billed on a thirty-day cycle.
Deferred revenue represents the pro-rata portion of billings to customers that
have not been earned. Customers are billed monthly, one month in advance. The
amount of deferred revenue is determined by multiplying the advance billing
amounts by the percentage of days during the preceding thirty-day service period
that occur during the subsequent accounting period.

NOTE 5.     NOTE  RECEIVABLE

In July 2004 the Company advanced IMS $600,000 at the time the Company entered
into a letter of intent to acquire it. The note was payable in July 2005 and
accrued no interest. During the fourth quarter of 2004, the Company entered into
an agreement to purchase IMS in January 2005 and in November 2004 advanced it an
additional $300,000. The $900,000 note was applied to the purchase price in
January 2005 upon its acquisition (see Note 22).

NOTE 6.     DEFERRED BILLING COSTS

The Company's billing costs consist of transaction charges from third party
billing companies and LEC's. Billing costs are deducted by the billing companies
in advance by reducing amounts collected on the Company's behalf before
remitting the net amount. Since the Company bills its customers one month in
advance, a portion of the billing costs deducted from remittances from the
billing companies relate to transaction charges for revenues that are

                                      F-19
<PAGE>

deferred (see Note 4). The amount of deferred billing costs is determined by
multiplying the billing amounts by the percentage of days that occur during the
subsequent accounting period.

NOTE 7.     PROPERTY AND EQUIPMENT

<TABLE>
<CAPTION>
                                              Estimated      December 31,     December 31,
                                            Useful Lives         2004             2003
                                           --------------   --------------   --------------
<S>                                            <C>          <C>              <C>
Computer and IT equipment                         3 years   $    2,773,580   $      522,268
Other equipment                                   5 years          480,667          443,078
Construction in progress                              N/A          483,133                -
Software                                          3 Years          200,000          200,000
Furniture and fixtures                            5 years          510,559          241,193
Vehicles                                          3 years          178,019           47,336
Leasehold improvements                         Lease Term        2,160,409          129,583
                                                            --------------   --------------
                                                                 6,786,368        1,583,458
Less accumulated depreciation and
 amortization                                                   (1,682,958)        (319,614)
                                                            --------------   --------------
                                                            $    5,103,409   $    1,263,844
                                                            ==============   ==============
</TABLE>

Depreciation and amortization expense amounted to $1,368,662, $214,299 and
$98,557 for the years ended December 31, 2004, 2003 and 2002, respectively.

Assets acquired under capital leases totaled $538,046 and $114,950 at December
31, 2004 and 2003, respectively.

NOTE 8.  INTANGIBLE ASSETS

                                            December 31,     December 31,
                                                2004             2003
                                           --------------   --------------
Balance of non-compete agreement:
  Gross                                           $     -   $       39,237
  Accumulated amortization                              -            4,907
                                           --------------   --------------
  Net balance                           $               -   $       34,330
                                           ==============   ==============

The Company's intangible asset consisted of a non-compete agreement entered into
as part of its acquisition of a long distance international pay phone service
provider. The non-compete agreement was stated at cost and was being amortized
on a straight-line basis over two years. As a result of the Company
discontinuing the operations of the subsidiary in May 2004, it wrote-off to
expense $34,330, the balance of this intangible asset. Amortization expense for
intangible assets was $4,907 for the year ended December 31, 2003.

NOTE 9.    DEBT AND CAPITAL LEASES

At December 31, 2004 and 2003, debt and capital leases consisted of the
following:

                                      F-20
<PAGE>

<TABLE>
<CAPTION>
                                                                                        2004             2003
                                                                                   --------------   --------------
<S>                                                                                <C>              <C>
7% secured convertible notes due December 2004, secured by accounts
 receivable                                                                        $      450,000   $       41,666
8% unsecured  convertible promissory notes, due April 2005, net of
 unamortized discount of $46,631                                                          953,369                -
Secured convertible term note due May 2007, payable in monthly installments
 commencing October 2004, bearing annual interest at 2.5% over prime, not to
 exceed 8%, collateralized by the assets of the
 Company, net of unamortized discount of $546,860                                       4,271,322                -
5% unsecured joint and several subordinated convertible promissory
 notes, due May 2007, net of unamortized discount of $111,899                           2,835,601                -
Non-interest bearing note payable, due June 2006, payable in monthly
 installments                                                                             127,487                -
6% Notes due December 2004, secured by equipment                                          500,000
Non-interest bearing promissory note, due September 2005, payable in
 monthly installments                                                                     404,762                -
Non-interest bearing assumption of equipment financing on acquisition
 of call center, payable through 2005                                                     158,301                -
11.9% promissory notes due August  2007, secured by automobiles,
 payable in monthly installments                                                           77,738                -
Non-interest bearing  note pursuant to asset purchase agreement,
 payable on demand                                                                         88,692                -
11% equipment financing agreement, with maturities from September 2005
 through March 2006                                                                       124,248                -
Revolving line of credit bearing annual interest at 3.25% above
 prime                                                                                          -            9,800
Capitals leases, at interest rates ranging from 9.0% to 11%  in 2004
 and 7% to 14% in 2003                                                                    214,708           93,650
                                                                                   --------------   --------------
                                                                                       10,206,228          145,116
Less current portion                                                                    6,312,758          121,513
                                                                                   --------------   --------------
                                                                                   $    3,893,470   $       23,603
                                                                                   ==============   ==============
</TABLE>

Annual maturities of debt and capital leases are as follows:

<TABLE>
<CAPTION>
For the years ending December 31,               Debt         Capital Leases        Total
----------------------------------------   --------------    --------------   --------------
<S>                                        <C>               <C>              <C>
2005                                       $    6,866,048    $      152,100   $    7,018,148
2006                                            1,175,915            60,561        1,236,476
2007                                            2,654,947             2,047        2,656,994
                                           --------------    --------------   --------------
Total payments due                             10,696,910           214,708       10,911,618
Less unamortized discount                        (705,390)                -         (705,390)
                                           --------------    --------------   --------------
                                           $    9,991,520    $      214,708   $   10,206,228
                                           ==============    ==============   ==============
</TABLE>

At December 31, 2004, the total value of future minimum capital lease payments
above amounted to $234,268, including $19,560 in imputed interest costs.

In December 2003, the Company issued 7% Secured Convertible Notes in the amount
of $500,000 to accredited investors. The outstanding principal and interest on
the Notes are convertible at any time into shares of the Company's common stock.
On the date of the December 2003 issuance of the convertible notes, the
Company's common stock had a closing price per share of $5.15. Based on the
terms of the conversion associated with the notes, there was an intrinsic value
associated with the beneficial conversion feature estimated at $326,619, which
was recorded as deferred interest and presented as a discount on the convertible
debenture, net of amortization to be

                                      F-21
<PAGE>
taken over the one-year term of the debenture. Also, as part of the December
2003 convertible notes, the Company issued detachable warrants to purchase
62,500 shares of the Company's common stock for $5.00 per share exercisable at
any time over a five year period from the date of issuance. Using the
Black-Scholes model the Company estimated the fair value of the warrants and
allocated $173,381 of the proceeds from the notes to the warrants which was
recorded as deferred interest and presented as a discount on the convertible
notes, net of amortization to be taken over the one-year term of the debenture.
During 2004, $50,000 was repaid and the remaining notes amounting to $450,000,
matured in December 2004. The Company is currently negotiating with the lender
to obtain an extension of the maturity date of the notes.

In April and May 2004, the Company issued 8% Unsecured Convertible Promissory
Notes in the amount of $2,500,000 to accredited investors. The notes mature in
April 2005. The outstanding principal and interest on the notes are convertible
at any time into shares of the Company's common stock. On the date of the
issuance of the convertible notes, the Company's common stock had a closing
price per share ranging from $4.25 to $4.75. Based on the terms of the
conversion associated with the notes, there was an intrinsic value associated
with the beneficial conversion feature estimated at $1,817,787, which was
recorded as deferred interest and presented as a discount on the convertible
debenture, net of amortization to be taken over the one-year term of the notes.
Also, as part of the convertible notes, the company issued detachable warrants
to purchase 136,749 shares of the Company's common stock for $5.05 per share
exercisable at any time over a five year period from the date of issuance. Using
the Black-Scholes model the Company estimated the fair value of the warrants and
allocated $401,852 of the proceeds from the notes to the warrants which was
recorded as deferred interest and presented as a discount on the convertible
notes, net of amortization to be taken over the one-year term of the notes. In
May 2004, certain holders of the notes exercised their rights to convert
$575,000 of principal and accrued interest valued at $3,833 into 195,552 shares
of common stock. Additionally, in May 2004, $,925,000, plus accrued interest was
repaid in cash. In August 2004, the terms of the notes, aggregating $1,000,000
were significantly modified, resulting in the elimination of the deferred
interest related to the intrinsic value of the beneficial conversion feature
(see Extinguishment of Debt below). At December 31, 2004, the notes, net of
unamortized discount of $46,631, resulting from the issuance of warrants,
amounted to $953,369.

In connection with the issuance of the 8% Unsecured Convertible Promissory
Notes, private placement agents received warrants to purchase 254,317 shares of
the Company's common stock at exercise prices ranging from $4.45 to $5.55 per
share, exercisable over five years. As part of the modification of the terms of
the convertible debt in August 2004, the exercise prices of the warrants were
reduced to $2.15 per share. Based upon the Black-Scholes option price
calculation, the value of the warrants on the date of modification was $183,108,
which was accounted for as loan costs, and is being amortized over the period
from the modification date to the maturity dates of the notes.

On May 14, 2004, the Company issued a secured convertible term note in the
amount of $5,000,000 to an accredited institutional investor. As of December 31,
2004, approximately $1,110,000 of the principal amount of the note is held in a
restricted account pursuant to the terms of the note and will be released upon
the effectiveness of a registration statement filed with the Securities Exchange
Commission covering the securities underlying the note. Interest accrues on the
unrestricted principal balance of the note at an annual interest rate equal to
the prime rate plus 2.5%, and shall not exceed 8%. Interest accrues on the
restricted balance of the note at 1% annually. The note matures on May 14, 2007
with equal monthly principal payments of $90,909 beginning in October 2004 until
the maturity date. The outstanding principal and interest on the note is
convertible at any time into shares of the Company's common stock. On the date
of the issuance of the convertible note, the Company's common stock had a
closing price per share of $4.10. Based on the terms of the conversion
associated with the notes, there was an intrinsic value associated with the
beneficial conversion feature estimated at $3,089,585, which was recorded as
deferred interest and presented as a discount on the convertible debenture, net
of amortization to be taken over the three-year term of the note. Also, as part
of the convertible note, the company issued detachable warrants to purchase
492,827 shares of the Company's common stock at exercise prices ranging from
$4.05 to $4.65 per share exercisable at any time over a seven-year period from
the date of issuance. Using the Black-Scholes model the Company estimated the
fair value of the warrants and allocated $1,163,910 of the proceeds from the
note to the warrants which was recorded as deferred interest and presented as a
discount on the convertible note, net of amortization to be taken over the
three-year term of the note. In August 2004, the terms of the convertible notes
were significantly modified, resulting in the elimination of the deferred
interest related to the intrinsic value of the beneficial conversion feature
(see EXTINGUISHMENT OF DEBT) below. In connection with the issuance of the
secured

                                      F-22
<PAGE>

convertible term note in the amount of $5,000,000, the Company entered in to a
registration rights agreement with the lender. Under the terms of the agreement,
the company is required to pay the lender $100,000 for each 30 day period after
120 days from the original issuance of the note that a registration statement
filed with the Securities and Exchange Commission ("SEC") covering the common
stock underlying the convertible note and detachable warrants is not declared
effective. The Company paid $170,000 during 2004 in accordance with this
agreement and an additional $193,333 is included in accrued expenses as of
December 31, 2004. In February 28, 2005, the Company entered into an agreement
with the lender, resulting in the waiver of additional penalties under the
agreement. As consideration for the waiver, the Company issued to the lender
warrants to purchase 1,900,000 shares of the Company's common stock at an
exercise price of $2.15 per share, exercisable at any time over a seven-year
period. At December 31, 2004, the notes, net of unamortized discount resulting
from the issuance of warrants, amounted to $4,271,322 ). On February 28, 2005,
and Amendment and Waiver was signed modifying certain terms of the secured
convertible term note (see Note 22).

Commencing October 15, 2004 through December 31, 2004, the Company and its
wholly-owned subsidiary, Voxx Corporation (Voxx), sold to accredited investors,
in a private placement, an aggregate of $2,947,500 principal amount of 5% Joint
Unsecured Subordinated Convertible Promissory Notes due May 2007 to accredited
investors. Pursuant to the notes, in the event Voxx becomes a public company,
the then outstanding notes are immediately converted into shares of Voxx common
stock. The rate of interest will be increased to an annual rate of 10% if Voxx
does not become a public corporation after one year. Until Voxx is a public
company a holder may convert his entire note into shares of the Company's Common
Stock for one year at a fixed conversion price related to market but not less
than $2.25. Thereafter the exercise price will be the lesser of $1.00 or the
average market price for a period preceding the one-year anniversary of the
notes, as specified in the agreement. The notes are subordinate in all respects
to the senior debt. In addition to the note each unit also consists of the right
to receive in the future (i) warrants to purchase the Company's Common Stock
and/or (ii) warrants to purchase Voxx's common stock. Based on the terms of the
conversion associated with the notes, there was an intrinsic value associated
with the beneficial conversion feature estimated at $118,996 as of December 31,
2004, which was recorded as deferred interest and presented as a discount on the
convertible debenture, net of amortization to be taken over the terms of the
notes. At December 31, 2004, the notes, net of unamortized discount of $111,899
resulting from the issuance of warrants, amounted to $2,835,601

In April 2004, a subsidiary of the Company issued a Non-interest bearing
Promissory Note in the amount of $191,230 to a vendor in payment amounts due for
telecommunication equipment. The note is payable in 30 equal monthly payments of
$6,374. During 2004, the Company made payments on this note totaling $63,743. At
December 31, 2004, the balance of the notes amounted to $127,487

In October 2004, in connection with the purchase of equipment related to the
contact center business, the Company issued 6% Notes in the amount of $500,000,
which matured in December 2004. The Company is currently negotiating with the
lender to obtain an extension of the maturity date.

In September 2004, the Company issued a Non-interest bearing Promissory Note
payable in the amount of $485,714. The note was executed in conjunction with the
purchase of software licenses related to the Company's call center business. The
licenses will be delivered to the Company as the Company determines the need for
such licenses and principal payments will occur in proportion to the number of
licenses delivered compared to the total number of licenses purchased. At
December 31, 2004, the balance of the note amounted to $404,762

In August 2004, the Company purchased vehicles for its call centers in the
Philippines. This asset acquisition is being financed through 11.9% Promissory
Notes, payable over 36 months in monthly installments of principal and interest
of approximately $3,000. Payments of $30,555 were made in 2004, and as of
December 31, 2004, the balance outstanding on these notes is $77,738. These
notes are secured by automobiles.

During 2004, the Company purchased computer equipment related to its call center
operations. The Equipment Financing Agreements are for a term of 18 months at an
annual interest rate of 11%. At December 31, 2004, the balance outstanding was
$77,738.

                                      F-23
<PAGE>

non-interest bearing note pursuant to an Asset Purchase Agreement, payable on
demand. As of December 31, 2004, the Company owed the selling party
approximately $88,692. As part of the acquisition of the call center's assets,
the Company assumed certain of the acquired company's liabilities associated
with the acquisition of equipment. The agreement entered into is non-interest
bearing and is payable in 2005. The balance outstanding as of December 31, 2004
is $158,301.

At various times during 2004, the Company purchased equipment related to its
call center operations from a vendor that allows payments to be made over 18
months and charges interest at an annual rate of 11%. At December 31, 2004,
amounts outstanding totaled $124,248.

The Company's Philippine subsidiary leases certain computer equipment under
capitalized leases with monthly payments ranging from $1,600 to $3,300,
including interest ranging from 11.1% to 11.5% annually. The leases expire
through out 2006. The Company also leases certain equipment under capitalized
leases with monthly payments ranging from $30 to $2,590 and interest ranging
from 7% to 14% annually. The leases expire from 2005 to 2008. At December 31,
2004, amounts outstanding totaled $214,708.

EXTINGUISHMENT OF DEBT

In May 2004, the Company repaid $925,000 of the secured convertible term notes
due in May 2007. In accordance with EITF 98-05, a portion of the reacquisition
price includes a repurchase of the beneficial conversion feature of the
originally issued convertible debt and results in a gain or loss on
extinguishment equal to the change in the intrinsic value of the beneficial
conversion feature. Based on the intrinsic value, on the date of extinguishment,
of the beneficial conversion feature associated with the portion of the debt
extinguished with the payment of cash, the Company recognized a gain on
extinguishment of debt of $281,250.

In August 2004, the Company agreed to reduce the conversion prices of the
convertible notes issued in April and May of 2004 and the exercise prices of the
related detachable warrants to $2.10 and $2.15 per share, respectively, as
consideration for the release of $400,384 of funds held in escrow. Also, as
additional consideration, the Company issued, to the holders of the notes,
five-year warrants to purchase 600,000 shares of common stock at an exercise
price of $2.15 per share. The modification of the terms of the convertible notes
was accounted for as an extinguishment of the original notes and the issuance of
new notes in accordance with the requirements of EITF 96-19: Debtor's Accounting
for a Modification or Exchange of Debt Instruments ("EITF 96-19"). On the date
of the modification of the terms of the convertible notes, the Company's common
stock had a closing price per share on the Over-the Counter Bulletin Board of
$.90. Based on the terms of the conversion associated with the notes, there was
no longer beneficial conversion features associated with the notes. In
accordance with EITF 96-19, the notes are reflected on the balance sheet as if
they were originally issued on the date of modification, resulting in the
elimination of the discounts related to the intrinsic value of the beneficial
conversion features of the notes on the dates of issuance. The elimination of
the discounts were offset by a charge to additional paid-in capital. Using the
Black-Scholes model, the Company estimated the fair value of the additional and
original warrants as of the date of modification and allocated $711,688 of the
proceeds from the notes to the warrants which was recorded as deferred interest
and presented as a discount on the convertible notes, net of amortization to be
taken over the period from the modification date to the maturity dates of the
notes. As a result of the early repayments and the modifications, the Company
recognized a gain on extinguishment of debt amounting to $859,287.

NOTE 10.    NOTE PAYABLE - STOCKHOLDER

On October 31, 2001, the Company issued a note in the amount of $2,474,000,
representing amounts borrowed from a then unrelated entity. In August 2002, the
creditor became a stockholder of the Company. The note provided for interest at
7%, was collateralized by accounts receivable and was due on demand. In November
2002, the Company entered into an agreement, which was executed on December 6,
2002 and amended on March 3, 2003, whereby the creditor released the collateral
and agreed not to demand payment before January 2005 in exchange for certain
consideration. That consideration consisted of warrants to purchase 4,000,000
shares of Company common stock at an exercise price of $0.50 per share for a
term of three years beginning in May 2003. Pursuant to EITF 96-19,

                                      F-24
<PAGE>

management accounted for this transaction as an extinguishment of the original
instrument and an execution of a new note at December 6, 2002. The fair value of
the warrants was recorded as a component of the calculation of the loss
associated with that extinguishment. The new note was recorded at fair value on
the date that it was entered into (December 6, 2002). The resulting discount on
the note is being amortized over the life of the new note, approximately two
years. The fair value of both the warrants and the note payable was determined
by appraisal.

As part of the agreement, the creditor also agreed to release its security
interest in the Company's accounts receivable to the extent required to secure
additional debt financing. Except for the demand deferral and the release of the
security interest, all other terms of the note stayed in effect. The outstanding
principal balance was $2,474,000 and $2,369,350 as of December 31, 2004 and
2003, respectively. Prior to maturity the note was presented net of unamortized
fair value adjustment. Interest of $255,334 was paid in July 2003.

NOTE 11.    GAINS ON SETTLEMENT OF LIABILITIES

In October 2004, the Company re-negotiated amounts due by a subsidiary to a
vendor. As a result, the Company recognized a gain of $421,396 on forgiveness of
liability. At December 31, 2004, the outstanding amount was $172,178, which is
included in accounts payable.

In August 2002, SavOn, Inc, a subsidiary of the Company filed for bankruptcy
protection under Chapter 11. During 2003, a bankruptcy settlement was reached,
resulting in a forgiveness of the liabilities amounting to $324,966.

NOTE 12.    CONVERTIBLE PREFERRED STOCK

During 2003, the Company issued 23,510 shares of Series A Convertible Preferred
Stock and warrants to 16 investors for aggregate consideration of $2,351,000.
Each share of Preferred Stock has a par value of $.001 and is convertible into
shares of the Company's common stock at an initial conversion price of $3.50.
However, the terms of the sale stated that, should the Company's net income for
the year ended December 31, 2003 not exceed $5,000,000, the conversion price
would be adjusted to $2.00 per share. Accordingly, the conversion price in
effect as of December 31, 2003 was $2.00 per share. Additionally, the conversion
price will be adjusted based upon the company's net income in 2004 to $2.00 if
the net income is less than $10,000,000, $3.00 if net income is between
$10,000,000 and $12,500,001, and $3.50 if net income exceeds $12,500,000. The
shares are to be automatically converted, at the then effective conversion
price, in the event of an offering in which the Company's common shares are
listed on the New York or American Stock Exchange or quoted on NASDAQ, or any
combination thereof; the minimum gross proceeds from such offering is at least
$50,000,000; and the offering price of such offering is at least $10.00 per
share. The shares are also subject to automatic conversion at the election of
the holders of a majority of the preferred shares. The conversion price is also
subject to anti-dilution adjustments as set forth in the purchase agreement. In
May and July 2004, certain holders of the Company's preferred stock converted
7,010 shares of preferred stock into 377,926 shares of the Company's common
stock.

Based on the terms of the conversion associated with the preferred stock, there
was an intrinsic value associated with the beneficial conversion feature
estimated at $1,884,375, which was recorded as a dividend and therefore as a
reduction of retained earnings. Additionally, each purchaser of the Preferred
stock received, for each share of preferred stock purchased, one warrant to
purchase 14 shares of the company's common shares at an exercise price of $7.87
per share over a five year period. Using the Black-Scholes model the Company
estimated the fair value of the warrants to be $1,749,845, which resulted in
offsetting charges to additional paid in capital.

In the event of liquidation, the holders of the preferred shares are entitled in
preference over holders of common shares to be paid first out of the assets of
the corporation available for distribution to holders of the Company's capital
stock of all classes, an amount equal to two (2) times the original purchase
price paid for the preferred stock, or $4,702,000.

                                      F-25
<PAGE>

The holders of the preferred stock are also entitled to receive equally, share
for share, as and when declared by the Board of Directors of the Company,
cumulative dividends at an annual rate of 8% of the original issue price. Such
dividends, if declared, are payable annually on each anniversary date of
original issuance. Cumulative dividends earned as of December 31, 2004 were
$374,932. No dividends can be declared or paid to holders of common shares
unless all cumulative dividends are paid to preferred stockholders.

After one year from the date of issuance of the preferred stock, the Company
may, at its discretion, repurchase all, but not less than all, of the preferred
stock issued for a price of $200 per share plus 8% cumulative dividends.

In connection with the offering of the preferred stock, the Company engaged
certain consultants. The consultants were compensated with $214,000 in cash,
which was netted against the proceeds, and the issuance of warrants to purchase
284,471 shares of the Company's common shares at exercise prices ranging from
$3.41 to $5.00 per share for a period of five years. Using the Black-Scholes
model the Company estimated the fair value of the warrants to be $154,375 which
was recorded as offerings costs and offset to additional paid in capital in
2003.

During 2004, holders of the preferred stock converted 7,010 shares of preferred
stock into 377,936 shares of the Company's common stock.

During June 2003, the Company issued warrants to purchase 329,140 shares of
common stock at an exercise price of $7.87 per share, exercisable over five
years, relating to the issuance of preferred stock (see Note 14).

During June 2003, the Company issued warrants to purchase 329,140 shares of
common stock at an exercise price of $7.87 per share, exercisable over five
years, relating to the issuance of preferred stock . The exercise price of the
warrants has been reduced to $3.46 per share due to the non-occurrence of
certain events in accordance with a registration rights agreement entered into
with the purchasers of the preferred stock, and may be further reduced in
accordance with anti-dilution provisions contained in the purchase agreements.
Based upon the Black-Scholes option price calculation, the value of each warrant
was $6.63 and the transaction was valued at $2,183,157, which was accounted for
as offering costs, resulting in offsetting charges to additional paid-in
capital.

NOTE 13.    COMMON STOCK

CONVERSION OF PREFERRED STOCK

From May through July 2004, holders of the Company's preferred stock converted
7,010 shares of preferred stock into 377,936 shares of the Company's common
stock. The holders of the preferred stock originally purchased the shares for
$701,000. Pursuant to the provisions of the Company's Amended Certificate of
Incorporation relating to the preferred stock, cumulative dividends were added
to the original purchase price and the adjusted value was converted into common
stock using a conversion price of $2.00 per share.

EXERCISE OF OPTIONS

During 2003, options to purchase 33,333 shares of the Company's common stock
were exercised for net proceeds of $9,000. The shares were issued in 2004.

COMMON STOCK

        Issued in Acquisitions

In July 2004, the Company issued 87,982 shares of common stock pursuant to a
placement agreement related to the March 2004 acquisition of certain assets and
assumption of certain liabilities of a contact center in the Philippines. The
shares were valued at $357,054 based on the value of the placement services
provided as specified in the agreement. The additional value was allocated to
the assets originally purchased in March 2004 (See Note 19).

                                      F-26
<PAGE>

In May 2004, the Company issued 65,030 shares of common stock as consideration
valued at $296,554 related to the acquisition of the net assets of a call center
located in the Philippines. The fair value of the shares was based upon the
terms of the purchase agreement and recorded in accordance with the allocation
of the purchase price to the assets and certain liabilities as specified in the
purchase agreement.

In October 2003, the Company agreed to issue 15,652 shares of common stock as
consideration valued at $90,000 related to the acquisition of the net assets of
a long distance international pay phone service provider (see Note 1). The
shares were valued based upon the terms of the purchase agreement and recorded
in accordance with the allocation of the purchase price to the assets and
certain liabilities as specified in the purchase agreement with the excess of
the total purchase price over the net assets purchased allocated to the
non-compete agreement included in the purchase agreement. In 2004, the Company
wrote-off its investment in the company, and in the non- compete intangible
asset. As of December 31, 2003, these shares had not been issued and as a
result, are included in common stock to be issued in the accompanying balance
sheet. The shares were issued during 2004

        Issued as Compensation

In April 2004, the Company issued 75,000 shares of common stock as compensation
for consulting services valued at $159,375. The services were valued based on
the closing price of the shares as listed on Over-the-Counter Bulletin Board on
the date of the agreement. The total amount was charged to expense during 2004.

In October 2003, the Company issued 13,617 shares of common stock as
compensation for consulting services valued at $85,000. The fair value of the
shares was based upon the value of services provided as provided for in the
agreement. The total amount was charged to expense during 2003.

In August 2003, the Company entered into a consulting agreement, providing for
the issuance of 50,000 shares of common stock as compensation for services
valued at $175,000 as specified in the agreement. The total amount was charged
to expense during 2003. As of December 31, 2003, these shares had not been
issued and as a result, were included in common stock to be issued in the
accompanying balance sheet. The shares were issued during the second quarter of
2004.

DEBT CONVERSION

In September 2003, the Company issued 127,117 shares of common stock in
settlement of debt and accrued interest totaling $404,506 and $40,406,
respectively. The shares were valued based upon the outstanding amounts related
to the loan and were accounted for as a reduction in debt and a charge to
accrued interest.

During 2004, holders of the convertible debt converted principal and accrued
interest aggregating $578,832 into 195,552 shares of common stock.

During June 2003, the Company issued warrants to purchase 329,140 shares of
common stock at an exercise price of $7.87 per share, exercisable over five
years, relating to the issuance of preferred stock (see Note 12).

NOTE 14.    COMMON STOCK WARRANTS

The warrants issued and outstanding in connection with convertible debentures
and equity transactions discussed above are convertible into an equal number of
the Company's common stock. These warrants are exercisable immediately.
Following is a summary of the warrants issued and outstanding in 2004 and 2003.
There were no warrants issued in 2002

<TABLE>
<CAPTION>
                                                           Weighted-Average                   Weighted-Average
                                               2004         Exercise Price        2003        Exercise Price
                                           -------------   ----------------   -------------   ----------------
     <S>                                       <C>         <C>                    <C>         <C>
     Outstanding at beginning of year          4,713,611   $           1.36               -                  -
     Granted                                   1,591,425   $           2.38       4,713,611   $           1.36
     Exercised                                         -                  -               -                  -
     Forfeited                                         -                  -               -                  -
                                           -------------                      -------------
     Outstanding at end of year                6,305,036   $           1.38       4,713,611   $           1.36
                                           =============                      =============
     Warrants exercisable at year-end          6,305,036   $           1.38       4,713,611   $           1.36
                                           =============                      =============
</TABLE>

The following table summarizes information for warrants outstanding at December
31, 2004 and 2003:

                                      F-27
<PAGE>

<TABLE>
<CAPTION>
                         Warrants Outstanding at December 31, 2004            Warrants Outstanding at December 31, 2003
                    ---------------------------------------------------   ---------------------------------------------------
                                                                                              Weighted-
                                         Weighted-                                             Average
    Range of            Number           Average           Weighted-           Number         Remaining         Weighted-
    Exercise          Outstanding     Remaining Life       Average          Outstanding         Life             Average
     Prices           at 12/31/04        in months       Exercise Price     at 12/31/03       in months       Exercise Price
-----------------   ---------------   ---------------   ---------------   ---------------   ---------------   ---------------
<S>                       <C>                      <C>  <C>                     <C>                      <C>  <C>
   $0.50                  4,000,000                38   $          0.30         4,000,000                29   $          0.50
$2.00 - 2.15              1,389,053                53   $          2.15                 -                 -                 -
$3.41 - 5.00                815,983                44   $          4.27           284,471                55   $          4.27
$5.01 - 6.00                100,000                45   $          5.29           429,140                55   $          5.35
                    ---------------                                       ---------------
                          6,305,036                45   $          5.29         4,713,611                55   $          5.35
                    ===============                                       ===============
</TABLE>

NOTE 15.    STOCK OPTION PLAN

The Company may grant stock options to its employees at exercise prices equal to
or exceeding the market price at the date of grant. Options granted for common
stock become vest one-third each year beginning one year from date of grant.
Options have a term of five years. No options may be granted under the 2001
Stock Option Plan after 2011. In February 2005, at the Company's Annual Meeting,
the shareholders ratified an amendment to the Company's 2001 Stock Option Plan
to change the number of shares subject to the Plan from 4,000,000 shares of the
Company's common stock to 6,000,000.

A summary of the Company's stock option plan is presented below:

<TABLE>
<CAPTION>
                                                                        Years Ended December 31,
                                 -------------------------------------------------------------------------------------------
                                             2004                            2003                           2002
                                 ----------------------------    ----------------------------   ----------------------------
                                                   Weighted                        Weighted                       Weighted
                                                    Average                         Average                        Average
                                                   Exercise                        Exercise                       Exercise
                                    Shares          Price           Shares          Price          Shares          Price
                                 ------------    ------------    ------------    ------------   ------------    ------------
<S>                                 <C>          <C>                <C>          <C>               <C>          <C>
Outstanding at the
 beginning of the period            4,729,667    $       3.40       1,030,000    $       2.50      1,050,000    $       2.50
Granted at fair value                 150,000            3.55       3,915,000            3.72              -               -
Forfeited                            (689,000)           3.68        (182,000)           4.40        (20,000)           2.50
Exercised                                   -                         (33,333)           0.42              -               -
                                 ------------                    ------------                   ------------
Outstanding at the
 end of  the period                 4,190,667    $       3.37       4,729,667    $       3.40      1,030,000    $       2.50
                                 ============                    ============                   ============
Options exercisable at
 the end of the period              1,983,333    $       3.08         644,661    $       2.50        338,997    $       2.50
                                 ============                    ============                   ============
</TABLE>

                                      F-28
<PAGE>

The following table summarizes information for stock options outstanding and
exercisable at December 31, 2004:

<TABLE>
<CAPTION>
                                   Options Outstanding                            Options Exercisable
                  ------------------------------------------------------   -----------------------------------
  Range of             Number        Weighted-Average                          Number
  Exercise          Outstanding       Remaining Life    Weighted-Average     Exercisable      Weighted-Average
   Prices           at 12/31/04         in years        Exercise Price       at 12/31/04       Exercise Price
---------------   ----------------   ----------------   ----------------   ----------------   ----------------
<S>                      <C>                     <C>    <C>                       <C>         <C>
$0.00 - 0.42                66,667               2.50   $           0.42             32,667   $           0.42
 2.50 - 3.50             3,589,000               2.97               3.25          1,805,666               2.99
 3.55 - 5.00               535,000               3.83               4.53            145,000               4.76
                  ----------------                                         ----------------
                         4,190,667                                                1,983,333
                  ================                                         ================
</TABLE>

The weighted average fair values of options at their grant date during 2004 and
2003were $2.83 and $3.01, respectively. The weighted average assumptions used in
the Black-Scholes option-pricing model used to determine fair value were as
follows:

                                  2004       2003       2002
                                --------   --------   --------
Risk-free interest rate              3.9%       3.0%       4.1%
Expected years until exercise        5.0        5.0        6.0
Expected stock volatility          191.4%     214.0%     209.0%
Dividend yield                      0.00%      0.00%      0.00%

NOTE 16.    INCOME TAXES

A reconciliation of income tax computed at the statutory federal rate to income
tax expense (benefit) is as follows:

<TABLE>
<CAPTION>
                                                               December 31,
                                                ------------------------------------------
                                                    2004           2003           2002
                                                ------------   ------------   ------------
                                                                               (Restated)
<S>                                             <C>            <C>            <C>
Tax provision at the statutory rate of 35%      $ (3,405,125)  $  1,532,600   $ (4,184,223)
State income taxes, net of federal
 income tax                                         (276,062)       175,730       (443,194)
Change in valuation allowance                      2,647,459     (1,752,797)     4,638,135
Permanent items                                       36,678         44,467         11,093
Foreign income exclusion                             878,957              -              -
Other                                                118,093              -        (21,811)
                                                ------------   ------------   ------------
                                                $          -   $          -   $          -
                                                ============   ============   ============
</TABLE>

                                      F-29
<PAGE>

The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets and deferred tax liabilities are presented below.

                                             December 31,
                                      --------------------------
                                         2004           2003
                                      -----------    -----------
Deferred tax assets:
Net operating loss carryforward       $ 5,422,790    $ 1,548,735
Deferred financings costs                       -      1,783,307
Debt discounts                            561,785              -
Allowance for doubtful accounts           691,229        847,256
Other                                     255,488              -
                                      -----------    -----------
Total gross deferred tax assets         6,931,292      4,179,298
Less valuation allowance               (6,709,136)    (4,061,678)
                                      -----------    -----------
Total net deferred tax assets             222,156        117,620

Deferred tax liabilities:
Depreciation on fixed assets             (222,156)      (117,620)
                                      -----------    -----------
Net deferred tax asset                $         -    $         -
                                      ===========    ===========

In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred tax
assets will not be realized. The ultimate realization of deferred 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 deferred tax liabilities, projected future taxable income
and tax planning strategies in making this assessment.

Because of the historical earnings history of the Company, the net deferred tax
assets have been fully offset by a 100% valuation allowance. The valuation
allowance for the net deferred tax assets was approximately $6.7 million and
$4.1 million as of December 31, 2004 and 2003, respectively.

At December 31, 2004 and 2003, the Company had net operating loss carryforwards
available for US tax purposes of approximately $15.7 million and $3.9 million
respectively. These carryforwards expire through 2025.

Under Section 382 of the Internal Revenue Code of 1986, as amended (the "Code"),
the utilization of net operating loss carryforwards is limited under the change
in stock ownership rules of the Code. As a result of ownership changes, which
occurred in June 2002, the Company's operating tax loss carryforwards are
subject to these limitations. Future ownership changes could also further limit
the utilization of any net operating loss carryforwards.

At December 31, 2004, no provision has been made for U.S. federal and state
income tax on approximately $66,000 of foreign earnings, which are expected to
be reinvested indefinitely. Upon distribution of those earnings in the form of
dividends or otherwise, the Company could be subject to U.S. income taxes
(subject to adjustment for foreign tax credits, if any), state income taxes, and
withholding taxes payable to various foreign countries. Determination of the
amount of unrecognized deferred U.S. tax liability is not practicable because of
the complexities associated with this hypothetical calculation.

In December 2004, the FASB issued FASB Staff Position ("FSP") No. 109-2,
"Accounting and Disclosure Guidance for the Foreign Earnings Repatriation
Provision with the American Jobs Creation Act of 2004" ("FSP 109-2"), The
American Jobs Creation Act of 2004 (the "Act") provides for a special one-time
tax deduction of 85% of certain foreign earnings that are repatriated as defined
in the Act. FASB Statement No. 109, "Accounting for Income Taxes," requires
adjustments of deferred tax liabilities and assets for the effects of a change
in tax laws or rates in the period that includes the enactment date. FSP No.
109-2 provides an exception to allow an enterprise time beyond the financial
reporting period of enactment to evaluate the effect of the Act on its plan for
reinvestment or repatriation of foreign earnings for purposes of applying FASB
Statement No. 109.

The Company has not yet completed evaluating the impact of the repatriation
provisions. Accordingly, as provided for in FSP 109-2, the Company has not
adjusted its tax expense or deferred tax liability to reflect the repatriation
provisions of the Jobs Act. The Company will reflect the effects of the Act, if
any, in 2005, as port of the income tax expense in the period action is taken.
The Company does, however, based upon the level of foreign earnings for 2004,
believe FSP No. 109-2 would not have a material impact on its financial
position, results of operations or cash flows.

NOTE 17.    RELATED PARTY TRANSACTIONS

The Company has entered into two agreements with Transvoice Investment, Inc.
("Transvoice"), the beneficial owner of Transvoice Investment LLC, the Company's
majority stockholder. The two principal stockholders of Transvoice are also
employees of the Company.

In October 2001, the Company entered into an agreement with Transvoice, whereby
Transvoice had provided certain services related to the development of the
Company's internet service provider business. Under the terms of the agreement,
the Company is to pay Transvoice $150,000 per month plus $1.00 for each customer
in excess of 100,000 customers computed monthly, until such time that the
Company is no longer generating revenues from its internet service provider
business. On November 1, 2004, the Company's agreement with Transvoice was
amended to limit the payment obligation to $4,200,000 payable in monthly
installments of $300,000 a month from November 2004 through December 2005. The
Company incurred expenses of $1,800,000, $2,637,618 and $2,111,438 during 2004,
2003 and 2002, respectively, for services under this agreement. At December 31,
2004, $750,000 remains unpaid and is included in accounts payable.

In April 2003, the Company entered into an agreement with Transvoice, whereby
Transvoice provides consulting services related to the development of marketing
and telemarketing aspects of the Company. Transvoice is not compensated for its
services but is reimbursed for payments made to a related party subcontractor
performing services associated with the agreement. The subcontractor is 100%
owned, indirectly, or directly, by an executive employee of the Company. The
Company incurred expenses under this agreement in the amount of $900,000 during
each of the years ended December 31, 2004 and 2003, respectively. At December
31, 2004, $225,000 remains unpaid and is included in accounts payable.

                                      F-30
<PAGE>

NOTE 18.    EARNINGS (LOSS) PER SHARE

The Company presents both basic and diluted earnings per share (EPS) amounts.
Basic EPS is calculated by dividing net income by the weighted average number of
common shares outstanding during the year. Diluted EPS is based upon the
weighted average number of common and common equivalent shares outstanding
during the year which is calculated using the treasury stock method for stock
options and assumes conversion of the Company's convertible notes. Common
equivalent shares are excluded from the computation in periods in which they
have an anti-dilutive effect. Stock options for which the exercise price exceeds
the average market price over the period have an anti-dilutive effect on EPS
and, accordingly, are excluded from the calculation.

A reconciliation of net income and the weighted average number of common and
common equivalent shares outstanding for calculating diluted earnings per share
is as follows:

<TABLE>
<CAPTION>
                                                                         Years Ended December 31,
                                                               ---------------------------------------------
                                                                   2004             2003           2002
                                                               -------------   -------------   -------------
<S>                                                            <C>             <C>             <C>
Numerator for basic income (loss) per share, as reported       $  (9,728,926)  $   4,379,160   $ (11,954,922)
Preferred stock dividends                                           (176,792)     (2,061,167)              -
                                                               -------------   -------------   -------------
Income (loss) for basic EPS calculations                          (9,905,718)      2,317,993     (11,954,922)
                                                               -------------   -------------   -------------
Effect of dilutive securities, as reported
 Interest on convertible debt                                              -          43,670               -
                                                               -------------   -------------   -------------
DILUTED INCOME (LOSS) FOR EPS CALCULATIONS                     $  (9,905,718)  $   2,361,663   $ (11,954,922)
                                                               -------------   -------------   -------------
WEIGHTED AVG NUMBER OF SHARES FOR BASIC EPS                       11,140,814      10,554,450      10,503,000

Effect of dilutive securities, as reported
Stock options                                                              -       1,132,362               -
Warrants                                                                   -       3,018,160               -
Convertible debt                                                           -          16,667               -
                                                               -------------   -------------   -------------
DILUTED INCOME (LOSS) PER SHARE                                   11,140,814      14,721,639      10,503,000
                                                               -------------   -------------   -------------
Basic EPS -                                                    $       (0.89)  $        0.22   $       (1.14)
                                                               -------------   -------------   -------------
Diluted EPS -                                                  $       (0.89)  $        0.16   $       (1.14)
                                                               -------------   -------------   -------------
</TABLE>

                                      F-31
<PAGE>

NOTE 19.    PHILIPPINE OPERATIONS

In the fourth quarter of 2003, the Company began operating a call center located
in the Philippines for its benefit. In accordance with the terms of an Asset
Purchase Agreement (the "Agreement") dated March 2, 2004, a subsidiary of the
Company, Epixtar Philippines IT-Enabled Services Corporation (EPISC), agreed to
acquire certain assets and assume certain liabilities of I-Call Global Services
Corporation (I-Call). This acquisition took place in May 2004. The purchase
price of approximately $821,000 was payable $55,000 upon execution of the
Agreement; $150,000 at closing subject to certain conditions as defined in the
Agreement; 65,030 common shares of Epixtar Corp. valued at $296,554; and a total
of $196,000 at various times up to sixty days after closing date. In July 2004,
the Company issued an additional 87,982 shares of common stock as consideration
valued at $357,054 pursuant to a consulting agreement directly related to the
acquisition. The shares were valued based upon the terms of the purchase
agreement and allocated to the purchase price of the net assets, resulting in a
total purchase price of $1,178,054. The acquisition of I-Call is not considered
by the Company to be a business combination in accordance with generally
accepted accounting principles.

NOTE 20.    BUSINESS SEGMENTS

The Company operates primarily in two segments: business process outsourcing and
contact center operations (BPO) and internet service provider services (ISP).
Through 2003, the Company's revenue was primarily derived from its ISP
operations which provide small businesses with internet access and other
services. In late 2004, the Company began its BPO operations.

Information concerning the revenues and operating income for the years ended
December 31, 2004, 2003 and 2002, and the identifiable assets for the two
segments in which the Company operates are shown in the following tables:

<TABLE>
<CAPTION>
                                                   Years Ended December 31,
                                      ------------------------------------------------
                                           2004             2003             2002
                                      --------------   --------------   --------------
                                                                          (Restated)
<S>                                   <C>              <C>              <C>
OPERATING REVENUE
 - ISP                                $   15,611,991   $   35,722,740   $   26,250,851
 - BPO                                     2,122,876          682,063                -
                                      --------------   --------------   --------------
Consolidated totals                   $   17,734,867   $   36,404,803   $   26,250,851
                                      --------------   --------------   --------------
INCOME (LOSS) FROM OPERATIONS
 - ISP                                $    5,882,462   $    5,358,363   $   (1,863,504)
 - BPO                                   (12,880,085)        (762,775)               -
                                      --------------   --------------   --------------
Consolidated totals                   $   (6,997,623)  $    4,595,588   $   (1,863,504)
                                      ==============   ==============   ==============
IDENTIFIABLE ASSETS
 - ISP                                $    6,085,591   $   10,116,495   $    5,045,550
 - BPO                                    11,963,123        2,866,299                -
                                      --------------   --------------   --------------
Consolidated totals                   $   18,048,714   $   12,982,794   $    5,045,550
                                      ==============   ==============   ==============
CAPITAL EXPENDITURES
 - ISP                                $      145,235        $       -   $      304,060
 - BPO                                     5,064,514        1,071,111                -
                                      --------------   --------------   --------------
Consolidated totals                   $    5,209,749   $    1,071,111   $      304,060
                                      ==============   ==============   ==============
DEPRECIATION AND AMORTIZATION
 - ISP                                $      303,670   $      183,202   $       84,999
 - BPO                                     1,064,992           31,097                -
                                      --------------   --------------   --------------
Consolidated totals                   $    1,368,662   $      214,299   $       84,999
                                      ==============   ==============   ==============
GEOGRAPHIC REVENUE
U.S.                                  $   17,734,867   $   36,454,803   $   26,250,851
Philippines                                        -                -                -
                                      --------------   --------------   --------------
Consolidated totals                   $   17,734,867   $   36,454,803   $   26,250,851
                                      ==============   ==============   ==============
</TABLE>

                                      F-32
<PAGE>

The Company allocates its geographic revenue based on customer location. All of
the Company's customers are U.S based companies. Subtantially all fo the
services performed for call center customers are performed in the Philippines.

NOTE 21.    COMMITMENTS, CONTINGENCIES AND OTHER MATTERS

LEASES

The Company entered into a lease for approximately 16,810 square feet of office
space in Miami, Florida for its corporate headquarters. The lease provides an
option to renew and expires in September 2006. The Company also leases
approximately 1,300 square feet of space used for its network operations center
(NOC). This lease expires in June 2009.

In 2003 and through 2004, the Company or its subsidiaries entered into lease
agreements in the Philippines, as part of the development of its BPO operations.

        o   During 2003, a subsidiary of the Company leased corporate residences
            and approximately 13,600 square feet of office space in the
            Philippines under an operating lease expiring in April 2006.

        o   In December 2003, the Company leased approximately 94,100 square
            feet of office space, with approximate 42,000 square feet of
            parking, to be used as its corporate headquarters in the Philippines
            and as a call center. The term of the lease began July 2004 and
            expires in December 2010, with annual rent escalation throughout the
            term of the lease.

        o   In 2004, the Company's Philippine subsidiary entered into a lease
            agreement for residential property to be utilized by its traveling
            employees. The lease is for a one-year period effective June 2004.

        o   In July 2004, the Company leased a 61,000 square-foot facility to be
            utilized as a call center, with approximately 17,000 square feet of
            parking and 22,000 square feet of common area. The agreement is for
            a five-year period beginning in January 2005. Occupancy is expected
            to be in the second quarter of 2005.

        o   In December 2004, the Company leased a 65,000 square-foot facility
            to be used as a call center. The agreement is for a ten-year period
            beginning in August 2005. Occupancy is expected to be in the third
            quarter of 2005.

        o   The Company's Philippine subsidiary subleases to a third party a
            facility formerly used for call center operations. The lease is for
            a term of two years, commencing January 2005.

Rent expense related to these leases, including common-area maintenance and
contingent rentals, amounted to $907,656, $289,832 and $218,273 for the years
ended December 31, 2004, 2003 and 2002, respectively.

                                      F-33
<PAGE>

Annual rental commitments under operating leases for the years ending December
31 are as follows:

                U.S. BASED
                COMPANIES          PHILIPPINES OPERATIONS
              --------------   -------------------------------
                 LEASES            LEASES         SUBLEASES          TOTAL
              --------------   --------------   --------------   --------------
2005          $      425,869   $    1,737,973   $     (450,000)  $    1,713,842
2006                 440,590        2,067,068         (450,000)       2,057,658
2007                 459,078        2,058,754                -        2,517,832
2008                 213,636        2,133,127                -        2,346,763
2009                  44,690        2,242,975                -        2,287,665
Thereafter                 -        5,814,607                -        5,814,607
              --------------   --------------   --------------   --------------
              $    1,583,863   $   16,054,504   $     (900,000)  $   16,738,367
              ==============   ==============   ==============   ==============

INVESTOR CLAIM

In 2004, the Company received notification from an investor in the preferred
stock private placement of a claim to rescind its $100,000 investment. As per
the investor's request, the Company returned the invested funds.

LEGAL PROCEEDINGS

All the Company's current proceedings arise out of our ISP business. The Company
recently settled several governmental proceedings and investigations. The
Company believes the proceedings and their settlement will not have a
significant effect on its operations since the Company no longer actively
markets its ISP business and in any event the Company believes it is in
substantial compliance with the law.

        Government Actions Relating to ISP Business

On October 30, 2003 the Company, its subsidiaries and an officer, were sued and
served with an ex parte temporary restraining order, asset freeze, order
permitting expedited discovery, order appointing temporary receiver, and an
order to show cause in an action commenced by the Federal Trade Commission (FTC)
in the United States District Court for the Southern District of New York. The
order covers each of these entities, as well as their parents, subsidiaries, and
affiliates. The proceeding arises out of alleged failures of the Company's
subsidiaries to comply with regulations relating to the conversion of trial
customers to paying customers. The Company vigorously denis any wrongdoing and
believe that the Company's business practices are in compliance with all
applicable laws. As of November 19, 2003 without any finding of wrongdoing, the
Company agreed in principle to enter into a preliminary injunction with the
Federal Trade Commission. As a result of the above action, the Company
experienced substantial business disruption, incurred significant expense and
reduction of the Company's working capital.

In July 2004 the Company executed a Stipulated Final Judgment for Permanent
Injunction in its FTC Proceeding. This stipulation was prepared by the Northeast
Region staff of the FTC and sent for approved by the Commission as required by
the rules of the Commission. The Stipulation specifically noted that there was
no finding of wrong doing on the Company's part. Under the terms of the
Stipulation the Company is required not to violate the free to pay conversion
rules and to adhere to specific procedures to insure compliance including
specific script requirements. The Company must record each call in its entirety.
For a two-year period the Company must continue to refund all amounts to
customers who were billed improperly. We have deposited $175,000 in escrow with
the Company's counsel to insure payment. The former monitor will continue to
serve as a referee to insure compliance with the stipulation and to resolve
disputes over refunds. The Stipulated Final Judgment for Permanent Injunction
was rejected by the Interim Board of the FTC and sent back to the Northeast
Regional Office for minor changes in language. The Northeast Regional Office
drafted additional language in keeping with the Interim Board's recommendations;
specifically, among other things, the additional language called for the
escrowed funds to be kept in an interest-bearing account and for the FTC to
retain any escrowed funds after the escrow account is terminated in accordance
with the Stipulated Final Judgment for Permanent Injunction. Such funds are to
be transferred to the FTC to be used for equitable relief, such as consumer
redress and administrative expenses associated with any redress. The Company
signed the revised Stipulated Final Judgment for Permanent Injunction in late
January 2005, and returned the document to the Northeast Regional Office for
approval by the FTC. If a settlement is not reached, and the FTC is successful
in its lawsuit, the FTC claims that it has statutory authority to obtain a
disgorgement of all funds received by defendants from the sales at issue. This
amount has been reported to be approximately $56 million.

                                      F-34
<PAGE>

On January 17, 2003, the Attorney General of Missouri filed an application for a
temporary restraining order and preliminary injunction against certain of our
subsidiaries alleging "cramming." The Company entered into a negotiated consent
to the entry of a temporary restraining order and preliminary injunction because
the consent did not hinder the way the Company's subsidiaries conduct their
business. The Company filed an answer that vigorously denies any wrongdoing and
argues that the allegations against the Company are without any basis in fact
and without merit. In July 2004, the Company entered into a Stipulation for
Consent Judgment and Permanent Injunction to settle this proceeding. Pursuant to
the stipulation the Company paid $7,500 for attorney's fees and costs incurred
by the state of Missouri, and $1,770 for restitution for a total of $9,270. The
provisions of the preliminary injunction continue.

On May 22, 2003, the Attorney General of North Carolina filed a complaint
alleging "cramming" against certain of our subsidiaries, as well as a motion for
temporary restraining order and preliminary injunction. As in the case with the
Missouri action and for the same reasons, the Company entered into a negotiated
consent to the entry of a temporary restraining order and preliminary
injunction. With this Consent Order there is no adjudication of any issue of law
or fact, and the Defendants do not admit liability for any of the matters
alleged within the Complaint. In January 2005, a draft Permanent Consent Order
was submitted to the Company for consideration. The matter is currently the
subject of settlement negotiations.

        Government Investigations Relating to ISP Business

From time to time, the Company also has received investigative process from
various other states. In 2003, Attorney Generals of Florida, Texas, Minnesota
and Kansas issued process requesting certain information and documentary
material concerning the operations of our ISP subsidiaries.

The Company recently settled the investigations in Florida and Kansas. In
Kansas, entered into a consent judgment that requires compliance with the Kansas
Consumer Protection Act, contains a denial that we committed unfair and
deceptive practices, and provides for payment of $10,000 for investigative fees
and expenses. The Company entered into an agreement with Florida that contained
similar terms and conditions as the FTC preliminary agreement and provided for a
payment of $100,000 for investigative costs, with no finding of wrongdoing.

        Private Action

On January 30, 2004 Dixon Aviation, Inc. commenced an action in the Circuit
Court of Alabama for Barbour County against an officer, NOL, Liberty, a billing
house, a LEC and the Company. This litigation was brought as a class action
complaint for declaratory and injunctive relief, alleging that the Defendants
engaged in cramming. The Company denies all liability and believe we have valid
defenses to these claims (including recorded verifications). The Company's
motion to remove the action to federal court has been denied. Pursuant to the
Company's arrangement with the LEC and billing house defendant the Company are
obligated to indemnify the LEC and billing company defendants for their legal
costs and any liability. On November 10, 2004, the Court issued a Scheduling
order that directed that only discovery pertinent to class certification be
conducted, and that discovery related solely to the merits of the claims be
stayed. The Order defined the issues and laid out the time scheduling for each
phase of pre-certification discovery. In February 2005, Plaintiff's Counsel
asked the Company's Counsel to refrain from taking depositions and incurring
costs until such time as Plaintiff's Counsel could speak to his client, Dixon
Aviation. The Company is unable to determine the likelihood of an unfavorable
outcome or estimate the amount or range of a potential loss.

        Settled Arbitration Proceedings

ETelecare International commenced an arbitration proceeding pursuant to an
agreement amended from time to time to provide call center services to us.
ETelecare claimed that the Company had failed to pay for the service rendered.
The Company denied liability and did counterclaim for the return of $3,293,038
paid to eTelecare alleging eTelecare engaged in systemic fraudulent activity
that caused the Company damage. This proceeding was settled by the Company's
payment of $85,000 on December 9, 2004.

                                      F-35
<PAGE>

Lawstar, Inc. commenced an arbitration proceeding to recover $1,000,000 in
connection with an agreement to provide a legal service access plan, marketed in
a private label environment to B2B Advantage, Inc.'s small business customers.
Lawstar has claimed that B2B has breached the contract and failed to pay for the
services rendered. B2B denies liability because the contract was terminated and
claimant was fully paid pursuant to the terms of the contract settlement. The
action was settled for $225,000 payable in installments, beginning January 1,
2005.

NOTE 22.    SUBSEQUENT EVENTS

Acquisition

In November 2004, the Company entered into an agreement to purchase all of the
outstanding common shares of IMS for a purchase price of approximately
$7,500,000. In July 2004, the Company had advanced IMS $600,000 and advanced an
additional $300,000 in November 2004 (see Note 5). Effective January 3, 2005 the
Company completed its acquisition of IMS. The remaining purchase price at
closing was approximately $5,100,000, after deducting the advances previously
made by the Company and agreed upon adjustments This amount is payable, pursuant
to a non-interest bearing note, in 24 equal monthly installments beginning 30
days after the closing. The note is secured by a pledge of the shares of IMS and
a subordinated security interest in the Company's assets. As part of the
acquisition, the Company entered into a finders fee agreement for $375,000, of
which $100,000 was paid at closing. The remaining amount of this agreement is
payable in 24 equal monthly installments.

Amendment and Waiver Agreement

On February 28, 2005, the Company entered into an Amendment and Waiver agreement
with a secured convertible term note holder. This agreement provided for (i) the
release of $1,100,000 in a restricted cash account as of December 31, 2004,
constituting part of an original loan to the Company in May 2003 and (ii) the
waiver of certain past and future payments of liquidated damages arising because
a registration statement covering certain securities owned by the note holder
had not been declared effective by the Securities and Exchange Commission as of
September 2004. In connection with the Amendment and Waiver the Company issued a
seven-year warrant to Laurus to purchase 1,900,000 shares of the Company's
common stock at an exercise price of $2.15 per share.

NOTE 23.    QUARTERLY FINANCIAL DATA (UNAUDITED)

The following is a summary of the Company's unaudited quarterly results of
operations for the years ended December 31, 2004, 2003, and 2002. Quarterly and
year-to-date computations of per share amounts are made independently.
Therefore, the sum of per share amounts for the quarters may not agree with per
share amounts for the year.

<TABLE>
<CAPTION>
                                     March 31,        June 30,     September 30,    December 31,
                                       2004            2004            2004            2004
                                   -------------   -------------   -------------   -------------
<S>                                <C>             <C>             <C>             <C>
Revenues                           $   4,876,148   $   4,287,336   $   4,360,539   $   4,210,844
Income from operations                  (639,746)     (2,079,918)     (2,026,857)     (2,044,547)
Net income (loss)                       (859,555)     (3,663,795)     (1,905,373)     (3,300,203
Net income (loss) per share -
  Basic                            $       (0.08)  $       (0.34)  $       (0.17)  $       (0.29)
  Diluted                                  (0.08)          (0.34)          (0.17)          (0.29)
</TABLE>

                                      F-36
<PAGE>

<TABLE>
<CAPTION>
                                     March 31,        June 30,     September 30,    December 31,
                                       2004            2004            2004            2004
                                   -------------   -------------   -------------   -------------
<S>                                <C>             <C>             <C>             <C>
Revenues                           $  12,366,775   $   9,268,098   $   8,557,326   $   6,929,078
Income from operations                 2,622,443       1,626,647       1,224,217        (877,719)
Net income (loss)                      1,976,550       1,370,029       1,104,324         (71,743)
Net income (loss) per share -
  Basic                            $        0.19   $        0.13   $        0.10   $       (0.01)
  diluted                                   0.16            0.10            0.08           (0.01)
</TABLE>

<TABLE>
<CAPTION>
                                     March 31,        June 30,     September 30,    December 31,
                                       2004            2004            2004            2004
                                   -------------   -------------   -------------   -------------
                                    (Restated)      (Restated)      (Restated)      (Restated)
<S>                                <C>             <C>             <C>             <C>
Revenues                           $   1,901,451   $   2,910,420   $   7,749,645   $  13,689,335
Income from operations                (1,083,908)     (2,255,458)       (869,804)     (2,355,967)
Net income                            (1,171,874)     (2,359,376)     (1,017,223)     (7,396,449)
Net income (loss) per share -
  Basic                            $       (0.11)  $       (0.23)  $       (0.10)  $       (0.70)
  Diluted                                  (0.11)          (0.23)          (0.10)          (0.70)
</TABLE>

                                      F-37
<PAGE>

INNOVATIVE MARKETING STRATEGIES, INC.
AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET (UNAUDITED)
SEPTEMBER 30, 2004

ASSETS
CURRENT ASSETS
  Cash                                               $    148,402
  Accounts receivable                                     545,490
  Factored receivable reserve                              30,000
  Unbilled receivables                                    575,521
  Due from stockholder                                     40,143
                                                     ------------
    Total current assets                                1,339,556
PROPERTY AND EQUIPMENT, NET                             1,271,505
OTHER ASSETS                                               44,192
                                                     ------------
                                                     $  2,655,253
                                                     ============

LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
  Current maturities of notes payable                $    698,480
  Accounts payable                                      1,607,688
  Accrued liabilities                                   1,249,124
  Due to officers                                         190,981
  Note payable, Epixtar                                   600,000
  Notes payable, officers                                 349,708
                                                     ------------
    Total current liabilities                           4,695,981

LONG-TERM LIABILITIES, less current maturities
  Notes payable                                           633,797
                                                     ------------
                                                        5,329,778
STOCKHOLDERS' DEFICIT
  Common stock, $1 par value; 7,500 shares
   authorized, issued and outstanding                       7,500
  Accumulated deficit                                  (2,682,025)
                                                     ------------
    Total stockholders' deficit                        (2,674,525)
                                                     ------------
                                                     $  2,655,253
                                                     ============

                                      F-38
<PAGE>

INNOVATIVE MARKETING STRATEGIES, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF
OPERATIONS AND ACCUMULATED DEFICIT (UNAUDITED)
NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2004 (UNAUDITED

REVENUES                                             $ 13,803,920

EXPENSES
  Personnel costs                                       9,990,595
  Selling, general and administrative                   3,629,634
  Consulting fees - related party                         538,256
  Depreciation                                            432,467
                                                     ------------
                                                       14,590,952
                                                     ------------
INCOME FROM OPERATIONS                                   (787,032)

OTHER INCOME (EXPENSE)
  Interest expense                                       (203,719)
  Other income                                              7,554
                                                     ------------
                                                         (196,165)
                                                     ------------
LOSS BEFORE INCOME TAXES                                 (983,197)
INCOME TAXES                                                    -
                                                     ------------
NET LOSS                                                 (983,197)
ACCUMULATED DEFICIT, BEGINNING                         (1,698,828)
                                                     ------------
ACCUMULATED DEFICIT, ENDING                          $ (2,682,025)
                                                     ============

                                      F-39
<PAGE>

INNOVATIVE MARKETING STRATEGIES, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2004 (UNAUDITED)

OPERATING ACTIVITIES
  Net loss                                           $   (983,197)
  Adjustments to reconcile net loss to net cash
   provided by operating activities:
    Depreciation                                          432,467
    Changes in:
      Accounts receivable                                 422,685
      Due from stockholder                                (13,680)
      Other assets                                         60,657
      Due to officers                                     108,949
      Accounts payable and accrued expenses               (90,384)
                                                     ------------
        Net cash used by operating activities             (62,503)
                                                     ------------
INVESTING ACTIVITIES
  Purchase of property and equipment                     (807,315)
                                                     ------------
        Net cash used in investing activities            (807,315)
                                                     ------------
FINANCING ACTIVITIES
  Principal payments on notes payable                  (1,081,592)
  Principal payments on officers' notes payable          (112,401)
  Advances on notes payable                               972,209
  Advance on note payable, Epixtar                        600,000
  Advances on officers' notes payable                     586,232
                                                     ------------
        Net cash provided by financing activities         964,448
                                                     ------------
NET CHANGE IN CASH                                         94,630
CASH, BEGINNING OF YEAR                                    53,772
                                                     ------------
CASH, END OF YEAR                                    $    148,402
                                                     ============
SUPPLEMENTAL CASH FLOW INFORMATION:
  Cash paid for interest                             $    203,719
                                                     ============

                                      F-40
<PAGE>

INNOVATIVE MARKETING STRATEGIES, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2004

(UNAUDITED)

1.   NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     a.   Description of Business - Innovative Marketing Strategies, Inc. and
          Subsidiaries (the "Company"), is a Florida corporation whose core
          business is the operation of a network of telecommunication call
          centers that provide direct marketing services. The Company, through
          its subsidiaries and divisions, also offers other marketing and
          advisory services.

          The Company's corporate headquarters are located in Leawood, Kansas.
          Call center locations include Kansas, Washington, Minnesota, West
          Virginia and Manila, Philippines.

          The Company is the majority owner in three Limited Liability Companies
          that were organized in the State of Kansas in either 2002 or 2003:
          Quantum Financial, LLC, Quantum Direct, LLC, and Quantum Marketing
          Group, LLC (together "Quantum").

          In September of 2003 the Company formed Innovative Marketing
          Strategies Asia, Inc ("IMS Asia"), a wholly owned subsidiary located
          in the Philippines that was organized to operate a call center located
          in the Philippines beginning in 2004.

     b.   Principles of Consolidation - The consolidated financial statements
          include the accounts of the Company and those of its wholly-owned and
          majority-owned subsidiaries. Intercompany accounts and transactions
          have been eliminated in consolidation.

     c.   Revenue Recognition - The Company recognizes revenues in the period in
          which the corresponding services are provided. Revenue received in
          advance of the delivery of service is recorded as deferred revenue.
          The revenue for services provided, but not invoiced, is recorded as
          unbilled receivables until invoiced.

     d.   Furniture, Fixtures and Equipment - Fixed assets, principally
          computers, furniture and leasehold improvements, are stated at cost
          less accumulated depreciation. Depreciation is computed using the
          straight-line and accelerated methods over the estimated useful lives
          of the corresponding assets.

     e.   Advertising Costs - Advertising costs are expensed as incurred.
          Advertising costs for the nine month period ended September 30,2004
          were $2,606.

     f.   Income Taxes - The Company uses the liability method for accounting
          for income taxes. Deferred tax assets and liabilities are recognized
          for the expected future tax consequences of temporary differences
          between the financial reporting and tax bases of assets and
          liabilities. If appropriate, deferred tax assets are reduced by a
          valuation allowance that reflects expectations of the extent to which
          such assets will be realized.

     g.   Cash Equivalents - All highly liquid debt investments with maturities
          of three months or less when purchased are considered to be cash
          equivalents.

     h.   Significance of Estimates - The preparation of 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-41
<PAGE>

     i.   Impairment of long-lived assets - The Company continually evaluates
          the carrying value of its long-lived assets. Impairment is recognized
          when the expected future discounted operating cash flows to be derived
          from such assets are less than their carrying values.

2.   ACCOUNTS RECEIVABLE FACTORING AGREEMENT

     The Company sells (with recourse) certain of its accounts receivables to
     Wells Fargo ("WF") under a factoring agreement. Under the terms of the
     agreement, WF held $30,000 at September 30, 2004 as reserve for
     uncollectible accounts. During the nine month period ended September 30,
     2004, the Company received approximately $8,670,000 of proceeds from the
     sale of accounts receivable to WF, and paid WF $123,493 in fees during the
     same nine month period.

3.   FURNITURE, FIXTURES AND EQUIPMENT

       Computers and equipment                            $   2,223,507
       Furniture and fixtures                                   120,235
       Leasehold improvements                                    57,253
                                                          -------------
                                                              2,400,995
       Less accumulated depreciation                         (1,129,490)
                                                          -------------
                                                          $   1,271,505
                                                          =============

4.   ACCRUED LIABILITIES

       Taxes payable                                      $     489,122
       Accrued payroll                                          412,946
       Accrued settlement                                       163,374
       Accrued termination payments                              38,333
       Accrued vacation                                          82,832
       Other                                                     62,517
                                                          -------------
                                                          $   1,249,124
                                                          =============

5.   NOTES PAYABLE

       Note payable dated 2002, interest at 6.0%,
       due in 24 monthly installments of $1,052,
       through maturity in 2004.  Secured by
       office furniture                                   $       2,189

       Note payable dated 1999, interest at 10.0%,
       due in monthly installments of $6,089
       including interest until paid in full                    290,194

       Notes payable dated 1999, Kansas Business
       Development Loans, non interest bearing,
       forgivable over a five year period if
       defined job creation requirements are met,
       subject to complete repayment under
       conditions of default                                     65,702

                                      F-42
<PAGE>

5.   NOTES PAYABLE (Continued)

       Note payable dated 2002, variable interest
       (Prime plus 3 1/4 %) due in 60 monthly
       installments through maturity in 2007
       Secured by certain equipment                              37,787

       Note payable dated 2003, West Virginia Business
       Development Loan, interest at 5.0%, due in 120
       monthly installments of $1,591, including
       interest, through maturity in 2013. Secured by
       certain assets defined in a security agreement
       and personal guarantees by two of the Company's
       stockholders                                             129,190

       Note payable dated 2003, West Virginia Business
       Development Loan, interest at 4.0%, due in 60
       monthly installments of $5,223, including
       interest, through maturity in 2008
       Secured by certain assets defined in a
       security agreement                                       220,537

       Note payable dated 2003, non-interest bearing,
       due in 30 monthly installments through maturity
       in 2007. Secured by certain equipment                    133,309

       Note payable dated 2004, interest at 8.8%, due
       in monthly installments of $36,613, through
       maturity in 2005. Secured by equipment                   449,825

       Notes payable, other                                       3,544
                                                          -------------
         Total notes payable                                  1,332,277
         Less current portion                                   698,480
                                                          -------------
                                                          $     633,797
                                                          =============

       Maturities of notes payable, for the years subsequent to September 30,
       2004 are as follows:

                                                              AMOUNT
                                                          -------------
         2005                                             $     698,480
         2006                                                   255,483
         2007                                                   139,091
         2008                                                   115,218
         2009                                                    68,292
         Thereafter                                              55,713
                                                          -------------
                                                          $   1,332,277
                                                          =============

6.   NOTES PAYABLE TO STOCKHOLDERS

     As of September 30, 2004 the Company had outstanding notes payable, due on
     demand, to the Company's three stockholders totaling $349,708. The
     obligations are unsecured and are non-interest bearing.

                                      F-43
<PAGE>

7.   OPERATING LEASES

     The Company leases equipment and office facilities under non-cancelable
     operating leases. Rental expense related to these leases approximated
     $578,978 during the nine-month period ended September 30, 2004. Minimum
     rental commitments subsequent to September 30, 2004 under such operating
     leases are as follows:

         2005                                             $     783,988
         2006                                                   687,433
         2007                                                   363,939
         2008                                                   200,504
                                                          -------------
                                                          $   2,035,864
                                                          =============

8.   INCOME TAXES

     The difference between the effective tax rate and the statutory federal and
     state income tax rates results from the effect of the timing differences on
     the deductibility of certain accrued expenses and the non-recognition of a
     deferred tax asset related to the Company's net operating loss
     carryforwards.

     SFAS No. 109 requires that a valuation allowance be provided if it is more
     likely than not that some portion or all of a deferred tax asset will not
     be realized. The Company's ability to realize the benefit of its deferred
     tax asset will depend on the generation of future taxable income. Because
     the Company's operations are not currently generating taxable income,
     management believes that a full valuation allowance should be provided as
     of September 30, 2004.

     Deferred taxes result from temporary differences between the financial
     statement and tax bases of assets and liabilities. As of September 30,
     2004, the sources of these differences and their cumulative tax effects
     are:

         Accrued liabilities                              $     161,677
         Operating loss carryforward                            456,573
                                                          -------------
           Deferred tax asset - current, net                    618,250
                                                          -------------
         Intangible assets - non-current                        123,639
                                                          -------------
         Valuation reserve                                     (741,889)
                                                          -------------
             Net deferred tax asset                       $           0
                                                          =============

     At September 30, 2004, the Company had net operating loss carry forwards
     for income tax purposes of approximately $1,340,000.

9.   401(K) RETIREMENT PLAN

     The Company maintains a 401(K) plan ("the Plan") covering all eligible
     employees who desire to participate. Contributions to the plan are based
     upon the amount of the employees' deferrals and the employer's matching
     contribution rate of 25%. For the period ended September 30, 2004 the
     Company recognized $6,992 of expense that represented their portion of the
     contribution.

                                      F-44
<PAGE>

10.  RELATED PARTY TRANSACTIONS

     The Company leases its corporate headquarters from an entity that is 50%
     owned by the two principal stockholders of the Company. Rent expense under
     this lease for the period ended September 30, 2004 was $158,866.

     The amount due to officers ($190,981 as of September 30, 2004) on the
     accompanying balance sheet arose as a result of accrued salaries to these
     parties. The amount due from stockholder ($40,143 as of September 30, 2004)
     on the accompanying balance sheet arose as a result of cash advances to a
     stockholder.

     During the nine-month period ended September 30, 2004, the Company expensed
     $538,256 for commissions paid or payable to a minority stockholder (or his
     company) for services provided under an agreement that calls for the
     Company to pay up to an 8% commission based on sales to certain customers.

11.  SIGNIFICANT CUSTOMERS

     For the nine-month period ended September 30, 2004, the Company had sales
     to one customer in the period totaling $8,605,884 or 63% of total sales.

12.  EMPLOYEE SEPARATION AND MUTUAL RELEASE AGREEMENTS

     In February of 2004, the Company entered into separation and mutual release
     agreements with two former employees who alleged that they were entitled to
     bonus payments, payment for stock certificates and payment of other
     benefits. Under the terms of the agreements, the Company is required to pay
     the former employees a total of $180,000 over a twelve-month period
     beginning in February of 2004. The Company recorded the corresponding
     $180,000 liability and expense related to these agreements as of and for
     the period ended December 31, 2003. The remaining liability at September
     30, 2004 is $38,333.

13.  OFF BALANCE SHEET RISK AND CREDIT RISK CONCENTRATION

     A substantial amount of the Company's revenues and trade receivables are
     the result of business with a relatively concentrated group of companies in
     the financial services industry. The Company does not require collateral or
     other security on most of these accounts. The credit risk on these accounts
     is controlled through credit approvals and monitoring procedures.

     The industry in which the Company operates is highly regulated and subject
     to restrictions that may increase as new laws and/or regulations are
     passed.

14.  CONTINGENCIES

     The Internal Revenue Service ("IRS") has filed a lien against substantially
     all of the Company's assets. The lien was filed as a result of non-payment
     of payroll taxes. As of September 30, 2004 the Company's unpaid payroll
     taxes, including related penalties and interest, approximated $398,000 and
     are included in accrued liabilities. The Company and the IRS have
     established a payment plan for the past due taxes. In the event that the
     Company is unable to comply with the plan, the IRS could seize virtually
     all of the Company's assets.

                                      F-45
<PAGE>

     Numerous lawsuits, claims and proceedings are pending against the company.
     The Company estimates that based on the facts and circumstances the claims
     are either without merit or have been adequately reserved. These matters,
     if resolved differently than management's estimates, could have a material
     adverse effect on the Company's financial position, operating results and
     cash flows when resolved in a future reporting period.

15.  SUBSEQUENT EVENTS, FINANCIAL RESULTS AND LIQUIDITY

     In July of 2004, the stockholders of the Company entered into a letter of
     intent to sell 100% of the Company's common stock to Epixtar Corp.
     (EPIXTAR). In connection with the agreement the Company received a loan
     from EPIXTAR of $600,000 in July of 2004 and an additional $300,000 in
     November of 2004. In November of 2004, a $900,000 non-interest bearing
     promissory note was executed in favor of EPIXTAR for the loan advances. In
     the event that the transaction is not completed or an event of default
     occurs, the note will become interest bearing at the rate of 18%. As of
     September 30, 2004 the $600,000 advanced on the loan has been classified as
     Note Payable, Epixtar.

     As of September 30, 2004 the Company had a negative net worth of $2,674,525
     and negative working capital of $3,356,425. In the event that the
     transaction discussed above does not occur, there can be no assurance that
     additional financing can be obtained from conventional sources to fund the
     Company's liabilities and cash flow requirements.

     The Company's independent public accountants have included a "going
     concern" emphasis paragraph in their review report accompanying these
     financial statements. The paragraph states that the Company's recurring
     losses and negative working capital raise substantial doubt about the
     company's ability to continue as a going concern and cautions that the
     financial statements do not include adjustments that might result from the
     outcome of this uncertainty.

     Management believes that, despite the financial hurdles and funding
     uncertainties going forward, it has business plans that can significantly
     improve operating results. The support of the company's vendors, customers,
     lenders, stockholders and employees will continue to be key to the
     Company's future success.

                                      F-46
<PAGE>

                         EPIXTAR CORP. AND SUBSIDIARIES

                SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS

              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002

<TABLE>
<CAPTION>
                                                                         Additions
                                                               ----------------------------
                                                                Charged to      Charged to
                                                 Beginning      Costs and         Other                           Ending
                                                  Balance        Expenses        Accounts       Deductions       Balance
                                                ------------   ------------    ------------    ------------    ------------
<S>                                             <C>            <C>             <C>             <C>             <C>
Year 2004
  Allowance for doubtful accounts               $  2,178,035   $     74,135    $          -    $   (372,231)   $  1,879,939
  Deferred tax asset valuation allowance           4,061,677      2,673,031                                       6,734,708
Year 2003
  Allowance for doubtful accounts                  2,132,371      1,533,983                      (1,488,319)      2,178,035
  Deferred tax asset valuation allowance           5,814,474     (1,752,797)                                      4,061,677
Year 2002
  Allowance for doubtful accounts                          -      2,083,268          49,103               -       2,132,371
  Deferred tax asset valuation allowance           1,176,339      4,638,135                                       5,814,474
</TABLE>

        All other financial statements and schedules not listed have been
        omitted because the required information is included in the consolidated
        financial statements or the notes thereto, or is not applicable or
        required.
                                      F-47

<PAGE>

                                   SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
the registrant has caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized.

                                               EPIXTAR CORP.

Dated: April 15, 2005                          By: /s/ Irving Greenman
                                               ---------------------------------
                                               Irving Greenman,
                                               Chief Financial Officer
                                               and Chief Accounting Officer

In accordance with the Exchange Act, this report has been signed below by the
following person on behalf of the registrant and in the capacities and on the
dates indicated.

Signature                    Title                               Date
--------------------------   ---------------------------------   ---------------
/s/ Ilene Kaminsky           Chief Executive Officer,            April 15, 2005
--------------------------   Director
Ilene Kaminsky

/s/ Irving Greenman          Director, Chief Financial Officer   April 15, 2005
--------------------------   and Chief Accounting Officer
Irving Greenman

/s/ David Srour
--------------------------   Director                            April 15, 2005
David Srour

/s/ David Berman
--------------------------   Director                            April 15, 2005
David Berman


--------------------------   Director                            April 15, 2005
Kenneth Elan


--------------------------   Director                            April 15, 2005
John W. Cooney

/s/ Sheldon Goldstein
--------------------------   Director                            April 15, 2005
Sheldon Goldstein


--------------------------   Director                            April 15, 2005
Robert Palmer