QUARTERLY REPORT ON FORM 10QSB FOR THE PERIOD ENDED March 31, 2008

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

                                   FORM 10-QSB

[X]   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934

                  For the quarterly period ended March 31, 2008

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

   For the transition period from __________________ to _____________________

                          Commission File No.000-31355

                     BEACON ENTERPRISE SOLUTIONS GROUP, INC.
                     ---------------------------------------
                 (Name of small business issuer in its charter)

            Nevada                                           81-0438093
            ------                                           ----------
  (State or other jurisdiction of                         (I.R.S. Employer
   incorporation or organization)                        Identification No.)

                  124 North First Street, Louisville, KY 40202
                  --------------------------------------------
                    (Address of principal executive offices)

                                  502-379-4788
                                  ------------
                           (Issuer's telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes  [X]   No  [ ]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).

Yes  [ ]   No  [X]

As of May 10, 2008, Beacon Enterprise Solutions Group, Inc. had a total of
10,468,021 shares of common stock issued and outstanding.

Transitional small business disclosure format:  Yes [ ]  No [X]


<PAGE>

TABLE OF CONTENTS

                          PART I: FINANCIAL INFORMATION

Item 1. Financial Statements                                                  3

Item 2. Management's Discussion and Analysis or Plan of Operation             44

Item 3A(T). Controls and Procedures                                           51

                           PART II: OTHER INFORMATION

Item 1. Legal Proceedings                                                     52

Item 6. Exhibits                                                              52

Signatures                                                                    53

                                   ----------


                                       2
<PAGE>

                         PART I: FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

            Beacon Enterprise Solutions Group, Inc. and Subsidiaries
                      Condensed Consolidated Balance Sheet

                                                                     March 31,
                                                                       2008
                                                                   ------------
                                                                    (Unaudited)

ASSETS

Current assets:
        Cash and cash equivalents                                  $   711,688
        Accounts receivable                                            665,180
        Inventory                                                      707,526
        Prepaid expenses and other current assets                      127,110
                                                                   -----------
               Total current assets                                  2,211,504
Property and equipment, net                                            252,327
Goodwill                                                             2,762,194
Other intangible assets, net                                         4,122,919
Inventory, less current portion                                         99,158
Security deposits                                                       27,892
                                                                   -----------
        Total assets                                               $ 9,475,994
                                                                   ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
        Current portion of long-term debt                          $   649,890
        Current portion of capital lease obligations                    17,734
        Accounts payable                                               709,763
        Accrued acquisition costs                                       84,924
        Accrued expenses                                               444,060
        Customer deposits                                              227,118
                                                                   -----------
               Total current liabilities                             2,133,489
Long-term debt, less current portion                                 1,732,565
Bridge notes (net of $176,698 of discounts)                            523,302
Capital lease obligations, less current portion                          2,807
Other acquisition liability                                             50,000
                                                                   -----------
        Total liabilities                                            4,442,163
                                                                   -----------

Stockholders' equity
        Preferred Stock: $0.01 par value, 5,000,000
               shares authorized, 4,800 shares
               outstanding in the following classes:
        Series A convertible preferred stock, $1,000
               stated value, 4,500 shares authorized,
               4,000 shares issued and outstanding,
               (liquidation preference $5,118,630)                   4,000,000
        Series A-1 convertible preferred stock, $1,000
               stated value, 1,000 shares authorized,
               800 shares issued and outstanding,
               (liquidation preference $1,006,813)                     800,000
        Common stock, $0.001 par value 70,000,000
               shares authorized, 10,468,021 shares
               issued and outstanding                                   10,468
        Additional paid in capital                                   6,390,393
        Accumulated deficit                                         (6,167,030)
                                                                   -----------
               Total stockholders' equity                            5,033,831
                                                                   -----------
        Total liabilities and stockholders' equity                 $ 9,475,994
                                                                   ===========

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


                                       3
<PAGE>

            Beacon Enterprise Solutions Group, Inc. and Subsidiaries
                 Condensed Consolidated Statement of Operations
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                      For the three      For the six
                                                                       months ended      months ended
                                                                         March 31,         March 31,
                                                                           2008              2008
                                                                      -------------      ------------
<S>                                                                    <C>               <C>
Net sales                                                              $  1,571,742      $ 1,708,830
Cost of goods sold                                                          838,925          873,757
                                                                       ------------      -----------
       Gross profit                                                         732,817          835,073
Operating expense
       Salaries and benefits                                              1,126,350        1,565,234
       Selling, general and administrative                                  593,354        1,057,760
       Depreciation expense                                                  20,308           21,178
       Amortization of intangible assets                                    160,101          181,155
                                                                       ------------      -----------
             Total operating expense                                      1,900,113        2,825,327
                                                                       ------------      -----------
Loss from operations                                                     (1,167,296)      (1,990,254)
Other expenses
       Interest expense                                                    (115,158)        (143,153)
       Interest income                                                        2,689            2,689
                                                                       ------------      -----------
             Total other expenses                                          (112,469)        (140,464)
                                                                       ------------      -----------
Net loss before income taxes                                             (1,279,765)      (2,130,718)
Income taxes                                                                   --               --
                                                                       ------------      -----------
Net loss                                                                 (1,279,765)      (2,130,718)
Series A and A-1 Preferred Stock:
       Contractual dividends                                                   --             (7,335)
       Deemed dividends related to beneficial conversion feature         (2,991,719)      (3,895,597)
                                                                       ------------      -----------
Net loss available to common stockholders                              $ (4,271,484)     $(6,033,650)
                                                                       ============      ===========
Net loss per share to common stockholders - basic and diluted          $      (0.41)     $     (0.74)
                                                                       ============      ===========
Weighted average shares outstanding
       basic and diluted                                                 10,468,021        8,159,662
                                                                       ============      ===========
</TABLE>

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


                                       4
<PAGE>

            Beacon Enterprise Solutions Group, Inc. and Subsidiaries
       Condensed Consolidated Statement of Stockholders' (Deficit) Equity
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                Series A Convertible       Series A-1 Convertible
                                                  Preferred Stock              Preferred Stock                 Common Stock
                                              -----------------------    ---------------------------    --------------------------
                                                            $1,000                        $1,000
                                                            Stated                        Stated                        $0.001 Par
                                               Shares        Value          Shares         Value           Shares          Value
                                              --------    -----------    -----------    ------------    ------------    ----------
<S>                                            <C>        <C>            <C>            <C>               <C>           <C>
Balance at October 1, 2007                                                                                 5,187,650       $ 5,188

Common stock granted to
  employee for services                                                                                      782,250           782
Vested portion of common stock
  granted to employee for services
Shares of Suncrest outstanding at
  time of share exchange                                                                                   1,273,121         1,273
Common stock issued as purchase
  consideration in business
  combinations                                                                                             3,225,000         3,225
Series A Preferred Stock issued
  in private placement                         4,000.0      4,000,000
Series A-1 Preferred Stock issued
  in private placement                                                         800.0       800,000
Private placement offering costs
Beneficial conversion feature -
  deemed preferred stock dividend
Bridge note warrants
Beneficial conversion feature -
  bridge notes
Vested contingent bridge warrants
Warrants issued for equity financing
  agreement
Compensatory warrants
Series A Preferred Stock contractual
  dividends
Series A-1 Preferred Stock contractual
  dividends
Issuance of Stock Options
Net loss
                                               -------    -----------    -----------    ------------      ----------    ----------
Balance at March 31, 2008 (unaudited)          4,000.0     $4,000,000           $800     $ 800,000        10,468,021      $ 10,468
                                               =======    ===========    ===========    ============      ==========    ==========
</TABLE>

<TABLE>
<CAPTION>
                                              Additional
                                               Paid-In       Accumulated
                                               Capital         Deficit          Total
                                              -----------    -----------     -----------
<S>                                           <C>            <C>             <C>
Balance at October 1, 2007                    $      (812)     $ (133,380)   $   (129,004)

Common stock granted to
  employee for services                              (782)                             --
Vested portion of common stock
  granted to employee for services                176,982                         176,982
Shares of Suncrest outstanding at
  time of share exchange                           (1,273)                             --
Common stock issued as purchase
  consideration in business
  combinations                                  2,738,025                       2,741,250
Series A Preferred Stock issued
  in private placement                                                          4,000,000
Series A-1 Preferred Stock issued
  in private placement                                                            800,000
Private placement offering costs                 (923,540)                       (923,540)
Beneficial conversion feature -
  deemed preferred stock dividend               3,895,597      (3,895,597)             --
Bridge note warrants                               72,000                          72,000
Beneficial conversion feature -
  bridge notes                                    128,000                         128,000
Vested contingent bridge warrants                  20,440                          20,440
Warrants issued for equity financing
  agreement                                        66,400                          66,400
Compensatory warrants                             219,000                         219,000
Series A Preferred Stock contractual
  dividends                                                        (7,335)         (7,335)
Series A-1 Preferred Stock contractual
  dividends                                                            --              --
Issuance of Stock Options                             356                             356
Net loss                                                       (2,130,718)     (2,130,718)
                                              -----------    ------------    ------------
Balance at March 31, 2008 (unaudited)         $ 6,390,393    $ (6,167,030)   $  5,033,831
                                              ===========    ============    ============
</TABLE>

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


                                       5
<PAGE>

            Beacon Enterprise Solutions Group, Inc. and Subsidiaries
                 Condensed Consolidated Statement of Cash Flows
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                 For the Six
                                                                                 Months Ended
                                                                                   March 31,
                                                                                     2008
                                                                                 ------------
<S>                                                                             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                                                        $(2,130,718)
Adjustments to reconcile net loss to net cash used in operating activities:
  Depreciation and Amortization                                                     202,333
  Non-cash interest                                                                  43,741
  Share based payment                                                               462,738
Changes in operating assets and liabilities:
  Accounts receivable                                                                23,821
  Inventory                                                                        (167,274)
  Prepaid expenses and other current assets                                         (49,674)
  Accounts payable                                                                 (122,369)
  Customer deposits                                                                (122,013)
  Other assets                                                                      111,087
  Accrued expenses                                                                  434,911
                                                                                -----------

    NET CASH USED IN OPERATING ACTIVITIES                                        (1,313,417)
                                                                                -----------

CASH FLOWS FROM INVESTING ACTIVITIES

  Capital expenditures                                                              (46,762)
  Acquisition of businesses, net of acquired cash                                (2,138,611)
                                                                                -----------

    NET CASH USED IN INVESTING ACTIVITIES                                        (2,185,373)
                                                                                -----------

CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from issuances of bridge notes                                           422,000
  Proceeds from sale of preferred stock, net of offering costs                    3,876,460
  Repayment of line of credit                                                      (250,000)
  Proceeds from note payable                                                        600,000
  Payments of notes payable                                                        (495,244)
  Payments of capital lease obligations                                              (4,949)
                                                                                -----------
    NET CASH PROVIDED BY FINANCING ACTIVITIES                                     4,148,267
                                                                                -----------
    NET INCREASE  IN CASH AND CASH EQUIVALENTS                                      649,477

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD                                      62,211
                                                                                -----------
CASH AND CASH EQUIVALENTS - END OF PERIOD                                       $   711,688
                                                                                ===========
Supplemental disclosures

  Cash paid for:
    Interest                                                                    $    50,419
                                                                                ===========
    Income taxes                                                                $        --
                                                                                ===========

  Acquisition of businesses
    Accounts receivable                                                         $   689,001
    Inventory                                                                       639,410
    Prepaid expenses and other current assets                                        55,283
    Property and equipment                                                          226,743
    Goodwill                                                                      2,762,194
    Customer relationships                                                        3,704,074
    Non-compete agreements                                                          500,000
    Tradenames                                                                      100,000
    Security deposits                                                                27,591
    Line of credit                                                                 (250,000)
    Accounts payable and accrued expenses                                          (832,132)
    Customer deposits                                                              (304,190)
    Long-term debt assumed                                                         (354,199)
    Capital lease obligations                                                       (25,490)
    Less: common stock issued as purchase consideration                          (2,741,250)
    Less: acquisition notes issued to sellers of acquired businesses             (1,973,500)
    Less: accrued acquisition costs                                                 (84,924)
                                                                                -----------
    Cash used in acquisition of businesses (net of $148,283 of cash acquired)   $ 2,138,611
                                                                                ===========
  Bridge note warrants                                                          $    72,000
                                                                                ===========
</TABLE>

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


                                       6
<PAGE>

            BEACON ENTERPRISE SOLUTIONS GROUP, INC. AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

NOTE 1 - THE COMPANY

Organization

      The financial statements presented are those of Beacon Enterprise
Solutions Group, Inc. ("Beacon" or the "Company"), which was originally formed
in the State of Indiana on June 6, 2007 and combined with Suncrest Global Energy
Corp. ("Suncrest" or the "Company"), a Nevada corporation, on December 20, 2007,
as described in "Share Exchange Transaction," below.

      The Company is a unified, single source information technology and
telecommunications enterprise that provides professional services and sales of
information technology and telecommunications products to mid-market commercial
businesses, state and local government agencies, and educational institutions.

      The Company was formed for the purpose of acquiring and consolidating
regional telecom businesses and service platforms into an integrated, national
provider of high quality voice, data and VOIP communications to small and
medium-sized business enterprises (the "SME Market"). The Company's business
strategy is to acquire companies that will allow it to serve the SME Market on
an integrated, turn-key basis from system design, procurement and installation
through all aspects of providing network service and designing and hosting
network applications.

      The Company was a development stage enterprise with no operating history
until completing the Share Exchange Transaction described below and simultaneous
business combinations and Private Placement financing transaction described in
Notes 4 and 14, respectively.

Share Exchange Transaction

      Pursuant to a Securities Exchange Agreement, Suncrest acquired all of the
outstanding no par value common stock of the Company on December 20, 2007.
Suncrest, in exchange for such Company common stock issued 1 share of its own
$0.001 par value common stock directly to the Company's stockholders for each
share of their Company common stock (the "Share Exchange Transaction").
Following the Share Exchange Transaction, the existing stockholders of Suncrest
retained 1,273,121 shares of Suncrest's outstanding common stock and the
Company's stockholders became the majority owners of Suncrest. Suncrest was
incorporated in the State of Nevada on May 22, 2000. The Company paid a $305,000
fee to the stockholders of Suncrest in connection with completing the Share
Exchange Transaction which is included as a component of selling, general and
administrative expense in the accompanying condensed consolidated statement of
operations.


                                       7
<PAGE>

      Prior to the Share Exchange Transaction, Suncrest was a publicly-traded
corporation with nominal operations of its own. Pursuant to the merger, Suncrest
was the surviving legal entity and Beacon was its wholly-owned subsidiary.
Following the Share Exchange Transaction, Suncrest changed its name to Beacon
Enterprise Solutions Group, Inc. on February 15, 2008 and continued to carry on
the operations of Beacon. The Share Exchange Transaction has been accounted for
as a reverse merger and recapitalization transaction in which the original
Beacon is deemed to be the accounting acquirer. Accordingly, the accompanying
condensed consolidated financial statements present the historical financial
position, results of operations and cash flows of Beacon, adjusted to give
retroactive effect to the recapitalization of Beacon into Suncrest.

Basis of Presentation

      The accompanying unaudited condensed consolidated financial statements as
of March 31, 2008 and for the three and six months then ended have been prepared
in accordance with the accounting principles generally accepted in the United
States of America for interim financial information and pursuant to the
instructions to Form 10-QSB and Item 310(b) of Regulation S-B of the Securities
and Exchange Commission ("SEC") and on the same basis as the annual audited
consolidated financial statements. The unaudited condensed consolidated balance
sheet as of March 31, 2008, condensed consolidated statement of operations for
the three and six months ended March 31, 2008 and the condensed consolidated
statement of stockholders' equity and cash flows for the six months ended March
31, 2008 are unaudited, but include all adjustments, consisting only of normal
recurring adjustments, which the Company considers necessary for a fair
presentation of the financial position, operating results and cash flows for the
period presented. The results for the three and six months ended March 31, 2008
are not necessarily indicative of results to be expected for the year ending
September 30, 2008 or for any future interim period. The accompanying condensed
consolidated financial statements should be read in conjunction with the
Company's financial statements and notes thereto included in the Company's
Current Report on Form 8-K, which was filed with the SEC on December 28, 2007.

NOTE 2 - LIQUIDITY, FINANCIAL CONDITION AND MANAGEMENT'S PLANS

      The Company incurred a net loss of approximately $2,131,000 and used
approximately $1,323,000 of cash in its operating activities for the six months
ended March 31, 2008. At March 31, 2008, the Company's accumulated deficit
amounted to approximately $6,167,000. The Company had cash of $711,688 and a
working capital surplus of approximately $78,000 at March 31, 2008.

      On June 14, 2007, the Company signed a non-exclusive engagement agreement
with Laidlaw & Company (UK) Ltd. ("Laidlaw") in which Laidlaw agreed to provide
the Company with certain corporate finance advisory services including (i)
raising capital under the Private Placement transaction described in Note 14;
(ii) structuring the business combinations described in Note 4; and (iii)
assisting the Company with identifying the public company in the Share Exchange
Transaction described in Notes 1 and 14. These transactions were completed on
December 20, 2007. The Company raised $4.0 million in the private placement in
three separate closings on December 20, 2007, January 15, 2008, and February 12,
2008. Pursuant to an oversubscription of the initial Private Placement, the
Company closed on an additional $0.8 million follow-on placement referred to
herein as the "Series A-1 Placement," completed on March 11, 2008. The Company
assumed approximately $405,000 of debt obligations in which the sellers of one
of the acquired businesses described in Note 4 triggered an acceleration of
principal under certain change of ownership provisions that constitute an event
of default under those agreements which was subsequently refinanced on March 14,
2008 (Note 10).



                                       8
<PAGE>

      As described in Note 10, the Company received $500,000 of gross proceeds
($278,000 prior to September 30, 2007 and $222,000 during the six months ended
March 31, 2008) under a bridge financing facility furnished by two of its
founding stockholders, who are also members of the Board of Directors. The
Company also raised $200,000 of additional capital through the issuance of
bridge notes in a second bridge note transaction completed on November 15, 2007.
As discussed in Note 12, the Company also had up to $500,000 of additional
equity financing available to it from one of its directors to draw as an
additional source of funding if needed.

      The Company believes that its currently available cash, the equity
financing arrangement and funds it expects to generate from operations will
enable it to effectively operate its business and pay its debt obligations they
become due within the next twelve months through April 1, 2009. However, the
Company will require additional capital in order to execute its current business
plan. If the Company is unable to raise additional capital, it will be required
to take various measures to conserve liquidity, which could include, but not
necessarily be limited to, curtailing its business development activities,
suspending the pursuit of its business plan, and controlling overhead expenses.
The Company cannot provide any assurance that it will raise additional capital.
The Company has not secured any commitments for new financing at this time, nor
can it provide any assurance that new financing will be available to it on
acceptable terms, if at all.

      On May 15, 2008, the Company received a new $500,000 equity financing
commitment from one of its directors and holders of the Company's bridge notes,
described in Note 10, agreed to defer payment of principal to April 1, 2009
(Note 17).

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

      The condensed consolidated financial statements include the accounts of
Beacon Enterprise Solutions Group, Inc., a Nevada corporation (formerly
Suncrest) and its wholly-owned subsidiaries the original Beacon formed in
Indiana in June 2007 and BH Acquisition Corp. All significant inter-company
accounts and transactions have been eliminated in consolidation.

Cash and Cash Equivalents

      The Company considers all highly liquid investments purchased with an
original maturity date of three months or less to be cash equivalents. Due to
their short-term nature, cash equivalents, when they are carried, are carried at
cost, which approximates fair value.

Revenue and Cost Recognition

      The Company applies the revenue recognition principles set forth under the
Securities and Exchange Commission's Staff Accounting Bulletin ("SAB") 104 with
respect to all of its revenue. Accordingly, the Company recognizes revenue when
(i) persuasive evidence of an


                                       9
<PAGE>

arrangement exists, (ii) delivery has occurred, (iii) the vendor's fee is fixed
or determinable, and (iv) collectability is probable.

      Business Telephone System and Computer Hardware Product Revenues - The
Company requires its hardware product sales to be supported by a written
contract or other evidence of a sale transaction that clearly indicates the
selling price to the customer, shipping terms, payment terms (generally 30 days)
and refund policy, if any. Since the Company's hardware sales are supported by a
contract or other document that clearly indicates the terms of the transaction,
and the selling price is fixed at the time the sale is consummated, the Company
records revenue on these sales at the time at which it receives a confirmation
that the goods were tendered at their destination when shipped "FOB
destination," or upon confirmation that shipment has occurred when shipped "FOB
shipping point."

      For product sales, the Company applies the factors discussed in Emerging
Issues Task Force ("EITF") issue 99-19 "Reporting Revenue Gross as a Principal
vs. Net as an Agent," ("99-19"), in determining whether to recognize product
revenues on a gross or net basis. In a substantial majority of these
transactions, the Company acts as principal because; (i) it has latitude in
establishing selling prices; (ii) takes title to the products; and (iii) has the
risks and rewards of ownership, including the risk of loss for collection,
delivery or returns. For these transactions, the Company recognizes revenues
based on the gross amounts billed to customers.

      Professional Services Revenue - The Company generally bills its customers
for professional telecommunications and data consulting services based on hours
of time spent on any given assignment at its hourly billing rates. As it relates
to delivery of these services, the Company recognizes revenue under these
arrangements as the work is completed and the customer has indicated their
acceptance of services by approving a work order milestone or completion order.
For certain engagements, the Company enters fixed bid contracts, and recognizes
revenue as phases of the project are completed and accepted by the client. We
generated approximately $1,034,000 of professional services revenue during both
the three and six months ended March 31, 2008.

      Time and Materials Contracts - Revenues from time and materials contracts,
which generally include product sales and installation services, are billed when
services are completed based on fixed labor rates plus materials. A substantial
majority of the Company's services in this category are completed in short
periods of time. The company may on occasion enter into long-term contracts in
which it would be appropriate to recognize revenue using long-term contract
accounting such as the percentage of completion method. We generated revenues of
approximately $513,000 and $650,000 from short-term time and materials contracts
for the three and six month periods ended March 31, 2008, respectively. These
services were fully completed as of March 31, 2008. Cost of revenues from time
and materials contracts includes materials and labor.

      Maintenance Contracts - The Company, as a representative of various
original equipment manufacturers, sells extended maintenance contracts on
equipment it sells and acts as an authorized servicing agent with respect to
these contracts. These contracts, which are sold as separate agreements from
other products and services, are individually negotiated and are generally not
bundled with other products and services. For maintenance contract sales, the
Company applies the factors discussed in "EITF" 99-19 in determining whether to
recognize


                                       10
<PAGE>

product revenues on a gross or net basis. Maintenance contracts are typically
manufacturer maintenance contracts that are sold to the customer on a reseller
basis. Based on an analysis of the factors set forth in EITF 99-19, the Company
has determined that it acts as an agent in these situations, and therefore
recognizes revenues on a net basis. The Company's share of revenue that it earns
from originating these contracts is deferred and recognized over the life of the
contract. Material and labor is charged for any service calls under these
maintenance contracts on a time and materials basis which is charged to either
the customer or manufacturer. We recognized approximately $26,000 of net
maintenance revenue during both the three and six months ended March 31, 2008.

      The Company accounts for sales taxes collected on behalf of government
authorities using the net method. Pursuant to this method, sales taxes are
included in the amounts receivable and a payable is recorded for the amounts due
the government agencies.

Use of Estimates

      The preparation of the condensed consolidated financial statements in
conformity with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the dates of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ materially from those estimates. These estimates and assumptions
include valuing equity securities and derivative financial instruments issued as
purchase consideration in business combinations and/or in financing transactions
and in share based payment arrangements, accounts receivable reserves, inventory
reserves, deferred taxes and related valuation allowances, allocating the
purchase price to the fair values of assets acquired and liabilities assumed in
business combinations (including separately identifiable intangible assets and
goodwill) and estimating the fair values of long lived assets to assess whether
impairment charges may be necessary.

Accounts Receivable

      The Company has a policy of reserving for uncollectible accounts based on
its best estimate of the amount of probable credit losses on its existing
accounts receivable. Account balances deemed to be uncollectible are charged to
the allowance for doubtful accounts after all means of collection have been
exhausted and the potential for recovery is considered remote. Historically, the
companies acquired in the business combinations described in Note 4 have
experienced minimal credit losses. Substantially all of the accounts receivable
outstanding at March 31, 2008 was generated during the period subsequent to the
acquisitions.

Inventory

      Inventory, which consists of business telephone systems and associated
equipment and parts, is stated at the lower of cost (first-in, first-out method)
or market. In the case of slow moving items, we may write down or calculate a
reserve to reflect a reduced marketability for the item. The actual percentage
reserved will depend on the total quantity on hand, its sales history, and
expected near term sales prospects. When we discontinue sales of a product, we
will write down the value of inventory to an amount equal to its estimated net
realizable value


                                       11
<PAGE>

less all applicable disposition costs. Slow moving items include spare parts for
older phone systems that the Company uses to repair or upgrade customer phone
systems. A portion of these items, which are stated at their net realizable
value, are likely to be used after the next twelve months and are therefore
presented as non-current inventory in the accompanying condensed consolidated
balance sheet. A significant portion of the inventory on hand at March 31, 2008
was acquired in the business combinations completed on December 20, 2007. These
goods are stated at the net realizable value established using the purchase
method of accounting (Note 4).

Property and Equipment

      Property and equipment is stated at cost, including any cost to place the
property into service, less accumulated depreciation. Depreciation is recorded
over the estimated useful lives of the assets which currently range from 2 to 5
years. Leasehold improvements are amortized over the shorter of their estimated
useful lives or the term of the lease.

Concentration of Credit Risk

      Financial instruments that potentially expose the Company to
concentrations of credit risk consist principally of cash and cash equivalents.
We maintain our cash accounts at high quality financial institutions with
balances, at times, in excess of federally insured limits. As of March 31, 2008,
we had cash balances of approximately $549,000 in excess of federally insured
limits. Management believes that the financial institutions that hold our
deposits are financially sound and therefore pose minimal credit risk.

Start Up Costs

      All expenses incurred in connection with our formation and related start
up activities have been expensed as incurred and are included in selling,
general and administrative expenses in the accompanying condensed consolidated
financial statements. Start up costs, which principally include professional
fees and other administrative costs amounted to approximately $127,000 for the
three and six months ended March 31, 2008 and are included in selling general
and administrative expense in the accompanying condensed consolidated statement
of operations.

Goodwill and Intangible Assets

      The Company accounts for goodwill and intangible assets in accordance with
Statement of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other
Intangible Assets," ("SFAS 142). SFAS 142 requires that goodwill and other
intangibles with indefinite lives should be tested for impairment annually or on
an interim basis if events or circumstances indicate that the fair value of an
asset has decreased below its carrying value.

      Goodwill represents the excess of the purchase price over the fair value
of net assets acquired in business combinations. SFAS 142, requires that
goodwill be tested for impairment at the reporting unit level (operating segment
or one level below an operating segment) on an annual basis and between annual
tests when circumstances indicate that the recoverability of the carrying amount
of goodwill may be in doubt. Application of the goodwill impairment test
requires judgment, including the identification of reporting units, assigning
assets and liabilities to reporting units, assigning goodwill to reporting
units, and determining the fair value. The


                                       12
<PAGE>

Company operates a single reporting unit. Significant judgments required to
estimate the fair value of reporting units include estimating future cash flows,
determining appropriate discount rates and other assumptions. Changes in these
estimates and assumptions could materially affect the determination of fair
value and/or goodwill impairment.

      The Company's amortizable intangible assets include customer
relationships, covenants not to compete and tradenames. These costs are being
amortized using the straight-line method over their estimated useful lives. The
estimated fair values and useful lives of the customer relationships,
non-compete agreements and tradenames are preliminary as of March 31, 2008 as
established by the Company using the purchase method of accounting. These
amounts will be adjusted when the Company completes its valuation.

      In accordance with SFAS 144 "Accounting for the Impairment or Disposal of
Long-Lived Assets," the Company reviews the carrying value of intangibles and
other long-lived assets for impairment at least annually or whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable.

      Recoverability of long-lived assets is measured by comparison of its
carrying amount to the undiscounted cash flows that the asset or asset group is
expected to generate. If such assets are considered to be impaired, the
impairment to be recognized is measured by the amount by which the carrying
amount of the property, if any, exceeds its fair market value.

Preferred Stock

      We apply the guidance enumerated in SFAS No. 150 "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity" and
EITF Topic D-98 "Classification and Measurement of Redeemable Securities," when
determining the classification and measurement of preferred stock. Preferred
shares subject to mandatory redemption (if any) are classified as liability
instruments and are measured at fair value in accordance with SFAS 150. All
other issuances of preferred stock are subject to the classification and
measurement principles of EITF Topic D-98. Accordingly we classify conditionally
redeemable preferred shares (if any), which includes preferred shares that
feature redemption rights that are either within the control of the holder or
subject to redemption upon the occurrence of uncertain events not solely within
our control, as temporary equity. At all other times, we classify our preferred
shares in stockholders' equity. Our preferred shares do not feature any
redemption rights within the holders control or conditional redemption features
not within our control as of March 31, 2008. Accordingly all issuances of
preferred stock are presented as a component of condensed consolidated
stockholders' (deficit) equity.

Convertible Instruments

      We evaluate and account for conversion options embedded in convertible
instruments in accordance with SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS 133") and EITF 00-19, "Accounting for
Derivative Financial Instruments Indexed to, and Potentially Settled in, a
Company's Own Stock" ("EITF 00-19").

      SFAS 133 generally provides three criteria that, if met, require companies
to bifurcate conversion options from their host instruments and account for them
as free standing derivative financial instruments in accordance with EITF 00-19.
These three criteria include circumstances in which (a) the economic
characteristics and risks of the embedded derivative instrument are not


                                       13
<PAGE>

clearly and closely related to the economic characteristics and risks of the
host contract, (b) the hybrid instrument that embodies both the embedded
derivative instrument and the host contract is not remeasured at fair value
under otherwise applicable generally accepted accounting principles with changes
in fair value reported in earnings as they occur and (c) a separate instrument
with the same terms as the embedded derivative instrument would be considered a
derivative instrument subject to the requirements of SFAS 133. SFAS 133 and EITF
00-19 also provide an exception to this rule when the host instrument is deemed
to be conventional (as that term is described in the implementation guidance to
SFAS 133 and further clarified in EITF 05-2, "The Meaning of "Conventional
Convertible Debt Instrument" in Issue No. 00-19").

      We account for convertible instruments (when we have determined that the
embedded conversion options should not be bifurcated from their host
instruments) in accordance with the provisions of EITF 98-5, "Accounting for
Convertible Securities with Beneficial Conversion Features" ("EITF 98-5") and
EITF 00-27, "Application of EITF 98-5 to Certain Convertible Instruments" ("EITF
00-27"). Accordingly, we record when necessary discounts to convertible notes
for the intrinsic value of conversion options embedded in debt instruments based
upon the differences between the fair value of the underlying common stock at
the commitment date of the note transaction and the effective conversion price
embedded in the note. Debt discounts under these arrangements are amortized over
the term of the related debt to their stated date of redemption. We also record
when necessary deemed dividends for the intrinsic value of conversion options
embedded in preferred shares based upon the differences between the fair value
of the underlying common stock at the commitment date of the transaction and the
effective conversion price embedded in the preferred shares.

      We evaluated the conversion option featured in the Bridge Financing
Facility and Bridge Notes that are more fully described in Note 10. These
conversion options provide the noteholders, of whom three are also founding
stockholders and/or directors of Beacon, with the right to convert any advances
outstanding under the facility, into shares of our common stock at anytime upon
or after the completion of the entire Private Placement described in Note 14.
The conversion options embedded in these notes would not have been exercisable
unless and until we raised the full $4,000,000 of proceeds stipulated in the
Private Placement that was commenced during the three months ended December 31,
2007 and completed during the three months ended March 31, 2008.

      We had deemed the completion of the entire Private Placement to be an
event that was not within our control. As described in Note 10, we completed our
Private Placement on February 12, 2008 at which time the conversion options
embedded in the Notes became exercisable at the option of the holders.
Accordingly, we recorded a $72,000 discount to the face value of the Bridge
Notes based on the relative fair values of the Bridge Warrants and the Notes
measured as of the commitment date on November 15, 2007 and an additional
$128,000 discount related to the beneficial conversion feature that is being
accreted to interest expense over the contractual term of the Notes.

Common Stock Purchase Warrants and Other Derivative Financial Instruments


                                       14
<PAGE>

      We account for the issuance of common stock purchase warrants and other
free standing derivative financial instruments in accordance with the provisions
of EITF 00-19. Based on the provisions of EITF 00-19, we classify as equity any
contracts that (i) require physical settlement or net-share settlement or (ii)
gives us a choice of net-cash settlement or settlement in our own shares
(physical settlement or net-share settlement). We classify as assets or
liabilities any contracts that (i) require net-cash settlement (including a
requirement to net cash settle the contract if an event occurs and if that event
is outside our control) or (ii) gives the counterparty a choice of net-cash
settlement or settlement in shares (physical settlement or net-share
settlement). We assess classification of our common stock purchase warrants and
other free standing derivatives at each reporting date to determine whether a
change in classification between assets and liabilities is required.

      Our free standing derivatives consist of warrants to purchase common stock
that were issued to three founding stockholders/directors and one independent
qualified investor in connection with the Bridge Financing Facility and Bridge
Notes described in Note 10 as well as warrants issued to the Series A and A-1
Preferred Stock stockholders and placement agent and its affiliates in
connection with the Private Placement described in Note 14. We evaluated the
common stock purchase warrants to assess their proper classification in the
balance sheet as of March 31, 2008 using the applicable classification criteria
enumerated in EITF 00-19. We determined that the common stock purchase warrants
do not feature any characteristics permitting net cash settlement at the option
of the holders. Accordingly, these instruments have been classified in
stockholders' equity in the accompanying condensed consolidated balance sheet as
of March 31, 2008.

Share-Based Payments

      We account for stock-based compensation using Statement of Financial
Accounting Standards ("SFAS") No. 123(R), "Accounting for Stock-Based
Compensation" ("SFAS 123(R)"), as amended, which results in the recognition of
compensation expense for stock-based compensation. The Company adopted SFAS
123(R) using the modified prospective method, which requires measurement of
compensation cost for all stock-based awards at fair value on the date of grant
and recognition of compensation over the service period for awards expected to
vest. The fair value of stock options is determined using the Black-Scholes
valuation model. The recognized expense is net of expected forfeitures and
restatement of prior periods is not required. The fair value of restricted stock
is determined based on the number of shares granted and the fair value of the
Company's common stock on date of grant.

Income Taxes

      We account for income taxes under SFAS No. 109, "Accounting for Income
Taxes" ("SFAS 109"). SFAS 109 requires the recognition of deferred tax assets
and liabilities for both the expected impact of differences between the
financial statements and tax basis of assets and liabilities and for the
expected future tax benefit to be derived from tax loss and tax credit carry
forwards. SFAS 109 additionally requires a valuation allowance to be established
when it is more likely than not that all or a portion of deferred tax assets
will not be realized. Furthermore, SFAS 109 provides that it is difficult to
conclude that a valuation allowance is not needed when there is negative
evidence such as cumulative losses in recent years. Therefore, cumulative losses


                                       15
<PAGE>

weigh heavily in the overall assessment. Accordingly, we have recorded a full
valuation allowance against our net deferred tax assets. In addition, we expect
to provide a full valuation allowance on future tax benefits until we can
sustain a level of profitability that demonstrates our ability to utilize the
assets, or other significant positive evidence arises that suggests our ability
to utilize such assets. We will continue to re-assess our reserves on deferred
income tax assets in future periods on a quarterly basis.

      Effective June 6, 2007 (date of inception), we adopted Financial
Accounting Standards Board Interpretation No. 48, "Accounting for Uncertainty in
Income Taxes" ("FIN 48") - an interpretation of FASB Statement No. 109,
"Accounting for Income Taxes." FIN 48 addresses the determination of whether tax
benefits claimed or expected to be claimed on a tax return should be recorded in
the financial statements. Under FIN 48, we may recognize the tax benefit from an
uncertain tax position only if it is more likely than not that the tax position
will be sustained on examination by the taxing authorities, based on the
technical merits of the position. The tax benefits recognized in the financial
statements from such a position should be measured based on the largest benefit
that has a greater than 50% likelihood of being realized upon ultimate
settlement. FIN 48 also provides guidance on the derecognition of income tax
liabilities, classification of interest and penalties on income taxes, and
accounting for uncertain tax positions in interim period financial statements.
Our policy is to record interest and penalties on uncertain tax provisions as a
component of our income tax expense.

      As described in Note 15, we completed our preliminary assessment of
uncertain tax positions in accordance with FIN 48 during our the period of June
6, 2007 through September 30, 2007 and for the quarters ended December 31, 2007
and March 31, 2008, including the effects of the Share Exchange Transaction
described in Note 1 and business combinations completed as described in Note 4.
Based on this preliminary assessment, we have determined that we have no
material uncertain income tax positions requiring recognition or disclosure in
accordance with FIN 48.

Net Loss Per Share

      Net loss per share is presented in accordance with SFAS No. 128 "Earnings
Per Share." ("SFAS 128") Under SFAS 128, basic net loss per share is computed by
dividing net loss per share available to common stockholders by the weighted
average shares of common stock outstanding for the period and excludes any
potentially dilutive securities. Diluted earnings per share reflects the
potential dilution that would occur upon the exercise or conversion of all
dilutive securities into common stock. The computation of loss per share for the
three and six month periods ended March 31, 2008 excludes potentially dilutive
securities because their inclusion would be anti-dilutive.


                                       16
<PAGE>

      Shares of common stock issuable upon conversion or exercise of potentially
dilutive securities at March 31, 2008 are as follows:

                                                                        Total
                                                         Common        Common
                                                          Stock         Stock
                                           Warrants    Equivalents   Equivalents
                                           ---------   -----------   -----------
Series A Convertible Preferred Stock       2,666,666    5,333,333     7,999,999
Series A-1 Convertible Preferred Stock       533,333    1,066,667     1,600,000
Placement Agent Warrants                   1,248,000                  1,248,000
Bridge Financing Warrants                    903,000    1,166,666     2,069,666
Compensatory Warrants                        360,000                    360,000
                                           ---------   ----------    ----------

                                           5,710,999    7,566,666    13,277,665
                                           =========   ==========    ==========

      The table above excludes 308,000 contingently exercisable common stock
purchase warrants issued to the bridge financing participants (Note 10).

Fair Value of Financial Instruments

      The carrying amounts reported in the financial statements for cash,
accounts receivable, prepaid expenses and other current assets, accounts payable
and accrued expenses and other current liabilities approximate fair value based
on the short-term maturity of these instruments. The carrying amounts of the
bridge notes, long-term debt and capital lease obligations approximate fair
value because the contractual interest rates or the effective yields of such
instruments, which includes the effects of contractual interest rates taken
together with the concurrent issuance of common stock purchase warrants, are
consistent with current market rates of interest for instruments of comparable
credit risk.

Recent Accounting Pronouncements

      In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements"
("SFAS 157"). SFAS 157 defines fair value, establishes a market based framework
for measuring fair value and expands disclosure of fair value measurements. SFAS
157 applies under other accounting pronouncements that require or permit fair
value measurements and accordingly, does not require any new fair value
measurements. SFAS 157 is effective for financial statements issued for fiscal
years beginning after November 15, 2007. The adoption of SFAS 157 is not
expected to have a material effect on the Company's consolidated financial
statements.

      On February 15, 2007, the FASB issued SFAS No. 159, "The Fair Value Option
for Financial Assets and Financial Liabilities" ("SFAS 159"). The guidance in
SFAS 159 "allows" reporting entities to "choose" to measure many financial
instruments and certain other items at fair value. The objective underlying the
development of this literature is to improve financial reporting by providing
reporting entities with the opportunity to reduce volatility in reported
earnings that results from measuring related assets and liabilities differently
without having to apply complex hedge accounting provisions, using the guidance
in SFAS 133, as amended. The provisions of SFAS 159 are applicable to all
reporting entities and are effective as of the beginning of the first fiscal
year that begins subsequent to November 15, 2007. The adoption of SFAS 159 is
not expected to have a material effect on the Company's consolidated financial
statements.


                                       17
<PAGE>

      In June 2007, the EITF reached a consensus on EITF Issue No. 06-11,
"Accounting for Income Tax Benefits on Dividends on Share-Based Payment Awards"
("EITF 06-11"). EITF 06-11 addresses share-based payment arrangements with
dividend protection features that entitle employees to receive (a) dividends on
equity-classified nonvested shares, (b) dividend equivalents on
equity-classified nonvested share units, or (c) payments equal to the dividends
paid on the underlying shares while an equity-classified share option is
outstanding, when those dividends or dividend equivalents are charged to
retained earnings under SFAS 123R and result in an income tax deduction for the
employer. A realized income tax benefit from dividends or dividend equivalents
that are charged to retained earnings are paid to employees for
equity-classified nonvested shares, nonvested equity share units, and
outstanding equity share options should be recognized as an increase in
additional paid in capital. The amount recognized in additional paid-in capital
for the realized income tax benefit from dividends on those awards should be
included in the pool of excess tax benefits available to absorb potential future
tax deficiencies on share-based payments for fiscal years beginning after
December 15, 2007. The adoption of this pronouncement did not have a material
impact on the consolidated financial statements.

      In December 2007, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 141R, "Business
Combinations" ("SFAS 141R"), which replaces SFAS No. 141, "Business
Combinations." SFAS 141R establishes principles and requirements for determining
how an enterprise recognizes and measures the fair value of certain assets and
liabilities acquired in a business combination, including noncontrolling
interests, contingent consideration, and certain acquired contingencies. SFAS
141R also requires acquisition-related transaction expenses and restructuring
costs be expensed as incurred rather than capitalized as a component of the
business combination. SFAS 141R will be applicable prospectively to business
combinations for which the acquisition date is on or after the beginning of the
first annual reporting period beginning on or after December 15, 2008. SFAS 141R
will have an impact on the accounting for any businesses acquired after the
effective date of this pronouncement.

In December 2007, the SEC staff issued SAB No. 110 ("SAB 110"),
"Share-Based Payment," which amends SAB 107, "Share-Based Payment," to permit
public companies, under certain circumstances, to use the simplified method in
SAB 107 for employee option grants after December 31, 2007. Use of the
simplified method after December 2007 is permitted only for companies whose
historical data about their employees' exercise behavior does not provide a
reasonable basis for estimating the expected term of the options. The adoption
of this pronouncement did not have a material effect on the Company's condensed
consolidated financial statements.

      In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests
in Consolidated Financial Statements - An Amendment of ARB No. 51" ("SFAS 160").
SFAS 160 establishes accounting and reporting standards for the noncontrolling
interest in a subsidiary (previously referred to as minority interests). SFAS
160 also requires that a retained noncontrolling interest upon the
deconsolidation of a subsidiary be initially measured at its fair value. Upon
adoption of SFAS 160, the Company would be required to report any noncontrolling
interests as a separate component of stockholders' equity. The Company would
also be required to present any net income allocable to noncontrolling interests
and net income attributable to the stockholders of the Company separately in its
consolidated statements of operations. SFAS 160 is effective for fiscal years,
and interim periods within those fiscal years, beginning on or after December
15, 2008. SFAS 160 requires retroactive adoption of the presentation and
disclosure requirements for existing minority interests. All other requirements
of SFAS 160 shall be applied prospectively. SFAS 160 will have an impact on the
presentation and disclosure of the noncontrolling interests of any non
wholly-owned businesses after the effective date of this pronouncement.


                                       18
<PAGE>

      Other accounting standards that have been issued or proposed by the FASB
or other standards-setting bodies that do not require adoption until a future
date are not expected to have a material impact on the Company's financial
statements upon adoption.

NOTE 4 - BUSINESS COMBINATIONS

Advanced Data Systems, Inc.

      On December 20, 2007, pursuant to an Asset Purchase Agreement (the
"ADSnetcurve Agreement"), our acquisition of Advance Data Systems, Inc.
("ADSnetcurve") became effective. The ADSnetcurve Agreement was entered into
between us, ADSnertcurve and the shareholders of ADSnetcurve, whereby the
Company acquired substantially all of the assets and assumed certain of the
liabilities of ADSnetcurve. Contemporaneously with the acquisition of
ADSnetcurve, certain employees of ADSnetcurve entered into employment agreements
with us, effective upon the closing of the acquisition.

      ADSnetcurve is a global information technology company that provides
technology solutions. Specifically, these services include web application
development, IT management and hosting services (for scalable infrastructure
solutions); and support services. The Company acquired ADSnetcurve because the
business provides the software development and support infrastructure that is
needed to develop custom applications for clients' information technology
systems, and to provide management, hosting and technical support services with
respect to those systems.

      The aggregate purchase price paid by Beacon, inclusive of direct
transaction expenses, in connection with the ADSnetcurve acquisition amounted to
$1,727,548, including 700,000 shares of common stock valued at $.85 per share,
$666,079 of cash, a $300,000 secured promissory note ("ADS Note"), and estimated
direct transaction expenses of $172,345 net of $5,876 of cash acquired.

      The ADS Note (Note 10) has a term of 48 months, bearing interest at the
prime rate, and is secured by the assets acquired by Beacon from ADSnetcurve.
The ADS Note provides for monthly principal and interest payments of $7,219. The
ADS Note also contains a pre-payment provision such that, following the initial
Private Placement, we are required to make additional principal payments equal
to 3.2% of the net amount received by us from any equity capital raised, in
excess of $1,000,000, after the closing date until such time as the ADS Note has
been paid in full.

      If, from the closing date to the first anniversary of the closing of this
transaction, the annual revenue generated by ADSnetcurve amounts to less than
$1,800,000, then the balance due under the ADS Note will be reduced by up to 60%
of its principal amount but will not be less than $120,000. As of March 31,
2008, Management believes that the ADS Note will not be adjusted to an amount
less than $300,000 and has therefore included the entire amount of the note in
the purchase consideration.

      The agreement was subject to a net working capital adjustment that was
initially measured and later adjusted as of December 20, 2007. Based on the
initial net working capital measurement, $116,049 was escrowed on December 20,
2007. On January 15, 2008, based on the final determination of net working
capital, $66,079 was released to the sellers (included in cash consideration
above) and the remaining balance was returned to the Company from escrow.


                                       19
<PAGE>

      Beginning December 21, 2007, the day immediately following the effective
date of the transaction, the financial results of ADSnetcurve were consolidated
with those of our business. The acquisition was accounted for under the purchase
method of accounting, whereby a preliminary valuation of the fair values of the
acquired assets and assumed liabilities of the acquired business was performed
as of December 20, 2007. The excess of the purchase price over net assets
acquired amounted to $614,384 and was recorded as goodwill. Other separately
identifiable intangibles consisting of customer relationships, non-compete
agreements and tradenames amounted to an aggregate of $962,027. The preliminary
estimates of fair value will be adjusted as necessary when the final valuation
is completed.

Bell-Haun Systems Inc.

      On December 20, 2007, pursuant to an Agreement and Plan of Merger (the
"Bell-Haun Agreement"), our acquisition of Bell-Haun Systems, Inc. ("Bell-Haun")
became effective. The Bell-Haun Agreement was entered into between Beacon, BH
Acquisition Sub, Inc. (the "Acquisition Sub"), Bell-Haun and Thomas Bell and
Michael Haun, whereby, Bell-Haun merged with and into the Acquisition Sub, with
the Acquisition Sub surviving the merger.

      Bell-Haun specializes in the installation, maintenance and ongoing support
of business telephone systems, wireless services, voice messaging platforms and
conference calling services to businesses throughout its region. The Company
acquired Bell-Haun because it believes the business provides it with (i) a
customer base and presence in the greater Columbus, Ohio region and (ii) an
established presence in the market for products and services needed to design
telecommunications infrastructures and implement such design plans and systems.

      The aggregate purchase price paid by Beacon, inclusive of direct
transaction expenses, in connection with the Bell-Haun acquisition amounted to
$794,100, including 500,000 shares of common stock valued at $.85 per share,
$155,048 of cash, notes payable (the "Bell-Haun Notes") in the amount $119,000,
and future payments in the amount of $50,000 related to non-compete agreements
that are included in the direct transaction costs of $95,052.

      The Bell-Haun Notes are payable over 60 months in installments of $2,413
including interest at 8% per annum with the first payment due and payable on
January 19, 2009 (Note 10).

      The Bell-Haun Agreement also provides for the payment of up to $480,374 of
additional purchase consideration upon the attainment of certain earnings
milestones based on gross profit earned over the twelve months following the
anniversary of the closing. These payments are being accounted for as contingent
consideration that would be recorded as an increase to goodwill at December 20,
2008, the measurement date of the milestone if such milestones are attained.

      Beginning December 21, 2007, the day immediately following the effective
date of the transaction, the financial results of Bell-Haun Systems Inc. were
consolidated with those of our business. The acquisition was accounted for under
the purchase method of accounting, whereby a preliminary valuation of the fair
values of the assets acquired and liabilities assumed was performed as of
December 20, 2007. The aggregate amount of the purchase price which amounted to
$794,100 plus the amount of the net liabilities assumed which amounted to
$599,520 (grand total of $1,393,620), was allocated to goodwill and other
intangible assets. Goodwill initially amounted to approximately $520,000,
subsequently adjusted to approximately $430,000 as of March 31, 2008, upon
continued review of the fair values of assets purchased and


                                       20
<PAGE>

liabilities assumed, and separately identifiable intangibles consisting of
customer relationships and non-compete agreements amounted to an aggregate of
$873,760. The preliminary estimates will be adjusted as necessary when the final
valuation is completed.

      As described in Notes 2 and 10, the Company assumed approximately $405,000
of debt obligations in this transaction that were in default as of the closing
due to certain change of control restrictions that the sellers breached upon the
transfer or their shares to the Company. These debt obligations were refinanced
on March 14, 2008.

CETCON, Inc.

      On December 20, 2007, pursuant to an Asset Purchase Agreement (the "CETCON
Agreement"), our acquisition of CETCON, Inc. ("CETCON") became effective. The
CETCON Agreement was entered into between Beacon, CETCON and the shareholders of
CETCON, whereby we acquired substantially all of the assets and assumed certain
of the liabilities of CETCON. Contemporaneously with acquisition of CETCON,
certain employees of CETCON entered into employment agreements with us,
effective upon the closing of the acquisition.

      CETCON provides engineering consulting services to commercial and
government entities with respect to the design and implementation of their
voice, data, video, and security infrastructures and systems. The Company
acquired CETCON because the business provides systems design and engineering
services that include evaluating information technology needs (including voice,
data, video, and security needs) and also designs and engineers systems (i.e.,
hardware) and infrastructure (i.e., cabling and connectivity) to meet those
needs at the enterprise level.

      The aggregate purchase price paid by Beacon, inclusive of direct
transaction expenses, in connection with the CETCON acquisition amounted to
$2,158,111, including 900,000 shares of common stock valued at $.85 per share,
$700,000 of cash, a $600,000 secured promissory note (the "CETCON Note") and
direct transaction costs of $235,519 net of cash acquired of $142,407.

      The CETCON Note (Note 10) has a term of 60 months, bearing interest at 8%
APR. The CETCON Note provides for monthly principal and interest payments in the
amount of $12,166 and is secured by the assets acquired by us in this
transaction (subordinate only to existing senior debt of $194,947 assumed in the
acquisition). If, from the closing date to October 31, 2008, the revenue
generated from CETCON is less than $2,000,000, the principal amount of the
CETCON Note will be reduced by the percentage of the actual revenue divided by
$2,000,000. We believe that the minimum revenue of $2,000,000 provided for in
the CETCON Note for which there would be consideration payable is probable.
Accordingly, the full principal amount of the CETCON Note is included in the
purchase consideration paid to the seller as of the closing date of the
acquisition.

      We may prepay all or a portion of the outstanding principal amount and
accrued interest under the CETCON Note. The CETCON Note contains a pre-payment
provision such that, following the initial Private Placement, we are required to
make additional principal payments equal to 3% of the net amount received by us
from any equity capital raised, in excess of $1,000,000, after the closing date
until such time as the CETCON Note is paid in full.

      Beginning December 21, 2007, the financial results of CETCON, Inc. were
consolidated with those of our business. The acquisition was accounted for under
the purchase method of accounting, whereby a preliminary valuation of the fair
values of the assets acquired and liabilities assumed of the acquired business
was performed as of December 20, 2007. The excess


                                       21
<PAGE>

of the purchase price over net tangible and separately identifiable intangible
assets acquired amounted to $944,220 and was recorded as goodwill. Other
separately identifiable intangibles consisting of customer relationships and
non-compete agreements amounted to an estimated aggregate fair value of
$1,127,887. The preliminary estimates will be adjusted as necessary when the
final valuation is completed.

Strategic Communications, Inc.

      On December 20, 2007, pursuant to an Asset Purchase Agreement (the
"Strategic Agreement"), our acquisition of selected assets Strategic
Communications, LLC ("Strategic") became effective. The Strategic Agreement was
entered into between Beacon, Strategic and the members of Strategic, whereby we
acquired substantially all of the assets and assumed certain of the liabilities
of Strategic. Contemporaneously with the Strategic Agreement, Beacon, RFK
Communications, LLC ("RFK") (co-owner of Strategic Communications, Inc.) and
the members of RFK entered into an Asset Purchase Agreement, whereby we acquired
substantially all of the assets and assumed certain of the liabilities of RFK.

      Strategic was a voice, video and data communication systems solutions
provider. Strategic specifically provided procurement for carrier services
(including voice, video, data, Internet, local & long distance telephone
applications), infrastructure services (including cabling and equipment);
routers, servers and hubs; telephone systems, voicemail, general technology
products and maintenance support. The Company acquired certain Strategic assets
because it believes the business provides it with a customer base and presence
in the greater Louisville, Kentucky region and an established presence in the
market for products and services needed to design and implement these types of
systems.

      The aggregate purchase price paid by Beacon, inclusive of direct
transaction expenses, in connection with the Strategic acquisition amounted to
$2,206,519, including 1,125,000 shares of common stock valued at $.85 per share,
$220,500 of cash, a $562,500 secured promissory note (the "Strategic Secured
Note"), a $342,000 promissory note (the "Strategic Escrow Note") and direct
transaction expenses of $125,269.

      We delivered the $342,000 Strategic Escrow Note (Note 10) and a stock
certificate for 200,000 shares of the common stock conveyed to the members of
Strategic as purchase consideration to be held in escrow (the "Strategic Escrow
Shares") for the purpose of securing the indemnification obligations of members
of Strategic. The specific indemnity secures a commitment on the part of the
sellers in this transaction to hold Beacon harmless from its previously existing
liabilities, including a $313,000 tax delinquency, since Beacon agreed to assume
only $500,000 of liabilities in the transaction. The escrow agreement will
terminate and the Strategic Escrow Note and Strategic Escrow Shares will be
released to the sellers upon confirmation that Strategic has settled the
liabilities specified under such indemnification. If necessary, the amounts
escrowed can be used to settle such liabilities.

      The Strategic Secured Note (Note 10) has a term of 60 months, bearing
interest at 8% APR. The Strategic Secured Note provides for monthly principal
and interest payments of $11,405. If, from the closing date to the first
anniversary of the closing of this transaction, the revenue generated from
Strategic is less than $4.5 million, the principal amount of the Strategic


                                       22
<PAGE>

Secured Note will be reduced by percentage of the actual revenue divided by the
minimum threshold. We believe that the minimum threshold provided for in the
Strategic Secured Note for which there would be consideration payable is
probable. Accordingly, the full principal amount of the Strategic Secured Note
is included in the purchase consideration paid to the seller as of the closing
date of the acquisition. We may prepay all or a portion of the outstanding
principal amount and accrued interest under the Strategic Secured Note.

      The Strategic Escrow Note bears interest at the Federal short term rate
(4% as of March 31, 2008) and matures on the earlier of the final round of
equity financing (as that term is defined in the Strategic Escrow Note) or
December 31, 2008 (the "Maturity Date"), at which time the entire principal and
accrued interest will be due and payable. The Company may prepay all or a
portion of the outstanding principal amount and accrued interest under the
Strategic Escrow Note. In addition, the Company has agreed to pay interest and
penalties that Strategic incurs related to a tax liability it incurred prior to
the acquisition. The acquired assets were encumbered by an aggregate of $313,000
of tax liens as of the time of the closing of this transaction; however
Strategic, as the seller in this transaction, is still the primary obligor of
this liability and is still therefore primarily liable for payment of the entire
balance, including penalties and interest. The remaining amount of the liens of
approximately $265,000 is expected to be settled on or before May 31, 2008.

      Beginning December 21, 2007, the day immediately following the effective
date of the transaction, the financial results of Strategic were consolidated
with those of our business. The acquisition was accounted for under the purchase
method of accounting, whereby a preliminary valuation of the fair values of the
assets acquired and liabilities assumed was performed as of December 20, 2007.
The excess of the purchase price over the net tangible and separately
identifiable intangible assets acquired amounted to $723,509 and was recorded as
goodwill, subsequently adjusted to $773,794 as of March 31, 2008, upon continued
review of the estimate fair values of the assets purchased and liabilities
assumed in the transaction. Other separately identifiable intangibles consisting
of customer relationships, non-compete agreements and tradenames amounted to an
estimated aggregate fair value of $1,340,400. The preliminary estimates will be
adjusted as necessary when the final valuation is completed.

Business Combination Accounting

      The Company accounted for its acquisitions of ADSnetcurve, Bell-Haun,
CETCON and Strategic using the purchase method of accounting prescribed under
SFAS 141 "Business Combinations." Under the purchase method, the acquiring
enterprise records any purchase consideration issued to the sellers of the
acquired business at their fair values. The aggregate of the fair value of the
purchase consideration plus any direct transaction expenses incurred by the
acquiring enterprise is allocated to the assets acquired (including any
separately identifiable intangibles) and liabilities assumed based on their fair
values at the date of acquisition. The excess of cost of the acquired entities
over the fair values of assets acquired and liabilities assumed was recorded as
goodwill. The results of operations for each of the acquired companies following
the dates of each of the business combination (which was December 20, 2007) are
included in the Company's consolidated results of operations for the three and
six month periods ended March 31, 2008. The Company evaluated each of the
aforementioned transactions to identify the acquiring entity as required under
SFAS 141 for business combinations


                                       23
<PAGE>

effected through an exchange of equity interests. Based on such evaluation the
Company determined that it was the acquiring entity in each transaction (and
cumulatively for all transactions) as (1) the larger portion of the relative
voting rights in each of the acquired business and in the combined business as a
whole was retained by the existing Beacon stockholders, (2) there are no
significant minority interests or organized groups of interests carried over
from the acquired entities that could exercise significant influence over the
operating policies or management decisions of the combined entity, (3) the
sellers in each of these transactions have no participation on the board of
directors nor are they involved in any corporate governance functions of the
combined entity and (4) a majority of the Senior Management positions in the
combined entity, including those of the Chairman and Chief Executive Officer and
the Chief Accounting Officer, were retained by officers of Beacon both prior and
subsequent to the business combination. The following table provides a breakdown
of the purchase prices of each of the acquired businesses including the fair
value of purchase consideration issued to the sellers of the acquired business
and direct transaction expenses incurred by the Company in connection with
consummating these transactions:

<TABLE>
<CAPTION>
                                                      Bell-Haun                  Strategic         Total
                                      ADSnetcurve      Systems       CETCON    Communications   Consideration
                                      -----------    ----------   -----------  --------------   -------------
<S>                                   <C>            <C>          <C>            <C>             <C>
Cash paid                             $   666,079    $  155,048   $   700,000    $  220,500      $ 1,741,627
Notes payable                             300,000       119,000       600,000       904,500        1,923,500
Common stock issued                       595,000       425,000       765,000       956,250        2,741,250
Direct acquisition costs (including
  $84,924 of accrued but unpaid)          172,345        95,052       235,519       127,276          630,192
Net of cash acquired                       (5,876)         --        (142,407)         --           (148,283)
                                      -----------    ----------   -----------    ----------      -----------

                                      $ 1,727,548    $  794,100   $ 2,158,111    $2,208,526      $ 6,888,285
                                      ===========    ==========   ===========    ==========      ===========
</TABLE>

      The fair value of common stock issued to the sellers as purchase
consideration was determined to be $.85 per share based on the selling D] prices
of equity securities issued by the Company in the Private Placement Transaction
described in Note 14. The fair value of note obligations issued to the sellers
as purchase consideration is considered to be equal to their principal amounts
because such notes feature interest rates that are deemed to be comparable for
instruments of similar credit risk. Transaction expenses, which include legal
fees and transaction advisory services directly related to the acquisitions
amount to approximately $630,000. Such fees include legal, accounting and
business broker fees paid in cash.

      The Company also evaluated all post combination payments payable or
potentially payable to the sellers of the acquired business as either contingent
consideration or compensation under applicable employment agreements to
determine their proper characterization in accordance with EITF 95-8 "Accounting
for Contingent Consideration Issued in a Purchase Business Combination." The
Company determined that potential contingent consideration payable to certain
sellers of the acquired businesses upon the attainment of certain pre-defined
financial milestones should be accounted for as additional purchase
consideration because there are no future services required on the part of such
sellers in order for them to be entitled to those payments. In addition, the
Company deems these payments to be a component of the implied value of the
acquired businesses for which payment would be made based on financial
performance. Conversely, any payments to be made to certain sellers of the
acquired businesses under their respective employment agreements are deemed to
be compensation for post combination services because such payments, which


                                       24
<PAGE>

management believes are comparable to amounts for similar employment services,
require the continuation of post-combination employment services.

Preliminary Purchase Price Allocation

      Under the purchase method of accounting, the total preliminary purchase
price was allocated to each of the acquired entities, net tangible and
identifiable intangible assets based on their estimated fair values as of
December 20, 2007. The preliminary allocation of the purchase price for these
four acquisitions is set forth below. The excess of the purchase price over the
net tangible and identifiable intangible assets was recorded as goodwill.

<TABLE>
<CAPTION>
                                                                    Bell-Haun                      Strategic           Total
                                                    ADSnetcurve      Systems        CETCON       Communications    Consideration
                                                    -----------    -----------    -----------    --------------    -------------
<S>                                                 <C>            <C>            <C>              <C>              <C>
Accounts receivable                                 $   151,208    $    71,335    $   466,458      $      --        $   689,001
Inventory                                                  --          168,065           --            471,345          639,410
Prepaid expenses and other current assets                13,430         34,522          5,516            1,815           55,283
Property and equipment                                   47,500         19,243         20,000          140,000          226,743
Goodwill                                                614,384        427,789        944,220          775,801        2,762,194
Customer relationships                                  812,027        773,760        927,887        1,190,400        3,704,074
Covenants not to compete                                100,000        100,000        200,000          100,000          500,000
Tradenames                                               50,000           --             --             50,000          100,000
Security deposits                                        21,541           --             --              6,050           27,591
Line of credit obligation                                  --         (250,000)          --               --           (250,000)
Accounts payable and accrued liabilities                (50,091)      (284,950)        (5,491)        (491,600)        (832,132)
Customer deposits                                       (32,451)       (56,412)      (205,532)          (9,795)        (304,190)
Capital lease obligations                                  --             --             --            (25,490)         (25,490)
Long-term debt                                             --         (159,252)      (194,947)            --           (354,199)
Other acquisition liability                                --          (50,000)          --               --            (50,000)
                                                    -----------    -----------    -----------      -----------      -----------
                                                    $ 1,727,548    $   794,100    $ 2,158,111      $ 2,208,526      $ 6,888,285
                                                    ===========    ===========    ===========      ===========      ===========
Net tangible asset acquired (liabilities assumed)   $   151,137    $  (507,449)   $    86,004      $    92,325      $  (177,983)
                                                    ===========    ===========    ===========      ===========      ===========
</TABLE>

      The purchase price allocation is preliminary, based on management's
estimates and has not yet been finalized. The Company considered its intention
for future use of the acquired assets, analyses of the historical financial
performance of each of the acquired businesses and estimates of future
performance of each acquired businesses' products and services in deriving the
fair values of the assets acquired and liabilities assumed. The Company's final
determination of the purchase price allocation could result in changes to the
amounts reflected in its preliminary estimate and estimated useful lives of
acquired assets.

Pro-Forma Financial Information

      The unaudited financial information in the table below summarizes the
combined results of operations of the Company and ADSnetcurve, Bell-Haun, CETCON
and Strategic, on a pro-forma basis, as if the companies had been combined as of
the beginning of each of the periods presented.

      The unaudited pro-forma financial information for the three and six months
ended March 31, 2008 combines the historical results of Beacon for the three and
six months ended March 31, 2008 and the historical results of ADSnetcurve,
Bell-Haun, CETCON and Strategic for the same period. The unaudited pro-forma
financial results for the three and six months ended March 31, 2007 combines the
historical results of ADSnetcurve, Bell-Haun, CETCON and Strategic. The
pro-forma weighted average number of shares outstanding also assumes that the
Share Exchange


                                       25
<PAGE>

Transaction described in Note 1 was completed as of the beginning of each of the
periods presented.

                                                 Three Months      Six Months
                                                    Ended             Ended
                                                   March 31,        March 31,
                                                     2007             2007
                                                 ------------     -----------
                                                  (Unaudited)     (Unaudited)

Net sales                                        $  2,128,004    $  4,230,502
Loss from operations                             $     24,804    $     11,517
Net loss available to common stockholders        $    (17,458)   $    (30,745)

Net loss per share - basic and diluted           $      (0.00)   $      (0.00)
Pro-forma weighted average shares outstanding      10,468,121      10,468,121

      The unaudited pro-forma financial information is presented for
informational purposes only and is not indicative of the results of operations
that would have been achieved if the acquisitions of these businesses had taken
place at the beginning of each of the periods presented.

NOTE 5 - ACCOUNTS RECEIVABLE

      Accounts receivable amounted to approximately $665,000 as of March 31,
2008. The majority of these accounts receivable were generated during the three
months ended March 31, 2008 and are therefore not considered doubtful.

NOTE 6 - INVENTORY, NET

      Inventory consists of the following as of March 31, 2008:

         Inventory (principally parts and system components)   $ 806,684
         Less: current portion                                  (707,526)
                                                               ---------
         Inventory, non-current                                $  99,158
                                                               =========

      A substantial amount of the inventory includes parts and system components
for phone systems that the Company uses to fulfill repair, maintenance services
and/or upgrade requirements. A portion of these items, which are stated at their
net realizable value, are likely to be used after the next twelve months and are
therefore presented as non-current inventory in the accompanying balance sheet.
A significant portion of the inventory on hand at March 31, 2008 was acquired in
the business combinations completed on December 20, 2007, which are stated at
net realizable value using the purchase method of accounting.

NOTE 7 - PROPERTY AND EQUIPMENT, NET

Property and equipment consist of the following as of March 31, 2008:


                                       26
<PAGE>

            Computer equipment                           $ 109,865
            Vehicles                                        74,934
            Furniture and fixtures                          45,000
            Leasehold Improvements                          14,398
            Software                                        29,308
                                                         ---------
                                                           273,505
            Less: accumulated depreciation                 (21,178)
                                                         ---------
                                                         $ 252,327
                                                         =========

      Property and equipment includes $20,541 of vehicles financed under capital
lease obligations that the Company assumed in its acquisitions of Strategic
Communications. Depreciation and amortization amounted to $20,308 and $21,178
for the three and six months ended March 31, 2008.

NOTE 8 - INTANGIBLE ASSETS, NET

      The following table is a summary of the intangible assets acquired in
business combinations as described in Note 4:

<TABLE>
<CAPTION>
                                               Bell-Haun                      Strategic         Total
                                ADSnetcurve     Systems        CETCON      Communications   Consideration
                                ----------    -----------    -----------   --------------   -------------
<S>                              <C>          <C>            <C>             <C>             <C>
Goodwill                         $ 614,384    $   427,789    $   944,220     $   775,801     $ 2,762,194
                                 =========    ===========    ===========     ===========     ===========

<CAPTION>
                                               Bell-Haun                      Strategic         Total
                                ADSnetcurve     Systems        CETCON      Communications   Consideration
                                ----------    -----------    -----------   --------------   -------------
<S>                                <C>            <C>            <C>           <C>             <C>
Customer relationships             812,027        773,760        927,887       1,190,400       3,704,074
Contracts not to compete           100,000        100,000        200,000         100,000         500,000
Tradenames                          50,000           --             --            50,000         100,000
                                 ---------    -----------    -----------     -----------     -----------
                                   962,027        873,760      1,127,887       1,340,400       4,304,074
Less: Accumulated amortization     (39,943)       (36,033)       (54,533)        (50,646)       (181,155)
                                 ---------    -----------    -----------     -----------     -----------
Intangibles, net                   922,084        837,727      1,073,354       1,289,754       4,122,919
                                 =========    ===========    ===========     ===========     ===========
</TABLE>

      The above noted intangible assets are being amortized on a straight-line
basis. Customer relationships are being amortized over a 10 year useful life,
contracts not to compete are being amortized over a 2 year useful life and
tradenames are being amortized over a 5 year useful life, based on the estimated
economic benefit.

      The following is a summary of amortization expense for the next five years
and thereafter:

                                  2008      $  480,306
                                  2009         472,087
                                  2010         390,407
                                  2011         390,407
                                  2012         389,750
                            Thereafter       1,999,962
                                            ----------
                                            $4,122,919
                                            ==========


                                       27
<PAGE>

      The values of the goodwill and intangible assets and the estimated useful
lives are preliminary based on estimates made by management using the purchase
method of accounting described in Note 4. These amounts are subject to change
upon the final determination of the purchase price allocations described in Note
4.

NOTE 9 - ACCRUED EXPENSES

      Accrued expenses consist of the following at March 31, 2008:

               Accrued compensation                      $243,139
               Accrued legal fees                          48,024
               Accrued employee expenses                   39,773
               Accrued other                              113,124
                                                         --------
                                                         $444,060
                                                         ========

NOTE 10 - NOTES PAYABLE AND LONG TERM DEBT

Bridge Financing Transactions

      On July 16, 2007, the Company entered into a $500,000 Bridge Financing
Facility provided by two of its founding stockholders who are also directors of
the Company. The terms of the facility provide for the founding
stockholders/directors to make up to $500,000 of advances to the Company on a
discretionary basis at any time prior to the closing of an equity offering in
which gross proceeds are at least $4,000,000 (the "Qualified Offering"). As of
March 31, 20008, the entire facility had been drawn down of which $278,000 of
the proceeds were received prior to September 30, 2007and the remaining $222,000
of proceeds were received during the three months ended December 31, 2007.

      Advances under this facility bear interest at the Prime Rate (5.25% as of
March 31, 2008) per annum and were to originally mature (i) in the event a
Qualified Offering did not occur on or prior to December 31, 2007, on December
31, 2007; or (ii) in the event a Qualified Offering occurred prior to December
31, 2007, on demand at any time following the completion of the offering but not
more than twenty-four (24) months after the date of the closing of the Qualified
Offering. Certain warrants described below that we issued to the note holders
would vest for each month repayment is deferred. In December 2007, the Company
was informed that only a portion of the Private Placement described in Note 14
(which would have satisfied the requirement to complete a Qualified Offering)
would be completed by December 31, 2007. Based on this development, the note
holders agreed, on December 28, 2007, not to demand repayment of the notes
before the completion of the Private Placement or December 31, 2008, whichever
came first. On May 15, 2008, the noteholders agreed not to demand repayment of
the notes before the completion of an offering in which the Company raises at
least $3 million of additional equity financing or April 1, 2009, whichever
comes first. Accordingly, the notes are included in long-term liabilities as
they are not due within one year of the balance sheet date.

      As of March 31, 2008, the notes are convertible into our common stock at a
conversion price equal to $.60 per share, or into the number and type of such
equity securities into which the shares otherwise issuable upon such conversion
are converted or exchanged under the terms of a merger, exchange or
reorganization consummated by the Company prior to or at the time of a Qualified
Offering. Unpaid principal is payable in cash or stock at the option of the
holder if the conversion options is effected and all unpaid accrued interest is
payable in cash only.

      We evaluated the conversion option stipulated in the Bridge Financing
Facility to determine whether it requires immediate accounting recognition and
whether under SFAS 133,


                                       28
<PAGE>

such conversion feature should be bifurcated from its host instrument and
accounted for as a free standing derivative in accordance with EITF 00-19. In
performing this analysis, we determined that the conversion option, which is
fixed and therefore conventional under EITF 05-2, provides the founding
stockholders/directors with the right to convert any advances outstanding under
the Bridge Financing Facility into shares of our common stock at anytime upon or
after the completion of a Qualified Offering. The Private Placement was
completed on February 12, 2008. The conversion option was out-of-the-money,
having a fair value of common stock $0.002 per share (as compared to an exercise
price of $0.60 per share) as of the commitment date of July 16, 2007 and
therefore is not considered beneficial.

      In connection with the issuance of the Bridge Financing Facility, we
issued warrants to purchase shares of our common stock (the "Warrants"). The
Warrants allow the holders to purchase up to 865,000 shares of our common stock
at an exercise price of $1.00 per share, of which 625,000 are immediately
exercisable. The remaining 240,000 Warrants (the "Contingent Bridge Facility
Warrants") vest and become exercisable at a rate of 10,000 shares on the 15th of
each month from the date of a Qualified Offering until the maturity date of the
Bridge Financing Facility for each month that the demand for payment is
deferred. Upon full conversion of the advances into shares of Beacon common
stock or upon the final maturity date, all remaining unvested Contingent Bridge
Note Warrants will automatically vest and become exercisable. If the founding
stockholders/directors require prepayment of the advances after the completion
of a Qualified Offering but prior to the final maturity date, all remaining
unvested Warrants will be forfeited and canceled. The Warrants expire on June
30, 2012. As of March 31, 2008, 20,000 Warrants had vested under the terms of
the Bridge Financing Facility. The value of the Warrants was nominal as of the
commitment date of July 16, 2007 and therefore did not have a significant impact
on our results of operations.

      The fair value of the 625,000 exercisable Warrants, which amounted to $0,
was calculated using the Black-Scholes option pricing model. Assumptions
relating to the estimated fair value of the Warrants are as follows: fair value
of common stock of $.002 on the commitment date of July 16, 2007; risk-free
interest rate of 4.95%; expected dividend yield of zero percent; life of five
years; and current volatility of 66.34%.

      The final closing of the Private Placement was completed on February 12,
2008. Accordingly, the founding stockholders/directors have the right to demand
repayment of these notes in cash at any time after February 12, 2008. From the
date of the final closing of the Private Placement on February 12, 2008, the
founding stockholders/directors may also (at their option) convert the
outstanding principal into shares of our common stock at an exercise price of
$0.60 per share and receive cash payment of accrued and unpaid interest. The
conversion option was not considered beneficial because the exercise price of
the conversion option is $0.60 per share and the commitment date fair value of
the stock was nominal. In addition to the above, vesting commenced on the
Contingent Bridge Facility Warrants on February 12, 2008. We recorded $14,600 of
non-cash interest expense related to the 20,000 Contingent Bridge Facility
Warrants that vested and became exercisable during the three and six months
ended March 31, 2008. The fair value of the vested Contingent Bridge Facility
Warrants was calculated using the Black-Scholes valuation model as detailed in
the following table:

<TABLE>
<CAPTION>
                        Expected                                                   Risk-Free      Value     Charge to
 Vesting    Quantity      Life      Strike   Underlying                 Dividend    Interest       per      Interest
   Date      Vested      (days)     Price      Price       Volatility    Yield        Rate       Warrant     Expense
---------   --------    --------    ------   ----------    ----------   --------   ---------    ---------   ---------
<C>          <C>         <C>        <C>        <C>           <C>           <C>        <C>         <C>       <C>
2/15/2008    10,000      1,825      $1.00      $1.35         66.34%        0%         2.76%       $0.86     $8,600.00
3/15/2008    10,000      1,825      $1.00      $1.04         66.34%        0%         2.37%       $0.60     $6,000.00
</TABLE>


                                       29
<PAGE>

      We recorded $7,858 and $14,948 of contractual interest expense under this
arrangement for the three and six months ended March 31, 2008, of which $8,100
is included in accrued expenses and other current liabilities in the
accompanying balance sheet.

      On November 15, 2007, we issued $200,000 of convertible notes payable (the
"Bridge Notes") in a separate debt financing. Of this amount, $100,000 of the
Bridge Notes was issued to one of the directors of Beacon. These Bridge Notes
were issued under terms substantially identical to the terms stipulated under
the Bridge Financing Facility described above. The holders of the Bridge Notes
also agreed, on December 28, 2007, not to demand repayment of these notes before
the completion of the Private Placement described in Note 14 or December 31,
2008, whichever came first. The effect of the change in the maturity dates of
these notes was insignificant to the Company's financial results. Accordingly,
these notes are due on demand anytime after the completion of the Private
Placement described in Note 14, which occurred on February 12, 2008. On March
15, 2008, the noteholders agreed not to demand repayment of the notes before the
completion of an offering in which the Company raises at least $3 million of
additional equity financing or April 1, 2009, whichever comes first.
Accordingly, the notes are included in long-term liabilities as they are not due
within one year of the balance sheet date.

      We evaluated the conversion option stipulated in the Bridge Notes (which
has terms identical to the conversion option featured in the Bridge Financing
Facility described above) to determine whether it requires immediate accounting
recognition and whether under SFAS 133, such conversion feature should be
bifurcated from its host instrument and accounted for as a free standing
derivative in accordance with EITF 00-19. In performing this analysis, we
determined that the conversion option, which is fixed and therefore conventional
under EITF 05-2, provides the founding stockholders/directors with the right to
convert any advances outstanding under the Bridge Notes into shares of our
common stock at anytime upon or after the completion of the Qualified Offering
on February 12, 2008.

      In connection with the issuance of the Bridge Notes, we also issued
warrants to purchase shares of our common stock (the "Note Warrants"). The Note
Warrants allow the holders to purchase up to 346,000 shares of our common stock
at an exercise price of $1.00 per share, of which 250,000 are immediately
exercisable. The remaining 96,000 Note Warrants (the "Contingent Bridge Note
Warrants") vest and become exercisable at a rate of 4,000 shares per month from
the date of a Qualified Offering (if completed) until the maturity date of the
Bridge Notes for each month that the demand for repayment of the principal
balance is deferred. Upon full conversion of the principal into shares of our
common stock or upon the final maturity date, all remaining unvested Note
Warrants will automatically vest and become exercisable. If the note holders
require prepayment of the principal after the completion of a Qualified Offering
but prior to the final maturity date, all remaining unvested Note Warrants will
be forfeited and canceled. The Warrants expire on June 30, 2012.

      The fair value of the 250,000 exercisable Warrants, which amounted to
$112,500, was calculated using the Black-Scholes option pricing model.
Assumptions relating to the estimated fair value of the Warrants are as follows:
fair value of common stock of $.85 on the commitment date of November 15, 2007;
risk-free interest rate of 3.71%; expected dividend yield of zero percent;
expected life of 1,689 days through June 30, 2012; and current volatility of
66.34%. Accordingly, we discounted the face value of the Bridge Notes to
$128,000 and recorded an attributable equity value of $72,000 upon the original
issuance of the Bridge Notes, in accordance with Accounting Principle Board
Opinion No. 14 "Accounting for Convertible Debt and Debt Issued with Stock
Purchase Warrants," ("APB 14"). The discount related to the Bridge Note Warrants
is being accreted over the estimated life of the Bridge Notes of 2.27 years from
the date of issuance on November 15, 2007.


                                       30
<PAGE>

      The final closing of the Private Placement was completed on February 12,
2008. Accordingly, the holders of the Bridge Notes have the right to demand
repayment of these notes in cash at any time after February 12, 2008 or convert,
at their option, the outstanding principal into shares of our common stock and
receive cash payment of accrued and unpaid interest. The intrinsic value of the
beneficial conversion feature of the Bridge Notes was determined to be
approximately $0.47 per share or an aggregate of $156,169 representing more than
100% of the remaining undiscounted face value of the Bridge Notes. Accordingly,
an additional discount of $128,000 to the face value of the Bridge Notes was
recorded for the beneficial conversion feature of the Bridge Notes. The discount
related to the beneficial conversion feature of the Bridge Notes will be
accreted over the two-year contractual term of the Notes. In addition, vesting
commenced on the Contingent Bridge Note Warrants on February 12, 2008.

      We recorded contractual interest expense of $3,144 and $5,033 for the
three and six months ended March 31, 2008, respectively, under this arrangement
of which $5,033 is included in accrued expenses and other current liabilities in
the accompanying condensed consolidated balance sheet. In addition, we recorded
accretion of the Bridge Note Warrant discount to fair value of $7,930 and
$14,769 for the three and six months ended March 31, 2008, respectively. We
recorded accretion of the discount of the remaining value of the Bridge Notes
related to the beneficial conversion feature of the Bridge Notes of $8,533 for
the three and six months ended March 31, 2008. We recorded $5,840 of non-cash
interest expense related to the 8,000 Contingent Bridge Note Warrants that
vested and became exercisable during the three and six months ended March 31,
2008. The fair value of the vested Contingent Bridge Note Warrants was
calculated using the Black-Scholes valuation model as detailed in the following
table:

<TABLE>
<CAPTION>
                         Expected                                                 Risk-Free     Value    Charge to
 Vesting     Quantity      Life     Strike   Underlying                Dividend    Interest      per      Interest
  Date        Vested      (days)    Price      Price       Volatility   Yield        Rate      Warrant    Expense
---------    --------    --------   ------   ----------    ----------  --------    --------    -------   ---------
<C>           <C>         <C>       <C>        <C>           <C>           <C>       <C>        <C>      <C>
2/15/2008     4,000       1,825     $1.00      $1.35         66.34%        0%        2.76%      $0.86    $3,440.00
3/15/2008     4,000       1,825     $1.00      $1.04         66.34%        0%        2.37%      $0.60    $2,400.00
</TABLE>

Long Term Debt

      The following is a summary of our long term debt:

       Integra Bank (new)                                         600,000

       Acquisition notes (payable to the sellers
           of the acquired businesses according
           to the terms described in Note 4)

           ADSnetcurve                                            283,683
           Bell-Haun                                              119,000
           CETCON                                                 575,339
           RFK                                                    539,380
           Strategic                                              265,053
                                                              -----------
                                                                2,382,455

           Less: Current portion                                 (649,890)
                                                              -----------
           Non-current portion                                $ 1,732,565
                                                              ===========


                                       31
<PAGE>

Integra Bank

      On March 14, 2008, the Company and Integra Bank entered into a credit
facility, under which the Company borrowed $600,000 at a 6.25% annual interest
rate with monthly payments of $11,696.35 over a 60 month term that matures on
March 12, 2013. The first payment is due in April, 2008. The proceeds of the
note were used to repay the three previously outstanding notes assumed in the
acquisitions, two of which were in default due to change in control provisions.

      The Company used a portion of the proceeds from the new installment
obligation to refinance $195,000 of previously outstanding indebtedness due to
the same creditor. The effect of having refinancing of the previous indebtedness
was insignificant to the Company's financial statements and therefore no gain or
loss has been recognized.

Acquisition Notes

      Notes payable with an aggregate value of $1,923,500 were issued as
purchase consideration in our business combinations as described in Note 4. The
terms of these notes, including provisions for partial acceleration in the event
we raise additional equity capital in future financing transactions and optional
prepayment provisions, are more fully described in Note 4.

      The following table summarizes the remaining debt principal payment
obligations by year for the long-term debt other than the Bridge Financing
Facility, Bridge Notes and Strategic Note Payable which are presumed to be paid
within the next twelve months:

                                                 Year
                                              ----------

                         2008                 $  547,518
                         2009                    420,488
                         2010                    451,090
                         2011                    471,078
                         2012                    429,896
                      Thereafter                  62,385
                                              ----------
                                              $2,382,455
                                              ==========

      Substantially all of the Company's assets are pledged as collateral under
its various debt obligations.

NOTE 11 - CAPITAL LEASE OBLIGATIONS

      The Company assumed capital lease obligations related to service vehicles
in its acquisitions of Strategic Communications under which the aggregate
present value of the minimum lease payments amounted to $21,056 as of March 31,
2008. In accordance with SFAS 13, "Accounting for Leases" ("SFAS 13"), the
present value of the minimum lease payments was calculated using discount rate
of 5%. Lease payments, including amounts representing interest, amounted to
approximately $1,725 and $3,450 for the three and six months ended March 31,
2008, respectively.

      Minimum lease payments due in years subsequent to March 31, 2008 are as
follows:


                                       32
<PAGE>

Twelve Months Ended March 31, 2009                                     $ 17,734
Twelve Months Ended March 31, 2010                                        3,195
                                                                       --------

Total minimum lease payments                                             20,929
Less: amount representing interest                                         (388)
                                                                       --------

Present value of minimum lease payments                                  20,541
Current portion of long-term capital lease obligations                  (17,734)
                                                                       --------

Long-term capital lease obligations, less current portion              $  2,807
                                                                       ========

NOTE 12 - RELATED PARTY TRANSACTIONS

      On July 16, 2007, the Company entered into the $500,000 Bridge Financing
Facility provided by two of its founding stockholders/directors (Notes 3 and
10).

      On November 15, 2007, the Company entered into a separate $100,000 bridge
note with one of its directors (Notes 3 and 10).

      One of the Company's founders also provides it with certain consulting
services. There is no formal agreement between the Company and this founder. For
the three and six months ended March 31, 2008, the Company recorded $46,611 and
$75,169 of compensation expense, respectively, paid in cash to the founder for
consulting services provided, which is included in salaries and benefits in the
accompanying condensed consolidated statement of operations and a $60,000 fee
for assisting in the successful execution of the Series A-1 Placement which was
netted against the proceeds from the placement.

      The Company has obtained insurance through an agency owned by one of its
founding stockholders/directors. Insurance expense paid through the agency for
the three and six months ended March 31, 2008 was $37,514 and $44,090,
respectively, and is included in selling, general and administrative expense in
the accompanying condensed consolidated statement of operations.

      On December 28, 2007, the Company entered into an equity financing
arrangement with two of its directors that provided up to $300,000 of additional
funding, the terms of which provided for compensation of 10,000 warrants to
purchase common stock at $1.00 per share, for each individual for the period the
financing arrangement was in effect. The warrants have a five-year term. The
financing arrangement was terminated upon the close of the Series A-1 Placement.
Accordingly, the Company recognized $66,400 of share-based compensation expense
for the three and six months ended March 31, 2008 based on the fair value of the
warrants as they were earned. The fair values were calculated using the
Black-Scholes option pricing model with the following assumptions:

<TABLE>
<CAPTION>
                       Expected                                                 Risk-Free    Value     Charge to
  Date      Quantity     Life     Strike   Underlying                Dividend    Interest     per      Interest
 Earned      Earned     (days)    Price      Price      Volatility     Yield       Rate     Warrant     Expense
---------   --------   --------   ------   ----------   ----------   --------   ---------   -------   ----------
<S>          <C>        <C>       <C>        <C>          <C>            <C>       <C>       <C>      <C>
1/28/2008    20,000     1,825     $1.00      $1.90        66.34%         0%        2.80%     $1.34    $26,800.00
2/28/2008    20,000     1,825     $1.00      $1.50        66.34%         0%        2.73%     $0.99    $19,800.00
3/7/2008     10,000     1,825     $1.00      $1.75        66.34%         0%        2.45%     $1.21    $12,100.00
</TABLE>

      On March 26, 2008, the Company issued warrants to purchase 300,000 shares
of common stock at $1.00 per share with a five-year term to one of its
directors. Accordingly, the Company recognized $219,000 of share-based
compensation expense for the three and six months ended March 31, 2008 based on
the fair value of the warrants on the grant date. The fair value was calculated
using the Black-Scholes option pricing model with the following assumptions:

<TABLE>
<CAPTION>
                       Expected                                                 Risk-Free    Value    Charge to
  Grant     Quantity     Life     Strike   Underlying                Dividend    Interest     per      Interest
   Date      Granted    (days)    Price       Price     Volatility    Yield        Rate     Warrant     Expense
---------   --------   --------   ------   ----------   ----------   --------   ---------   -------   ---------
<S>         <C>          <C>      <C>         <C>         <C>           <C>        <C>       <C>       <C>
3/26/2008   300,000      1,825    $1.00       $1.20       66.34%        0%         2.55%     $0.73     $219,000
</TABLE>

NOTE 13 - COMMITMENTS AND CONTINGENCIES

Employment Agreements

      The Company has entered into employment agreements with three of its key
executives with no specific expiration dates that provide for aggregate annual
compensation of $480,000 and up to $120,000 of severance payments for
termination without cause. In addition, the Company entered into employment
agreements with five key employees of certain of the acquired businesses upon
its completion of the business combinations described in Note 4. Aggregate
compensation under these agreements amounts to $580,000. Two of these agreements
expire on December 31, 2009 and the remaining three have no specified expiration
date. These agreements also provide for aggregate severance payments of up to
$326,000 for termination without cause.

Operating Leases


                                       33
<PAGE>

      The Company has entered into operating leases for office facilities in
Louisville, KY, Columbus, OH and Cincinnati, OH. A summary of the minimum lease
payments due on these operating leases exclusive of the Company's share of
operating expenses and other costs:

                             2008              $182,784
                             2009               170,223
                             2010               100,000
                                               --------
                                               $453,007
                                               ========

Strategic Communications Tax Liability

      As further described in Note 4, the assets of Beacon acquired from
Strategic Communications are encumbered by an $313,000 tax liens for delinquent
sales and use, payroll and income taxes incurred by Strategic prior to the
acquisition on December 20, 2007. The Company has agreed to pay interest and
penalties accruing on this obligation, which amount to approximately $32,000 as
of March 31, 2008. Strategic, as the seller in this transaction, is still the
primary obligor of these tax liabilities and is therefore primarily liable for
payment of the entire balance, including penalties and interest. The Company
expects the liability to be settled and the liens to be released on or before
May 31, 2007. The remaining amount of the lien amounts to $265,000 as of March
31, 2008. The Company has placed the Strategic Escrow Note and Strategic Escrow
Shares described in Note 4 in an escrow account as security for this obligation.

Legal Proceedings

      On May 13, 2008, we received a letter from counsel for Uplink Technology,
Inc. ("Uplink"), which had been in litigation with Strategic Communications LLC
("Strategic") at the time we acquired certain assets and assumed certain
liabilities of Strategic. Uplink counsel claims Uplink and/or its principals are
owed up to $420,000 by Strategic and demands that all net proceeds (including
cash as well as our Common Stock) due by us to Strategic or its principals will
continue to be held "in trust" pending the completion of the litigation between
Strategic and Uplink. If we do not provide written confirmation by May 19, 2008
of our intention to do so, Uplink has stated that it will seek injunctive relief
in order to obtain same. Beacon is not currently a party to the litigation and
management does not believe this situation will result in a material impact to
our financial position or results of operations.

NOTE 14 - STOCKHOLDERS EQUITY

Authorized Capital

      The Company is currently authorized to issue up to 70,000,000 shares of
common stock, par value $0.001 per share, and 5,000,000 shares of preferred
stock, par value $0.01 per share, of which two series have been designated:
4,500 shares of Series A Convertible Preferred Stock and 1,000 shares of Series
A-1 Convertible Preferred Stock.

      Each share of Series A and Series A-1 preferred has voting rights equal to
an equivalent number of common shares into which it is convertible. The holders
of the Series A and Series A-1 are entitled to receive contractual cumulative
dividends in preference to any dividend on the common stock at the rate of 10%
per annum on the initial investment amount commencing on the date of issue. Such
dividends are payable on January 1, April 1, July 1 and October 1 of each year.
Dividends accrued but unpaid with respect to this feature amounted to $94,904
and $5,450 as of March 31, 2008 for the Series A and A-1 preferred,
respectively, and are presented as an increase in net loss available to the
common stockholders for the three and six months ended March 31, 2008. The
Company has the option of paying the dividend in either common stock or cash.

      The Series A and A-1 Preferred Stock designation contains certain
restrictive covenants including restrictions against: the declaration of
dividend distributions to common stockholders; certain mergers, consolidations
and business combinations; the issuance of preferred shares with rights or
provisions senior to each of the Series A and A-1 Preferred Stock; and
restrictions against incurring or assuming unsecured liabilities or indebtedness
unless certain minimum performance objectives are satisfied. The Series A
Preferred Stock is senior to the Series A-1 Preferred Stock.

      The Series A and A-1 Preferred Stock also contains a right of redemption
in the event of liquidation or a change in control. The redemption feature
provides for payment of 125% of the face value and 125% of any accrued unpaid
dividends in the event of bankruptcy, change of control, or any actions to take
the Company private. The amount of the redemption preference


                                       34
<PAGE>

was $5,118,630 and $1,006,813 for the Series A and A-1 preferred, respectively,
as of March 31, 2008.

      The Company, by resolution of the Board of Directors, may designate
additional series of Preferred Stock ("blank check preferred stock") and to fix
or alter the rights, preferences, privileges and restrictions granted to or
imposed upon such blank check preferred stock, and the number of shares
constituting any such series of such blank check preferred stock. The rights,
privileges and preferences of any such blank check preferred stock shall be
subordinate to the rights, privileges and preferences to the existing Series A
and Series A-1 Preferred Stock.

The Board of Directors may also increase or decrease the number of shares of any
series (other than the Series A Preferred Stock or the Series A-1 Preferred
Stock), prior or subsequent to the issue of that series, but not below the
number of shares of such series then outstanding.

Private Placement of Convertible Preferred Stock

Series A Preferred Stock Placement

      On January 15 and February 12, 2008, we issued in two Private Placement
transactions, an aggregate of 1,566.1 shares of our Series A convertible
preferred stock and 1,044,066 five year common stock purchase warrants
exercisable at $1.00 per share for net proceeds of $1,324,117 (gross proceeds of
$1,566,100 less offering costs of $241,983). During the six months ended March
31, 2008, we issued in three Private Placement transactions, an aggregate of
4,000 shares of our Series A convertible preferred stock and five year common
stock purchase warrants exercisable at $1.00 per share for net proceeds of
$3,276,610 (gross proceeds of $4,000,000 less offering costs of $723,390).
Offering costs included fees paid to the placement agent of $650,000 and legal
and related expenses of $73,390 in addition to warrants granted to the placement
agent to purchase 1,040,000 shares of our common stock at $1.00 per share with a
5 year term. An additional 600,000 warrants to purchase shares of our common
stock at $1.00 per share with a 5 year term were earned by, but not yet issued
to, affiliates of the placement agent. The Series A is convertible into common
stock at any time, at the option of the holder at a conversion price of $.75 per
share. The conversion price is subject to adjustment for stock splits, stock
dividends, recapitalizations, dilutive issuances and other anti-dilution
provisions, including circumstances in which we, at our discretion, issue equity
securities or convertible instruments that feature prices lower than the
conversion price specified in the Series A preferred shares. The Series A is
also automatically convertible into shares of our common stock, at the then
applicable conversion price upon the closing of a firm commitment underwritten
public offering of shares of our common stock yielding aggregate proceeds of not
less than $20 million or under certain other circumstances when the trading
volume and average trading prices of the stock attain certain specified levels.

      As described in Note 1, we evaluated the conversion options embedded in
the Series A securities to determine (in accordance with SFAS 133 and EITF
00-19) whether they should be bifurcated from their host instruments and
accounted for as separate derivative financial instruments. We determined, in
accordance with SFAS 133, that the risks and rewards of the common shares
underlying the conversion feature are clearly and closely related to those of
the host instrument. Accordingly the conversion features, which are not deemed
to be beneficial at the commitment dates of these financing transactions, are
being accounted for as embedded conversion options in accordance with EITF 98-5
and EITF 00-27. During the three and six months


                                       35
<PAGE>

ended March 31, 2008, based on an evaluation of the beneficial conversion
feature of the Series A Preferred Shares, the Company recorded deemed dividends
of $1,579,837 and $2,483,715, respectively. The table below lists the detailed
fair value of the warrants issued in each of the three closings of the Series A
Preferred Stock Private Placement. The fair values were calculated using the
Black-Scholes option pricing model with the following assumptions:

<TABLE>
<CAPTION>
                                                               Fair Value of
                  Quantity of     Estimated       Estimated      Underlying      Risk-Free  Expected
   Date            Warrants       Fair Value    Fair Value of      Common        Interest   Dividend    Life       Current
  Issued            Issued       Per Warrant      Warrants         Stock           Rate       Yield    (Years)    Volatility
----------        -----------    -----------    -------------  -------------     ---------  --------   -------    ----------
<S>               <C>              <C>             <C>             <C>             <C>          <C>       <C>        <C>
12/20/2007        1,622,600        $0.46           $746,396        $0.85           3.45%        0%        5          66.34%
 1/15/2008          480,333        $0.78           $374,660        $1.25           3.00%        0%        5          66.34%
 2/12/2008          563,733        $0.78           $439,712        $1.25           2.71%        0%        5          66.34%
</TABLE>

      Accordingly, deemed dividends related to the conversion feature were
recorded based on the difference between the effective conversion price of the
conversion option and the fair value of the common stock at the commitment date
of the transaction detailed in the table below.

                 Fair Value of                  Intrinsic   Common
                    Common                      Value of    Shares
Date of Issue/      Stock on      Effective    Beneficial  Issuable
 Commitment       Commitment     Conversion    Conversion    Upon        Deemed
    Date             Date           Price        Feature   Conversion   Dividend
--------------   -------------   -----------   ----------  ----------   --------

 12/20/2007         $ 0.85         $ 0.57        $ 0.28     3,245,200   $903,878
  1/15/2008         $ 1.25         $ 0.49        $ 0.76       960,667   $726,820
  2/12/2008         $ 1.25         $ 0.49        $ 0.76     1,127,466   $853,017

      The Company has reserved 5,333,333 shares of its common stock for issuance
upon the conversion of its Series A convertible preferred stock and 2,666,666
shares of its common stock for issuance upon exercise of the Investor Warrants.

      As described in Note 1, the Company applies the classification and
measurement principles enumerated in EITF Topic D-98 with respect to accounting
for its issuances of the Series A preferred stock. The Company is required,
under Nevada law, to obtain the approval of its board of directors in order to
effectuate a merger, consolidation or similar event resulting in a more than 50%
change in control or a sale of all or substantially all of our assets. The board
of directors is then required to submit proposals to enter into these types of
transactions to its stockholders for their approval by majority vote. The
preferred stockholders do not (i) have control of, or currently, any
representation on its Board of Directors and (ii) currently do not have
sufficient voting rights to control a redemption of these shares by either of
these events. In addition the effectuation of any transaction or series of
transactions resulting in a more than 50% change in control can be made only by
us at our own election. Based on these provisions, we classified the Series A
preferred shares as permanent equity in the accompanying condensed consolidated
balance sheet because the liquidation events are deemed to be within the
Company's control in accordance with the provisions of EITF Topic D-98.


                                       36
<PAGE>

      We evaluate the Series A convertible preferred stock at each reporting
date for appropriate balance sheet classification.

Series A-1 Preferred Stock Placement

      On March 7 and 11, 2008, we issued in a two Private Placement
transactions, an aggregate of 800 shares of Series A-1 convertible preferred
shares of Beacon (which was exchanged for shares of Series A-1 Preferred Stock
of the Company on May 8, 2008) and 533,333 five year common stock purchase
warrants exercisable at $1.00 per share for net proceeds of $599,850 (gross
proceeds of $800,000 less offering costs of $200,150). Offering costs included
fees paid to the placement agent of $104,000, a fee for the successful
completion of the placement of $60,000 paid to a related party and $36,250 in
legal and relate fees in addition to warrants to purchase 208,000 shares of our
common stock at $1.00 per share with a 5 year term. The Series A-1 Preferred
Stock is convertible into common stock at any time, at the option of the holder
at a conversion price of $.75 per share. The conversion price is subject to
adjustment for stock splits, stock dividends, recapitalizations, dilutive
issuances and other anti-dilution provisions, including circumstances in which
we, at our discretion, issue equity securities or convertible instruments that
feature prices lower than the conversion price specified for shares of Series
A-1 Preferred Stock. The Series A-1 Preferred Stock is also automatically
convertible into shares of our common stock, at the then applicable conversion
price upon the closing of a firm commitment underwritten public offering of
shares of our common stock yielding aggregate proceeds of not less than $20
million or under certain other circumstances when the trading volume and average
trading prices of the stock attain certain specified levels.

      As described in Note 1, we evaluated the conversion options embedded in
the Series A-1 securities to determine (in accordance with SFAS 133 and EITF
00-19) whether they should be bifurcated from their host instruments and
accounted for as separate derivative financial instruments. We determined, in
accordance with SFAS 133, that the risks and rewards of the common shares
underlying the conversion feature are clearly and closely related to those of
the host instrument. Accordingly the conversion features, which are not deemed
to be beneficial at the commitment dates of these financing transactions, are
being accounted for as embedded conversion options in accordance with EITF 98-5
and EITF 00-27. During the three and six months ended March 31, 2008, based on
an evaluation of the beneficial conversion feature of the Series A-1 Preferred
Shares, the Company recorded deemed dividends of $1,411,882. The table below
lists the fair value of the warrants issued in each of the two closings of the
Series A-1 Preferred Stock Private Placement. The fair values were calculated
using the Black-Scholes option pricing model with the following assumptions:

<TABLE>
<CAPTION>
                                                           Fair Value of
            Quantity of    Estimated         Estimated       Underlying     Risk-Free   Expected
  Date       Warrants     Fair Value       Fair Value of       Common        Interest    Dividend   Life       Current
 Issued       Issued      Per Warrant        Warrants           Stock         Rate        Yield    (Years)   Volatility
---------   -----------   -----------      -------------   -------------    ---------   ---------  -------   ----------
<S>           <C>           <C>               <C>              <C>            <C>           <C>       <C>       <C>
 3/7/2008     515,200       $ 1.20            $618,240         $ 1.75         2.45%         0%        5         66.34%
3/11/2008      18,133       $ 0.99            $ 17,952         $ 1.50         2.61%         0%        5         66.34%
</TABLE>

      Accordingly, deemed dividends related to the conversion feature were
recorded based on the difference between the effective conversion price of the
conversion option and


                                       37
<PAGE>

the fair value of the common stock at the commitment date of the transaction
detailed in the table below.

                Fair Value of                Intrinsic    Common
                   Common                    Value of     Shares
Date of Issue/    Stock on       Effective  Beneficial   Issuable
  Commitment     Commitment     Conversion  Conversion     Upon        Deemed
     Date           Date           Price      Feature   Conversion    Dividend
--------------  -------------   ----------  ----------  ----------   ----------
   3/7/2008        $ 1.75         $ 0.42       $ 1.33    1,030,400   $1,373,867
  3/11/2008        $ 1.50         $ 0.45       $ 1.05       36,267   $   38,015

      The Company has reserved 2,166,666 shares of its common stock for issuance
upon the conversion of its Series A-1 convertible preferred stock and 533,333
shares of its common stock for issuance upon exercise of the Investor Warrants.

      As described in Note 1, the Company applies the classification and
measurement principles enumerated in EITF Topic D-98 with respect to accounting
for its issuances of the Series A-1 preferred stock. The Company is required,
under Nevada law, to obtain the approval of its board of directors in order to
effectuate a merger, consolidation or similar event resulting in a more than 50%
change in control or a sale of all or substantially all of our assets. The board
of directors is then required to submit proposals to enter into these types of
transactions to its stockholders for their approval by majority vote. The
preferred stockholders do not (i) have control of, or currently, any
representation on its Board of Directors and (ii) currently do not have
sufficient voting rights to control a redemption of these shares by either of
these events. In addition the effectuation of any transaction or series of
transactions resulting in a more than 50% change in control can be made only by
us at our own election. Based on these provisions, we classified the Series A
preferred shares as permanent equity in the accompanying condensed consolidated
balance sheet because the liquidation events are deemed to be within the
Company's control in accordance with the provisions of EITF Topic D-98.

      We evaluate the Series A-1 convertible preferred stock at each reporting
date for appropriate balance sheet classification.

Registration Rights

      Pursuant to the terms of the registration rights agreement entered into in
connection with the Private Placement and Series A-1 Placement, the Company
agreed to file with the SEC as soon as is practicable after completion of the
offering a registration statement (the "Registration Statement") and use its
best efforts to have the Registration Statement declared effective not later
than June 30, 2008. The Registration Statement would register for resale (i) the
shares of the Company's common stock underlying the units sold in the Private
Placement (the "Units") and (ii) the shares of the Company's common stock
issuable upon the exercise of the warrants issued in the Private Placement and
issued to the placement agent. The Company agreed to use its commercially
reasonable best efforts to have such "resale" Registration Statement declared
effective by the SEC as soon as possible and, in any event, not later than June
30, 2008.


                                       38
<PAGE>

      If the Registration Statement is not declared effective by the SEC by June
30, 2008 then the Company is obligated to issue to each purchaser of units in
the Private Placement to pay a 1% of the aggregate purchase price of the units,
for each 30 day period the Company is late in filing the Registration Statement
or the Registration Statement is late in being declared effective.

      The Company applies FASB Staff Position EITF 00-19-2 "Accounting for
Registration Payment Arrangements," with respect to determining whether to
record a liability for contingent consideration potentially transferable to
security holders covered under registration rights agreements. On April 18,
2008, the Placement Agent waived the registration right and potential penalty
subject to consent of the 60% of the holders of the Series A and Series A-1
Preferred Stock. Should the holders of the Series A and Series A-1 Preferred
Stock withhold such consent, the Company believes it will be able to fulfill its
registration obligations and has therefore not accrued any penalties under this
arrangement.

Completion of Share Exchange Transaction

      On December 20, 2007, pursuant to the a Share Exchange transaction between
Suncrest and Beacon, Beacon exchanged 9,194,900 shares of Beacon common stock
and 2,433.9 shares of Beacon Series A preferred stock for 9,194,900 shares of
Suncrest common stock and 2,433.9 shares of Suncrest Series A preferred stock.
The shareholders of Suncrest, prior to the recapitalization, held 3,003,847
shares of which they returned 1,730,726 for cancellation and retained 1,273,121
shares of the recapitalized company. Immediately following the Share Exchange
transaction, there were 10,468,121 shares of common stock outstanding, including
9,194,900 shares held by Beacon's existing stockholders and 1,273,121 shares
held by the stockholders of Suncrest. As described in Note 1, the Share Exchange
has been accounted for as a recapitalization of Beacon into Suncrest because the
existing Beacon stockholders retained a majority interest in the combined
enterprise. The Company paid a $305,000 fee to the stockholders of Suncrest in
connection with completing the Share Exchange Transaction which is included as a
component of selling, general and administrative expense in the accompanying
condensed consolidated statement of operations.

Issuances of Common Stock in Business Combinations

      The Company issued 3,225,000 shares of common stock in connection with
business combinations described in Note 4. The aggregate fair value of these
shares amounted to $2,741,250.

Restricted Stock Grant

      On December 5, 2007, the Company granted 782,250 shares of restricted
common stock with an aggregate fair value of $664,913 to the Company's
president. Immediately upon grant 150,000 shares vested with the remaining
shares vesting in quantities of 210,750 shares on each of December 20, 2008,
2009 and 2010. The Company accounts for share-based compensation under SFAS No.
123(R), "Share-Based Payment," which requires it to expense the fair value of
grants made under the share based compensation programs over the vesting period
of each individual agreement. Awards granted are valued and non-cash share-based
compensation expense is recognized in the consolidated statements of operations
in accordance with SFAS


                                       39
<PAGE>

No. 123(R). The Company recognizes non-cash share-based compensation expense
ratably over the requisite service period which generally equals the vesting
period of awards, adjusted for expected forfeitures. The Company recognized
$44,610 and $176,983 of non-cash share-based compensation expense during the
three and six months ended March 31, 008, respectively, in connection with such
grants. Unamortized compensation under this arrangement amounted to $489,735 as
of March 31, 2008 and will be amortized over the remaining vesting period of 3
years. The shares vest immediately upon the Company's termination without cause
or the Executive's resignation for good reason. In the event of termination for
cause, or resignation without good reason, the Company has the right to
repurchase any unvested shares for nominal consideration.

      On March 26, 2008, the Company issued warrants to purchase 300,000 shares
of common stock at $1.00 per share with a five-year term to one of its
directors. Accordingly, the Company recognized $219,000 of share-based
compensation expense for the three and six months ended March 31, 2008 based on
the fair value of the warrants on the grant date. For the fair value was
calculated using the Black-Scholes option pricing model refer to Note 12.

NOTE 15 - INCOME TAXES

      As described in Note 1, the Company adopted FIN 48 effective June 6, 2007.
FIN 48 requires companies to recognize in their financial statements, the impact
of a tax position, if that position is more likely than not of being sustained
on audit, based on the technical merits of the position. FIN 48 prescribes a
recognition threshold and measurement attribute for the financial statement
recognition and measurement of a tax position taken or expected to be taken in a
tax return. FIN 48 also provides guidance on derecognition, classification,
interest and penalties, accounting in interim periods, and disclosure.

      The Company and its subsidiaries intend to conform their tax periods to
the September 30 reporting period established by Beacon and subsequently file
consolidated federal and state income tax returns. The consolidated group for
this purpose includes (i) Beacon, the former development stage enterprise
organized to execute the business combinations and Share Exchange transactions
as described in Notes 4 and 14, respectively, (ii) BH Acquisition Corp., the
legal entity formed by Beacon to acquire the stock of Bell-Haun Systems, Inc.,
and (iii) the Company (f/k/a Suncrest Global Energy Corp.) which acquired all of
the equity interests of Beacon in the Share Exchange transaction completed on
December 20, 2007.

      Beacon's initial tax reporting period is June 6, 2007 (inception) through
September 30, 2007 but has not yet filed any Federal or State income tax
returns. Beacon estimates that its deferred tax assets as of September 30, 2007
amount to approximately $52,000 and principally consist of a net operating loss
and start up costs. Beacon, as a result of having evaluated all available
evidence as required under SFAS 109, fully reserved for its net deferred tax
assets since it is more likely than not that the future tax benefits of these
deferred tax assets will not be realized in future periods.

      Suncrest, prior to the Share Exchange transaction, had nominal operations
and a net operating loss of approximately $499,000 expiring at various times
through 2016 and has filed Federal and State income tax returns for the years
ended June 30, 2004, 2005 and 2006 that have not been examined by the applicable
Federal and State tax authorities.

      Bell-Haun, previous to its acquisition by the Company had net operating
losses of approximately $969,000 expiring at various times through 2027.
Bell-Haun filed Federal and State income tax returns for the years ended
December 31, 2004, 2005 and 2006 that have not been examined by the applicable
Federal and State tax authorities


                                       40
<PAGE>

      The Company preformed a preliminary assessment of possible uncertain tax
positions under FIN 48. Based on this preliminary assessment management does not
believe that the Company has any material uncertain tax positions requiring
recognition or measurement in accordance with the provisions of FIN 48.
Accordingly, the adoption of FIN 48 did not have a material effect on the
Company financial statements. The Company's policy, is to classify penalties and
interest associated with uncertain tax positions, if required as a component of
its income tax provision. The Company also intends to perform a nexus study but
has, on a preliminary basis, determined it must file State income tax returns in
Indiana, Kentucky, Nevada and Ohio.

      The Company is in the process of evaluating and quantifying the extent of
any deferred tax assets of Suncrest and Bell-Haun that may have existed as of
the dates of the Share Exchange Transaction and acquisition of Bell-Haun,
respectively. However, the Company believes that limitations were triggered with
respect to these tax assets at the time of the Share Exchange Transaction and
acquisition of Bell-Haun, respectively, due to the "change in ownership"
provisions under Section 382 of the Internal Revenue Code. Accordingly, the
Company has not recognized any income tax benefits for these or any other
possible deferred tax assets. The utilization of these and any net operating
losses that the Company may have generated may be subject to substantial
limitations in future periods due to the "change in ownership" provisions under
Section 382 of the Internal Revenue Code and similar state provisions.

NOTE 16 - EMPLOYEE BENEFIT PLANS

Stock Options and Other Equity Compensation Plans

      In March 2008, the Board of Directors of the Company adopted the 2008 Long
Term Incentive Plan, subject to shareholder approval, referred to as the 2008
Incentive Plan. The Company reserved 1,000,000 shares of Company common stock
under the 2008 Incentive Plan for the issuance of stock options, restricted
stock awards, stock appreciation rights and performance awards, pursuant to
which certain options were granted. The terms and conditions of such awards are
determined at the sole discretion of the Company's board of directors or a
committee designated by the Board to administer the plan. Previously unissued
shares of our common stock are provided to a participant upon a participant's
exercise of vested options. Of the 1,000,000 shares authorized, 910,000 are
available for future grants as of March 31, 2008.

      Effective December 20, 2007, we account for stock-based compensation under
SFAS No. 123(R), "Share-Based Payment," a revision of SFAS No. 123, "Accounting
for Stock-Based Compensation" and superseding APB Opinion No. 25, "Accounting
for Sock Issued to Employees," which requires us to expense the fair value of
grants made under the stock option program over the vesting period of each
individual option agreement. Awards that are granted after the effective date of
SFAS No. 123(R) are valued and non-cash share-based compensation expense is
recognized in the consolidated statements of operations in accordance with SFAS
No. 123(R). No non-vested awards were granted before the effective date of SFAS
No. 123(R). We recognize non-cash share-based compensation expense ratably over
the requisite service period which generally equals the vesting period of
options, adjusted for expected forfeitures.


                                       41
<PAGE>

      In accordance with SFAS 123(R), we recognized non-cash share-based
compensation expenses as follows:

                                                   Three Months   Six Months
                                                      Ended          Ended
                                                    March 31,      March 31,
                                                      2008           2008
                                                   ------------   ----------
Non-Cash Share-Based Compensation Expense

       Restricted Stock                              $44,610       $176,983
       Stock Options                                     356            356
                                                     -------       --------

             Non-Cash Stock Compensation Expense     $44,966       $177,339
                                                     =======       ========

      We value stock options using the Black-Scholes option-pricing model, which
was developed for use in estimating the fair value of traded options that are
fully transferable and have no vesting restrictions. In determining the expected
term, we separate groups of employees that have historically exhibited similar
behavior with regard to option exercises and post-vesting cancellations. The
option-pricing model requires the input of subjective assumptions, such as those
listed below. The volatility rates are based on historical stock prices. The
expected life of options granted are based on historical data, which, as of
March 31, 2008 is a partial option life cycle, adjusted for the remaining option
life cycle by assuming ratable exercise of any unexercised vested options over
the remaining term. The risk-free interest rate is based on the U.S. Treasury
yield curve in effect at the time of grant. The total expense to be recorded in
future periods will depend on several variables, including the number of
share-based awards.

      The fair values of options granted were estimated on the date of grant
using the following assumptions:

                         Weighted
                          Average    Expected    Expected   Risk-Free
             Grant       Expected      Life      Dividend   Interest
             Date       Volatility   (Years)      Yield       Rate
           ---------    ----------   --------    --------   ---------
           3/26/2008      66.34%       6.50        0.00%      2.55%

      The strike price of options granted on March 26, 2008 was $1.20. The grant
date fair value of the options was $0.73 per share. Shares granted March 26,
2008 vest 33% annually as of each March 26, 2009 through 2011. As of March 31,
2008, there was approximately $65,344 in non-cash share-based compensation cost
related to non-vested awards not yet recognized in our consolidated statements
of operations. This cost is expected to be recognized over the remaining vesting
period of 3 years. For the three and six months ended March 31, 2008, no shares
were forfeited and no options were exercised.

Restricted Stock

      Prior to adoption of the 2008 Incentive Plan, on December 5, 2007, the
Company granted restricted stock to a named executive officer of the Company as
further described in Note 14.

Beacon Solutions 401(k) Plan


                                       42
<PAGE>

      During the three months ended December 31, 2007, Beacon established a
retirement benefits plan, referred to as the Beacon Solutions 401(k) Plan,
intended to meet the requirements of section 401(k) of the Internal Revenue Code
of 1986. Under the Beacon Solutions 401(k) Plan, employees may contribute up to
the maximum allowable under federal law, and the Company will match up to 100%
of the first 1% contributed by the employee and up to 50% of the next 5%
contributed by the employee, in cash subject to a vesting schedule based on
years of service. All employees are eligible to enroll on date of hire.
Employees are automatically enrolled at 3% employer contribution but can change
their election at any time.

      Total contributions under the Beacon Solutions 401(k) Plan, recorded as
salaries and benefits expense, totaled approximately $44,900 for the three and
six months ended March 31, 2008.

NOTE 17 - SUBSEQUENT EVENTS

      The Company filed Amended and Restated Articles of Incorporation with the
Secretary of State of the State of Nevada on April 24, 2008 to authorize up to
5,000,000 shares of Preferred Stock, to designate and authorize 1,000 shares of
Series A-1 Preferred Stock, and to authorize the issuance of blank check
preferred from time to time.

      On May 8, 2008, the 800 Series A-1 Preferred Shares of Beacon issued in
the Series A-1 Placement were exchanged for 800 shares of Series A-1 Preferred
Stock of the Company to consummate the Series A-1 Placement described in Note
14.

      On March 15, 2008, the Company entered into an equity financing
arrangement with two of its directors that provided up to $500,000 of additional
funding, the terms of which provided for compensation of 33,333 warrants to
purchase common stock at $1.00 per share, the period the financing arrangement
is in effect. The warrants have a five-year term. The financing arrangement will
terminate upon completion of an offering in which the Company raises at least $3
million of additional equity financing or upon mutual agreement of the parties.


                                       43
<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

      Beacon Enterprise Solutions Group, Inc. and subsidiaries (collectively the
"Company") is a unified, single source information technology and
telecommunications enterprise that provides professional services and sales of
information technology and telecommunications products to mid-market commercial
businesses, state and local government agencies, and educational institutions.
In this report, the terms "Company," "Beacon," "we," "us" or "our" mean Beacon
Enterprise Solutions Group, Inc. and all subsidiaries included in our
consolidated financial statements.

Cautionary Statements - Forward Outlook and Risks

      Certain statements contained in this quarterly report on Form 10-Q,
including, without limitation, statements containing the words "believes,"
"anticipates," "intends," "expects," "assumes," "trends" and similar
expressions, constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements are
based upon the Company's current plans, expectations and projections about
future events. However, such statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results, performance
or achievements of the Company to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. These factors include, among others, the following:

      o     general economic and business conditions;


      o     effects of competition in the markets in which the Company operates;


      o     liability and other claims asserted against the Company;


      o     ability to attract and retain qualified personnel;


      o     availability and terms of capital;


      o     loss of significant contracts or reduction in revenue associated
            with major customers;


      o     ability of customers to pay for services;


      o     business disruption due to natural disasters or terrorist acts;


      o     ability to successfully integrate the operations of acquired
            businesses and achieve expected synergies and operating efficiencies
            from the acquisitions, in each case within expected time-frames or
            at all;

      o     changes in, or failure to comply with, existing governmental
            regulations; and


      o     changes in estimates and judgments associated with critical
            accounting policies and estimates.

      For a detailed discussion of these and other factors that could cause the
Company's actual results to differ materially from the results contemplated by
the forward-looking statements, please refer to Item 2.01 "Risk Factors" in the
Company's Current Report on Form 8-K filed on December 28, 2007. The reader is
encouraged to review the risk factors set forth therein. The reader should not
place undue reliance on forward-looking statements, which speak only as of the
date of this report. Except as required by law, the Company assumes no
responsibility for updating forward-looking statements to reflect unforeseen or
other events after the date of this report.


                                       44
<PAGE>

Overview

      We were formed for the purpose of acquiring and consolidating regional
telecom businesses and service platforms into an integrated, national provider
of high quality voice, data and VOIP communications to small and medium-sized
business enterprises (the "MBE Market"). Our business strategy is to acquire
companies that will allow us to serve the MBE Market on an integrated, turn-key
basis from system design, procurement and installation through all aspects of
providing network service and designing and hosting network applications.

      Beacon was a development stage enterprise with no operating history until
the completion of the share exchange transaction in which the shareholders of
Beacon become the majority owners of Suncrest ("Share Exchange Transaction")
completed on December 20, 2007. Concurrent with the Share Exchange Transaction,
we also completed the acquisition of four complementary information technology
and telecommunications businesses (the "Phase I Acquisitions") described below.

Phase I Acquisitions

      Since December 20, 2007, Beacon has focused on the consolidation of
various operational elements of the Phase I Acquisitions into a single core
infrastructure. By example, in the three months ended March 31, 2008, Beacon
merged the four distinct payroll systems of the Phase I Acquisitions into one
payroll system; launched a company-wide intranet and human resource information
system; centralized the Company's marketing, advertising and promotional
programs; and introduced a company-wide Customer Relationship Management (CRM)
system. We have also hired eight new sales executives in our primary markets;
launched a network circuit sales group; rebranded our customer facing sales and
support material; and attempted to capitalize on cross-selling opportunities
among our different product and service groups.

Acquisition Growth Strategy

      We will continue to integrate these operations into a single integrated
organization and to develop the internal infrastructure to scale the business.
Consistent with our operating plan, upon our successful integration of the Phase
I Acquisitions and the development of organic growth described below, we expect
to pursue our phase II acquisition strategy, financed by additional debt or
equity financings, by exploring acquisition targets to build around our three
state operating hub to grow Beacon into a large regional telecommunications
provider with a strong Southeast/Midwest concentration and focus.


                                       45
<PAGE>

Organic Growth Strategy

      With respect to our plans to increase revenue organically, we have
identified, and are currently pursuing, several significant customer
opportunities including an international design/service contract with an
existing Fortune 100 client, a domestic service contract with an existing
Fortune 500 client and a hardware/services contract with the United States
military. We believe these opportunities resulted, in part, from our ability to
provide fully integrated voice and data communication services. In addition,
subject to securing additional capital, we intend to consolidate our Louisville,
Kentucky based operating facilities and implement a Cisco-centric expansion
strategy for a portion of our business. We have assessed the current market
environment for the growth of our Cisco-centric business and believe that we can
expand our Cisco business more efficiently and economically through organic
growth rather than through acquisitions. Collectively, these opportunities could
increase the Company's annual revenue to over $25 million.

Our Cisco-centric initiative would have three elements:

o     The first goal of our Cisco-expansion strategy will be to hire additional,
      highly skilled staff with the appropriate Cisco certifications and
      background. We would deploy these additional certified Cisco staff
      throughout all our facilities.

o     The second goal is to achieve the Cisco "Silver" and then "Gold"
      certifications. The primary benefit of these additional certifications is
      that we achieve "trusted partner" status, which we believe would increase
      our access to the Cisco sales channel. In addition, we anticipate that a
      "Gold" certification would lower our cost of goods purchased from Cisco.

o     The third goal is to incorporate a fully operational Cisco technology lab
      into our headquarters and operating facility in Louisville, Kentucky. Our
      goal is to create a lab superior to any Cisco demonstration facility
      within our region and to provide Cisco and Beacon sales executives the
      opportunity to bring large client accounts into the Beacon facility and
      demonstrate the high-definition video conferencing capabilities otherwise
      known as "Telepresence" technology.

                  Following the creation of a Cisco technology lab, we would
            intend to offer similar Microsoft demonstration capabilities
            centered on Office Communications Server 2007 and Sharepoint. We
            believe the need for the Microsoft lab is driven by the future of
            "voice" within the Microsoft roadmap. Ultimately, we expect that
            voice will become an application that rides atop the exchange
            environment and will not be a separate technology deployed as with a
            separate phone system.

                  By developing and housing these two "showcase" labs, we hope
            to establish a distinct competitive advantage within our primary
            markets and be at the forefront of Cisco's and Microsoft's efforts
            to reshape business communications.

Although our focus in the Cisco and Microsoft areas of our business will be on
organic growth, we may explore Cisco-centric Microsoft-centric acquisition
candidates in the future.


                                       46
<PAGE>

Results of Operations

      For the three and six months ended March 31, 2008

      Revenue for the three and six months ended March 31, 2008 was $1,571,742
and $1,708,830, respectively, provided primarily by services performed by the
Phase I Acquisitions consisting primarily of engineering and design, software
development, business telephone system installations, and time and materials
services for system maintenance. Revenue was recognized for the period December
21, 2007 through March 31, 2008 subsequent to the acquisition of the four target
companies on December 20, 2007.

      Cost of goods sold for the three and six months ended March 31, 2008
amounted to $838,925 and $873,757, respectively, and consisted of equipment and
materials used in business telephone system installations, parts used in
services, and direct labor incurred in providing all of our services,
respectively.

      Salaries and benefits of approximately $1,126,0000 for the three months
ended March 31, 2008 consisted of salaries expended primarily in integrating the
acquisitions and managing the developing sales channel, $427,864 of salaries and
benefits of the acquired company employees for the period, approximately $44,900
of matching contributions to the Company's 401(k) plan, $285,400 of non-cash
share-based payments to three of our directors, and non-cash share-based
compensation of $44,966 related primarily to restricted stock that vested during
the period. Salaries and benefits of approximately $1,565,000 for the six months
ended March 31, 2008 included approximately $116,469 of salaries expended in
developing and executing the acquisition strategy, an accrual of $31,500 for the
successful execution of the acquisitions, and accrued paid time off of $16,500,
$285,400 of non-cash share-based payments to three of our directors, non-cash
share based compensation expense of $177,339 and $569,907 of salaries and
benefits of acquired company employees for the period December 21, 2007 through
March 31, 2008. The non-cash share-based payments to our directors related to
compensatory stock warrants issued during the period. The non-cash share based
compensation expense relates to the compensation earned related to a restricted
stock award granted on the day of the Phase I Acquisitions and represents the
vested portion of the restricted stock award based on the fair market value on
the date of grant.

      Selling, general and administrative expense for the three months ended
March 31, 2008 of $593,354 consists primarily of fixed operating costs of the
four acquired companies including approximately $88,000 of accounting and
professional fees associated with the Company's December 31, 2007 quarterly
review, approximately $104,000 of outside services assisting in the transition
and integration of the four businesses and approximately $68,000 of expenses
related to our India software development operation. Selling, general and
administrative expense for the six months ended March 31, 2008 of $1,057,760
consists primarily of fixed operating costs of the four acquired companies
including $309,000 of expenses incurred in connection with the recapitalization,
approximately $173,000 of accounting and professional fees associated with the
Company's September 30, 2007 annual audit and December 31, 2007quarterly review,
approximately $104,000 of outside services assisting in the transition and
integration of the four businesses and approximately $68,000 of expenses related
to our India software development operation.

      Interest expense of $115,158 and $143,153 for the three and six months
ended March 31, 2008, respectively, includes interest related to our Bridge
Notes in addition to the notes payable issued in connection with our Phase I
Acquisitions. Non-cash interest expense related to the accretion of the Bridge
Notes to face value and the vesting of contingent bridge warrants was $36,903
and $43,742 for the three and six months ended March 31, 2008, respectively.

      Contractual dividends on our Series A and A-1 Preferred Stock amounted to
$7,335 for the six months ended March 31, 2008, respectively. Deemed dividends
related to the beneficial conversion feature embedded in our Series A and A-1
Preferred Stock of $2,991,719 and $3,895,597 was recognized during the three and
six months ended March 31, 2008, respectively.


                                       47
<PAGE>

Liquidity and Capital Resources

      Net cash used in operating activities of approximately $1,323,000
consisted primarily of a net loss of approximately ($2,131,000) offset by
increases in our accrued expenses and other current liabilities of approximately
$435,000 and impacted by non-cash share based payments of approximately
$462,000.

      Cash used in investing activities of ($2,185,373) resulted primarily from
proceeds of our Private Placement offering used to purchase the Phase I
Acquisitions.

      Cash provided by financing activities of approximately $4,158,000 was
derived primarily from $3,876,460 raised in our Private Placement offerings of
Series A and A-1 preferred stock (gross proceeds of $4,800,000 less placement
costs of $923,540), $422,000 of proceeds from the issuance of convertible notes
payable, $600,000 of proceeds from the issuance of a note payable offset by note
payments and payoffs of $740,383.

      We incurred a net loss of approximately $2,131,000 for the six months
ended March 31, 2008. At March 31, 2008, the Company's accumulated deficit
amounted to approximately $6,167,000. The Company had cash of $7111,688 and a
working capital surplus of approximately $78,000 at March 31, 2008.

      On June 14, 2007, we signed a non-exclusive engagement agreement with
Laidlaw & Company (UK) Ltd. ("Laidlaw") in which Laidlaw agreed to provide us
with certain corporate finance advisory services including (i) raising capital
under the Private Placement transaction; (ii) structuring our Share Exchange
Transaction; and (iii) assisting us with identifying the public company in the
Share Exchange Transaction. These transactions were completed on December 20,
2007. We raised $4.0 million in the private placement in three separate closings
on December 20, 2007, January 15, 2008, and February 12, 2008 and an additional
$0.8 million on or about March 7, 2008 in a follow-on placement resulting from
an oversubscription of the original private placement.

      We received $500,000 of gross proceeds ($278,000 prior to September 30,
2007 and $222,000 during the three months ended December 31, 2007) under a
bridge financing facility furnished by two of our founding stockholders, who are
also members of the Board of Directors. We also raised $200,000 of additional
capital through the issuance of bridge notes in a second bridge note transaction
completed on November 15, 2007.

      On March 14, 2008, the Company and Integra Bank entered into a credit
facility, under which the Company borrowed $600,000 at a 6.25% annual interest
rate with monthly payments of $11,696.35 over a 60 month term that matures on
March 12, 2013. The first payment is due in April, 2008. The proceeds of the
note were used to repay the three previously outstanding notes assumed in the
Phase I Acquisitions, two of which were in default due to change in control
provisions.

      On May 15, 2008, the Company entered into an equity financing arrangement
with two of its directors that provided up to $500,000 of additional funding,
the terms of which provided for compensation of 33,333 warrants to purchase
common stock at $1.00 per share, the period the financing arrangement is in
effect. The warrants have a five-year term. The financing arrangement will
terminate upon completion of an offering in which the Company raises at least $3
million of additional equity financing or upon mutual agreement of the parties

      The Company believes that its currently available cash, the equity
financing arrangement and funds it expects to generate from operations will
enable it to effectively operate its business and pay its debt obligations they
become due within the next twelve months through April 1, 2009. However, the
Company will require additional capital in order to execute its current business
plan. If the Company is unable to raise additional capital, it will be required
to take various measures to conserve liquidity, which could include, but not
necessarily be limited to, curtailing its business development activities,
suspending the pursuit of its business plan, and controlling overhead expenses.
The Company cannot provide any assurance that it will raise additional capital.
The Company has not secured any commitments for new financing at this time, nor
can it provide any assurance that new financing will be available to it on
acceptable terms, if at all.


                                       48
<PAGE>

Off-Balance Sheet Arrangements

      We have four operating lease commitments for real estate used for office
space and production facilities.

      Contractual Obligations as of March 31, 2008

      The following is a summary of our contractual obligations as of March 31,
2008:

<TABLE>
<CAPTION>
                                                            Payment Due by Period
                                               -----------------------------------------------
                                                   Year       Years       Years
  Contractual Obligations            Total          1          2-3         4-5      Thereafter
-------------------------------   ----------   ----------   ----------   --------   ----------
<S>                               <C>          <C>          <C>          <C>          <C>
Long-term debt obligations        $2,382,455   $  547,518   $  871,578   $900,974     $62,385
Interest obligations (1)             390,216      139,056      189,916     60,537         707
Operating lease obligations (2)      453,007      182,784      270,223
                                  ----------   ----------   ----------   --------     -------
                                  $3,225,678   $  869,358   $1,331,717   $961,511     $63,092
                                  ==========   ==========   ==========   ========     =======
</TABLE>

            (1)   Interest obligations assume Prime Rate of 5.25% at March 31,
                  2008. Interest rate obligations are presented through the
                  maturity dates of each component of long-term debt.

            (2)   Operating lease obligations represent payment obligations
                  under non-cancelable lease agreements classified as operating
                  leases and disclosed pursuant to Statement of Financial
                  Accounting Standards No. 13 "Accounting for Leases," as may be
                  modified or supplemented. These amounts are not recorded as
                  liabilities of the current balance sheet date.

      Dividends on Series A and A-1 Preferred Stock are payable quarterly at an
annual rate of 10% in cash or the issuance of additional shares of Series A and
A-1 Preferred Stock, at our option. If we were to fund dividends accruing during
the twelve months ended March 31, 2008 in cash, the total obligation would be
$480,000 based on the number of shares of Series A and A-1 Preferred Stock
outstanding as of March 31, 2009.

      We currently anticipate the cash requirements for capital expenditures,
operating lease commitments and working capital will likely be funded with our
existing fund sources and cash provided from operating activities. In the
aggregate, total capital expenditures are not expected to exceed $100,000 for
the twelve months ended March 31, 2009.

Working Capital

      As of March 31, 2008, our current assets exceed current liabilities by
approximately $78,000. The bridge notes recorded in current liabilities are
convertible into common stock and the note agreements provide for vesting of
additional warrants to purchase shares of common should the holders continue to
hold the debt and immediate vesting of the additional warrants upon conversion.
During the three months ended March 31, 2008 we refinanced the line of credit
obligation and a note payable that were in default as of December 31, 2007 that
we assumed in the Phase I Acquisitions. In addition, certain vendors have agreed
to defer payment or agreed to payment plans or to accept common stock in
exchange for settlement of their outstanding balance. We have reduced our
working capital deficit by approximately $1.7 million during the three months
ended March 31, 2008. We can give no assurance that we will continue to be
successful in our efforts to negotiate favorable terms with our vendors.

Client Base

      Through the Phase I Acquisitions, Beacon acquired a client base that
consisted of approximately 4,000 customers, which were predominantly MBEs with
25-2,500 end users each, as well as approximately 50 larger customers. We expect
that most of our revenue will be derived from the MBE market.


                                       49
<PAGE>

Competitors

      Beacon has numerous competitors in each one of its four service areas,
many of which are substantially better capitalized, have more employees, have a
longer operating history and are better known in the industry. However,
management is not aware of any direct competitor in the middle-market service
space that can provide all of these services without significant outsourcing or
reselling, although IBM Global and others do present these services by relying
upon outside consultants. Beacon believes that its integration of these
services, particularly of its systems and software design and engineering
capabilities, provides a distinct competitive advantage.

      Technology & equipment procurement competitors include: AT&T, Qwest, Level
3, Broadwing, and Covad. Application development/support competitors include:
Trigent, Inventa Technologies, and AAlpha. Competitors specific to the
interconnect services include: BellSouth, Vonage, and Packet8. Competittors with
respect to data/systems integration services include: Cisco, Datacomm Solutions,
Dell, and Sun Microsystems.

Employees

      Beacon currently employs approximately 80 persons as a result of the Phase
I Acquisitions. In addition, Beacon has entered into an operating agreement with
ADSnetcurve to employ a team of developers in India while Beacon acquires the
necessary licensure to operate a business within India. None of Beacon's
employees is subject to a collective bargaining agreement.

Facilities

      Beacon currently maintains its offices at 124 N. First Street, Louisville,
KY 40202 and our telephone number is (502) 657-3500.

      On November 1, 2007, Beacon entered into an operating lease for its office
space in Louisville, Kentucky. The lease term is for a period of four months
commencing November 1, 2007 expiring February 28, 2008 for a base rent of $1,675
per month. Beacon has renewed this lease on a month to month basis as we
consider consolidating our Louisville-based businesses to improve operating
results. In addition, Beacon leases office space in Cincinnati, Ohio and
Columbus, Ohio for amounts that are not deemed to be material.

Certain Relationships and Related Party Transactions

      Bridge Financing

      John D. Rhodes, III and affiliated entities of Sherman Henderson and
Robert Clarkson hold Bridge Notes in the aggregate principal amount of $600,000.
Dr. Rhodes, Sherman Henderson and Robert Clarkson are all directors of Beacon,
and Sherman Henderson and Robert Clarkson are 5% shareholders of Beacon.

      Consulting Agreement

      Beacon has a consulting arrangement with Mr. Rick Hughes, who is an
immediate family member of the principal of Brook Street Enterprises, LLC, a
stockholder of Beacon, for the provision of consulting services. Previously
under this arrangement, Beacon was paying Mr. Hughes a monthly fee of $12,500.

      Under a new agreement with Mr. Hughes, payment is contingent upon the
Company's ability to accomplish capital funding objectives as set by the Board
of Directors.

Filing Status

      Beacon Enterprise Solutions Group, Inc., a Nevada corporation has in the
past filed reports with the SEC and will continue to do so as Beacon. You can
read and copy any materials we file with the SEC at its Public Reference


                                       50
<PAGE>

Room at 450 Fifth Street, NW, Washington, DC 20549. You can obtain additional
information about the operation of the Public Reference Room by calling the SEC
at 1-800-SEC-0330. In addition, the SEC maintains an Internet site (www.sec.gov)
that contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the Commission, including us.

ITEM 3A(T). CONTROLS AND PROCEDURES

      We maintain disclosure controls and procedures that are designed to ensure
that information required to be disclosed in our filings under the Exchange Act
is recorded, processed, summarized and reported within the periods specified in
the rules and forms of the SEC. This information is accumulated and communicated
to our executive officers to allow timely decisions regarding required
disclosure. As of March 31, 2008, our Chief Executive Officer, who acts in the
capacity of principal executive officer and our Chief Accounting Officer who
acts in the capacity of principal financial officer, have evaluated the
effectiveness of our disclosure controls and procedures as of the end of the
period covered by this report. Based upon that evaluation, the Company's Chief
Executive Officer and the Chief Financial Officer have concluded that the
Company's disclosure controls and procedures were not effective as of March 31,
2008, based on their evaluation of these controls and procedures required by
paragraph (b) of Exchange Act Rules 13a-15 or 15d-15.

DISCLOSURE CONTROLS AND INTERNAL CONTROLS

      Disclosure controls are designed with the objective of ensuring that such
information is accumulated and communicated to our management, including our
Chief Executive Officer and Chief Accounting Officer, as appropriate, to allow
timely decisions regarding required disclosure. Internal controls are procedures
which are designed with the objective of providing reasonable assurance that our
transactions are properly authorized, recorded and reported and our assets are
safeguarded against unauthorized or improper use, to permit the preparation of
our financial statements in conformity with generally accepted accounting
principles, including all applicable SEC regulations.


      As of December 31, 2007, we had identified certain matters that
constituted material weaknesses in our internal controls over financial
reporting. Pursuant to the closing of the Phase I Acquisitions on December 20,
2007, we acquired four businesses with distinctly separate internal control
structures. These internal control structures have been combined and streamlined
to correct certain existing material weaknesses including lack of segregation of
duties, inadequate internal accounting information systems and limited qualified
accounting staff. Accordingly our systems and personnel were insufficient to
support the complexity of our financial reporting requirements. Since December
31, 2007, we have taken certain steps to correct these material weaknesses that
include consolidating our accounting functions on a single unified Accounting
Information Technology Solution and undertaking a coordinated accounting and
operating policy documentation process to fully implement controls and
procedures. Although we believe that these steps will result in significant
improvements to our internal controls and expect to correct our material
weaknesses, additional time is still required to fully document our systems,
implement control procedures and test their operating effectiveness.

      We believe that our internal controls risks are partially mitigated by the
fact that our Chief Executive Officer and Chief Accounting Officer review and
approve substantially all of our major transactions and we have, when needed,
hired outside experts to assist us with implementing complex accounting
principles. We believe that our weaknesses in internal control over financial
reporting and our disclosure controls relate primarily to the fact that we are
an emerging business with limited personnel. Our Chief Accounting Officer was
our only employee with SEC reporting experience at the time of the close of the
Phase I Acquisitions and as of the date of this Quarterly Report on Form 10-Q.

Changes in Internal Control Over Financial Reporting

      Except as discussed above, there were no changes in the Company's internal
control over financial reporting during the Company's last fiscal quarter that
could have materially affected or is likely to materially affect the Company's
internal control over financial reporting.


                                       51
<PAGE>

                           PART II: OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

      On May 13, 2008, we received a letter from counsel for Uplink Technology,
Inc. ("Uplink"), which had been in litigation with Strategic Communications LLC
("Strategic") at the time we acquired certain assets and assumed certain
liabilities of Strategic. Uplink counsel claims Uplink and/or its principals are
owed up to $420,000 by Strategic and demands that all net proceeds (including
cash as well as our Common Stock) due by us to Strategic or its principals will
continue to be held "in trust" pending the completion of the litigation between
Strategic and Uplink. If we do not provide written confirmation by May 19, 2008
of our intention to do so, Uplink has state that it will seek injunctive relief
in order to obtain same. Beacon is not currently a party to the litigation and
management does not believe this situation will result in a material impact to
our financial position or results of operations.

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

      On January 15, 2008, stockholders holding 6,315,850 shares, or
approximately 60.3%, of the then outstanding issued and outstanding Common Stock
of the Company consented in writing to the amendment of the Articles of
Incorporation in order to 1) change the name of the Company to "Beacon
Enterprise Solutions Group, Inc."; 2) cancel the existing authorized shares of
the Company's Preferred Stock, none of which are currently issued or
outstanding; and 3) authorize the Series A Preferred Stock, as described in Note
14 of Part I. This amendment is described in detail in the Definitive
Information Statement filed with the Securities and Exchange Commission and
disseminated to the shareholders of January 25, 2008. This consent of
shareholders on January 15, 2008 was sufficient under Nevada law to approve this
amendment of the Articles of Incorporation.

      On February 14, 2008, stockholders holding 6,845,600 shares, or
approximately 65.4%, of the then issued and outstanding Common Stock of the
Company consented in writing to the amendment of the Articles of Incorporation
in order to: 1) increase the number of authorized shares of Preferred Stock to
Five Million (5,000,000); 2) authorize the issuance "blank check" preferred
stock by the Board of Directors of the Company; and 3) authorize the Series A-1
Preferred Stock, as described in Note 14 of Part I. This amendment is described
in detail in the Definitive Information Statement filed with the Securities and
Exchange Commission and disseminated to the shareholders on March 31, 2008. The
consent of shareholders on February 14, 2008 was sufficient under Nevada law to
approve this amendment of the Articles of Incorporation.

ITEM 6. EXHIBITS

Part I Exhibits

10.1        Documents related to the Integra Bank Credit Facility
31.1        Principal Executive Officer Certification
31.2        Principal Financial Officer Certification
32.1        Section 1350 Certification
32.2        Section 1350 Certification


                                       52
<PAGE>

                                   SIGNATURES

      In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                         Beacon Enterprise Solutions Group, Inc.

Date: May 15, 2008                       By: /s/ Bruce Widener
                                             -----------------------------------
                                             Bruce Widener
                                             Chief Executive Officer and
                                             Chairman of the Board of Directors


                                       53