[restatedablefinancials001.jpg]





















ABLEAUCTIONS.COM, INC.





CONSOLIDATED FINANCIAL STATEMENTS





MARCH 31, 2005

















































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ABLEAUCTIONS.COM, INC.



CONSOLIDATED BALANCE SHEET



|                                                     |          |                            |   |                            |  |  |  |  |  | 
|---------------------------------------------------- | -------- | -------------------------- | - | -------------------------- |  |  |  |  |  | 
|                                                     | MARCH 31 | DECEMBER 31               
|                                                     |          | 2005
(As restated- Note 2) |   | 2004
(As restated- Note 2)
|ASSETS                                               |          |                            |   |                           
|Current                                              |          |                            |   |                           
|Cash and cash equivalents                            | $        | 471,346                    | $ | 182,305                   
|Marketable securities                                |          | 6,390,895                  |   | 8,645,570                 
|Accounts receivable  trade, net of allowance        |          | 934,980                    |   | 861,439                   
|Loans receivable                                     |          | 130,107                    |   | 252,745                   
|Inventory                                            |          | 930,714                    |   | 961,345                   
|Prepaid expenses                                     |          | 246,841                    |   | 183,616                   
|Current portion of notes receivable                  |          | 47,601                     |   | 71,544                    
|                                                     |          | 9,152,484                  |   | 11,158,564                
|Notes Receivable                                     |          | 4,960                      |   | 4,992                     
|Intangible Assets                                    |          | 224,061                    |   | 196,376                   
|Property and Equipment(note 4)                       |          | 2,708,293                  |   | 506,260                   
|                                                     |          |                            |   |                           
|                                                     | $        | 12,089,798                 | $ | 11,866,192                
|LIABILITIES                                          |          |                            |   |                           
|Current                                              |          |                            |   |                           
|Accounts payable and accrued liabilities             | $        | 258,731                    | $ | 138,757                   
|Deferred revenue                                     |          | 39,072                     |   | 52,425                    
|                                                     |          | 297,803                    |   | 191,182                   
|                                                     |          |                            |   |                           
|Investor Deposit                                     |          | -                          |   | 100,254                   
|                                                     |          | 297,803                    |   | 291,436                   
|                                                     |          |                            |   |                           
|STOCKHOLDERS EQUITY (DEFICIENCY)                    |          |                            |   |                           
|                                                     |          |                            |   |                           
|Capital Stock                                        |          |                            |   |                           
|Authorized:                                          |          |                            |   |                           
|100,000,000 common shares with a par value of $0.001 |          |                            |   |                           
|Issued and outstanding:                              |          |                            |   |                           
|62,366,834 common shares at March 31, 2005           |          |                            |   |                           
|61,621,065 common shares at December 31, 2004        |          | 62,367                     |   | 61,621                    
|Additional paid-in capital                           |          | 37,134,310                 |   | 36,751,076                
|                                                     |          |                            |   |                           
|Deferred Compensation                                |          | (10,635)                   |   | (15,954)                  
|Deficit                                              |          | (25,461,575)               |   | (25,292,012)              
|Accumulated Other Comprehensive Income (Loss)        |          | 67,528                     |   | 70,025                    
|                                                     |          | 11,791,995                 |   | 11,574,756                
|Contingent Liabilities(Note 5)                       |          |                            |   |                           
|                                                     | $        | 12,089,798                 | $ | 11,866,192                











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ABLEAUCTIONS.COM, INC.



CONSOLIDATED STATEMENT OF OPERATIONS

(Unaudited)



|                                              |                    |            |   |           
|--------------------------------------------- | ------------------ | ---------- | - | ----------
|                                              | THREE MONTHS ENDED
|                                              | MARCH 31          
|                                              |                    | 2005       |   | 2004      
|                                              |                    |            |   |           
|Revenues                                      |                    |            |   |           
|Sales                                         | $                  | 1,149,744  | $ | 786,594   
|Commissions                                   |                    | -          |   | 4,930     
|                                              |                    | 1,149,744  |   | 791,524   
|Cost Of Revenues                              |                    | 877,316    |   | 513,662   
|Gross Profit                                  |                    | 272,428    |   | 277,862   
|                                              |                    |            |   |           
|Expenses                                      |                    |            |   |           
|Operating expenses  (Note 7)                  |                    | 293,110    |   | 268,573   
|Depreciation and amortization                 |                    | 32,154     |   | 18,034    
|                                              |                    | 325,264    |   | 286,607   
|Loss Before Other Items                       |                    | (52,836)   |   | (8,745)   
|                                              |                    |            |   |           
|Other Items                                   |                    |            |   |           
|Share of income of joint venture              |                    | -          |   | 5,670     
|Investment income                             |                    | 73,109     |   | 75,087    
|Foreign exchange gain                         |                    | 20,646     |   | -         
|Legal claim costs (Note 6)                    |                    | (210,482)  |   | (25,000)  
|                                              |                    | (116,727)  |   | 55,757    
|                                              |                    |            |   |           
|Income (Loss) From Continuing Operations      |                    | (169,563)  |   | 47,012    
|Income From Discontinued Operations           |                    | -          |   | 4,911     
|                                              |                    |            |   |           
|Income (Loss) For The Period                  | $                  | (169,563)  | $ | 51,923    
|                                              |                    |            |   |           
|Basic And Diluted Income (Loss) Per Share     |                    |            |   |           
|Income (Loss) from continuing operations      | $                  | (0.003)    | $ | 0.001     
|Income (Loss) for the period                  | $                  | (0.003)    | $ | 0.001     
|                                              |                    |            |   |           
|Weighted Average Number Of Shares Outstanding |                    | 61,909,937 |   | 54,477,347











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ABLEAUCTIONS.COM, INC.



CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)



|                                                        |                    |                            |   |            
|------------------------------------------------------- | ------------------ | -------------------------- | - | -----------
|                                                        | THREE MONTHS ENDED
|                                                        | MARCH 31          
|                                                        |                    | 2005
(As restated- Note 2) |   | 2004       
|                                                        |                    |                            |   |            
|Cash Flows From Operating Activities                    |                    |                            |   |            
|Income (loss) for the period from continuing operations | $                  | (169,563)                  | $ | 47,012     
|Non-cash items included in net income (loss):           |                    |                            |   |            
|Depreciation and amortization                           |                    | 32,154                     |   | 18,034     
|Stock based compensation                                |                    | 5,319                      |   | 9,035      
|Joint venture share of income                           |                    | -                          |   | (5,670)    
|                                                        |                    | (132,090)                  |   | 68,411     
|Changes in operating working capital items:             |                    |                            |   |            
|(Increase) Decrease in accounts receivable              |                    | (73,541)                   |   | (510,724)  
|(Increase) Decrease in inventory                        |                    | 30,631                     |   | (310,088)  
|Increase in prepaid expenses                            |                    | (63,225)                   |   | (18,099)   
|Increase in accounts payable and accrued liabilities    |                    | 119,974                    |   | 59,028     
|Decrease in deferred revenue                            |                    | (13,353)                   |   | (14,241)   
|Net cash used in operating activities                   |                    | (131,604)                  |   | (725,713)  
|                                                        |                    |                            |   |            
|Cash Flows From Investing Activities                    |                    |                            |   |            
|Purchase of capital assets, net                         |                    | (2,221,687)                |   | (48,638)   
|Sale (Purchase) of short-term investments               |                    | 2,254,675                  |   | (2,677,518)
|Loan advances                                           |                    | 122,638                    |   | (54,865)   
|Investment in intangible assets                         |                    | (40,185)                   |   | (150,000)  
|Investment in joint venture                             |                    | -                          |   | 4,252      
|Note receivable                                         |                    | 23,975                     |   | 21,006     
|Net cash used in investing activities                   |                    | 139,416                    |   | (2,905,763)
|                                                        |                    |                            |   |            
|Cash Flows From Financing Activities                    |                    |                            |   |            
|Issuance of share capital                               |                    | -                          |   | 3,000,000  
|Exercise of warrants                                    |                    | -                          |   | 425,546    
|Exercise of stock options                               |                    | 283,726                    |   | 117,500    
|Share issuance costs                                    |                    | -                          |   | (186,530)  
|Net cash from financing activities                      |                    | 283,726                    |   | 3,356,516  
|                                                        |                    |                            |   |            
|Change In Cash And Cash Equivalents For The Period      |                    | 291,538                    |   | (274,960)  
|Net Cash Used In Discontinued Operation                 |                    | -                          |   | 8,249      
|Cash And Cash Equivalents, Beginning Of Period          |                    | 182,305                    |   | 738,226    
|Effect Of Exchange Rates On Cash                        |                    | (2,497)                    |   | 4,380      
|                                                        |                    |                            |   |            
|Cash And Cash Equivalents, End Of Period                | $                  | 471,346                    | $ | 475,895    







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ABLEAUCTIONS.COM, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



MARCH 31, 2005

(Unaudited)







1.

BUSINESS AND BASIS OF ORGANIZATION



Ableauctions.com, Inc. (the 'Company') was organized on September 30, 1996, under the laws of the State of Florida, as J.B. Financial Services, Inc.  On July 19, 1999, an Article of Amendment was filed with the State of Florida for the change of the Company's name from J.B. Financial Services, Inc. to Ableauctions.com, Inc.



The Company is high-tech auction technology company and a liquidator based in British Columbia, Canada with operations in the United States and Canada.  The Company earns revenues by broadcasting auctions live over the Internet, through the sale of merchandise from its liquidation operations, from the installation of Point-of-Sale software, and from its investment portfolio.



The Company's operating subsidiaries at March 31, 2005 were:



Able Auctions (1991) Ltd., a Canadian-based auction business.



Ableauctions.com (Washington) Inc., a U.S.-based auction business.



652297 B.C. Ltd. (ANO), a Canadian-based hardware and network

services business.



Rapidfusion Technologies Inc., a Canadian-based Internet auction business.



Icollector.Com Technologies Ltd., a Canadian-based Internet auction facility.



Jarvis Industries Ltd., a Canadian-based auction house.



ICollector International, Ltd., a US-based Internet auction business



Unlimited Closeouts Inc., a US-based liquidation business.



Itrustee.Com Technologies Ltd., a Canadian-based liquidation business



Itrustee.Com International, Ltd. a US-based liquidation business.



0716590 B.C.

Ltd., a Canadian-based real estate holding company.









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ABLEAUCTIONS.COM, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



MARCH 31, 2005

(Unaudited)



The unaudited consolidated financial statements of the Company at March 31, 2005 include the accounts of the Company and its wholly-owned subsidiaries, and reflect all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the interim period.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in these interim statements under the rules and regulations of the Securities and Exchange Commission  (SEC).  Accounting policies used in fiscal 2005 are consistent with those used in fiscal 2004.  The results of operations for the three-month period ended March 31, 2005 are not necessarily indicative of the results for the entire fiscal year ending December 31, 2005.  These interim financial statements should be read in conjunction with the financial statements for the fiscal year ended December 31, 2004 and the notes thereto included in the Companys Form 10KSB filed with the SEC on March 30, 2005.  The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States.



2.

RESTATEMENT



In March 2006, while preparing its financial statements for the year ended December 31, 2005, the Company determined that certain balances as at December 31, 2004 required adjustment.



During the year ended December 31, 2004, the company recorded marketable securities at cost.  While preparing its financial statements for the year ended December 31, 2005, it determined that the marketable securities should have been recorded at fair value.   The effect of the necessary restatement is an increase to the carrying amounts of marketable securities by $269,474 and to increase investment income by $269,474 for the fourth quarter of 2004.









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ABLEAUCTIONS.COM, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



MARCH 31, 2005

(Unaudited)



2.     RESTATEMENT(Continued)



Additionally, while preparing its financial statements for the year ended December 31, 2005, the Company determined that certain accounts receivable at December 31, 2004, which had been outstanding for over one year, should have been offset by an allowance for doubtful accounts.   The company has restated its 2004 financial statements to reflect a provision for bad debt related to these accounts.  The effect of this restatement is to decrease the carrying value of accounts receivable by $200,524, increase bad debts expense by $192,531, and decrease accumulated other comprehensive income by $7,991 for the fourth quarter.



The following presents the effect on the Companys previously issued financial statements for the year ended December 31, 2004.  There is no change on the consolidated statements of operations and cash flows for the period ended March 31, 2004.



Balance Sheet as at December 31, 2004:



|                                              |              |  |            |  |              | 
|--------------------------------------------- | ------------ |  | ---------- |  | ------------ | 
|                                              | Previously   |  | Increase   |  |              | 
|                                              | Reported     |  | (Decrease) |  | Restated     | 
|Marketable securities                         | $
8,376,096  |  | $
269,474  |  | $
8,645,570  | 
|Accounts receivable  trade, net of allowance | 1,061,963    |  | (200,524)  |  | 861,439      | 
|Accumulated other comprehensive income (loss) | 78,016       |  | (7,991)    |  | 70,025       | 
|Deficit                                       | (25,368,953) |  | 76,941     |  | (25,292,012) | 



The changes to the figures for the 2004 year also include certain reclassifications made to conform to the presentation adopted for the 2005 year.







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ABLEAUCTIONS.COM, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



MARCH 31, 2005

(Unaudited)



2.     RESTATEMENT(Continued)



As a result of the above adjustments on the 2004 financial statements, the Company has restated the affected balances for the period ended March 31, 2005.  The following presents the effect on the Companys previously issued financial statements for the period ended March 31, 2005.  There is no change in the consolidated statement of operations.



Balance sheet as at March 31, 2005:



|                                              |              |  |            |  |              | 
|--------------------------------------------- | ------------ |  | ---------- |  | ------------ | 
|                                              | Previously   |  | Increase   |  |              | 
|                                              | Reported     |  | (Decrease) |  | Restated     | 
|Marketable securities                         | $
6,121,421  |  | $
269,474  |  | $
6,390,895  | 
|Accounts receivable  trade, net of allowance | 1,133,386    |  | (198,406)  |  | 934,980      | 
|Accumulated other comprehensive income (loss) | 73,401       |  | (5,873)    |  | 67,528       | 
|Deficit                                       | (25,538,516) |  | 76,941     |  | (25,461,575) | 



Statement of cash flows for the period ended March 31, 2005:



|                                                 |            |  |            |  |          | 
|------------------------------------------------ | ---------- |  | ---------- |  | -------- | 
|                                                 | Previously |  | Increase   |  |          | 
|                                                 | Reported   |  | (Decrease) |  | Restated | 
|(Increase) Decrease in accounts receivable       | (71,423)   |  | (2,118)    |  | (73,541) | 
|Change in cash and cash equivalents for the year | 293,656    |  | (2,118)    |  | 291,538  | 
|Effect of exchange rates on cash                 | (4,615)    |  | 2,118      |  | (2,497)  | 



The changes to the figures for the 2005 period also include certain reclassifications made to conform to the presentation adopted for the 2005 year.





3.   DISCONTINUED OPERATIONS



Effective September 1, 2004, the company abandoned the computer resale operations of 652297 B.C. Ltd., which operated as ANO Office Automation (ANO). The Company sold the exclusive right to the names of ANO and customer lists in consideration for payment of the greater of $750 per month or 3% of gross sales per month generated from clients in the ANO client database, to a maximum of $3,000 per month for a period of 2 years.  The minimum entitlement under the agreement of $13,553 ($18,000 CAN) has been recorded as Note Receivable.







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ABLEAUCTIONS.COM, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



MARCH 31, 2005

(Unaudited)





4.   RELATED PARTY TRANSACTIONS



On February 24, 2005, the Company, through its wholly owned subsidiary, 0716590 B.C. Ltd., purchased the commercial building and property that the Company previously leased for use as its head office.  The property was purchased from a private company wholly owned by the spouse of the president and director of the Company.  The purchase price was $2,221,316 ($2,750,000 CAN), which was paid in cash.





5.

CONTINGENT LIABILITIES



The Company is a defendant in several legal actions commenced by certain trade creditors of one of its wholly-owned US subsidiaries.  The ultimate liability, if any, arising from this action is not expected to exceed $75,000 and will be recorded at the time of that determination, if necessary.



6.

LEGAL CLAIM



During the 2004 year, the Company and its subsidiary iCollector.com Technologies Ltd (iCollector) commenced a lawsuit against a former officer of iCollector for alleged breach of fiduciary duty.  During the three month period ended March 31, 2005, a judgement awarding damages was issued in favor of the Company and iCollector, for a total of $417,300.  The former officer has appealed the judgement.  The ultimate recovery of or costs to the Company, if any, from this action is not presently determinable and will be recorded at the time of that determination.



During the period ended March 31, 2005, the Company incurred legal and related costs totalling $210,482 related to this matter.







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ABLEAUCTIONS.COM, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



MARCH 31, 2005

(Unaudited)







7.

OPERATING EXPENSES



|                                               |                             |         |   |        
|---------------------------------------------- | --------------------------- | ------- | - | -------
|                                               | THREE MONTHS ENDED MARCH 31
|                                               |                             | 2005    |   | 2004   
|Operating Expenses                             |                             |         |   |        
|Accounting and legal                           | $                           | 32,549  | $ | 32,973 
|Advertising and promotion                      |                             | 23,262  |   | 20,432 
|Automobile                                     |                             | 1,159   |   | 1,241  
|Bad Debt                                       |                             | -       |   | 20,000 
|Commission                                     |                             | 16,852  |   | 57,157 
|Consulting                                     |                             | -       |   | 1,500  
|Insurance                                      |                             | 3,714   |   | 3,752  
|Investor relations and shareholder information |                             | 8,582   |   | 1,275  
|Management fees                                |                             | 18,310  |   | 17,556 
|Office and administration                      |                             | 22,282  |   | 23,396 
|Rent and utilities                             |                             | 6,638   |   | 23,111 
|Repairs and maintenance                        |                             | 4,116   |   | 2,564  
|Salaries and benefits                          |                             | 122,634 |   | 32,000 
|Telephone                                      |                             | 13,133  |   | 13,635 
|Travel                                         |                             | 15,554  |   | 7,001  
|Website maintenance                            |                             | 4,325   |   | 10,980 
|                                               |                             |         |   |        
|Total Operating Expenses                       | $                           | 293,110 | $ | 268,573