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

                                   Form 10-KSB
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
    1934
                     For the fiscal year ended May 31, 2004

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934
                For the transition period from ________ to ________

                         Commission file number 0-17978

                              EDD HELMS GROUP, INC.
                 (Name of small business issuer in its charter)

             Florida                                     59-2605868
     (State or other jurisdiction                     (I.R.S. Employer
      of incorporation or origination)              Identification No.)

   17850 N.E. 5th Avenue, Miami, Florida                  33162-1008
  (Address of principal executive offices)                (Zip Code)

Issuer's telephone number (305) 651-5176

Securities registered under Section 12(b) of the Exchange Act:

Title of each class                 Name of each exchange on which registered

       None                                      None

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

                          COMMON STOCK, $.01 Par Value
                                (Title of class)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
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

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

The issuer's revenues for its most recent fiscal year were $16,168,152.

The aggregate market value of the voting and non voting common equity held by
non-affiliates computed by reference to the average bid and asked price of such
common equity as of February 2, 2005, was $281,295 (1,125,178 shares at an
average bid price of $.25 per share).

There were 12,574,896 shares outstanding of the issuer's common stock, $.01 par
value, as of March 2, 2005.

                                       1
<PAGE>



                     EDD HELMS GROUP, INC. AND SUBSIDIARIES
                                   FORM 10-KSB
                                TABLE OF CONTENTS

PART I                                                                     PAGE
--------                                                                   ----
  Item 1.   Description of Business.                                          4
  Item 2.   Description of Property.                                         11
  Item 3.   Legal Proceedings.                                               11
  Item 4.   Submission of Matters to a Vote of Security Holders.             12

PART II
--------
  Item 5.   Market for Common Equity and Related Stockholder Matters.        12
  Item 6.   Management's Discussion and Analysis or Plan of Operation.       12
  Item 7.   Financial Statements.                                            17
  Item 8.   Change in and Disagreements With Accountants on Accounting and
              Financial Disclosure.                                          35
  Item 8A.  Controls and Procedures.                                         35
  Item 8B.  Other Information.                                               35

PART III
--------
  Item 9.   Directors, Executive Officers, Promoters and Control Persons;
              Compliance with Section 16(a) of the Exchange Act.             36
  Item 10.  Executive Compensation.                                          37
  Item 11.  Security Ownership of Certain Beneficial Owners, Management and
              Stockholder Related Matters.                                   39
  Item 12.  Certain Relationships and Related Transactions.                  38
  Item 13.  Exhibits.                                                        41
  Item 14.  Principal Accountant Fees and Services.                          41


                                       2
<PAGE>


Forward-Looking Information

Certain information contained or incorporated by reference in this Annual Report
on Form 10KSB is forward looking in nature. All statements included or
incorporated by reference in this Annual Report on Form 10-KSB or made by
management of Edd Helms Group, Inc. and its subsidiaries, other than statements
of historical fact, are forward-looking statements. Examples of forward-looking
statements include statements regarding Edd Helms Group, Inc.'s future financial
results, operating results, business strategies, projected costs, products,
competitive positions and plans, and objectives of management for future
operations. In some cases, forward-looking statements can be identified by
terminology such as "may", "will", "should", "would", "expects", "plans",
"anticipates", "believes", "estimates", "predicts", "potential", "continue", or
the negative of these terms or other comparable terminology. These statements by
their nature involve substantial risks and uncertainties, and actual results may
differ materially depending on a variety of factors, many of which are not
within our control. These factors include, but are not limited to:
  o Economic conditions generally and in the industries in which our
      customers participate
  o Competition within our industry, including:
      o Competition from much larger competitors
      o   Price increases or supply limitations for components purchased by us
          and delays, reductions, or cancellations of orders previously placed
          with and by us, or,
      o Cancellations of orders previously placed with and by us.

                                     PART I
Terms used in this report:
HVAC       Heating, Ventilation, Air Conditioning
CCTV       Closed Circuit Television
ABYC       American Boating and Yachting Council
CFC's      ChloroFlouroCarbon
UPS        Uninterruptible Power Supply (a sophisticated battery)
NASDAQ     National Association of Securities Dealers Automated Quotation System
Gigabit    1,000,000 bits of computer information
Clean-room Sterile or semi-sterile manufacturing environment

                                       3
<PAGE>

Item 1. Description of Business.

We are a Florida Corporation, organized in 1985 and originally incorporated
under the name of Hotelecopy, Inc. In August of 1999, Hotelecopy, Inc. merged
with Edd Helms, Inc. a Florida corporation and changed its name to Edd Helms
Group, Inc.  We presently have three wholly-owned Florida corporation
subsidiaries:

          Edd Helms Air Conditioning, Inc.,
          Edd Helms Marine Air Conditioning and Refrigeration, LLC, and
          DataTelcom, Inc.

Edd Helms Group, Inc., is a diversified services company with specific
disciplines of service in the areas of:

          Electrical,
          Air conditioning,
          Data communications,
          Wireless,
          Marine air conditioning and refrigeration, and,

Although the primary focus of our core business is service, we regularly perform
design-build projects. We also service the convention and exhibition services
industry with our skilled labor force and a large inventory of temporary
equipment. During the year, we employed over one hundred-thirty employees and
operated approximately fifty service vehicles, each radio equipped for peak
efficiency in providing our services to our customer base.

We operate state-of-the-art computer systems, which include Microsoft Windows
2000(tm)and Citrix MetaFrame(tm) servers. These computer systems have built-in
redundancy and are backed by uninterruptible power systems to avoid information
loss during power outages. Our management software is specifically designed for
the service industry and related accounting functions. The strength of our
business rests in our reputation, workforce and management team.

Our ability to employ, train and retain highly motivated service technicians to
provide quality service is a key to our success in being competitive. In order
to recruit qualified individuals, we offer superior training and equipment, a
safety program (with our own safety director), excellent benefits and career
opportunities that we believe are more comprehensive than those typically
offered within the industry. We maintain good labor relations with our
employees. Management is involved in local industry associations and participate
in organized labor and training programs. Substantially all of our service
people are unionized, and we have not experienced a strike or any significant
labor stoppage. We believe that our relationships with our employees are
satisfactory.

A large part of our services are provided by means of our mobile service
vehicles. These service vehicles and the licensed technicians that operate them
carry an inventory of equipment, tools, parts and supplies needed to complete
the typical variety of jobs. The technician assigned to a service call travels
to the business or residence, interviews the customer, diagnoses the problem,
presents the solution, obtains agreement from the customer and performs the
work.

                                       4
<PAGE>

We maintain a high profile advertising campaign in the yellow pages and radio
spots that are run throughout the year, and use a direct sales force to market
our services. We continue to preserve and enhance our value of the unique and
long-standing trade names and customer identification. Our logo and identifying
marks are featured on all our trucks, marketing materials, and advertisements.
All of our field technicians wear uniform shirts with our marketing logo and
color, and display photo identification to each customer when they arrive at the
customer's facility or home.

Electrical and Data Communications

We provide these services to commercial businesses, factories, hotels, banks,
convention facilities and residences. Our services include preventive
maintenance, emergency repairs, and replacements (in conjunction with the
retrofitting or remodeling of a residence or commercial building, or as a result
of an emergency repair) of systems and associated parts, electrical control
systems, wiring, data cabling, switches and panels. We also install and maintain
computer and communications wiring in homes and businesses.

Wireless

Our wireless division provides services to the communication industry.
During the past year, we completed cellular installations for AT&T, Cingular and
Metro PSC. We operate our tower subsidiary under the name of Datatelcom, Inc.
The work is performed by our own employees and with outside subcontractors.

The nature of the work is the installation of antennas, coaxial cables,
electrical power of both AC and DC, and other electronic equipment on towers and
rooftops. The work is generally performed at heights from 100 feet to 450 feet
on rooftops, monopoles, self supporting towers and free standing towers.

We provide training to our tower climbers through a certification program
operated by an independent tower training company. We send one of our employees
to the third-party trainer who attends a comprehensive course in Certified Tower
Climbing Safety and Rescue. Upon completion of this course our employee receives
a certification which then enables him to teach this course to our other
employees. This provides the employees with the ability to use the needed
knowledge and skills to utilize the techniques and equipment effectively in
their individual work environments.

Safety is paramount to all of our operations. No parts of our operations are
ignored, but additional safety training and attention is maintained in the
wireless group. Since most of the wireless work is done at heights that exceed
100 feet, every precaution is taken to protect our employees.

Testing and certifications of the test equipment and the materials utilized by
the wireless division are an ongoing educational process supported by us. With
the certified training programs, our employees are equipped to perform the
highest quality of work while servicing the ever demanding cellular carriers.

We believe that the cellular industry is continuously evolving with new
technologies and expanding markets. Although the cellular carriers have suffered
recently on Wall Street, we believe that we have carved out a niche market that
should allow growth and increased sales over the next five years.

                                       5
<PAGE>

Trade Shows and Exhibition Services

We provide temporary electrical services to the convention and trade show
industry. These services are generally provided in hotels, convention halls, and
temporary outside facilities. We sell our services to decorators and trade show
groups where various vendors exhibit their products and services. These trade
shows require temporary power for the use of the individual exhibitors during
these events. We sell power, install and maintain the power and outlets, remove
and store the inventory of temporary equipment until the next trade show event,
for the respective group.

Edd Helms Group has been a major trade show electrical provider in the South
Florida area for the past twenty years. We have a full-time marketing person to
further develop our presence in the trade show arena. With South Florida being a
major hub for tourism, we expect our sales in the trade show arena to continue
to grow over the next five years.

With our completion of a major hotel project in Hollywood, Florida, during 2002,
we entered into an agreement with that major hotel and convention facility to
provide its electrical and mechanical trade show services to the decorators and
exhibitors at the facility. We expect this facility to grow into one of South
Florida's top convention facilities and anticipate positive growth for our trade
show services.

The equipment required for a trade show electrical exhibition provider is
extensive and requires continuous maintenance and annual safety certification.
We own a large inventory of trade show equipment that is maintained and stored
at our main warehouse and storage facilities. We believe that this specialized
equipment has a value substantially in excess of that reflected in our books.

We believe that our convention trade show and exhibition services division would
benefit from acquisition of other trade show service providers. We will attempt
to locate acquisition opportunities in this arena that would allow us to grow
this niche market and allow us to maximize the use of our large inventory.

Integrated Services

We service our customer base with fire alarm, life safety, security, gate
access, CCTV, and monitoring services. These services are referred to as
integrated services. This integrated services market mixes well with our
electrical services and our existing licenses which allow us to perform all of
these services under our electrical licenses. We believe, with the homeland
attention to security that this niche market will allow increased sales from our
present client base.

We sell these integrated services individually or packaged. These services
generally require annual maintenance, inspections, and certification. Many
companies request monitoring of these systems and we provide this monitoring
through contracts with third party vendors.

                                       6
<PAGE>

Air Conditioning and Refrigeration

We provide a broad variety of maintenance, repair, and replacement services to
both residential and commercial customers. Most of our air conditioning and
refrigeration efforts are in the service, retrofit, and design build markets.
Our services include preventive maintenance (periodic checkups, cleaning and
filter change-outs), emergency repairs, and the replacement (in conjunction with
the retrofitting or remodeling of a residence or commercial building, or as
result of an emergency repair request) of HVAC systems and associated parts. We
also provide certain specialized services and technical facilities
managementservices to commercial building owners or building managers. In
connection with both new installation business and maintenance, repair and
replacement services, we sell a wide range of HVAC equipment, parts and
supplies. We use specialized systems to log service orders, schedule service
calls, identify and ready the necessary repair parts or equipment, track the
work order, and provide information for communication with the service
technicians and customers. Service histories and specific product information
are generally accessible to the dispatcher in a database that may be searched by
customer name or address. We are committed to providing the highest level of
customer service through the development of a highly trained workforce. Prior to
employment, we make an assessment of the technical competence level of all
potential new employees, confirm background references and conduct criminal and
driving record checks. In addition, all employees are subject to drug testing.
Once hired, employees are required to complete a progressive training program to
advance their technical competencies and to ensure that they understand and
follow our safety practices and other internal policies. Both technical and
customer service personnel are given intensive training in customer
communication, sales and problem-solving skills.

Marine Air Conditioning and Refrigeration

We provide marine air conditioning and refrigeration services. We believe the
marine industry to be a market where our highly-qualified labor force and our
commitment to quality service will allow the development of this potentially
lucrative niche market. Our marine technicians are ABYC certified. A visible
marketing campaign has been launched in the South Florida market. The South
Florida market is referred to by many as the boating capital of the United
States. With our full-time residence of boat owners combined with the seasonal
transient market, we believe that we can establish ourself as one of the leading
providers of marine air conditioning and refrigeration services. We have
established relationships to provide factory warranty service with several major
boating companies and manufacturers in South Florida.

E-Commerce

We have developed a fully functional Internet web site that is both an internet
and an intranet. It is presently being utilized to market our divisions and
services. It is also growing in the information and training programs being
offered to our employees.

We believe that E-Commerce opportunities will benefit us. As a result we have
developed and will continue to develop, on-line services. We believe that the
Internet will allow us an opportunity to expand our market and improve our
efficiencies. We have entered into a contract with a third party web developer
to help develop an expanded Internet presence.

                                       7
<PAGE>

Competition

The facilities service industry is highly competitive with few barriers to
entry. We believe that the principal competitive factors are timeliness,
reliability and quality of services provided, range of services offered, market
share and visibility strengthened by advertising and price. Most of our
competitors are small, owner-operated companies that typically operate in a
single market. Certain of these smaller competitors may have lower overhead cost
structures and may be able to provide their services at lower rates. Often
times, these small competitors have long established relationships with
homeowners for a variety of home repairs, which makes that market difficult for
us to penetrate. There are currently a limited number of public companies
focused on providing services in some of the same service lines provided by us.
Some of these competitors, and potential competitors, have greater financial
resources than we do to finance acquisition and development opportunities, and
may be able to pay higher prices for the same opportunities to develop and
support service operations.

Our ability to employ, train and retain highly motivated service technicians to
provide quality service is a key to our success in being competitive. In order
to recruit qualified individuals, we offer attractive compensation, health and
savings benefits that are more comprehensive than those typically offered within
the industry, including a 401(k) plan.

Governmental Regulation

Many aspects of our business operations are subject to various federal, state
and local laws and regulations, including, among others, permitting and
licensing requirements; building, mechanical and electrical codes and zoning
ordinances; laws and regulations relating to consumer protection; laws and
regulations relating to worker safety and protection of human health.

We believe we have all the required permits and licenses to conduct our
operations and that we are in substantial compliance with applicable regulatory
requirements relating to our operations. If we were to fail to comply with the
applicable regulations it could result in substantial fines or revocation of our
operating permits.

A large number of state and local regulations governing the facilities services
trades require various permits and licenses to be held by individuals. In some
cases, a required permit or license held by a single individual may be
sufficient to authorize specified activities for all our service technicians who
work in the geographic area covered by the permit or license.

                                       8
<PAGE>

Environmental Regulation

Our operations are subject to numerous federal, state and local environmental
laws and regulations, including those governing vehicle emissions and the use
and handling of refrigerants. These laws and regulations are administered by
various federal, state and local governmental agencies. The technical
requirements of these laws and regulations are becoming increasingly complex and
stringent, and meeting these requirements can become expensive. We are subject
to the Clean Air Act, Title VI of which governs air emissions and imposes
specific requirements on the use and handling of substances known or suspected
to cause or contribute significantly to harmful effects on the stratospherical
ozone layer, such as chlorofluorocarbons and certain other refrigerants
("CFC's"). Clean Air Act regulations require the certification of service
technicians involved in the service or repair of systems, equipment and
appliances containing these refrigerants and also regulate the containment and
recycling of these refrigerants. These requirements have increased our training
expenses and expenditures for containment of recycling equipment. The Clean Air
Act is intended ultimately to eliminate the use of CFC's in the United States
and require alternative refrigerants to be used in replacement HVAC systems.

Expenditures related to environmental matters during the fiscal years ended May
31, 2004 and 2003, were not material. We do not currently anticipate any
material adverse effect on our business or consolidated financial position as a
result of future compliance with existing environmental laws and regulations.

Suppliers

We obtain materials and supplies from approximately 150 suppliers. Suppliers of
materials are plentiful and we are not dependent on any one vendor.

                                       9
<PAGE>

Cyclicality of the Industry

We generate increased revenues in the summer months when the dependency on air
conditioning is greater than in the winter months. The electrical services
business is not cyclical.

Economic Dependence

We believe that there is always a demand for electrical and air conditioning
services. With the emergence of the broadband industry with fast computers, the
reliability of the electrical power and network computer wiring has become more
critical than ever. The required reliability of many of these electrical systems
exceeds 99.999%. Uninterruptible power supplies (UPS) and standby emergency
generators are required in greater numbers than ever before. Aside from the
initial installation of power and network cabling, ongoing maintenance programs
are imperative. Indoor air quality with proper temperature and humidity control
is also required. Many computer networks now require transmission of information
at gigabit speed which requires upgrading slower network cables. Fiber optics is
now replacing copper wire in many of these installations.

The electrical, data communications, telecommunications and air conditioning
construction services industry has had a higher overall growth rate than the
overall construction industry. This is due in part to the increase in complexity
of electrical and mechanical systems in many projects. This results from the
increased use of computers and more advanced data and voice communications and
environmental control systems. As a result, buildings are now consuming more
electricity per square foot than in the past and more extensive air conditioning
and electrical distribution systems are now required.

Voice, data communication and telecommunication systems now require more
reliable power supplies and improved low voltage and fiber optic cabling. The
need for increased environmental controls within a building, such as the
increased need for air conditioning control to maintain computer systems at
optimal temperatures and the increased demand for environmental control in
individual spaces, are creating expanded opportunities for electrical,
mechanical, telecommunications and data communications facilities service
businesses

Electrical and mechanical construction services involve the design, installation
and start-up of several systems. These include:
     1) Generation and distribution of electrical power including conduits,
     power cables, transformers, electrical panels, switch gear, controls,
     generators and uninterruptible power supplies,
     2) Lighting fixtures and controls,
     3) Voice and data communications, including fiber optic and copper cabling,
     4) Fire alarm, security, and process control, and, 5) Heating, ventilation,
     air conditioning, refrigeration and increased
        requirements of all of these systems in clean-room applications

We perform most of our services pursuant to contracts with owners, corporations,
government organizations, construction managers, developers, general contractors
and individual tenants in multi-tenant facilities and we are not economically
dependent on any single customer or group.

                                       10
<PAGE>

Employees

As of May 31, 2004, we had approximately 117 employees. Approximately fifty
of these employees are electrical technicians and another thirty are air
conditioning technicians. We have thirty-seven employees who fill
administrative, sales and management roles. We believe that our relations with
our employees are good. We are signatory to various collective bargaining
agreements with local unions representing approximately 75% of our employees.
None of these collective bargaining agreements are nationwide or regional in
scope.

We are a member of the National Electrical Contractors Association who
represents us in bargaining with the International Brotherhood of Electrical
Workers. Our air conditioning subsidiary is a member of the Mechanical
Contractors Association who represents us in bargaining with the United
Association.

Our Executive Officers

See the information contained in Part III, Item 9, which describes our executive
officers in detail.

Item 2. Description of Property.

We lease approximately 32,000 square feet for the warehousing, distribution and
executive offices at a total annual cost of approximately $305,462, including
sales tax. A large majority of the leased property is owned by a partnership of
which Carol Helms and W. Edd Helms, Jr., are the sole owners. W. Edd Helms is an
officer and director and the owner of approximately 80% of our common stock and
is related to some of our other officers and directors. We believe that these
facilities are in good condition and are sufficient to accommodate our needs. We
believe the rent to be reasonable and competitive in price with rent for similar
facilities located at the Miami-Dade/Broward county line.

Item 3.  Legal Proceedings.

The Company is engaged in litigation with Siemen's Building Technologies, Inc.,
Edd Helms Group, Inc. v. Siemens Building Technologies, Case No. 04-8784 CA 08,
Circuit Court in and for Miami-Dade County, Florida. The proceeding commenced on
April 16, 2004, when the Company filed suit against Siemens for breach of
contract. The Company sued Siemens for material breach of contract in failing to
provide necessary drawings for the complete performance work of the contract for
fire alarm installations. Siemens has filed a counter claim against the Company
and its surety, which in turn, has filed an action against the Company for
indemnification under the Bond, should the surety be held liable. The Company is
suing for damages in excess of $1 million. The counter claim has not been
quantified but is assumed to exceed $500,000.

                                       11
<PAGE>

The Company is engaged in litigation with Cameron Baird, Cameron Baird v. Edd
Helms Group, Inc. d/b/a Edd Helms Electric, Case No. 01-10407 (08), Circuit
Court in and for Broward County, Florida. The proceeding commenced on June 14,
2001. A judgment of $40,000.00 was awarded against the Company. The Plaintiff's
attorney has filed a request for fees and a hearing on fees is scheduled on
April 13, 2005. The Company has filed an appeal in this matter.

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

No matters have been submitted during the year for vote.

Item 5. Market for Common Equity and Related Stockholder Matters.

There is currently no established public trading market for our common stock. In
order to obtain bid quotations for our common stock, it is necessary to contact
certain broker/dealers, if any, who make a market in our common stock. We are
not aware of any such broker/dealers. Our NASDAQ trading symbol is EDDH.

The following tables set forth, for the periods indicated, the range of high and
low closing bid and ask price for our common stock from June 1, 2002, through
May 31, 2004. These quotations represent prices between dealers, do not include
retail markups, markdowns, or commissions, and do not represent actual
transactions. The following information for the fiscal years ended May 31, 2004
and 2003 was obtained from the NASDAQ historical data service.

                                                            Year Ended
                                                   May 31, 2004     May 31, 2003
                                                      High Low        High  Low
                                                    -----------      -----------
          First Quarter                            $ .16  $.16      $ .25  $.17
          Second Quarter                           $ .23  $.23      $ .22  $.18
          Third Quarter                            $ .21  $.21      $ .26  $.19
          Fourth Quarter                           $ .23  $.23      $ .22  $.16

On May 31, 2004, there were approximately 437 holders of record of our common
stock. This number does not include any adjustment for stockholders owning the
stock in "Street" name.

We have not paid dividends since our inception and do not anticipate paying any
dividends in the near future. We intend to retain earnings to provide funds for
general corporate purposes and the expansion of our business.

Item 6.  Management's Discussion and Analysis or Plan of Operations.

The following discussion should be read in conjunction with the consolidated
financial statements of Edd Helms Group, Inc. and Subsidiaries and the related
footnotes, included in this Annual Report as Item 7. This discussion contains
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements are based on our current
expectations and involve risks and uncertainties that could cause our actual
results to differ materially from those set forth in the forward-looking
statements. See "Forward Looking Statements" and "Risk Factors".

                                       12
<PAGE>

Highlights of Critical Accounting Policies

Our significant accounting policies are described in Note 2 of Notes to
Consolidated Financial Statements which have been prepared in accordance with
generally accepted accounting principles in the United States. Management
believes that our most critical accounting policy is in accounting for long-term
construction contracts. Determining the points at which revenue should be
recognized as earned and costs should be recognized as expenses is a major
accounting issue common to all businesses engaged in the performance of
long-term construction contracts. We use the percentage-of-completion accounting
method for construction contracts in accordance with the American Institute of
Certified Public Accountants Statement of Position 81-1, "Accounting for
Performance of Construction-Type and Certain Production-Type Contracts". Each of
our business units calculates the percentage-of-completion of each contract by
dividing the costs incurred to date by the estimated total contract costs at
completion (the "cost-to-cost" method). This percentage is then applied to the
estimated total contract value (the total amount of revenue expected to be
realized from the contract) in order to calculate the amount of revenue to be
recognized to date on each contract. Provisions are recognized in the statement
of operations for the full amount of estimated losses on uncompleted contracts
whenever evidence indicates that the estimated total cost of a contract exceeds
its estimated total contract value.

Percentage-of-completion accounting requires considerable reliance on estimates
in determining revenues, costs, profit margins and the extent of progress toward
completion on a contract-by-contract basis. Uncertainties inherent in the
performance of contracts generally include labor availability and productivity,
job conditions, material cost, change order scope and pricing, final contract
settlements and other factors. These uncertainties are evaluated continually for
each contract, and the impact of changes in estimates of total contract costs,
total contract value, and other factors are reflected in the consolidated
financial statements in the period in which the revisions are determined.

Our business units enter into contracts primarily through competitive bids, with
the final terms and prices often negotiated with the customer. Although the
pricing terms and conditions of contracts vary considerably, most of these
contracts are known as "fixed-price" or "lump-sum" contracts, in which the
business unit essentially agrees to perform all acts under the contract for a
stated price. Our business units also enter into "cost-plus" contracts (costs
incurred plus a stated mark-up percentage or a stated fee) and
"time-and-materials" contracts (stated hourly labor rate plus the costs of
materials). Fixed-price contracts inherently contain higher risk of loss than
the other contract types, but management believes that we are generally able to
achieve higher gross profit margins on fixed-price contracts as a result of the
expertise and experience of our business units in bidding and job performance.
No assurance can be given, however, that we will not incur significant job
losses on contracts in the future.

We recognize maintenance, repair and replacement revenues, including maintenance
management services, as services are performed. Service contract revenue is
recognized ratably over the term of the service contract. We account for
revenues from fixed-price installation and retrofit contracts on a
percentage-of-completion basis using the cost-to-cost method.

                                       13
<PAGE>

Cost of services consists primarily of salaries, wages, benefits and insurance
of service and installation technicians, project managers and other field
support employees, materials, components, parts and supplies, engineered
equipment, subcontracted services, depreciation, fuel and other vehicle expenses
and equipment rentals. Selling, general and administrative expenses consist
primarily of compensation and related benefits for management, administrative
salaries and benefits, advertising, office rent and utilities, communications
and professional fees.

Accounts receivable collectibility represents another critical accounting
policy. Our business units grant credit, generally without collateral, to their
customers, which primarily include general contractors, property owners and
developers, governmental agencies, educational and medical institutions, and
commercial and industrial companies in a variety of industries. We are subject
to potential credit risk related to changes in business and economic factors
throughout the United States. However, we are entitled to payment for work
performed and often have certain lien rights that can be attached to the
property in which the work was performed. Additionally, management continually
monitors the financial condition of our customers to reduce risk of loss. We
provide an allowance for doubtful accounts when future collection is considered
doubtful. Historically, receivable collectibility has not been a significant
issue in our service industries.

Results of Operations, May 31, 2004, Compared to Year Ended May 31, 2003

Revenues Earned

Revenues decreased approximately $611,208 or 3.6% to $16.168 million for the
fiscal year ended May 31, 2004, from $16.779 million for the fiscal year ended
May 31, 2003. In light of the economic conditions, the slight decrease is
proportional.

Costs of Revenues Earned

Cost of revenues was $11.935 million or 74% of revenues earned, for the year
ended May 31, 2004, as compared with $12.463 million or 74% of revenues earned
for the year ended May 31, 2003. Our gross profit margin as a percentage of
revenues earned for the years 2004 and 2003 was 26%.

Selling, General and Administrative Expenses

Selling, general, and administrative expenses for the year ended May 31, 2004
were $4,697,553 or 29% of revenues earned, as compared with $4,653,153 or 28% of
revenues earned for the year ended May 31, 2003. Overhead increased slightly due
to an increase in healthcare and liability insurance cost.

Loss From Continuing Operations Before Income Taxes (Credits)

Loss from continuing operations before income taxes increased approximately
$229,079 to ($397,782) as compared to the fiscal year ended May 31, 2003.
This increased loss can be attributed to the 3.6% decrease in sales and an
increase in selling, general and administrative costs.

                                       14
<PAGE>

Provision for Income Taxes (Credits)

We follow Statement of Financial Accounting Standards No. 109, Accounting for
Income Taxes. That statement focuses on the balance sheet and on calculating
deferred tax assets and liabilities. Deferred income tax expense (and our
provision for income taxes (credits)) is the difference between the deferred tax
balance sheet accounts at the beginning and end of each period. For the year
ended May 31, 2004 our tax benefit was $133,234 as compared to $56,818 for year
ended May 31, 2003.

Liquidity and Capital Resources

As of May 31, 2004, we had cash, cash equivalents and securities available for
sale totaling approximately $337,255 compared with $856,903 as of May 31,
2003. Working capital decreased to $2.991 million at May 31, 2004, compared to
$3.210 million in the prior year. Our ratio of current assets to current
liabilities was 2.68 to 1 as of May 31, 2004, compared to 2.67 to 1 in the prior
year. During fiscal 2004, our cash decreased by approximately $519,649. Cash was
used to purchase additional vehicles, continue paying notes on existing
vehicles, leasehold improvements, and upgrading our systems software and
hardware. Historically, we have financed our operation and growth with
internally generated working capital. Our primary requirement for capital
consists of purchasing vehicles, equipment, inventory and supplies used in the
operation of our business. Our credit line was used during the year. We expect
to use our credit line as it may be needed from time to time for short-term
working capital. We anticipate that our cash flow from operations will provide
cash in excess of our normal working capital needs, debt service requirements
and planned capital expenditures in the year ahead.

Effects of Inflation

We believe that our revenues and results of operations have not been
significantly affected by inflation during the last two years ended May 31,
2004.

Results of Operations, May 31, 2003, Compared to Year Ended May 31, 2002

Revenues Earned

Revenues decreased approximately $7.7 million or 32% to $16.8 million for the
fiscal year ended May 31, 2003, from $24.5 million for the fiscal year ended May
31, 2002. This decrease can be attributed to the completion of a major project,
which was completed in February 2002, which has not been replaced with another
major project. Revenues were also adversely impacted by the national economy.

Costs of Revenues Earned

Cost of revenues was $12.5 million or 74% of revenues earned, for the year ended
May 31, 2003, as compared with $17.8 million or 73% of revenues earned for the
year ended May 31, 2002. Our gross profit margin as a percentage of revenues
earned for the years 2003, and 2002 were 26% and 27%, respectively. The decrease
in gross margin, as a percentage of revenues earned, is primarily related to a
more competitive market in light of the economic conditions.

                                       15
<PAGE>

Selling, General and Administrative Expenses

Selling, general, and administrative expenses for the year ended May 31, 2003,
were $4,653,153 or 28% of revenues earned, as compared with $5,057,298 or 21% of
revenues earned for the year ended May 31, 2002. The decrease in these expenses
was a result of reductions in expenses which were made throughout the year as
the company experienced lower sales due to the completion of a major project and
the impact of the national economy. Some positions were eliminated along with
infrastructure expenses that supported these positions.

Income From Continuing Operations Before Income Taxes (Credits)

Income from continuing operations before income taxes decreased approximately
$1.8 million to ($168,703) as compared to the fiscal year ended May 31, 2002.
This decrease can be attributed to the end of a major project, which was
completed in February 2002 and has not been replaced with another major project.
Revenues where also adversely impacted by the national economy.

Provision for Income Taxes (Credits)

We follow Statement of Financial Accounting Standards No. 109, Accounting for
Income Taxes. That statement focuses on the balance sheet and on calculating
deferred tax assets and liabilities. Deferred income tax expense (and our
provision for income taxes (credits)) is the difference between the deferred tax
balance sheet accounts at the beginning and end of each period. For the year
ended May 31, 2003, our tax benefit was $56,818 compared to income taxes of
$687,877 for year ended May 31, 2002. We paid no income taxes in the year ending
May 31, 2002, due to large income tax net operating loss carryforwards. We had
previously recorded the deferred tax effects of these loss carryforwards in the
fiscal year ended May 31, 2001, when it became more likely than not (a
likelihood of more than 50 percent) that we would be able to offset future
income with these carryforwards.

Liquidity and Capital Resources

As of May 31, 2003, we had cash, cash equivalents and securities available for
sale totaling approximately $856,000 compared with $1.4 million as of May 31,
2002. Working capital decreased slightly to $3.1 million at May 31, 2003, as
compared to $3.2 million in the prior year. Our ratio of current assets to
current liabilities was 2.6 to 1 as of May 31, 2003, compared to 1.8 to 1 in the
prior year. During fiscal 2003, our net cash provided by operations decreased
approximately $1.1 million. Cash was used to purchase additional vehicles,
continuing the upgrade of our fleet of service vehicles, upgrading our software
and hardware and upgrading of our trade show equipment. Historically, we have
financed our operation and growth with internally generated working capital. Our
primary requirement for capital consists of purchasing vehicles, equipment,
inventory and supplies used in the operation of our business. Our credit line
was not used during the year ended May 31, 2003.

Effects of Inflation

We believe that our revenues and results of operations have not been
significantly affected by inflation during the last two years ended May 31,
2004.

                                       16
<PAGE>

Item 7. Financial Statements

                     C O N T E N T S

                                                                       Page
                                                                       -----
Report of Independent Registered Accounting Firm                        18

Consolidated Financial Statements

   Consolidated Balance Sheets                                          19

   Consolidated Statements of Operations and
    Comprehensive Income                                                20

   Consolidated Statements of Cash Flows                                21

   Consolidated Statements of Stockholders' Equity                      22

Notes to Consolidated Financial Statements                            23 to 34

                                       17
<PAGE>



Dohan and Company                                  7700 North Kendall Drive, 200
Certified Public Accountants                          Miami, Florida  33156-7578
A Professional Association                            Telephone   (305) 274-1366
                                                      Facsimile   (305) 274-1368
                                                      E-mail      info@uscpa.com
                                                      Internet     www.uscpa.com

                 REPORT OF INDEPENDENT REGISTERED ACCOUNTING FIRM

Board of Directors
Edd Helms Group, Inc. and Subsidiaries
Miami, Florida

We have audited the accompanying consolidated balance sheets of Edd Helms Group,
Inc. and Subsidiaries as of May 31, 2004 and 2003, and the related consolidated
statements of operations and comprehensive income, cash flows and stockholders'
equity for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Edd Helms Group,
Inc. and Subsidiaries as of May 31, 2004 and 2003, and the results of their
operations and their cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.


                                                 /s/ Dohan and Company CPA's

Miami, Florida
January 30, 2005

Member:
Florida Institute of Certified Public Accountants
American Institute of Certified Public Accountants
  - Private Companies and SEC Practice Sections
National and World-wide Associations through
  AGI - Accounting Group International


                                       18
<PAGE>


EDD HELMS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
May 31,                                                  2004            2003
--------------------------------------------------------------------------------
                                     ASSETS
CURRENT ASSETS
Cash and cash equivalents                         $     337,254     $   856,903
Available-for-sale equity security                          839            -
Accounts receivable, less allowance for doubtful
  accounts of $182,694 and $151,596                     083,360       2,297,527
Due from employees                                        6,821           5,482
Other receivables                                        77,814         105,221
Deferred contract costs                                    -            139,512
Costs and estimated earnings in excess of billings
  on uncompleted contracts                              488,569         441,505
Inventories                                           1,027,843         698,321
Prepaid expenses                                        291,292         249,946
Deferred income tax asset                               452,819         338,951
--------------------------------------------------------------------------------
      TOTAL CURRENT ASSETS                            4,766,612       5,133,368
PROPERTY AND EQUIPMENT, NET                             993,904       1,136,036
GOODWILL, NET                                           143,866         143,866
OTHER ASSETS                                             27,627          14,575
--------------------------------------------------------------------------------
      TOTAL ASSETS                                 $  5,932,008   $   6,427,845
================================================================================
                      LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt               $    151,296   $     237,809
Current obligations under capital leases                 17,047          21,317
Accounts payable                                        808,391         926,389
Accrued liabilities                                     416,313         373,744
Deferred revenue                                        129,822         217,336
Billings in excess of costs and estimated
 earnings on uncompleted contracts                      253,227         146,455
--------------------------------------------------------------------------------
      TOTAL CURRENT LIABILITIES                       1,776,096       1,923,050
DEFERRED INCOME TAX LIABILITY                           173,802         193,169
LONG-TERM DEBT                                           72,050         119,969
LONG-TERM OBLIGATIONS UNDER CAPITAL LEASES                 -             17,047
--------------------------------------------------------------------------------
      TOTAL LIABILITIES                               2,021,948       2,253,235
--------------------------------------------------------------------------------
COMMITMENTS AND CONTINGENCIES (NOTES 10, 13 AND 15) STOCKHOLDERS' EQUITY Common
stock;$.01 par value; 20,000,000 shares
  authorized; 12,661,358 shares issued;
  12,574,896 shares outstanding                         126,614         126,614
Additional paid-in capital                              208,182         208,182
Retained earnings                                     3,669,307       3,933,857
Treasury stock                                          (23,345)        (23,345)
Unrealized loss on available-for-sale equity security   (70,698)        (70,698)
--------------------------------------------------------------------------------

      TOTAL STOCKHOLDERS' EQUITY                      3,910,060       4,174,610
--------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY        $   5,932,008   $   6,427,845
================================================================================
See accompanying notes.

                                       19
<PAGE>

EDD HELMS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
For the years ended May 31,                              2004            2003
--------------------------------------------------------------------------------
REVENUES EARNED                                   $ 16,168,152    $  16,779,360
COST OF REVENUES EARNED                             11,935,153       12,463,029
--------------------------------------------------------------------------------
      GROSS PROFIT                                   4,232,999        4,316,331
--------------------------------------------------------------------------------
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES         4,697,553        4,653,153
--------------------------------------------------------------------------------
LOSS FROM OPERATIONS BEFORE OTHER INCOME AND
  EXPENSES AND INCOME TAX CREDITS                     (464,554)        (336,822)
--------------------------------------------------------------------------------
INTEREST INCOME                                          1,962            5,039
OTHER INCOME                                            90,085          178,161
INTEREST EXPENSE                                       (12,694)         (15,081)
LOSS ON SALES OF EQUIPMENT                             (12,581)
--------------------------------------------------------------------------------
      TOTAL OTHER INCOME AND EXPENSES                   66,772          168,119
--------------------------------------------------------------------------------
LOSS INCOME FROM OPERATIONS BEFORE
  INCOME TAX CREDITS                                  (397,782)        (168,703)
PROVISION FOR INCOME TAX CREDITS                       133,234           56,818
--------------------------------------------------------------------------------
NET LOSS                                              (264,549)        (111,885)
UNREALIZED HOLDING LOSSES ON SECURITIES
 ARISING DURING THE PERIOD, NET                           -                (784)
--------------------------------------------------------------------------------
COMPREHENSIVE LOSS                                   $(264,549)   $    (112,669)
================================================================================
NET LOSS PER SHARE
                            - BASIC               $      (0.02)   $       (0.01)
                            - DILUTED             $      (0.02)   $       (0.01)
================================================================================
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC         12,574,896       12,574,896
                                    - DILUTED       12,574,896       12,574,896
================================================================================
See accompanying notes.

                                       20
<PAGE>

EDD HELMS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended May 31,                              2004            2003
--------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
  Net Loss from operations                        $   (264,549)   $    (111,885)
--------------------------------------------------------------------------------
Adjustments to reconcile net (loss) income to
  net cash provided by operating activities:
Depreciation and amortization                          438,746          473,100
Deferred income taxes                                 (133,234)         (56,817)
Provision for bad debts                                 31,098          (65,192)
Change in assets (increase) decrease:
 Accounts receivable                                   183,069          106,161
 Due from employees                                     (1,339)           7,254
 Other receivables                                      27,407         (105,221)
 Deferred contract costs                               139,513        1,665,313
 Costs and estimated earnings in excess of billings
   on uncompleted contracts                            (47,064)        (166,819)
 Inventories                                          (329,523)           4,144
 Prepaid expenses                                      (41,347)        (113,891)
 Other assets                                          (13,890)          11,847
Change in liabilities increase (decrease):
 Accounts payable                                     (118,002)        (410,331)
 Accrued liabilities                                    42,569         (507,896)
 Deferred revenue                                      (87,514)        (706,997)
 Billings in excess of costs and
  estimated earnings on uncompleted contracts          106,772         (204,657)
--------------------------------------------------------------------------------
Total adjustments                                      197,261          (70,002)
--------------------------------------------------------------------------------
Net cash used for operating activities                 (67,288)        (181,887)
--------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
 Payment of capitalized lease obligations              (23,073)         (21,018)
 Proceeds from credit line                             500,000             -
 Repayment of credit line                             (500,000)            -
 Proceeds from notes payable                            53,645         (163,576)
 Payments on notes payable                            (186,320)        (220,584)
--------------------------------------------------------------------------------
Net cash used for financing activities                (155,748)        (405,178)
--------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
 Purchase of property and equipment                   (296,613)         (29,819)
 Proceeds on sales of assets                              -              33,517
--------------------------------------------------------------------------------
Net cash used for investing activities                (296,613)           3,698
--------------------------------------------------------------------------------
DECREASE IN CASH                                      (519,649)        (583,367)
CASH, beginning of year                                856,903        1,440,270

CASH, end of year                                 $    337,254    $     856,903
================================================================================
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING TRANSACTIONS:
Interest paid                                     $     12,694    $      15,081
Interest received                                 $      1,962    $       5,039
Income taxes paid                                 $        -      $         -
New capital lease obligations                                     $      32,496
================================================================================
See accompanying notes.

                                       21
<PAGE>

EDD HELMS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the years ended May 31, 2004 and 2003

                        Additional
          Common Stock    Paid-in   Retained Treasury Stock  Unrealized
          Shares   Amount  Capital   Earnings Shares  Amount  Loss on     Total
                                                           Available-for
                                                            -Sale Equity
                                                              Security
--------------------------------------------------------------------------------
May 31, 2002
     12,661,358 $126,614 $208,182 $4,045,742  86,462($23,345)($69,914)$4,287,279

Unrealized
loss on equity
security    -        -        -          -      -       -        (784)     (784)

Net loss  -       -        -        (111,885)   -       -        -     (111,885)

--------------------------------------------------------------------------------
May 31, 2003

     12,661,358 $126,614 $208,182 $3,933,857  86,462($23,345)($70,698)$4,174,610

--------------------------------------------------------------------------------
May 31, 2004

Net Loss  -       -        -        (264,549)   -       -        -     (264,549)

     12,661,358 $126,614 $208,182 $3,669,308  86,462($23,345)($70,698)$3,910,062

================================================================================
See accompanying notes

                                       22
<PAGE>

Edd Helms Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements

Note 1. Business

Nature of Operations - Edd Helms Group, Inc. is a Florida corporation and has
two reportable segments. The electrical segment has provided electrical service,
repair, and maintenance of commercial and residential facilities in the South
Florida area since 1975. Additionally, they provide services related to wireless
antenna contracts. The air conditioning segment derives the majority of its
business activity from its service, repair and maintenance of commercial and
residential air conditioning systems, including marine applications in the South
Florida area.

Note 2.  Summary of Significant Accounting Policies

Basis of Presentation - The accompanying consolidated financial statements
include the accounts of Edd Helms Group, Incorporated (EHG) and its wholly-
owned subsidiaries, Edd Helms Air Conditioning, Inc. (Air Conditioning) and
Datatelcom, Inc. (Datatelcom). The Company also has an inactive wholly-owned
subsidiary, Edd Helms Marine Air Conditioning and Refrigeration, LLC. All
significant intercompany accounts and transactions of Edd Helms Group, Inc. and
Subsidiaries (the Company) for the periods presented have been eliminated in
consolidation.

Cash and Cash Equivalents - Cash and cash equivalents consist of time deposits
and all liquid instruments (including overnight repurchase agreements with a
bank) with maturities of three months or less.

Available-for-Sale Equity Security - Marketable securities consist of common
stock and are stated at market value as determined by the most recently traded
price of each security at the balance sheet date. All marketable securities are
defined as trading securities or available-for-sale securities under the
provisions of Statement of Financial Accounting Standards No. 115 (SFAS 115),
"Accounting for Certain Investments in Debt and Equity Securities". Management
determines the appropriate classification of its investments in marketable
securities at the time of purchase and reevaluates such determination at each
balance sheet date. Available-for-sale securities are carried at fair value,
with the unrealized gains and losses, net of tax, reported as a separate
component of stockholders' equity.

Revenue and Cost Recognition - Revenues and direct costs produced by the
Company's hourly based electrical and air conditioning service, repair, and
maintenance activities are recognized as earned or incurred. Revenues from work
orders are classified as service related revenues, and recognized as earned.
Revenues from service and maintenance contracts are recognized over the term of
the contracts. Revenues from significant construction contracts, excluding
wireless antenna services, are recognized on the percentage-of-completion
method, measured by the percentage of costs incurred to date to estimated total
costs for each contract. This method is used because management considers
expended costs to be the best available measure of progress on the contracts.

                                       23
<PAGE>

These percentage-of-completion contract costs include direct labor, material,
subcontract, equipment rental, and other miscellaneous direct and indirect costs
as allocated. Other operating costs are charged to expense as incurred.
Provisions for estimated losses, if any, on uncompleted contracts are made in
the period in which such losses are determined. In estimating the ultimate
profitability on certain contracts, and for all wireless antenna services,
estimated recoveries are included for work performed under customer change
orders to contracts for which firm prices have not yet been negotiated. The
costs incurred for these change orders is reported as "Deferred contract costs"
on the balance sheets, while the related estimated revenue is recorded as
"Deferred revenue". Also included in "Deferred contract costs", are amounts the
Company seeks or will seek to collect from customers or others for errors or
changes in contract specifications or design, contract change orders in dispute
or unapproved as to both scope and price, or other customer-related causes of
unanticipated additional contract costs (claims and unapproved change orders).
These amounts are recorded at their estimated net realizable value when
realization is probable and can be reasonably estimated. No profit is recognized
on the construction costs incurred in connection with these amounts. Unapproved
change orders involve the use of estimates, and it is reasonably possible that
revisions to the estimated recoverable amounts of recorded unapproved change
orders may be made in the near-term. Changes in job performance, job conditions,
and estimated profitability, including those arising from contract penalty
provisions and final contract settlements may result in revisions to costs and
income and are recognized in the period in which the revisions are determined.

The asset "Cost and estimated earnings in excess of billings on uncompleted
contracts" represents revenues recognized in excess of amounts billed. The
liability "Billings in excess of costs and estimated earnings on uncompleted
contracts" represents amounts billed in excess of revenues earned.

Inventories - Inventories consist principally of electrical and air conditioning
equipment, supplies, components and accessories, and are valued at the lower of
cost or market using the first-in, first-out (FIFO) method to determine cost and
net realizable value to determine market.

Property and Equipment - Property and equipment is recorded at cost.
Expenditures for major betterments and additions are charged to the property
accounts, while replacements, maintenance, and repairs that do not improve or
extend the lives of the respective assets are charged to expense currently.
Depreciation is computed principally using the straight-line method, based on
the estimated useful lives of the assets, which range from five to ten years.

                                       24
<PAGE>

Income Taxes - Income taxes are computed under the provisions of the Financial
Accounting Standards Board Statement (SFAS) No. 109, "Accounting for Income
Taxes,". SFAS 109 is an asset and liability approach that requires the
recognition of deferred tax assets and liabilities for the expected future tax
consequences of the differences in events that have been recognized in the
Company's financial statements compared to the tax returns. Current and deferred
taxes are allocated to members of the consolidated group by applying FASB
Statement No. 109 to each member as if it were a separate taxpayer.

Income Tax Credits - Income tax credits will be recognized as a reduction of the
provision for income taxes in the year in which utilized.

Amortization - Goodwill was previously amortized using the straight-line method.
Goodwill recognized as a result of the merger on July 1999, was being amortized
over five years. Goodwill representing the acquisition of a communications
business, acquired during 1999, was being amortized over fifteen years. SFAS 142
requires that ratable amortization of goodwill be replaced with periodic test of
the goodwill impairment and that intangible assets other than goodwill and other
indefinite lived intangible assets, be amortized over their useful lives. SFAS
141 is effective for all business combinations initiated after June 30, 2001,
and for all business combinations accounted for by the purchase method for which
the date of acquisition is after June 30, 2001. The provisions of SFAS 142 are
effective for fiscal years beginning after December 15, 2001. In addition, the
standard includes provisions for the reclassification of certain existing
recognized intangibles as goodwill, reassessment of the useful lives of existing
recognized intangibles, reclassification of certain intangibles out of
previously reported goodwill and the identification of reporting units for
purposes of assessing potential future impairments of goodwill. SFAS 142 also
requires the Company to complete a transitional goodwill impairment test six
months from the date of adoption. Based on the initial impairment test on June
1, 2002, it was determined that none of the goodwill recorded was impaired.
Impairment adjustments recognized after adoption, if any, generally are required
to be recognized as operating expenses. The Company performed the impairment
test on goodwill as of May 31, 2004, and determined that goodwill was not
impaired.

Concentrations of Credit Risk and Economic Dependence - The Company provides its
electrical and air conditioning services in the South Florida area.
Consequently, the Company's ability to collect the amounts due from customers
may be affected by economic fluctuations in the service and construction
industries, its geographical location and natural disasters. Concentrations of
credit with respect to trade receivables, consists primarily of five customers
who comprise 32% of accounts receivables. However, the Company is entitled to
payment for work performed and often has certain lien rights in that work. The
Company monitors its exposure for credit losses and maintains allowances for
anticipated losses. Additionally, management continually monitors the financial
condition of its customers to reduce risk of loss. The Company provides an
allowance for doubtful accounts when, in their judgment, future collection is
considered doubtful. Concentrations with respect to sales exist in that revenue
from two customers comprise approximately 25% of revenue for the current fiscal
year.

Concentrations of Credit Risk Arising from Cash Deposits in Excess of Insured
Limits - The Company maintains the majority of its cash balances in financial
institutions located in Miami, Florida. The balance in each institution is
insured by the Federal Deposit Insurance Corporation up to $100,000.
Additionally, the Company maintains sweep accounts utilizing nightly repurchase
accounts which are uninsured by the Federal Deposit Insurance Corporation. At
May 31, 2004, the Company's balances in these sweep accounts totaled $212,076.
At May 31, 2004, the Company's uninsured cash and sweep balances total $374,017.

                                       25
<PAGE>

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

Reclassifications - Certain amounts in the prior year financial statements have
been reclassified for comparative purposes to conform to the current year
presentation.

Advertising - Advertising costs are charged to operations in the year incurred.
Advertising expense for the years ended May 31, 2004 and 2003, amounted to
$524,853 and $497,138, respectively.

Fair Value of Financial Instruments - Cash, receivables, accounts payable, debt,
accrued expenses and other liabilities are carried at amounts which reasonably
approximate their fair value due to the short-term nature of these amounts or
due to variable rates of interest which are consistent with current market
rates.

Basic and Diluted Net Loss Per Share - Basic net loss per common share is
computed by dividing the net loss by the weighted average number of common
shares outstanding during each period. The 400,000 available stock options at
May 31, 2004 and 2003, were anti-dilutive and therefore excluded from net loss
per share calculations.

In January 2003, FASB issued Financial Interpretation No. 46 "Consolidation of
Variable Interest Entities" ("FIN 46") (revised in December 17, 2003). The
objective of FIN 46 is to improve financial reporting by companies involved with
variable interest entities. A variable interest entity is a corporation,
partnership, trust, or any other legal structure used for business purposes that
either (a) does not have equity investors with voting rights or (b) has equity
investors that do not provide sufficient financial resources for the entity to
support its activities. FIN 46 requires a variable interest entity to be
consolidated by a company if that company is subject to a majority of the risk
of loss from the variable interest entity's activities or entitled to receive a
majority of the entity's residual returns or both. FIN 46 also requires
disclosures about variable interest entities that the company is not required to
consolidate but in which it has a significant variable interest. The
consolidation requirements of FIN 46 is required in financial statements of
public entities that have interests in variable interest entities for periods
ending after December 15, 2003. The consolidation requirements for all other
types of entities is required in financial statements for periods ending after
March 15, 2004.

In April 2003, FASB issued Statements of Financial Accounting Standards
No. 149 "Amendment of Statement 133 on Derivative Instruments and Hedging
Activities" ("SFAS 149"). SFAS 149 amends and clarifies financial accounting and
reporting for derivative instruments, including certain derivative instruments
embedded in other contracts and for hedging activities under FASB Statement No.
133 "Accounting for Derivative Instruments and Hedging Activities". SFAS 149 is
generally effective for contracts entered into or modified after June 30, 2003.

In May 2003, FASB issued Statements of Financial Accounting Standards No. 150
"Accounting for Certain Financial Instruments with Characteristics of both
Liabilities and Equity" ("SFAS 150"). SFAS 150 establishes standards for how an
issuer classifies and measures certain financial instruments with
characteristics of both liabilities and equity. SFAS 150 is effective for
financial instruments entered into or modified after May 31, 2003.

The adoption of these new pronouncements is not expected to have a material
effect on the Company's financial position or results of operations.


The adoption of these new pronouncements did not or is not expected to have a
material effect on the Company's consolidated financial position or results of
operations.

                                       26
<PAGE>

Note 3. Available-for-Sale Equity Security

Gross unrealized losses on the available-for-sale security at May 31, 2004, was
$70,698.

Note 4. Accounts Receivable

Accounts receivable consisted of the following:
                                                        2004            2003
                                                    ------------    ------------
Contracts completed and in progress - billed        $  1,333,375    $ 1,982,759
Contracts completed and in progress - unbilled           791,919        321,394
Retention                                                140,760        144,970
Allowance for doubtful accounts                         (182,694)      (151,596)
                                                    ------------    -----------
                                                    $  2,083,360    $ 2,297,527
                                                    ============    ============

Note 5.  Other receivables

Other receivables consists of refundable amounts due from general liability and
workers' compensation insurance carriers based on audits of the premiums paid
during the policy periods ending May 31, 2004 and December 1, 2003.

Note 6. Costs and Estimated Earnings on Uncompleted Contracts

Costs and estimated earnings on uncompleted contracts are summarized as follows:

                                                        2004            2003
                                                    ------------    -----------
Billings on uncompleted contracts                   $  3,793,068    $ 2,834,252
                                                    ------------    -----------
Costs incurred on uncompleted contracts            (   3,382,811)  (  2,570,638)
Estimated earnings on uncompleted contracts        (     758,614)  (    558,664)
                                                    ------------    -----------
Total costs and estimated earnings on
  uncompleted contracts                            (   4,141,425)  (  3,129,302)
                                                    ------------    -----------
                                                    $   (348,357)   $  (295,050)
                                                    ============    ===========

These amounts are included in the accompanying consolidated balance sheets as
follows:
                                                         2004           2003
                                                    ------------    ------------
Billings in excess of costs and estimated
  earnings on uncompleted contracts                ($    253,227)  ($   146,455)
Costs and estimated earnings in excess
  of billings on uncompleted contracts                   488,569        441,505
                                                    ------------    -----------
                                                    $    235,342    $   295,050
                                                    ============    ===========

                                       27
<PAGE>

Note 7. Property and Equipment

Property and equipment consisted of the following:
                                                         2004           2003
                                                    ------------    ------------
Transportation equipment                            $ 1,917,908     $ 2,035,849
Machinery and equipment                                 577,830         696,229
Furniture and fixtures                                   55,964          66,592
Computer equipment and software                         466,074         598,610
Leasehold improvements                                  210,370         132,911
                                                    -----------     -----------
                                                      3,228,146       3,530,191
Accumulated depreciation                           (  2,234,242)   (  2,394,155)
                                                    -----------     -----------
Property and equipment, less
  accumulated depreciation                          $   993,904       1,136,036
                                                    ===========     ===========

Depreciation expense for the years ending May 31, 2004 and 2003, amounted to
$438,746 and $473,100, respectively, and is included in costs of revenues earned
and selling, general and administrative expenses in the consolidated statements
of income and comprehensive income.

Note 8. Income Taxes

The provisions for income taxes are summarized as follows:
                                                         2004           2003
                                                     ------------   ------------
Current tax, net of utilization of net operating
  loss carryforwards:

Federal                                              $     -        $      -
State                                                      -               -
                                                     ----------     -----------
 Total current tax                                         -               -
                                                     ----------     -----------

Deferred tax, net of utilization of net operating
  loss carryforwards:

Federal                                                (120,671)        (48,864)
State                                                   (12,563)         (7,954)
                                                     ----------     -----------
Total deferred tax                                     (133,234)        (56,818)
                                                     ----------     -----------
Total income taxes                                   $ (133,234)    $   (56,818)
                                                     ==========     ===========

                                       28
<PAGE>

The Company files consolidated income tax returns with its two wholly-owned
corporate subsidiaries. Deferred income taxes and benefits for 2004 and 2003 are
provided for certain income and expenses which are recognized in different
periods for tax and financial reporting purposes. The principal temporary
differences that give rise to the deferred tax asset (liability) and the effects
(computed at 37.63% in both years) that the changes in those temporary
differences had on the provision for deferred tax expense are as follows:

                                                         2004           2003
                                                     ------------   ------------
Deferred tax asset:
Accrued officers' salaries                           $      3,264   $      -
Allowance for bad debts                                    68,748        57,046
Full absorption cost method                                45,353        36,199
Net operating loss carryforward                           335,454       245,706
                                                     ------------   -----------
Total deferred tax asset                                  452,819       338,951
                                                     ------------   -----------

Deferred tax liability:
Depreciation                                         (    151,147) (    170,514)
Amortization                                         (     22,655) (     22,655)
                                                      -----------   -----------
Total deferred tax liability                         (    173,802) (    193,169)
                                                      -----------   -----------

Net deferred tax asset                                $   279,017   $   145,782
                                                      ===========   ===========

The amounts have been presented in the Company's financial statements as
follows:
                                                         2004           2003
                                                     ------------   ------------
Current deferred tax asset                           $    452,819   $   338,951
Non-current deferred tax liability                  (     173,802) (    193,169)
                                                     ------------   -----------
Net deferred tax asset                               $    279,017   $   145,782
                                                     ============   ===========

The net operating loss carryforwards at May 31, 2004 and 2003, were $891,453 and
$652,953 respectively. The federal loss carryforward expires in the tax year
2042.

A valuation allowance must be established to reduce deferred income tax benefits
if it is more likely than not that a portion of the deferred income tax benefits
will not be realized. It is Management's opinion that it is likely that the
entire deferred tax benefit will be recognized in future years. Therefore, no
valuation allowance has been established.

                                       29
<PAGE>

Note 9. Employee Benefit Plans

Employee Stock Ownership Plan and Deferred Compensation Profit Sharing Plan -
The Company has a qualified employee stock ownership plan (ESOP), and a deferred
compensation profit sharing plan (401K) under Sections 401 and 401K of the
Internal Revenue Code, covering substantially all full-time employees.
Contributions to the plans are at the discretion of the Board of Directors, and
are limited to a specified percentage of eligible compensation for each
participant. No contribution was made to either plan for 2004 or 2003. All
employee benefit plan administrative expenses are paid at the option of the
Company.

Incentive Stock Option Plan - Upon shareholder approval, the Company adopted its
Incentive Stock Option Plan (ISOP) in order to attract, retain and motivate
employees who contribute materially to the success of the Company. Employees of
the Company and its subsidiaries are covered by the ISOP. Under the terms of the
ISOP, the Company is authorized to grant incentive stock options to purchase up
to an aggregate of 1,500,000 shares of its common stock. The option price under
the ISOP will be the fair market value of the common stock at the date of grant
or, if granted to individuals who own 10% or more of the Company's common stock,
at 110% of fair market value. No option is exercisable after ten years from the
date of grant (five years for holders of greater than 10% of the stock). The
ISOP is administered by the Compensation Committee for the Company's Board of
Directors. During 2002, options were granted to two officers in the amount of
200,000 purchase options each, while 1,100,000 shares remain available for
future grants under this plan.

Non-Qualified Stock Option Plan - In May of 2004, the shareholders approved a
non-qualified stock option plan. The maximum aggregate number of common shares
which may be optioned and sold pursuant to the plan is 250,000. The option price
is the fair market value of the common shares at the date of grant. No option is
exercisable after five years from the date of grant. Options were granted to two
directors of the Company in the amount of 10,000 each, while 230,000 shares
remain available for future grants under the plan.

Note 10. Related Party Transactions

The Company leases its facilities under a three-year operating lease expiring
September 2005 from a partnership affiliated through common ownership, at rental
rates that management believes are comparable to those obtainable from unrelated
parties. The leases provide for monthly payments of $21,643 including applicable
taxes. Rent expense under these leases totaled $259,720 and $248,823 for the
years ended May 31, 2004 and 2003, respectively. Additionally, the lease for the
Marine division of the Air Conditioning business unit expired in September 12,
2003 for the Fort Lauderdale warehouse facility at a monthly payment of $1,749.
A new lease was entered into for a new facility in the same general area at a
monthly payment of $4,742. The leased facility contained two warehouses, of
which one of the warehouses was subleased for a monthly payment of $2,392.
Future minimum rental payments required under the affiliated ownership operating
leases subsequent to the year ended May 31, are as follows:

              2005                         259,720
              2006                          86,573
                                       -----------
                                       $   346,293
                                       ===========

                                       30
<PAGE>

Note 11. Long-Term Debt

Notes payable consisted of the following:
                                                         2004           2003
                                                     ------------   ------------
Bank notes, payable in monthly installments
  totaling $22,110, bearing interest at
  rates varying from 0.0% to 10.5%,secured by
  transportation equipment, maturing at various
  dates through 2008.                                 $   223,346    $  346,672

Note payable to bank with interest payable monthly
  at prime plus 1%, payment of $1,667 maturing in
  December 2003, collateralized by computer equipment
  and personally guaranteed by principal shareholders        -           10,000

Unsecured note payable to vendor with monthly
installments of $282, bearing interest at a rate
of 8.8%, maturing September 2003                             -            1,106
                                                     -----------    -----------
                                                         223,346        357,778
Current maturities of long-term debt                (    151,296)  (    237,809)
                                                     -----------    -----------
Long-term debt                                       $    72,050    $   119,969
                                                     ===========    ===========

Aggregate maturities of notes payable for the years subsequent to the year-ended
May 31, 2003 are as follows:

                  2005                               $ 151,296
                  2006                               $  37,899
                  2007                               $  19,410
                  2008                               $  14,741
                                                     ---------
                                                     $ 223,346
                                                     =========

Interest expense on notes payable amounted to $9,922 and $10,029 for the years
ended May 31, 2004 and 2003.

Note 12. Credit Arrangement

The Company has a line of credit with a bank for advances up to $500,000,
secured by the Company's accounts receivable. Interest is charged at the bank's
prime interest rate plus one percent (1%) annually. Interest is paid monthly.
The line of credit is available to fund day-to-day working capital needs.
Certain information regarding the credit arrangement as of May 31, 2004, is
summarized as follows:

Maximum amount of borrowing outstanding, at any month end $ 500,000 Minimum
amount of borrowing outstanding at any month end $ -

Interest expense related to this credit arrangement amounted to $2,450 for the
year ended May 31, 2004. There was no interest paid in 2003.

                                       31
<PAGE>

Note 13. Capital Lease Obligations

Capital lease obligations consisted of the following:
                                                         2004           2003
                                                     ------------   ------------
Lease payments, payable in monthly installments
of $1,483 inclusive of imputed interest at rates
varying from 8.55% to 16.63% maturing in 2005        $     17,047   $    38,364

Current obligations under capital lease             (      17,047) (     21,317)
                                                     ------------   -----------
Long-term obligations under capital lease            $          0   $    17,047
                                                     ============   ===========

Future minimum lease payments under capital lease for the years ended subsequent
to May 31, are as follows:

                    2005                              $  17,047
                                                      ---------
                                                         17,047
Amount representing interest                         (    1,629)
                                                      ---------
Present value of future minimum lease payments        $  15,418
                                                      =========

Interest expense recorded on capital lease obligations amounted to $3,129 and
$5,862 for the years ended May 31, 2004 and 2003, respectively, and are included
in other income and expenses.

Note 14. Accrued Liabilities

Accrued liabilities consisted of the following:
                                                         2004           2003
                                                     ------------   ------------

Compensation, related taxes, and benefits            $    218,345   $   308,003
Professional fees                                          80,000        60,000
Other, including accrued claims                           117,968         5,741
                                                     ------------   -----------
                                                     $    416,313   $   373,744
                                                     ============   ===========

Note 15.  Commitments and Contingencies

Operating Leases - The Company also leases various office equipment under
non-cancelable leases expiring at various dates through September 2006. Rent
expense under these operating leases was $31,246 in the current year and is
included in selling, general, and administrative expenses.

In addition, the Company leases several automobiles. The leases have monthly
payments ranging from $468 to $744. Lease payments totaled $31,246 and $57,264
for the years ended May 31, 2004 and 2003, respectively. Future minimum lease
payments under all operating leases for years subsequent to May 31, 2004 are as
follows:
                           2005                                  22,520
                           2006                                     585
                                                             ----------
                                                             $   23,105
                                                             ==========

                                       32
<PAGE>

Warranty - In its normal course of business, the Company provides a one-year
warranty covering its work. The Company's policy is to expense costs, if any, in
connection with this warranty in the period such costs are incurred. In the
opinion of management, based upon prior experience, future warranty costs are
not anticipated to be material.

Prepaid Service Agreements - Air Conditioning sells prepaid service agreements,
which are primarily for a period of one year. Unearned revenues related to these
service agreements are reflected on the consolidated balance sheets as deferred
revenues.

Note 16. Segments and Related Information

The Company's two business segments have separate management teams and
infrastructures that offer different services. They are managed separately
because each business segment provides different unrelated services. The
Company's two business segments are Electric and Air Conditioning. The Company
provides electrical service, repair, and maintenance of commercial and
residential facilities through Electric. Installation, service, repair and
maintenance of commercial and residential air conditioning systems are done
through Air Conditioning.

The accounting policies of the segments are the same as those described in the
summary of significant accounting policies. All intersegment sales prices are
market based. The Company evaluates performance based on operating earnings of
the respective business units. The following segment information includes
allocations of certain costs, including overhead and shared services which are
allocated based on revenues, payroll and other factors. These agreed-upon
amounts between the segments may differ from amounts that would be negotiated in
an arms-length transaction.

                                            Air
Year ended May 31, 2004   Electric    Conditioning    Unallocated       Total
--------------------------------------------------------------------------------
Revenues earned -
  External customers     $11,004,154  $ 5,163,998     $      -     $ 16,168,152

  Intersegment                81,912      169,585            -          251,497
--------------------------------------------------------------------------------
Total revenues earned    $11,086,066  $ 5,333,583     $      -     $ 16,419,649
================================================================================
Gross margins            $ 2,791,202  $ 1,441,797     $      -     $  4,232,999
================================================================================
Operating earnings (loss)$  (241,680) $  (156,102)    $      -     $   (397,782)
================================================================================
Depreciation and
 amortization            $   325,122  $   113,624     $      -     $    438,746
================================================================================
Interest expense         $     8,564  $     4,130     $      -     $     12,694
================================================================================
Total assets             $ 3,091,046  $ 1,543,614     $ 1,297,348  $  5,932,008
================================================================================
Capital expenditures     $   132,611  $    75,577     $   101,006  $    309,194
================================================================================

                                       33
<PAGE>


                                            Air
Year ended May 31, 2003   Electric    Conditioning    Unallocated       Total
--------------------------------------------------------------------------------
Revenues earned -
  External customers     $11,958,715  $ 4,820,645     $      -     $ 16,779,360

  Intersegment                61,180       23,691            -           84,871
--------------------------------------------------------------------------------
Total revenues earned    $12,019,895  $ 4,844,336     $      -     $ 16,864,231
================================================================================
Gross margins            $ 3,145,168  $ 1,171,163     $      -     $  4,316,331
================================================================================
Operating earnings (loss)$    36,749  $  (205,452)    $      -     $   (168,703)
================================================================================
Depreciation and
 amortization            $   354,285  $   118,815     $      -     $    473,100
================================================================================
Interest expense         $    10,319  $     4,762     $      -     $     15,081
================================================================================
Total assets             $ 3,566,979  $ 1,423,024     $ 1,437,842  $  6,427,845
================================================================================
Capital expenditures     $    51,867  $    70,648     $    28,598  $    151,113
================================================================================

Note 17.  Barter Transactions

The Company accounts for barter transactions in accordance with EITF No. 99-17
"Accounting for Advertising Barter Transactions". EITF 99-17 provides that the
Company recognize revenue and advertising expenses from barter transactions at
the fair value only when it has a historical practice of receiving or paying
cash for similar transactions.

The Company entered into a reciprocal trade agreement which provided advertising
services in exchange for electrical and air conditioning services at a ratio of
1.5 times gross billing amount. Barter revenue for year ended May 31, 2004, was
zero, as compared to $129,818 for the year ended May 31, 2003. Revenue in excess
of advertising used for the period is carried as a prepaid expense while
advertising used in excess of revenue is carried as accounts payable. At May 31,
2004 there was no prepaid advertising. At May 31, 2003, there was an advertising
payable of $25,980. No barter transaction occurred during the year ending May
31, 2004.

                                       34
<PAGE>
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.

During the fiscal years covered by this report, we did not have a change in or a
disagreement with our accountants. We initially appointed Dohan and Company,
Certified Public Accountants, as our auditors in 1997.

Item 8A.  Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to
ensure that information required to be disclosed in the Company's Securities
Exchange Act of 1934 reports is recorded, processed, summarized and reported
within the time periods specified in the SEC's rules and forms, and that such
information is accumulated and communicated to the Company's management,
including its Chief Executive Officer and Chief Financial Officer, as
appropriate, to allow timely decisions regarding required disclosure. Within 90
days prior to the date of this report, the Company's management carried out an
evaluation, under the supervision and with the participation of the Company's
management, including the Company's Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of the Company's
disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based
upon the foregoing, the Company's Chief Executive Officer and Chief Financial
Officer concluded that the Company's disclosure controls and procedures are
effective in connection with the filing of this Annual Report on Form 10-KSB for
the year ended May 31, 2004.

There were no significant changes in the Company's internal controls or in other
factors that could significantly affect these controls subsequent to the date of
their evaluation, including any significant deficiencies or material weaknesses
of internal controls that would require corrective action.

Item 8B.  Other Information.

None.


                                       35
<PAGE>

                                    PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
                    With Sections 16(a) of the Exchange Act.

Rules promulgated by the Securities and Exchange Commission govern the reporting
of securities transactions by directors, executive officers and holders of 10%
or more of our common stock. Based solely upon our review of copies of reports
filed with the SEC and received by us, we believe that our directors and
executive officers have filed all required reports during the year-ended May 31,
2004.

Our directors and executive officers are as follows:

Director
Name                 Since         Age      Position
-----                -----         ---      --------
W. Edd Helms, Jr.    1985           58      Chairman of the Board of
                                            Directors, President and
                                            Chief Executive Officer

L. Wade Helms        1986           47      Executive Vice President, Secretary,
                                            Treasurer and Director

Joseph M. Komarmy    1984           57      Vice President and Director

Walter Revell**      2002           69      Independent Director

Edward McCarthy*     2002           60      Independent Director

* Designates member of the audit and compensation committees of the Board of
Directors.

** Designated as a financial expert and member of the audit and compensation
committees of the Board of Directors

W. Edd Helms, Jr., since 1985, has been our Chairman of the Board of Directors,
President, Chief Executive Officer and Chief Financial Officer. Mr. Helms is
also the President of Edd Helms Air Conditioning, Inc. Prior to the merger of
Edd Helms Incorporated with and into Hotelecopy, Inc. ("Merger"), Mr. Helms was
the President and Director of Edd Helms, Incorporated. Mr. Helms is the brother
of L. Wade Helms.

L. Wade Helms is the Executive Vice President and a Director since the Merger.
From February 1986 until the effective date of the Merger, Mr. Helms served in
the capacity of Executive Vice President and a Director of Hotelecopy. From 1983
to 1986, he was the Chief Financial Officer and Vice President of Edd Helms,
Incorporated and he served as a Director of Edd Helms, Incorporated from 1984
until 1990.

Joseph M. Komarmy has been our Vice President since the merger. Mr. Komarmy was
Vice President of Edd Helms, Incorporated since 1984. He was elected a Director
on April 5, 2002.

                                       36
<PAGE>

Mr. Revell has been Chairman of the Board and CEO of H. J. Ross Associates,
Inc., a consulting engineering, planning and environmental firm in Coral Gables,
Florida, since 1991, and also Chairman and CEO of Revell Investments
International, Inc., since 1984. He was President, CEO and a Director of Post,
Buckley, Schuh & Jernigan, Inc. from 1975 to 1983 after serving as Secretary of
Transportation for the State of Florida from 1972 to 1975. Mr. Revell is a
Director and Chairman of the Audit Committee of The St. Joe Company, and a
Director of Rinker Materials and other closely-held companies. He is Chairman of
the Greater Miami Foreign Trade Zone and also Chairman of the Florida Energy
2020 Study Commission by appointment of Governor Jeb Bush.

Edward J. (Ted) McCarthy is currently Vice President and General Manager of
William Lehman Leasing Corporation, a position he has held since 1976. William
Lehman Leasing is a 32 year old company associated with the William Lehman
Dealership Organization. Mr. McCarthy has been with leasing since 1973. He has
also served as Vice President and General Manager of William Lehman Dodge from
1985 to 1987 and Vice President and General Manager of William Lehman Isuzu,
Suzuki, and Subaru from 1991 to 1999.

Directors are elected to hold office until the next Annual Meeting of
Shareholders and until their respective successors are elected and qualified.
Our officers are elected by the Board of Directors at the Annual Meeting and
hold office for the term of one year and until their successors are elected and
qualified.

Our By-Laws contain provisions that permit indemnification, including legal
fees, of our directors, officers, employees, and agents to the fullest extent
permitted by Florida law.

Item 10. Executive Compensation.

I.  Summary Compensation Table

The following table sets forth certain information regarding compensation paid
during each of the last three fiscal years to our executive officers. In January
2002, each of L. Wade Helms and Joseph M. Komarmy received 50,000 shares of our
common stock as additional compensation. We have no employment agreements with
any officers or employees.

Directors who are our employees do not receive additional compensation for
serving as directors. Non-employee directors receive $2,500 for each Board
meeting attended in person and $500 for each Board Meeting attended by
telephone. Upon first becoming a director, each non-employee director received
options under the non-qualified Stock Option Plan to purchase 10,000 shares of
common stock.

                                       37
<PAGE>

All of our directors are reimbursed for out-of-pocket expenses incurred in
attending meetings of the Board of Directors or committees thereof, and for
other expenses incurred in their capacity as directors.

--------------------------------------------------------------------------------
Annual Compensation                       Long-Term Compensation
----------------------------------------- --------------------------------------
                                          Awards                 Payouts
----------------------------------------- ---------------------- ---------------
   (a) (b) (c) (d) (e) (f) (g) (h) (i)
------------- ---- ------ ----- ------ ---------- ----------- ------- ----------
Name and      Year Salary Bonus  Other  Restricted Option/SARs LTIP    All Other
Principal                 Annual Stock                        Payouts comp.(inc.
Position                  Comp   Awards                                cars)
------------- ---- ------ ----- ------ ---------- ----------- ------- ----------

W. Edd Helms, 2004 $250,000                                             $  -
Jr.           2003 $250,000                                             $ 3,277
              2002 $255,000                                             $12,558
President and
Chief
Executive
Officer
------------- ---- ------ ----- ------ ---------- ----------- ------- ----------

L. Wade Helms 2004 $95,004  $ 3,000                                     $21,122
              2003 $95,004  $30,000 $12,500        200,000              $13,702
Exec. Vice    2002 $98,104                                              $14,757
President
------------- ---- ------ ----- ------ ---------- ----------- ------- ----------

Joseph M.     2004 $106,121 $ 3,000                                     $24,561
Komarmy       2003 $106,121 $30,000 $12,500                             $15,341
              2002 $110,662                        200,000              $14,182
Vice
President
------------- ---- ------ ----- ------ ---------- ----------- ------- ----------

                                       38
<PAGE>

Equity Compensation Plan Information

The following table summarizes share information about Edd Helms Group equity
compensation plans including the 2001 Incentive Stock Option Plan and the 2001
Non-qualified Stock Option Plan. Both of these plans have been approved by our
shareholders.

                                                            Number of securities
              Number of securities                       remaining available for
                      to be issued    Weighted-average     future issuance under
                  upon exercise of   exercise price of equity compensation plans
              outstanding options, outstanding options,    (excluding securities
Plan category  warrants and rights warrants and rights   reflected in column (a)

                    (a)                     (b)                (c)
2001 Incentive
stock option
plan for
officers and
key employees     400,000                   0.15             1,100,000

2001 Non-qualified
stock option plan
to enable certain
directors, employees
and consultants to
acquire or expand
propriety interest
our Company        20,000                   0.21               230,000

Equity compen-
sation plans not
approved by
security holders     NONE                    NONE                 NONE

Total             420,000                                    1,330,000

Item 11. Security Ownership of Certain Beneficial Owners, Management and Related
Stockholder Matters.

The following table sets forth, as of August 23, 2002, information with respect
to:

  (a) any person known to us to be the beneficial owner of five percent or more
      of the outstanding shares of our common stock,
  (b) each of our directors and our executive officers, and, (c) all of our
      directors and executive officers as a group.

                                       39
<PAGE>

For computing the percentage of the shares of our common stock owned by each
person or group listed in this table, any shares not outstanding, which are
subject to options or warrants exercisable within 60 days have been deemed
outstanding. Except as otherwise indicated below, we believe each of the persons
named below to possess sole voting and investment power with respect to the
shares of our common stock beneficially owned by such person.

                           Amt. Of Beneficially
      Name                     Owned Common Stock              Percent
-------------------        -------------------              -------
W. Edd Helms, Jr.               10,065,814              80.00%   (1)(9)
L. Wade Helms                       54,876                .43%      (2)
Joseph M. Komarmy                  133,458               1.06%      (3)
Carol Helms                      9,343,539              74.30%   (4)(9)
Walter L. Revell                    25,935                .20%      (5)
Edward McCarthy                      2,580                -         (6)
ESOP                             1,167,055               9.28%      (7)
All officers and directors      10,282,663              81.77%      (8)

The address of all four of our officers is: 17850 N.E. 5th Ave, Miami, Florida
33162.

(1) This includes 9,277,934 shares held as a joint tenant with his wife Carol
Helms, 517,177 shares in his name, and 270,703 shares attributed to him due to
his percentage ownership of our ESOP, which holds 1,167,055 shares of our common
stock.

(2) This includes the 2,147 shares held as joint tenants with his wife, 500
shares in his name, 50,000 shares issued in January of 2002, and 2,229 shares in
the ESOP. This does not include stock option to acquire 200,000 shares of our
stock pursuant to our incentive stock plan at a purchase price of $.15 which
options will expire in 2011.

(3) This includes 13,000 shares held as joint tenants with his wife, 50,000
shares issued in January of 2002, and 70,458 shares in the ESOP. This does not
include an option to acquire 200,000 shares of our stock pursuant to the our
incentive stock option plan at a purchase price of $.15 which options will
expire in 2011.

(4) This includes 9,277,934 shares held as a joint tenant with her husband, Edd
Helms, 65,605 shares attributed to Mrs. Helms due to her percentage ownership of
our ESOP.

(5) Walter L. Revell has sole voting and investment power of these shares. This
does not include 10,000 nonqualified stock options awarded April 5, 2002.

(6) Edward McCarthy shares voting and reinvestment power of these shares with
his wife. This does not include 10,000 nonqualified stock options awarded April
5, 2002.

                                       40
<PAGE>

(7) The ESOP was adopted by Edd Helms, Incorporated on May 15, 1995, and at the
time of the merger was funded with 638 shares of the common stock of Edd Helms,
Incorporated. As a result of the merger with Hotelecopy, the ESOP received
1,378,781 of our shares of common stock. Since the merger, 188,642 shares have
been distributed from the ESOP so that as of May 31, 2002, the ESOP held
1,190,139 shares. On July 15, 2002, 23,084 shares were distributed from the
ESOP, so that as of May 31, 2004 the ESOP holds 1,167,055 shares.

(8) See notes 1-6 for the details.

(9) For purposes of the percentage calculations, the shares held in common by
Edd and Carol Helms are included in the percentage ownership of each of them.

Item 12. Certain Relationships and Related Transactions

We lease our office and warehouse facilities from a partnership owned by W. Edd
Helms, Jr. and Carol Helms. See Item 2 "Description of Property".

We believe that the above transaction is on terms and conditions at least as
favorable to us as those that would have been available from non-affiliated
third parties. Any future transactions between us and our officers, directors or
principal shareholders or any affiliates will be made for bona fide business
purposes on terms no less favorable than could be obtained from unaffiliated
third parties, and will be approved by a majority of the Board of Directors.

Item 13. Exhibits and Reports on Form 8-K.

a. Exhibits required to be filed by Item 601 of Regulation S-B:

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


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


b. No Form 8-K was filed during the last quarter of the period covered by this
   report.


Item 14. Principal Accountant Fees and Services

Audit Fees

Dohan and Company, CPA's, billed $94,870 for professional services rendered for
the audit of our annual financial statements for fiscal year 2003 and the
reviews of the financial statements included in our Forms 10-QSB for that fiscal
year. For fiscal year 2004, the amount billed or accrued for the same services
is expected to be $95,844.

                                       41
<PAGE>

Tax Fees

Dohan and Company, CPA's, billed $4,938 for fiscal year May 31, 2003, for
professional tax services and is expected to bill approximately $5,500 for
fiscal year ended May 31, 2004.

The above audit fees were pre-approved by the audit committee based on estimated
budgets presented to the audit committee.


                                   SIGNATURES

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


                                          /s/ EDD HELMS GROUP, INC.
                                          -------------------------
                                              (Registrant)

                                       By:/s/ W. Edd Helms, Jr.
                                          -------------------------
                                          W. EDD HELMS, JR. PRESIDENT AND CHIEF
                                          EXECUTIVE OFFICER

                                       Date: March 25, 2005

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

                                       By:/s/ W. Edd Helms, Jr.
                                          -------------------------
                                          W. EDD HELMS, JR. PRESIDENT AND CHIEF
                                          EXECUTIVE OFFICER
                                          AND DIRECTOR


                                       By:/s/ L. Wade Helms
                                          -------------------------
                                          L. WADE HELMS
                                          EXECUTIVE VICE PRESIDENT, SECRETARY,
                                          TREASURER AND DIRECTOR

                                       By:/s/ Joseph M. Komarmy
                                          -------------------------
                                          JOSEPH M. KOMARMY
                                          VICE PRESIDENT AND
                                          DIRECTOR

                                       By:/s/ Walter Revell
                                          -------------------------
                                          WALTER REVELL
                                          DIRECTOR

                                       By:/s/ Edward McCarthy
                                          -------------------------
                                          EDWARD MCCARTHY
                                          DIRECTOR

                                       Date: March 25, 2005