UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                      Washington, DC  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, 2007

[ ] Transition Report Under Section 13 or 15(d) of The Securities
    Exchange Act of 1934

     For the transition period from ______________ to _____________


______________________________________________________________________


                 Commission File Number: 000-17058
                                         ---------

                 Epicus Communications Group, Inc.
       ---------------------------------------------------------------
      (Exact name of small business issuer as specified in its charter)

          Florida                              59-2564162
   ----------------------                 ----------------------
  (State of incorporation)               (IRS Employer ID Number)

                300 Crescent Executive Court- Suite 300
                       Lake Mary, Florida 32746
                --------------------------------------
               (Address of principal executive offices)

                           (561) 688-0440
                     -------------------------
                    (Issuer's telephone number)

______________________________________________________________________

 Securities registered under Section 12 (b) of the Exchange Act - None

   Securities registered under Section 12(g) of the Exchange Act: -
                   Common Stock - $0.001 par value

______________________________________________________________________

Check whether the issuer has (1) filed all reports required to be
files by Section 13 or 15(d) of the Exchange Act during the past 12
months (or for such shorter period the Company was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.  Yes  X     No
                           ---
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B contained in this form, and no disclosure
will be contained, to the best of Company'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.  [   ]

Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act):
Yes       No  X
             ---
The issuer's revenues for the fiscal year ended May 31, 2007 were
$8,013,044


                                                                     1
<PAGE>


The aggregate market value of voting common equity held by non-
affiliates as of July 12, 2007 was approximately $47,271.00, based
upon 47,271,316 shares issued and outstanding and a closing market
price of $0.001 per share.

As of July 7, 2007 there were 60,684,288 shares of Common Stock issued
and outstanding.

Transitional Small Business Disclosure Format : Yes        No   X
                                                               ---








                                                                     2
<PAGE>

                   Epicus Communications Group, Inc.

                           Index to Contents

                                                           Page Number

Part I

Item 1   Description of Business                                     4
Item 2   Description of Property                                    12
Item 3   Legal Proceedings                                          13
Item 4   Submission of Matters to a Vote of Security Holders        13

Part II

Item 5   Market for Company's Common Stock and Related
           Stockholders Matters                                     13
Item 6   Management's Discussion and Analysis or Plan of
           Operation                                                14
Item 7   Financial Statements                                      F-1
Item 8   Changes in and Disagreements with Accountants
           on Accounting and Financial Disclosures                  17
Item 8A  Controls and Procedures                                    17

Part III

Item 9   Directors, Executive Officers, Promoters and Control
           Persons; Compliance with Section 16(a) of the
           Exchange Act                                             17
Item 10  Executive Compensation                                     18
Item 11  Security Ownership of Certain Beneficial Owners and
           Management and Related Stockholder Matters               18
Item 12  Certain Relationships and Related Transactions             19
Item 13  Exhibits and Reports on 8-K                                19
Item 14  Principal Accountant Fees and Services                     20

Signatures                                                          21


                                                                     3
<PAGE>


           Caution Regarding Forward-Looking Information
           ---------------------------------------------

Certain statements contained in this annual filing, including, without
limitation, statements containing the words "believes", "anticipates",
"expects" and words of similar import, constitute forward-looking
statements. Such forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause the actual
results, performance or achievements of the Company, or industry
results, to be materially different from any future results,
performance or achievements expressed or implied by such
forward-looking statements.

Such factors include, among others, the following: international,
national and local general economic and market conditions: demographic
changes; the ability of the Company to sustain, manage or forecast its
growth; the ability of the Company to successfully make and integrate
acquisitions; raw material costs and availability; new product
development and introduction; existing government regulations and
changes in, or the failure to comply with, government regulations;
adverse publicity; competition; the loss of significant customers or
suppliers; fluctuations and difficulty in forecasting operating
results; changes in business strategy or development plans; business
disruptions; the ability to attract and retain qualified personnel;
the ability to protect technology; and other factors referenced in
this and previous filings.

Given these uncertainties, readers of this Form 10-KSB and investors
are cautioned not to place undue reliance on such forward-looking
statements. The Company disclaims any obligation to update any such
factors or to publicly announce the result of any revisions to any of
the forward-looking statements contained herein to reflect future
events or developments.


                           PART I

Item 1 - Description of Business

Epicus Communications Group, Inc. (Epicus Group), is a holding
company, with primary interests in the telecommunications industry.
As of May 31, 2007, the Company had only one wholly owned subsidiary,
ECG on the Net, LLC, which was formed in the current fiscal year.  In
prior periods, the Company had two other wholly owned subsidiaries,
Moye & Associates (a/k/a TheBest.Net), and Mic-Mac Investments, Inc.

Epicus Communications Group, Inc. was incorporated on July 22, 1985,
pursuant to the laws of the State of Florida as Hydrobac, Inc.  In May
2003, the Company changed it's name to better reflect the Company's
business emphasis on the telecommunications sector and to better
create consistent name branding with the Company's then-wholly-owned
operating subsidiary, EPICUS, Inc.  In accordance with the Company's
Plan for Reorganization under Chapter 11 of the U. S. Bankruptcy code,
on December 7, 2005, all operations were transferred to the Company
and EPICUS, Inc. was liquidated.

In prior years, the Company acquired 100% each of the then issued and
outstanding stock of Moye & Associates, Inc. (Moye), a Georgia
corporation, and Mic Mac Investments, Inc. (Mic Mac), a South Carolina
corporation.  All operations related to Moye and Mic Mac were
discontinued prior to May 31, 2004.  During the quarter ended August
31, 2006,  the Company dissolved these two entities.

On November 13, 2006, the Company formed a new wholly-owned
subsidiary, ECG on the Net, LLC, a Florida Limited Liability Company,
for the purpose of providing low cost VoIP telephone services to
consumers nationwide.

Historical Development
----------------------

We were incorporated on July 22 1985, pursuant to the laws of the
State of Florida under the name Hydrobac, Inc. On July 7, 1986, the
company's name was changed to ProBac, Inc. and on October 5, 1994, its
name was changed to Trident Environmental Systems, Inc.  During those
periods our primary business was in various types of products and
systems for use in the environmental clean- up industry.


                                                                     4
<PAGE>


On October 2, 1996 our name was changed to Phoenix International
Industries, Inc. and our common stock was reverse split 15 to 1.  Our
shareholders approved Amendments to the Articles of Incorporation,
changing the authorized capital to 20,000,000 shares of common stock,
par value $.001 per share, and up to 5,000 shares of Preferred Stock
for use as needed.  From January 1996 through May 31, 1997, we sought
acquisitions as we wound down and closed our original environmental
clean-up business.  We have not been in the environmental clean-up
business since May 31, 1997.

On June 13, 1998, we acquired 100% of the stock of Intuitive
Technology Consultants, Inc. ("ITC") of Atlanta, Georgia. ITC was
engaged in the business of computer system design and computer related
(MIS) employee placement.  By  June 1999, we had sold Intuitive
Technology Consultants Inc to a group headed by the current management
of ITC. We recognized a total gain of $479,583 on the sale of this
business.

On July 21, 1997, we acquired 100% of the stock of HDX 9000, Inc.
("HDX"), a company specializing in compliance methodology for the Y2K
problem and for the various types of "ISO" compliance certification.
Since the demand for HDX's primary product, a compliance methodology
to solve the Year 2000 date change problem, has become understandably
non-existent, and due to HDX's inability to establish a new marketable
product in a timely fashion, on March 20, 2000, it was the decision of
our Board of Directors, in concert with the previous shareholder of
100% of HDX's stock, to rescind the agreement by which HDX was
acquired by Phoenix.  This was done and the stock of each company
which was originally exchanged to effect the acquisition was returned
to the original holder or issuer.  We recognized a total loss of
$99,140 in connection with this transaction.

On April 9, 1998, we acquired 100% of the outstanding stock of Mic Mac
Investments, Inc., a long distance telephone service "reseller"
specializing in the hospitality industry.  Mic-Mac ceased to operate
by the end of the quarter ended February 28, 1999 and had no remaining
assets or liabilities as of May 31, 1999.  We abandoned and wrote off
any remaining investment in Mic Mac Investments, Inc. as of May 31,
1999.  We recognized a gain of $13,417 in connection with the write
off this investment.  We formally dissolved this entity during the
quarter ended August 31, 2006.

Based on an agreement entered into on December 14, 1998, we acquired
100% of the stock of Cambridge Gas Transport Corporation (CGTC), a
Cayman Islands Corporation, in the business of owning and operating
specialized chemical/fuel tanker transport ships.  Due to various
disagreements, an agreement to rescind the acquisition was executed by
the parties.  We did not recognize any gain or loss on this
transaction.  We filed litigation to recoup our payments to CGTC,
resulting in an out of court settlement on December 15, 2000.

During Fiscal 2000, we acquired 100.0% of the issued and outstanding
stock of Telephone Company of Central Florida, Inc. ("TCCF").  TCCF is
a "competitive local exchange carrier" (CLEC) telephone company and a
reseller of other telecommunications services.  TCCF was at that time
operating under the protection of "Chapter 11"of the United States
Bankruptcy Code.  The effective date of the our acquisition was ten
days after the Order of Confirmation was issued by the Bankruptcy
Court.  The Order of Confirmation was issued on June 9, 1999 and TCCF
began operating as a reorganized debtor on that date.  On January 17,
2001 the name of TCCF was changed to EPICUS, Inc.

On July 28, 2000, we acquired 100% of the stock of Moye & Associates,
Inc. (Moye).  Moye's primary business was that of an Internet Service
Provider (ISP) known as TheBest.Net.  This move was seen by
management, at that time, to be synergetic with the operations of
TCCF.  On July 19, 2001, we signed a Letter of Intent to sell the
active clients of Moye.  The buyer paid $133.33 for each
existing"dial-up" and "domain hosting client".  It was estimated that
there were between approximately 1,500 and 2,700 active fee-for-
service clients on the date of signing the Letter of Intent.  The
buyer deposited a down payment of $150,000 with the Company and an
additional $50,000 into an interest bearing account at the date of
signing.   As of May 31, 2002, all amounts due under this sale of
assets contract have been satisfied.  During our year ended May 31,
2003, we issued approximately 500,000 shares of restricted,
unregistered common stock to Tully Moye in complete settlement of all
remaining obligations related to the acquisition and disposition of
Moye.  We formally dissolved this entity during the quarter ended
August 31, 2006.

Bankruptcy Action
-----------------


                                                                     5
<PAGE>


On October 25, 2004 (the "Petition Date"), Epicus Communications
Group, Inc. (the "Company") and its subsidiary, Epicus, Inc.,
(collectively, the "Debtors") filed voluntary petitions in the United
States Bankruptcy Court for the Southern District of Florida (the
"Bankruptcy Court") seeking reorganization relief under the provisions
of Chapter 11 of Title 11 of the United States Code (the "Bankruptcy
Code") (Case Nos. 04-34915, 04-34916, collectively, the "Cases").

Under Chapter 11, certain claims against the Debtors in existence
prior to the filing of the petitions for relief under Federal
Bankruptcy Laws are stayed while the Debtors continue to operate their
businesses as debtors-in-possession under the jurisdiction of the
Bankruptcy Court and in accordance with the applicable provisions of
the Bankruptcy Code and the orders of the Bankruptcy Court.  These
claims were reflected in the Company's balance sheets as "Liabilities
Subject to Compromise."  Additional claims (liabilities subject to
compromise) may arise subsequent to the Petition Date resulting from
the rejection of executory contracts, including leases, and from the
determination of the court (or agreed to by parties in interest) of
allowed claims for contingencies and other disputed amounts.  Claims
secured against the Debtors' assets ("secured claims") are also
stayed, although the holders of such claims have the right to move the
Bankruptcy Court for relief from the stay.  Secured claims, if any,
are secured primarily by liens on the Debtors' property, plant and
equipment.

The Company's Plan of Reorganization was confirmed by the Bankruptcy
Court on September 30, 2005 and became effective on December 8, 2005.
It was determined that Epicus Communications Group, Inc.'s
reorganization value computed immediately before December 8, 2005, the
effective date of the Plan of Reorganization, was approximately
$1,395,488, which consisted of the following:

  Current assets retained by the post-confirmation entity    $1,054,287
  Fair market value of property and equipment                    86,000
  Deposits with vendors and other assets transferred
    to the post-confirmation entity                             255,201
                                                             ----------

  Reorganization value                                       $1,395,488
                                                             ==========

Pursuant to the Plan of Reorganization, all of the operations of the
Company's then-wholly-owned subsidiary, EPICUS, Inc. were transferred
to Epicus Communications Group, Inc. and the EPICUS, Inc. subsidiary
was dissolved.  The Company adopted fresh-start reporting because the
holders of existing voting shares immediately before filing and
confirmation of the Plan received less than 50.0% of the voting shares
of the emerging entity and its reorganization value is less than its
postpetition liabilities and allowed claims, as shown below:

  Postpetition current liabilities                          $   643,824
  "New" common stock issued upon reorganization                  10,000
  Liabilities deferred pursuant to Chapter 11 proceeding      8,762,705
    Total postpetition liabilities and allowed claims         9,416,529
  Reorganization value                                       (1,395,488)
                                                             ----------

  Excess of liabilities over reorganization value            $8,021,041
                                                             ==========

The reorganization value of Epicus Communications Group, Inc. was
determined in consideration of several factors and by reliance on
various valuation methods, including discounting cash flow and
price/earnings and other applicable ratios.  The factors considered by
Epicus Communications Group, Inc. included the following:

  * Forecasted operating and cash flows results which gave effect to the
    estimated impact of
    - Corporate restructuring and other operating program changes
    - Limitations on the use of available net operating loss
    carryforwards and other tax attributes resulting from the Plan of
  * Reorganization and other events
  * The discounted residual value at the end of the forecast period
    based on capitalized cash flows for the last year of that period.
  * Market share and position
  * competition and general economic conditions
  * Projected sales growth


                                                                     6
<PAGE>


  * Potential profitability
  * Seasonality and working capital requirements

After consideration of Epicus Communications Group, Inc.'s debt
capacity and other capital structure considerations, such as industry
norms, projected earnings to fixed charges, earnings before interest
and taxes to interest, free cash flow to interest and free cash flow
to debt service and other applicable ratios, it was agreed that Epicus
Communications Group, Inc.'s reorganization capital structure should
be as follows:

  Convertible Debentures                          $  5,347,000
  Callable Secured Convertible Note                  3,750,000
  Bankruptcy Settlement Notes
    Internal Revenue Service                           674,026
    BellSouth Corp.                                    328,702
    State of Florida                                    59,910
  Common stock                                          10,000
                                                  ------------

                                                  $ 10,169,638
                                                  ============

The following entries record the provisions of the Plan of
Reorganization and the adoption of fresh-start reporting:
<TABLE>
<CAPTION>
Entries to record debt discharge
--------------------------------
<S>                                                        <C>          <C>
Liabilities subject to compromise                          $13,226,818
  Bankruptcy settlement obligations                                     $  3,515,442
Current liabilities                                          2,114,011
  Cash                                                                           660
  Prepaid expenses                                                         1,020,724
  Other assets                                                               348,210
  Gain on debt discharge                                                  10,455,793

Entries to record exchange of stock for stock
---------------------------------------------

Common stock - old                                            $661,404
  Common stock - new                                                    $     10,000
  Additional paid-in capital                                                 651,404

Entries to record the adoption of fresh-start reporting and to
--------------------------------------------------------------
eliminate the deficit
---------------------

Accumulated depreciation                                 $     563,028
  Property and equipment                                                $    606,286
Additional paid-in capital                                  18,516,543
  Accumulated deficit                                                     26,494,326
Reorganization value in excess of amounts allocated to
   identifiable assets                                       8,021,041
</TABLE>
The effect of the Plan of Reorganization on Epicus Communications
Group, Inc.'s balance sheet at December 8, 2005, is as follows:
<TABLE>
<CAPTION>
                                                    Adjustments to record confirmation of Plan
                                                    ------------------------------------------
                                                                  Reorganized
                                   Pre-             Debt          Exchange of        Fresh            Balance
                               Confirmation       discharge          stock           start             Sheet
                               ------------     ------------      ------------     ------------     ------------
<S>                            <C>              <C>               <C>              <C>              <C>
Cash on hand and in bank             80,229             (660)                -                -           79,569
Accounts receivable
  Trade                           1,307,675                -                 -                -        1,307,675
  Allowance for


                                                                     7
<PAGE>



    doubtful accounts              (225,000)               -                 -                -         (225,000)
Prepaid expenses                    912,767       (1,020,724)                -                -         (107,957)
                               ------------     ------------      ------------     ------------     ------------
  Total current assets            2,075,671       (1,021,384)                -                -        1,054,287
                               ------------     ------------      ------------     ------------     ------------

Property and equipment              692,286                -                 -         (606,286)          86,000
  Accumulated depreciation         (563,028)               -                 -          563,028                -
                               ------------     ------------      ------------     ------------     ------------
    Net Property and Equipment      129,258                -                 -          (43,258)          86,000
                               ------------     ------------      ------------     ------------     ------------
Other assets
Deposits and other                  603,411         (348,210)                -                -          255,201
Reorganization value in
  excess of amounts
  allocated to identifiable
  assets                                  -                -                 -        8,021,041        8,021,041
                               ------------     ------------      ------------     ------------     ------------
  Total other assets                603,411         (348,210)                -        8,021,041        8,276,242
                               ------------     ------------      ------------     ------------     ------------

Total Assets                   $  2,808,340     $ (1,369,594)     $          -     $  7,977,783     $  9,416,529
                               ============     ============      ============     ============     ============

Liabilities not subject
  to compromise
  Accounts payable and other      2,757,835       (2,114,011)                -                -          643,824
                               ------------     ------------      ------------     ------------     ------------
Liabilities subject to
  compromise                     13,226,818      (13,226,818)                -                -                -
IRS Note                                  -          674,026                 -                -          674,026
BellSouth Note                            -          328,702                 -                -          328,702
State of Florida Note                     -           59,910                 -                -           59,910
Convertible debentures            5,247,263          100,037                 -                -        5,347,300
Convertible note                          -        2,352,767                 -                -        2,352,767
                               ------------     ------------      ------------     ------------     ------------
                                 18,474,081       (9,711,376)                -                -        8,762,705
                               ------------     ------------      ------------     ------------     ------------
  Total Liabilities              21,231,916      (11,825,387)                -                -        9,406,529
                               ------------     ------------      ------------     ------------     ------------

Shareholders' equity (deficit)
  Common stock - new                      -                -            10,000                -           10,000
  Common stock - old                661,404                -          (661,404)               -                -
  Additional paid-in capital     17,865,139                -           651,404      (18,516,543)               -
  Accumulated deficit           (36,950,119)      10,455,793                 -       26,494,326                -
                               ------------     ------------      ------------     ------------     ------------
  Total shareholders'
    deficit                     (18,423,576)      10,455,793                 -        7,977,783           10,000
                               ------------     ------------      ------------     ------------     ------------
Total Liabilities and
  Shareholders' Equity         $  2,808,340     $ (1,369,594)     $          -     $  7,977,783     $  9,416,529
                               ============     ============      ============     ============     ============
</TABLE>

The Company's Plan of Reorganization was confirmed by the Bankruptcy
Court on September 30, 2005 and was effective on December 8, 2005.
The confirmed Plan provided for the following:

CLASS 1: is the Bell South secured claim in the amount of
$1,929,396.96, which is secured by a lien on the assets of Epicus.
 On the Effective Date, BellSouth shall receive (I) a cash payment in
 the amount of $1,278,000 and (ii) application of the deposit in the
 amount of $322,695 toward payment of the BellSouth Cure Claim.
 Following the Effective Date, the remaining balance due on the
 Be1lSouth Cure Claim (i.e. ($328,702) shall be paid over the next
 twelve months subsequent to the Effective Date, with interest at the
 rate of 8%, in equal monthly payments ($28,593.18) and Be1lSouth
 shall retain its lien upon the Epicus Collateral until the balance of
 the BellSouth Cure Claim is paid in fall and the Post Petition
 Deposit (defined in the Plan) equals two months of estimated
 billings, at which time Be1lSouth shall release its lien upon the
 Epicus Collateral.


                                                                     8
<PAGE>


CLASS 2: is compromised of all secured claims other than the BellSouth
Secured Claim, the NIR Group Debenture Claim and the IRS Secured
Claim.
 Except to the extent that a holder of an Allowed Other Secured Claim
 agrees to different treatment, on the later of (I) 10 business days
 after the Effective Date and the date on which such Allowed Other
 Secured Claim becomes an Allowed Other Secured Claim, or as soon
 thereafter as practicable; or (ii) such other date as may be fixed by
 the Bankruptcy Court whether fixed before or after the relevant date
 above, each holder of an Allowed Other Secured Claim shall receive,
 at Reorganized Epicus Communications' sole option, in full and final
 satisfaction of such Allowed Other Secured Claim the following: (I)
 the Collateral securing such Allowed Other Secured Claim; (ii) Cash
 from Reorganized Epicus Communications in the amount of the Allowed
 Other Secured Claim; or (iii) monthly principal payments over a term
 of thirty-six months with interest at me rate of 4% per annum.  Each
 holder of an Allowed Other Secured Claim shall retain any security
 interests held as of the Petition Date until such Allowed Other
 Secured Claim is paid in full.

CLASS 3: is the Debenture Claim of the NIR Group secured by a lien
upon the NIR Group Collateral.  The NIR Group is the company which is
the common ownership and management group associated with the hedge
funds that comprise the AJW Group.
 On the Effective Date, the Old Debentures and the accompanying
 registration rights agreement shall be reinstated, pursuant to the
 terms of the Old Debenture Documents, as may be modified by any post-
 Effective Date amendments by The NIR Group and Reorganized Epicus
 Communications.  The NIR Group shall retain, and to the extent
 necessary be granted, alien upon the NIR Group Collateral and the
 Epicus Collateral, subject only to the lien of BellSouth upon the
 Epicus Collateral and the liens of holders of Allowed Other Secured
 Claims until the Allowed NIR Group Debenture Claims are paid in full.

CLASS 4: are the priority claims against Epicus Communications.
 Except to the extent that a holder of an Allowed Priority Claim
 against Epicus Communications has been paid by the Debtor prior to
 the Effective Date or agrees to a different treatment, on the later
 of (I) 10 business days after the Effective Date and the date on
 which such Allowed Priority Claim against Epicus Communications
 becomes an Allowed Claim, or as soon thereafter as practicable; or
 (ii) such other date as may be fixed by the Bankruptcy Court whether
 fixed before or after the relevant date above, each holder of an
 Allowed Priority Claim against Epicus Communications, if any, shall
 receive, at Reorganized Epicus Communications' sole option, the
 following: (I) Cash from Reorganized Epicus Communications in the
 amount of such Allowed Claim; (ii) with respect to a claim of a kind
 specified in Section 507(a) of the Plan, deferred Cash payments, of a
 value, as of the Effective Date, equal to the amount of such Allowed
 Claim; or (iii) with respect to a claim of a kind specified in
 section 507(a)(8) of the Bankruptcy Code, Cash payments, over a
 period not exceeding six years after the date of assessment of such
 Allowed Claim, of a value, as of the Effective Date, equal to amount
 of such Allowed Claim.  Upon the payment of the Class 4 Allowed
 Priority Claims against Epicus Communications, no person holding or
 that could hold a Class 4 Claim against Epicus Communications shall
 have a claim against the Debtor inasmuch as any such liability shall
 be deemed discharged.

CLASS 5: are the priority claims against Epicus.
 Except to the extent that a holder of an Allowed Priority Claim
 against Epicus has been paid by the Debtor prior to the Effective
 Date or agrees to a different treatment, each holder of an Allowed
 Priority Claim against Epicus, if any, shall receive its Pro Rata
 share of the Plan Trust Assets (excluding the Haryman Payment, the
 NIR Group Payment, the proceeds of the Avoidance Actions and 7.5% of
 the Newly Authorized Capital Stock of Reorganized Epicus
 Communications), and in the event that Allowed Claims in Class 5 are
 paid in full, the remaining balance of the Plan Trust Assets shall be
 distributed Pro Rata to the holders of Allowed Claims in Class 9.
 Upon the payment of the Class 5 Allowed Priority Claim against
 Epicus, no person holding or that could hold ,a Class 5 Claim against
 Epicus shall have a claim against the Debtor inasmuch as any' such
 liability shall be deemed discharged.

CLASS 6: are the Convenience Claims against Epicus Communications.
 Each holder of an Allowed Convenience Claims against Epicus
 Communications shall receive Cash in an amount equal to the lesser of
 (I) its Allowed Claim or (ii) one thousand ($1,000) dollars, in full
 and complete satisfaction of such Allowed Claim.

CLASS 7: are the Convenience Claims against Epicus.


                                                                     9
<PAGE>


 Each holder of an Allowed Convenience Claims against Epicus shall
 receive Cash in an amount equal to the lesser of (I) its Allowed
 Claim or (ii) one thousand ($1,000) dollars, in full and complete
 satisfaction of such Allowed Claim.

CLASS 8: are the Claims of General Unsecured Creditors against Epicus
Communications.
 Except to the extent that a holder of an Allowed General Unsecured
 Claim against Epicus Communications has been paid by the Debtor prior
 to the Effective Date or agrees to a different treatment, each holder
 of an Allowed General Unsecured Claim against Epicus Communications,
 if any, shall receive its Pro Rata share of the balance remaining of
 the Old Equity Payment after the Allowed Claims in Class 4 are paid
 in full.  Upon the payment of the Class 8 Allowed General Unsecured
 Claims against Epicus Communications, no person holding or that could
 hold a Class 8 General Unsecured Claim against Epicus Communications
 shall have a claim against the Debtor inasmuch as any such liability
 shall be deemed discharged.

CLASS 9: are the General Unsecured Creditors against Epicus.
 Except to the extent that a holder of an Allowed General Unsecured
 Claim against Epicus has been paid by the Debtor prior to the
 Effective Date or agrees to a different treatment, the Plan Trustee
 shall pay the holders of Allowed Claims in Class 9 their Pro Rata
 share from a $175,000.00 contribution made by Gerard Haryman to the
 plan trust in exchange for releases for himself, Thomas Donaldson,
 Timothy Palmer, and Aptek, Inc. .  Unsecured creditors will also
 receive a Pro Rata share of a $25,000.00 payment from the NIR Group
 in exchange for a release and 7.5% of the capital stock of
 Reorganized Epicus Communications and the proceeds of Avoidance
 Actions, through a plan trust.  Upon the payment of the Class 9
 Allowed General Unsecured Claims against Epicus, no person holding or
 that could hold a Class 9 General Unsecured Claim against Epicus
 shall have a claim against the Debtor inasmuch as any such liability
 shall be deemed discharged.

CLASS 10: are the Insider Subordinated Debt Claims of Gerard Haryman,
Thomas Donaldson and Aptek.
 On the Effective Date, or as soon thereafter as is practicable, each
 holder of an Allowed Insider Subordinated Debt Claim shall receive on
 account of such claim the shares of Newly Authorized Capital Stock of
 Reorganized Epicus Communications as provided for in conjunction with
 the Class 11 claims.  Because holders of senior Allowed General
 Unsecured Claims against Epicus Communications in Class 8 will likely
 not be paid in full, the distribution to be received by the holders
 of Class 10 Insider Subordinated Debt Claims is in exchange for new
 value represented by the Old Equity Payment.

CLASS 11: are the Equity Interest in Epicus Communications, exclusive
of the equity interests of the Haryman Parties.
 Prior to the Effective Date, Epicus Communications will effect a
 reverse stock split of its outstanding common stock, par value $0.001
 per share, so that following the said reverse stock split, there
 shall be one share for every one thousand shares in existence prior
 to the said reverse stock split.  Also, prior to the Effective Date,
 immediately following the aforesaid reverse stock split, Epicus
 Communications will amend its certificate of incorporation to
 authorize the Newly Authorized Capital that will increase its
 authorized capital stock to 100,000,000 shares.  On the Effective
 Date, or as soon thereafter as is practicable, from the Newly
 Authorized Capital Stock, Reorganized Epicus Communications shall
 issue shares to effectuate the following capital structure:
   (I)   Ocean Avenue Advisors, LLC - 52.5%
   (ii)  Collectively, the Haryman Parties (including amount received
         for Old Equity Interests) - 30.4%
   (iii) Old Equity (exclusive of the Old Equity Interests of the
         Haryman - 9.6%
   (iv)  Class 9 (General Unsecured Claims against Epicus) - 7.5%.

CLASS 12: are the Epicus Equity interests
 As of the Effective Date, all Class 12 Epicus Equity Interests shall
 be extinguished and the holder of such Equity Interests shall be
 forever precluded and permanently enjoined from asserting directly or
 indirectly against the Debtors, Reorganized Epicus Communications,
 The NIR Group or any of their respective successors and assigns or
 their respective heirs, directors, employees, shareholders, partners,
 members, agents, representatives, advisors or attorneys, or the
 properties of any of them, any further Claims, debts, rights, causes
 of action, remedies, liabilities or Equity Interests based upon any
 act, omission, document, instrument, transaction or other activity
 of any kind or nature that occurred prior to the Effective Date.
 The holder of any canceled Equity Interest shall have


                                                                     10
<PAGE>


 no rights arising from or relating to such Equity Interests, or the
 cancellation thereof, except the rights, if any, provided in the Plan.

CLASS 13: is the Secured Claim of the IRS.
 Except to the extent that a holder of the Allowed IRS Secured Claim
 agrees to different treatment, on the later of, (I) 10 business days
 after the Effective Date and the date on which such Allowed IRS
 Secured Claim becomes an Allowed IRS Secured Claim, or as soon
 thereafter as practicable; or (ii) such other date as may be fixed by
 the Bankruptcy Court whether fixed before or after the relevant date
 above, each holder of an Allowed IRS Secured Claim shall receive, at
 Reorganized Epicus Communications' sole option, in full and final
 satisfaction of such Allowed IRS Secured Claim the following (I) the
 Collateral securing such Allowed IRS Secured Claim; (ii) Cash from
 Reorganized Epicus Communications in the amount of the Allowed IRS
 Secured Claim; or (iii) monthly principal payments over a terms of
 one hundred and twenty (120) months, with interest at the rate of 4%
 per annum. The holder of the Allowed IRS Secured Claim shall retain
 any security interests held as of the Petition Date until such
 Allowed IRS Secured Claim is paid in full.

Our operating activity
----------------------

We are a multi-service telecommunications company with approximately
19,000 active accounts incorporating approximately 20,971 lines, as of
July 31, 2006, in both the residential and business markets.  We focus
on developing integrated telephone service in the Competitive Local
Exchange Carrier area of the telecommunications industry.  Like many
other emerging Competitive Local Exchange Carriers, our entry in this
industry was facilitated by the passing of the Telecommunications Act
of 1996 which allows Competitive Local Exchange Carriers to lease
various elements of the networks of the Incumbent Local Exchange
Carriers that are necessary to provide local telephone service in a
cost-effective manner.  We offer small businesses and residential
consumers an integrated set of telecommunications products and
services, including local exchange, local access, domestic and
international long distance telephone, data and dial up access to the
Internet.  We are certified to offer long distance and internet
services in the 48 contiguous states.

Our current service market is focused on 6 of the 9 States serviced by
AT&T Corporation (formerly BellSouth Corp.)  In prior periods, we
have provided long distance services to customers in 40 of the
Continental 48 states in prior periods and have elected to withdraw
from these markets as these markets proved themselves to be
unprofitable.

Further, changes in Telecommunications Law have caused the
profitability of a CLEC to provide telecommunications services to
seriously deteriorate.  Our future survival is predicated on being
able to develop products and pricing structures to be profitable and
competitive in today's telecommunication marketplace.

We have built our company by primarily focusing on being in the
vanguard of new telecommunication products and services such as our
"Freedom Rings" and "AccessNOW" voice and data services brands, and
creating software systems and processes to deliver telecommunication
services over leased networks, instead of concentrating on buying
switches and hardware to build a very expensive network, which could
be severely under-utilized for a potentially long period of time.  In
our opinion, owned network development has been a major expense which
has contributed to the demise of many emerging telephone companies.
Instead, we have developed a scalable operating platform that can
provision a local phone line, read usage records, rate phone calls for
billing purposes, and prepare monthly invoices to customers.  Our
system has allowed for the billing of a customer's telecommunication
services on one itemized bill.

Due to the dramatic increases in AT&T's (formally BellSouth's) price
structure for their services to CLECS, we have begun to change our
marketing emphasis from one of reselling the AT&T unbundled UNE-P
products to developing and marketing telecommunication services and
technology for Internet protocol, or VOIP, telephony applications.
Through our wholly owned subsidiary ECGontheNet, we now offer
broadband VoIP phone service to both residential and business
customers with special emphasis on the small business market.
Customers can choose to keep their current telephone number and
telephone equipment and then use a terminal adapter supplied by
ECGontheNET to connect any telephone to a broadband Internet
connection and make or receive calls from their regular
telephone number. All ECGontheNET telephone accounts have
the options of voice mail, caller ID, call


                                                                     11
<PAGE>


waiting, call waiting caller ID, call forwarding, hold, line-alternate,
3-way conferencing, and online billing.  Plans to offer digital
broadband service are almost complete and we expect to be able to
offer that service in the next fiscal quarter.

Our wholly-owned subsidiaries
-----------------------------

At the first quarter of fiscal 2006 Epicus still possessed two wholly
owned subsidiaries, Moye & Associates, Inc. and Mic-Mac Investments,
Inc., Neither company had any assets or liabilities and both had been
totally inactive since May of 2002 and May of 1999 respectively.
Both subsidiaries were foreign corporations to the state of Florida.
Therefore it was the decision of the Board to allow these two entities
to be  dissolved.

On November 13, 2006, the Company formed a new wholly-owned
subsidiary, ECG on the Net, LLC, a Florida Limited Liability Company,
for the purpose of providing low cost VoIP telephone services to
consumers nationwide.

Item 2 - Description of Property

Our principal executive offices are located at 610 Crescent Executive
Court   Suite 300, Lake Mary, FL 32746 and our telephone number is
(407) 942-1234.  The Company's operating and administrative functions
are  housed in this location under a long-term operating lease
agreement.  The lease commenced on September 20, 2004 and expires on
March 19, 2010.  The lease requires initial minimum monthly payments
of approximately $20,800 per month, plus the applicable state sales
taxes.  The monthly rental rate increases by 3.0% in each successive
twelve-month period.    Additionally, the Company is responsible for
it's proportional share of increases in "operating expenses" (as
defined) over the base calendar year as defined in the Lease
Agreement.

Future non-cancellable minimum lease payments due under this operating
lease agreement are as follows:

                                 Year ended
                                   May 31,         Amount
                                 ----------       --------

                                    2008          $270,793
                                    2009           278,917
                                    2010           239,053
                                                  --------

                                   Total          $788,763
                                                  ========


Item 3 - Legal Proceedings

All previously disclosed and discussed legal proceedings were
terminated effective with the Bankruptcy Court's confirmation of the
Company's Plan of Reorganization on September 30, 2005, which became
effective on December 8, 2005.


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

NONE

                         PART II

Item 5 - Market for Common Equity and Related Stockholder Matters


                                                                     12
<PAGE>


Our common stock is quoted on the NASDAQ OTC Bulletin Board under the
symbol "EPCG".  During our time under the protection of the Bankruptcy
Court, our common stock traded under the symbol "EPUCQ.OB".  There can
be no assurance that quotations will not fluctuate greatly in the
future in the event trading activity increases or decreases.  The
information contained in the following table was obtained from the
NASD and from various broker-dealers and shows the range of
representative bid prices for our common stock for the periods
indicated. The prices represent quotations between dealers and do not
include retail mark, mark-down or commission and do not necessarily
represent actual transactions:
                                                         BID
                                                         ---
Quarter ending                                    High           Low
                                                  ----           ----
2005
    March 31                                     .0018           .0004
    June 30                                      .0035           .0005
    September 30                                 .0025            .001
 ** December 31                            7.00                    .01

2006
    March 31                               1.10              .08
    June 30                                        .14            .011
    September 30                                  .016             .01
    December 31                                   .011            .011

2007
    March 31                                      .003            .003
    June 30                                       .002            .001

** adjusted for reverse split of 1000 to 1 from this point forward

Dividends
---------

The Company has not paid any dividends during the past five fiscal
years on any class of its issued and outstanding securities.

The payment by the Company of dividends, if any, in the future rests
within the discretion of its Board of Directors and will depend, among
other tier things, upon the Company's earnings, its capital
requirements and its financial  condition, as well;  as other relevant
factors. By reason of the Company's present financial condition, the
Company does not contemplate or anticipate paying any dividends on,
the Common Stock in the foreseeable future.

Item 6 - Management's Discussion and Analysis or Plan of Operation

Bankruptcy Filing

On October 25, 2004 (Petition Date), Epicus Communications Group, Inc.
(Epicus Communications or Company, for purposes of identification in
discussing the bankruptcy situation) and its wholly-owned subsidiary,
Epicus, Inc. (Epicus for purposes of identification in discussing the
bankruptcy situation), (collectively, Debtors) filed voluntary
petitions in the United States Bankruptcy Court for the Southern
District of Florida (Bankruptcy Court) seeking reorganization relief
under the provisions of Chapter 11 of Title 11 of the United States
Code (Bankruptcy Code).  These actions were assigned case numbers 04-
34915, 04-34916, respectively (collectively, Cases).

The Company submitted a Plan of Reorganization (Plan) for
consideration by the Bankruptcy Court and the affected creditors.
On September 30, 2005, the Company received approval of the
Plan of Reorganization and it was funded


                                                                     13
<PAGE>


and became effective on December 8, 2005.  Upon confirmation by
the Bankruptcy Court and became binding upon all Claimants and
Interest holders.

Overview

With the effectiveness of the Plan of Reorganization, the Company
transferred all operations into Epicus Communications Group, Inc.  The
Company had no operations in any subsidiary entity as of December 8,
2005.

As a result of the Company's initial filing of the Bankruptcy Action,
the Company virtually eliminated all marketing activities.  Management
believes that it has identified the service areas which afford the
best potential profitability and customer quality.  With the December
8, 2005 settlement of the Bankruptcy Action, the Company reinstated
various marketing efforts, including telemarketing activities,
directed towards prospective customers with the highest likelihood of
long-term retention and profitability.

Management, utilizing the tools available under the respective tariffs
within the Company's geographic operating boundaries, began to more
stringently evaluate the creditworthiness of prospective customers and
terminate relationships with customers that were less than responsible
in fulfilling their payment obligations.  Further, within the
limitations imposed by the Company's operating tariffs, management is
evaluating the availability of rate increases as soon as practicable.
As practicable, the Company, during future periods, as circumstances
and situations warrant, will continue to pursue its efforts to add
additional subsidiaries or become involved in attractive joint
ventures, primarily in the telecommunications industry.  The Company
intends to continue its strategic acquisition activities to promote
the products and the growth of Epicus as its primary subsidiary.

Results of Operations

Epicus Communications Group, Inc. (Company or Epicus Group) operates
in the telecommunications industry; however, we may become involved in
any venture which management believes would be in the best interest of
the Company and its shareholders.

For the period from June 1, 2006  through May 31, 2007, the Company
reported net revenues of approximately $8,013,044 with gross profit of
approximately $2,084,942 (approximately 26%).  These revenues were
solely derived from telecommunication service sales.  We have
experienced deteriorations in gross margins as a result of various
statutory changes and U. S. Congressional legislation allowing the
primary telecommunication carriers, which provide the Company's
backbone service, to raise rates and diminish pricing margins on CLEC
carriers, such as the Company.  Future tariff and pricing, as well as
potential increases in rates from our primary telecommunication
carriers will have an impact on our future revenues and gross profit
levels, which at this time are unpredictable.

The Company incurred selling and marketing expenses of approximately
$26,507 and general and administrative expenses of approximately
$2,782,403 for the period from June 1, 2006  through  May 31, 2007.

As a result of the 2004 bankruptcy filing, the Company disbanded its
in-house marketing operations.  The Company is also experiencing a
negative impact from this action in replacing customers lost through
normal attrition in the telecommunications industry.  As a result of
the December 2005 approval and funding of the Company's Plan of
Reorganization, management  undertook steps to rebuild it's marketing
efforts and realized additions to the customer base as a result of
these actions.  However, the stability of the customer base and the
addition of new customers is not deemed to be either predictable or
reliable as the Company continues to evaluate it's service areas,
tariffs and creditworthiness of it's customers.


                                                                     14
<PAGE>


Management is of the opinion that the cost levels experienced during
the 4th quarter of Fiscal 2006 should be reflective of future periods.
However, due to the uncertainty of the bankruptcy action, the need for
adding personnel and other unpredictable factors, the actual cost
levels in future periods may experience significant fluctuations.  As
a result of the bankruptcy action, management is evaluating all
possible areas of personnel and expenditure savings, and in some areas
has enacted the utilization of third-party service providers for
customer service, billing, cash management and carrier billing review.
The ultimate impact, if any, of these items being considered is
unknown at this time; however, management is of the opinion that only
actions with a positive impact on the Company's operations and
profitability will be undertaken.

The Company experienced a net loss of approximately $(3,062,714) for
the period from June 1, 2006 through May 31, 2007.  A significant
component of the net loss for this period was the charge to operations
for the recognition of bad debts of approximately $1,216,450 and the
recognition of interest expense on the convertible notes and
debentures of approximately $621,962.  Concurrent with the Company's
filing of a Petition for Relief under Chapter 11, the Company adopted
the policy of recording a net accounts receivable balance equal to the
actual cash collected during the 30-day period subsequent to any
reporting period.  Any differential between the Company's actual
accounts receivable and the actual subsequent cash collections is
recorded as bad debt expense in the respective reporting period.

Also continuing to contribute to our operating loss during the period
are the expenses associated with continuing to operate and maintain
Epicus Group's offices, professional fees, including legal and
accounting plus other expenses associated with being a reporting
public company.

Liquidity and Capital Resources
-------------------------------

As of May 31, 2007, we had approximately $118,031 in cash in our
operating accounts.  To assist us in our cash flow requirements we may
determine, depending upon the prevailing stock price of our shares, to
seek subscriptions from the sale of securities to private investors,
although there can be no assurance that we will be successful in
securing any investment from private investors at terms and conditions
satisfactory to us, if at all.

As of this filing, the Company does not anticipate future capital
resource demands for new equipment or furnishings.

Competition
-----------

We have many competitors ranging from the very large like
AT&T,(formerly BellSouth Corporation), McLeod Communications,
Verizon, ICG Communications as well as smaller competitors that may be
better capitalized, have better name recognition or longer track
records of providing telecommunications services.  The Company
believes that the competitive factors affecting its markets include
features such as functionality, adaptability, ease of use, quality,
performance, price, customer service and support, effectiveness of
sales and marketing efforts and Company reputation.  Although the
Company believes that it currently competes favorably with respect to
such factors, there can be no assurance that the Company can maintain
its competitive position against current and potential competitors,
especially those with greater financial marketing support and other
resources than the Company.

We believe that our "Alternative Sales" approach of using utility
companies gives us a distinct marketing identity, as does our almost
total automation in provisioning of new services and all of our
billing, which is very rare for a CLEC.  These factors we believe,
give us the competitive edge we need to continue our growth.  However,
there can be no assurance that we can maintain our competitive
position against current and potential competitors, especially those
with greater financial resources than we have.


                                                                     15
<PAGE>


Risks related to our business
-----------------------------

Our auditors have expressed doubt about our ability to continue as a
--------------------------------------------------------------------
going concern.
-------------

Our independent auditors have issued their report dated September 11,
2007 on our consolidated financial statements as of May 31, 2007,
which includes an explanatory paragraph expressing substantial doubt
about our ability to continue as a going concern.  We have minimal
working capital and we continue to experience cash flow difficulties
in matching our contractual payment obligations, principally to
BellSouth Corp. and Global Crossing, to our revenue billing cycles.

These conditions raise substantial doubt about our ability continue as
a going concern.  We have a history of operating losses and may
continue to incur operating losses.  We will most likely require
additional financing and, if we are unable to raise such funds, our
operations may be adversely affected.

Based upon our present liquid resources, our present operating
expenses, and the commitment of our executive officers to continue to
defer most or all of their salaries, and if no increased revenues are
generated from operations or other sources, we believe we will be able
to operate for a minimum of an additional twelve months.

We continue to be dependant upon private sales of stock in the form of
convertible debentures to supplement our cash flow for operations and
the acquisition of new customers.

If additional funds are required, but cannot be raised, it will have
an adverse effect upon our operations.  To the extent that additional
funds are obtained by the sale of equity securities, our stockholders
may sustain significant dilution.



Item 7 - Financial Statements

The required financial statements begin on page F-1 of this document.


Item 8 - Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure

None


Item 8A - Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

 Under the supervision and with the participation of our management,
 including our principal executive officer and principal financial
 officer, we conducted an evaluation of our disclosure controls and
 procedures, as such term is defined under Rule 13a-15(e) promulgated
 under the Securities Exchange Act of 1934, as amended (Exchange Act),
 as of May 31, 2007.  Based on this evaluation, our principal
 executive officer and principal financial officer concluded that our
 disclosure controls and procedures are effective in alerting them on
 a timely basis to material information relating to our Company
 required to be included in our reports filed or submitted under the
 Exchange Act.

(b) Changes in Internal Controls


                                                                     16
<PAGE>


 There were no significant changes (including corrective actions with
 regard to significant deficiencies or material weaknesses) in our
 internal controls over financial reporting that occurred during the
 fourth quarter of Fiscal 2007 that has materially affected, or is
 reasonably likely to materially affect, our internal control over
 financial reporting.


                         PART III

Item 9 - Directors and  Executive Officers of the Registrant

The following table sets forth certain information with respect to our
executive officers and directors. Each director serves a term of one
year or until a successor is elected.

The directors and executive officers serving the Company are as
follows:

    Name                Age     Position Held and Tenure
    ----                ---     ------------------------

  Mark Schaftlein        47     Chief Executive Officer and Director
  Thomas Donaldson       64     Vice President for Corp. Operations

Mark Schaftlein, Mark Schaftlein has been a Consultant with Ocean
---------------
Avenue Advisors for the past six years focusing on Corporate Finance,
Restructuring and Management Consulting. At Ocean Avenue Advisors, he
concentrated on Small and Microcap companies with an emphasis on
telecommunications, technology and finance.  Mr. Schaftlein sits on
the Board of Directors of GlobalNet Corporation and SP Holding
Corporation. He spent 20 years at Citigroup with 8 of those years
spent in Mortgage Banking and Consumer Finance.

Thomas N. Donaldson, is currently the Company's Vice President of
-------------------
Corporate Operations.  Mr Donaldson, prior to the December 8, 2006
bankruptcy settlement date, served as both an officer and director of
the Company and it's predecessors since February 1993.  Prior to
joining the Company, he had a successful background in the electronic
media, both television and radio.  Before being promoted to executive
level management in the broadcasting industry, he was an award winning
Producer/ Director at both the local and network levels. Additionally,
he was a majority partner in the television production company,
"American Televent", which produced commercials and syndicated
programming.  Mr. Donaldson attended both the University of Miami and
the University of Paris.


Item 10 - Executive Compensation

The following table shows all the cash compensation paid or to be paid
by us or our subsidiaries, as well as certain other compensation paid
or accrued, during the fiscal years indicated, to our chief executive
officer and all other executive officers whose total annual salary and
bonus exceeded $100,000 in all capacities in which the person served.
<TABLE>
<CAPTION>
Summary Compensation Table
--------------------------
Name and                        (1)               Annual      Restricted   Options/    All Other
Principal Positions    Year    Salary   Bonus   Compensation    Stock       SARs(#)  Compensation
-------------------   -----   --------  -----   ------------  ----------   --------
<S>                   <C>     <C>       <C>     <C>           <C>          <C>
Mark Schaftlein        2007   $180,000   $-0-      $-0-          $-0-         $-0-        $-0-
CEO                    2006   $180,000   $-0-      $-0-          $-0-         $-0-        $-0-


                                                                     17
<PAGE>



Chief Executive        2005     $-0-     $-0-      $-0-          $-0-         $-0-        $-0-
Officer                2004     $-0-     $-0-      $-0-          $-0-         $-0-        $-0-

Thomas                 2007   $80,000    $-0-      $-0-          $-0-         $-0-        $-0-
Donaldson              2006   $120,000   $-0-      $-0-          $-0-         $-0-        $-0-
VP Corp Opps           2005   $104,000   $-0-      $-0-          $-0-         $-0-        $-0-
                       2004   $104,000   $-0-      $-0-          $-0-         $-0-        $-0-

Gerard Haryman         2006   $250,000   $-0-      $-0-          $-0-         $-0-        $-0-
President, CFO         2005   $250,000   $-0-      $-0-          $-0-         $-0-        $-0-
Chairman of the        2004   $250,000   $-0-      $-0-          $-0-         $-0-        $-0-
Board
</TABLE>


 (1) Due to our cash position, Mr. Haryman and Mr. Donaldson deferred
     payment of all or part of their salaries and/or bonuses from
     June 1, 2003 through December 8, 2005.  As a component of the
     bankruptcy settlement, all accrued and unpaid compensation due
     to Mr. Haryman and Mr. Donaldson were forfeited and no future
     obligation for payment exists.
 (2) Gerard Haryman resigned on September 22, 2006.
 (3) Messrs. Schaftlein and Donaldson have continued to defer
     portions of their salaries to date.

Directors are not compensated for acting in their capacity as
directors. Directors are reimbursed for their accountable expenses
incurred in attending meetings and conducting their duties.

Options granted in the last Fiscal Year
---------------------------------------

There were no grants of stock options made during either Fiscal 2007
or Fiscal 2006 to our executive officers and/or directors.

Stock Options held at end of Fiscal 2007 and 2006
-------------------------------------------------

No stock options, stock appreciation rights or other compensation were
granted to our President or other corporate officers or directors
during either Fiscal 2007 and Fiscal 2006.

Employment Agreements
---------------------

On December 8, 2005, the Company executed new Employment Contracts
with Gerard Haryman as President, Thomas Donaldson as Vice President
and Mark Schaftlein as Chief Executive Officer.  These contracts were
filed in their entirety as exhibits to the aforementioned December 14,
2005 Form 8-K and expire on December 31, 2006.

Effective January 1, 2007, by mutual consent and a resolution of the
Board of Directors, the Employment Contracts with Messrs. Schaftlein
and Donaldson were extended for a period of 12 months, expiring on
December 31, 2007, with  equivalent terms to the aforementioned
Agreements.

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

The following table sets forth information as of July 1, 2007 with respect
to any person known by us to own beneficially more than 5% of our common
stock, common stock beneficially owned by each of our officers named


                                                                     18
<PAGE>


in "Executive Compensation," and each of our directors, and the amount
of common stock beneficially owned by our officers and directors as a group.
<TABLE>
<CAPTION>
                                                            % of Class
Name and address                     Number of Shares    Beneficially Owned
----------------                     ----------------    ------------------
<S>                                  <C>                 <C>
Mark Schaftlein, CEO                    5,250,000             8.65%
610 Crescent Executive Court - #300
Lake Mary, FL 32746

Thomas Donaldson, VP                      400,000             .007%
610 Crescent Executive Court - #300
Lake Mary, FL 32746

All Executive Officers                  5,650,000             9.35%
and Directors as a
Group (2 persons)
</TABLE>

  (1)  Percentage of beneficial ownership is based upon the 60,684,288
       shares of our common stock outstanding as of July 12, 2007

Unless otherwise noted below, we believe that all persons named in the
table have sole voting and investment power with respect to all shares
of common stock beneficially owned by them.  For purposes hereof, a
person is considered to be the beneficial owner of securities that can
be acquired by such person within 60 days from the date hereof upon
the exercise of warrants or options or the conversion of convertible
debentures.  Each beneficial owner's percentage ownership is
determined by assuming that any such warrants, options or convertible
debentures that are held by such person (but not those held by any
other person) and which are exercisable within 60 days from the date
hereof, have been exercised.


Beneficial Ownership Reporting Compliance
-----------------------------------------

All but one  of the Company's officers and/or directors, and/or their
affiliates, as appropriate, complied with the annual requirements to
file Form 3, 4 or 5 with the U. S. Securities and Exchange Commission.
The non-filer was Thomas Donaldson.

Item 12 - Certain Relationships and Related Transactions

The company was a party to and has a direct or indirect material
interest in the following transactions during the fiscal year ended
May 31, 2007 and 2006, respectively: None.

Item 13 - Exhibits

  3  Articles of Incorporation and By-Laws

The Articles of Incorporation and Articles of Amendment to The
Articles of Incorporation and By-Laws of the Registrant were pre-filed
as Exhibits 3-1, 3.2, and 3.3, respectively, to our Form I 0-KSB, for
the fiscal year 1995, filed April 1, 1998, with the Securities and
Exchange Commission and are incorporated herein by reference.

  10 Material Contracts

Some of the Material Contracts of the Registrant were filed as Exhibits
10.1, 10.2, 10.3, 10.4, and 10.5, respectively, to the Registrant's Form
10-KSB as of May 31, 195 under the Securities and Exchange Ad: of 1934,


                                                                     19
<PAGE>


filed April 1, 1998 with the Securities and Exchange Commission - The
Contracts for the sale of ITC and the purchases of Hospitality Telecom
Corp (formerly Mic Mac Investments, Inc.)and Cambridge Gas Transport
Corporation, were included in Epicus Group's (formerly Phoenix
International Industries, Inc.'s) 10-KSB for the year ended
May 31, 1998 and are incorporated herein by reference.

31.1 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


Item 14 - Principal Accountants Fees and Services

The Company paid or accrued the following fees in each of the prior
two fiscal years to it's principal accountant, S. W. Hatfield, CPA of
Dallas, Texas:
<TABLE>
<CAPTION>
                              Year ended          Year ended
                             May 31, 2007        May 31, 2006
                             ------------        ------------
 <S>                            <C>                  <C>
 1.  Audit fees                 $35,475              $43,800
 2.  Audit-related fees               -                    -
 3.  Tax fees                     3,200                2,200
 4.  All other fees                   -                    -
                                -------              -------

     Totals                     $38,675              $46,000
                                =======              =======
</TABLE>
The Company has no formal audit committee.  However, as defined in
Sarbanes-Oxley Act of 2002, the entire Board of Directors is the
Company's defacto audit committee.

In discharging its oversight responsibility as to the audit process,
the Board obtained from the independent auditors a formal written
statement describing all relationships between the auditors and the
Company that might bear on the auditors' independence as required by
Independence Standards Board Standard No. 1, "Independence Discussions
with Audit Committees."  The Board discussed with the auditors any
relationships that may impact their objectivity and independence,
including fees for non-audit services, and satisfied itself as to the
auditors' independence.  The Board also discussed with management, the
internal auditors and the independent auditors the quality and
adequacy of the Company's internal controls.  The Board reviewed with
the independent auditors their management letter on internal controls,
if one was issued by the Company's auditors.

The Board discussed and reviewed with the independent auditors all
matters required to be discussed by auditing standards generally
accepted in the United States of America, including those described in
the applicable auditing standards regarding communications with Audit
Committees.

The Board reviewed the audited consolidated financial statements of
the Company as of and for the year ended May 31, 2007 and 2006, with
management and the independent auditors.  Management has the sole
ultimate responsibility for the preparation of the Company's financial
statements and the independent auditors have the responsibility for
their examination of those statements.

Based on the above-mentioned review and discussions with the
independent auditors and management, the Board of Directors approved
the Company's audited consolidated financial statements and
recommended that they be included in its Annual Report on Form 10-KSB
for the year ended January 31, 2007, for filing with the Securities
and Exchange Commission.


                                                                     20
<PAGE>


The Company's principal accountant, S. W. Hatfield, CPA did not engage
any other persons or firms other than the principal accountant's full-
time, permanent employees.

______________________________________________________________________

                                SIGNATURES

In accord with Section 13 or 15(d) of the Securities Act of 1933, as
amended, the Company caused this report to be signed on its behalf by
the undersigned, thereto duly authorized.

                                 Epicus Communications Group, Inc.

Dated: September 11, 2007        By:      /s/ Mark Schaftlein
       ------------------           -------------------------
                                              Mark Schaftlein
                                  Chief Executive Officer and
                               Acting Chief Financial Officer

In accordance with the Securities Exchange Act of 1934, as amended,
this report has been signed below by the following persons on behalf
of the Company and in the capacities and on the date as indicated.



Dated: September 11, 2007        By:    /s/ Mark Schaftlein
       ------------------           -----------------------
                                            Mark Schaftlein
                                    Chief Executive Officer,
                             Acting Chief Financial Officer
                                               and Director



                                                                     21
<PAGE>


Exhibit No. 31.1
----------------
Form 10-KSB
Epicus Communications Group, Inc.
File No. 000-17058

             Certification Pursuant to Section 302
              of the Sarbanes-Oxley Act of 2002 -
   Chief Executive Officer and Acting Chief Accounting Officer


I, Mark Schaftlein, certify that:

1.  I have reviewed this report on Form 10-KSB for the quarter ended May
    31, 2006 of Epicus Communications Group, Inc.

2.  Based on my knowledge, this report does not contain any untrue
    statement of a material fact or omit to state a material fact
    necessary to make the statements made, in light of the circumstances
    under which such statements were made, not misleading with respect to
    the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial
    information included in this report, fairly present in all material
    respects the financial condition, results of operations and cash
    flows of the registrant as of, and for, the periods presented in this
    report;

4.  The registrant's other certifying officer(s) and I are responsible
    for establishing and maintaining disclosure controls and procedures
    (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
    registrant and have:
    a)  designed such disclosure controls and procedures, or caused
        such disclosure controls and procedures to be designed under
        our supervision, to ensure that material information relating
        to the registrant  is made known to us by others within those
        entities, particularly during the period in which this report
        is being prepared;
    b)  evaluated the effectiveness of the registrant's disclosure
        controls and procedures and presented in this report our
        conclusions about the effectiveness of the disclosure controls
        and procedures, as of the end of the period covered by this
        report based on such evaluation; and
    c)  disclosed in this report any change in the registrant's
        internal control over financial reporting that occurred during
        the registrant's most recent fiscal quarter (the registrant's
        fourth fiscal quarter in the case of an annual report) that
        has materially affected, or is reasonably likely to materially
        affect, the registrant's internal control over financial
        reporting;

5.  The registrant's other certifying officer(s) and I have disclosed,
    based on our most recent evaluation of internal control over
    financial reporting, to the registrant's auditors and the audit
    committee of registrant's board of directors (or persons performing
    the equivalent functions):
    a)  all significant deficiencies and material weaknesses in the
        design or operation of internal control over financial
        reporting which are reasonably likely to adversely affect the
        registrant's ability to record, process, summarize and report
        financial information; and
    b)  any fraud, whether or not material, that involves management
        or other employees who have a significant role in the
        registrant's internal control over financial reporting.


Date: September 11, 2007         By: /s/ Mark Schaftlein
      ------------------            --------------------
                                         Mark Schaftlein
                             Chief Executive Officer and
                          Acting Chief Financial Officer

<PAGE>






         Epicus Communications Group, Inc. and Subsidiary

            Index to Consolidated Financial Statements


                                                                     Page

Report of Registered Independent Certified Public Accounting Firm    F-2

Consolidated Financial Statements

 Consolidated Balance Sheets
   as of May 31, 2007 and 2006                                       F-3

 Consolidated Statements of Operations and Comprehensive Loss
  for the year ended May 31, 2007 and
  for the period from December 8, 2005 (date of
   bankruptcy settlement) through May 31, 2006                       F-4

 Consolidated Statement of Changes in Stockholders' Deficit
  for the period from December 8, 2005 (date of bankruptcy
   settlement) through May 31, 2007                                  F-5

 Consolidated Statements of Cash Flows
  for the year ended May 31, 2007 and
  for the period from December 8, 2005 (date of bankruptcy
   settlement) through May 31, 2006                                  F-6

 Notes to Consolidated Financial Statements                          F-7


<PAGE>

                LETTERHEAD OF S. W. HATFIELD, CPA
                ---------------------------------


 REPORT OF REGISTERED INDEPENDENT CERTIFIED PUBLIC ACCOUNTING FIRM
 -----------------------------------------------------------------



Board of Directors and Stockholders
Epicus Communications Group, Inc.

We have audited the accompanying consolidated balance sheets of Epicus
Communications Group, Inc. (a Florida corporation) and Subsidiary as of
May 31, 2007 and 2006 and the related consolidated statements of
operations and comprehensive loss, changes in stockholders' deficit and
cash flows for the year ended May 31, 2007 and the period from December
8, 2005 (date of bankruptcy settlement) through May 31, 2006,
respectively.  These consolidated financial statements are the
responsibility of the Company's management.  Our responsibility is to
express an opinion on these consolidated financial statements based on
our audit.

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

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of Epicus Communications Group, Inc. as of May 31, 2007 and 2006
and the consolidated results of its operations and its consolidated cash
flows for the year ended May 31, 2007 and for the period from December
8, 2005 (date of bankruptcy settlement) through May 31, 2006, in
conformity with accounting principles generally accepted in the United
States of America.

The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern.  As discussed
in Note D to the consolidated financial statements, the Company has
reorganized pursuant to Chapter 11 of the U. S. Bankruptcy Code and
continues to experience operating losses and negative cash flow from
operating activities.  These circumstances create substantial doubt about
the Company's ability to continue as a going concern.  The consolidated
financial statements do not contain any adjustments that might result
from the outcome of these uncertainties.



                                              S. W. HATFIELD, CPA
Dallas, Texas
September 11, 2007


<PAGE>

         Epicus Communications Group, Inc. and Subsidiary
                   Consolidated Balance Sheets
                      May 31, 2007 and 2006
<TABLE>
<CAPTION>

                                                      May 31, 2007    May 31, 2006
                                                      ------------    ------------
<S>                                                   <C>             <C>
                              ASSETS
                              ------
Current Assets
 Cash on hand and in bank                             $    118,031    $    279,726
 Accounts receivable - Trade, net of allowance
   for doubtful accounts of approximately $-0-
   and $225,000, respectively                              494,937         790,172
 Prepaid expenses and other                                  3,650          40,642
                                                      ------------    ------------
  Total Current Assets                                     616,618       1,110,540

Property and Equipment - at cost or
  post-reorganization fair market value                    132,736          97,764
    less accumulated depreciation                          (38,451)        (10,597)
                                                      ------------    ------------
  Net Property and Equipment                                94,285          87,167
                                                      ------------    ------------

Other Assets
 Deposits and other                                         22,259         134,998
 Reorganization value in excess of amounts
  allocatable to identifiable assets                     8,021,040       8,021,040
                                                      ------------    ------------
   Total Other Assets                                    8,043,299       8,156,038
                                                      ------------    ------------

Total Assets                                          $  8,754,202    $  9,353,745
                                                      ============    ============


              LIABILITIES AND STOCKHOLDERS' DEFICIT
              -------------------------------------
Current Liabilities
 Deferred customer revenue                            $    247,397    $    512,433
 Current maturities of bankruptcy settlement debt           81,423         397,821
 Accounts payable - trade                                  214,143         143,420
 Accrued taxes payable and other liabilities             1,016,450         431,834
                                                      ------------    ------------
  Total Current Liabilities                              1,559,413       1,485,508
                                                      ------------    ------------

Long-Term Liabilities
 Bankruptcy settlement debt, net of current
   maturities                                              540,345         503,342
 Convertible debentures and notes                       10,818,267       9,405,342
                                                      ------------    ------------
  Total Liabilities                                     12,918,025      11,394,192
                                                      ------------    ------------

Commitments and Contingencies

Stockholders' Deficit
 Common stock - $0.001 par value.
  1,000,000,000 shares authorized.
  64,089,210 and 10,817,600 shares issued
  and outstanding                                           64,089          10,818
 Additional paid-in capital                              1,504,530         618,463
 Accumulated deficit                                    (5,732,442)     (2,669,728)
                                                      ------------    ------------
  Total Stockholders' Deficit                           (4,163,823)     (2,040,447)
                                                      ------------    ------------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT           $  8,754,202    $  9,353,745
                                                      ============    ============
</TABLE>


       The accompanying notes are an integral part of these
                 consolidated financial statements.
                                                                       F-3

<PAGE>

          Epicus Communications Group, Inc. and Subsidiary
   Consolidated Statements of Operations and Comprehensive Loss
                   Year ended May 31, 2007 and
   Period from December 8, 2005 (date of bankruptcy settlement)
                      through May 31, 2006

<TABLE>
<CAPTION>
                                                                     Period from
                                                                   December 8, 2005
                                                                 (date of bankruptcy
                                               Year ended        settlement) through
                                              May 31, 2007          May 31, 2006
                                            -----------------    -------------------
<S>                                         <C>                  <C>
Revenues - net                                $ 8,013,044           $  5,829,974
Cost of Sales                                  (5,928,102)            (4,843,177)
                                              -----------           ------------
Gross Profit                                    2,084,942                986,797
                                              -----------           ------------

Operating Expenses
 Selling and marketing expenses                    26,507                362,855
 General and administrative expenses
  Personnel                                     1,733,212                987,193
  Other                                         1,022,684                461,149
 Bad debt expense                               1,216,450              1,116,217
 Depreciation and amortization                     27,854                 10,597
 Consulting expense related to
  common stock issuances at
  less than "fair value"                          202,431                 83,753
                                              -----------           ------------
  Total operating expenses                      4,229,138              3,021,764
                                              -----------           ------------

 Income (Loss) from operations                 (2,144,196)            (2,034,967)

Other income
 Interest and other income (expense) - net        207,204                  5,804
 Interest expense                              (1,125,722)              (491,006)
 Post-bankruptcy reorganization costs                   -               (126,035)
 Abandonment of name development costs                  -                (23,524)
                                              -----------           ------------

Loss before income tax benefit                 (3,062,714)            (2,669,728)

Provision for income tax benefit                        -                      -
                                              -----------           ------------

Net Loss                                       (3,062,714)            (2,669,728)

Other comprehensive income                              -                      -
                                              -----------           ------------

Comprehensive Loss                            $(3,062,714)          $ (2,669,728)
                                              ===========           ============

Net loss per weighted-average share
 of common stock outstanding, calculated
 on Net Loss - basic and fully diluted        $     (0.12)          $     (0.25)
                                              ===========           ============

Weighted-average number of shares
 of common stock outstanding                   25,126,823             10,278,400
                                              ===========           ============
</TABLE>


       The accompanying notes are an integral part of these
                 consolidated financial statements.
                                                                       F-4

<PAGE>


         Epicus Communications Group, Inc. and Subsidiary
    Consolidated Statement of Changes in Shareholders' Deficit
   Period from December 8, 2005 (date of bankruptcy settlement)
                     through May 31, 2007
<TABLE>
<CAPTION>
                                                           Additional
                                    Common Stock             paid-in      Accumulated
                                    ------------
                               Shares        Amount          capital        deficit         Total
                            -----------    -----------    -----------    -----------    -----------
<S>                         <C>            <C>            <C>            <C>            <C>
Stock issued pursuant
 to Plan of Reorganization
 at Settlement Date on
 December 8, 2005             10,000,000    $    10,000    $         -    $         -    $    10,000

Issuance of common stock
 upon debenture conversion       817,600            818         66,139              -         66,957
  Consulting expense
   related to issuance of
   common stock at less
   than "fair value"                   -              -         83,753              -         83,753

Contribution of suspended
 interest on debentures
 and note payable                      -              -        468,571              -        468,571

Net loss for the period                -              -              -     (2,669,728)    (2,669,728)
                             -----------    -----------    -----------    -----------    -----------
Balances at
 May 31, 2006                 10,817,600         10,818        618,463     (2,669,728)    (2,040,447)

Issuance of common stock
 upon debenture conversion    53,271,610         53,271         61,674              -        114,945
  Consulting expense
   related to issuance of
   common stock at less
   than "fair value"                   -              -        202,431              -        202,431

Contribution of suspended
 interest on debentures
 and note payable                      -              -        621,962              -        621,962

Net loss for the period                -              -              -     (3,062,714)    (3,062,714)
                             -----------    -----------    -----------    -----------    -----------
Balances at
 May 31, 2007                 64,089,210    $    64,089    $ 1,504,530    $(5,732,442)   $(4,163,823)
                             ===========    ===========    ===========    ===========
</TABLE>


       The accompanying notes are an integral part of these
                 consolidated financial statements.
                                                                       F-5

<PAGE>



         Epicus Communications Group, Inc. and Subsidiary
               Consolidated Statements of Cash Flows
                   Year ended May 31, 2007 and
   Period from December 8, 2005 (date of bankruptcy settlement)
                      through May 31, 2006
<TABLE>
<CAPTION>
                                                                                               Period from
                                                                                             December 8, 2005
                                                                                           (date of bankruptcy
                                                                          Year ended       settlement) through
                                                                         May 31, 2007          May 31, 2006
                                                                        --------------        --------------
<S>                                                                     <C>                   <C>
Cash Flows from Operating Activities
  Net loss for the period                                                 $(3,062,714)        $(2,669,728)
  Adjustments to reconcile net loss to net cash
    provided by operating activities
      Depreciation                                                             27,854              10,597
      Bad Debt Expense                                                      1,216,450           1,116,217
      Abandonment of name development costs                                         -              23,524
      Consulting expense related to common stock
        issuances at less than "fair value"                                   202,431              83,753
      Contribution of interest expense related to
        suspended interest payable on notes payable                           621,962             468,571
      (Increase) Decrease in
        Accounts receivable                                                  (921,215)           (823,714)
        Deposits, intangible and other assets                                 149,731             (51,920)
      Increase (Decrease) in
        Deferred customer revenue                                            (265,036)              7,180
        Accounts payable                                                       70,723               4,849
        Accrued taxes payable and other liabilities                           584,616             431,834
                                                                          -----------         -----------

Net cash used in operating activities                                      (1,375,198)         (1,398,837)
  Cash Flows from Investing Activities                                    -----------         -----------
  Cash paid on deposit for pending equipment acquisition                            -             (11,764)
  Cash paid to acquire property and equipment                                 (34,972)                  -
                                                                          -----------         -----------

Net cash used in investing activities                                         (34,972)            (11,764)
  Cash Flows from Financing Activities                                    -----------         -----------

  Cash paid on bankruptcy settlement debt                                    (279,395)           (161,475)
  Cash advances on new convertible debentures                               1,527,870             375,000
  Cash advances on callable secured convertible note                                -           1,297,233
                                                                          -----------         -----------

Net cash provided by financing activities                                   1,248,475           1,610,758
                                                                          -----------         -----------

Increase (Decrease) in Cash                                                  (161,695)            200,157
Cash at beginning of period                                                   279,726              79,569
                                                                          -----------         -----------

Cash at end of period                                                     $   118,031         $   279,726
                                                                          ===========         ===========
Supplemental Disclosure of Interest and Income Taxes Paid
  Interest paid for the period                                            $    25,893         $    22,435
                                                                          ===========         ===========
  Income taxes paid for the period                                        $         -         $         -
                                                                          ===========         ===========
Supplemental Disclosure of Non-cash Investing and Financing Activities
  Common stock issued for retirement of debt                              $   114,695         $    66,958
                                                                          ===========         ===========
</TABLE>


       The accompanying notes are an integral part of these
                 consolidated financial statements.
                                                                       F-6

<PAGE>



         Epicus Communications Group, Inc. and Subsidiary
            Notes to Consolidated Financial Statements
                      May 31, 2007 and 2006



NOTE A - Organization and Description of Business

Epicus Communications Group, Inc. (Company) was incorporated on July
22, 1985, pursuant to the laws of the State of Florida as Hydrobac,
Inc.  In May 2003, the Company changed it's name to better reflect the
Company's business emphasis on the telecommunications sector and to
better create consistent name branding with the Company's then-wholly-
owned operating subsidiary, EPICUS, Inc.  In accordance with the
Company's Plan for Reorganization under Chapter 11 of the U. S.
Bankruptcy code, on December 7, 2005, all operations were transferred
to the Company and EPICUS, Inc. was liquidated.

In prior years, the Company acquired 100% each of the then issued and
outstanding stock of Moye & Associates, Inc. (Moye), a Georgia
corporation, and Mic Mac Investments, Inc. (Mic Mac), a South Carolina
corporation.  All operations related to Moye and Mic Mac were
discontinued prior to May 31, 2004.  During the quarter ended August
31, 2006,  the Company dissolved these two entities.

On November 13, 2006, the Company formed a new wholly-owned
subsidiary, ECG on the Net, LLC, a Florida Limited Liability Company,
for the purpose of providing low cost VoIP telephone services to
consumers nationwide.


NOTE B - Reorganization Under Chapter 11 of the U. S. Bankruptcy Code

On October 25, 2004 (the "Petition Date"), Epicus Communications
Group, Inc. (the "Company") and its subsidiary, Epicus, Inc.,
(collectively, the "Debtors") filed voluntary petitions in the United
States Bankruptcy Court for the Southern District of Florida (the
"Bankruptcy Court") seeking reorganization relief under the provisions
of Chapter 11 of Title 11 of the United States Code (the "Bankruptcy
Code") (Case Nos. 04-34915, 04-34916, collectively, the "Cases").

Under Chapter 11, certain claims against the Debtors in existence
prior to the filing of the petitions for relief under Federal
Bankruptcy Laws are stayed while the Debtors continue to operate their
businesses as debtors-in-possession under the jurisdiction of the
Bankruptcy Court and in accordance with the applicable provisions of
the Bankruptcy Code and the orders of the Bankruptcy Court.  These
claims were reflected in the Company's balance sheets as "Liabilities
Subject to Compromise."  Additional claims (liabilities subject to
compromise) may arise subsequent to the Petition Date resulting from
the rejection of executory contracts, including leases, and from the
determination of the court (or agreed to by parties in interest) of
allowed claims for contingencies and other disputed amounts.  Claims
secured against the Debtors' assets ("secured claims") are also
stayed, although the holders of such claims have the right to move the
Bankruptcy Court for relief from the stay.  Secured claims, if any,
are secured primarily by liens on the Debtors' property, plant and
equipment.

The Company's Plan of Reorganization was confirmed by the Bankruptcy
Court on September 30, 2005 and became effective on December 8, 2005.
It was determined that Epicus Communications Group, Inc.'s
reorganization value computed immediately before December 8, 2005, the
effective date of the Plan of Reorganization, was approximately
$1,395,488, which consisted of the following:

   Current assets retained by the post-confirmation entity  $1,054,287
   Fair market value of property and equipment                  86,000
   Deposits with vendors and other assets transferred
     to the post-confirmation entity                           255,201
                                                            ----------

     Reorganization value                                   $1,395,488
                                                            ==========

Pursuant to the Plan of Reorganization, all of the operations of the
Company's then-wholly-owned subsidiary, EPICUS, Inc. were transferred
to Epicus Communications Group, Inc. and the EPICUS, Inc. subsidiary
was dissolved.  The Company adopted fresh-start reporting because the
holders of existing voting shares immediately before filing and
confirmation of the Plan received less than 50.0% of the voting shares
of the emerging entity and its reorganization value is less than its
postpetition liabilities and allowed claims, as shown below:


                                                                       F-7

<PAGE>


         Epicus Communications Group, Inc. and Subsidiary
      Notes to Consolidated Financial Statements - Continued
                      May 31, 2007 and 2006



NOTE B - Reorganization Under Chapter 11 of the U. S. Bankruptcy Code
- Continued

   Postpetition current liabilities                         $   643,824
   "New" common stock issued upon reorganization                 10,000
   Liabilities deferred pursuant to Chapter 11 proceeding     8,762,705
                                                            -----------
     Total postpetition liabilities and allowed claims        9,416,529
   Reorganization value                                      (1,395,488)
                                                            -----------

   Excess of liabilities over reorganization value          $ 8,021,041
                                                            ===========

The reorganization value of Epicus Communications Group, Inc. was
determined in consideration of several factors and by reliance on
various valuation methods, including discounting cash flow and
price/earnings and other applicable ratios.  The factors considered by
Epicus Communications Group, Inc. included the following:

 * Forecasted operating and cash flows results which gave effect to the
   estimated impact of
   - Corporate restructuring and other operating program changes
   - Limitations on the use of available net operating loss
   carryforwards and other tax attributes resulting from the Plan of
 * Reorganization and other events
 * The discounted residual value at the end of the forecast period
   based on capitalized cash flows for the last year of that period.
 * Market share and position
   competition and general economic conditions
 * Projected sales growth
 * Potential profitability
 * Seasonality and working capital requirements

After consideration of Epicus Communications Group, Inc.'s debt
capacity and other capital structure considerations, such as industry
norms, projected earnings to fixed charges, earnings before interest
and taxes to interest, free cash flow to interest and free cash flow
to debt service and other applicable ratios, it was agreed that Epicus
Communications Group, Inc.'s reorganization capital structure should
be as follows:

  Convertible Debentures                       $  5,347,000
  Callable Secured Convertible Note               3,750,000
  Bankruptcy Settlement Notes
   Internal Revenue Service                         674,026
   BellSouth Corp.                                  328,702
   State of Florida                                  59,910
  Common stock                                       10,000
                                               ------------
                                               $ 10,169,638
                                               ============

The following entries record the provisions of the Plan of
Reorganization and the adoption of fresh-start reporting:

Entries to record debt discharge
--------------------------------
 Liabilities subject to compromise                $13,226,818
  Bankruptcy settlement obligations                            $  3,515,442
 Current liabilities                                2,114,011
  Cash                                                                  660
  Prepaid expenses                                                1,020,724
  Other assets                                                      348,210
  Gain on debt discharge                                         10,455,793

Entries to record exchange of stock for stock
---------------------------------------------
 Common stock - old                               $   661,404
  Common stock - new                                           $     10,000
  Additional paid-in capital                                        651,404


                                                                       F-8

<PAGE>


           Epicus Communications Group, Inc. and Subsidiary
      Notes to Consolidated Financial Statements - Continued
                      May 31, 2007 and 2006



NOTE B - Reorganization Under Chapter 11 of the U. S. Bankruptcy Code
- Continued

Entries to record the adoption of fresh-start reporting and to
--------------------------------------------------------------
eliminate the deficit
---------------------
 Accumulated depreciation                            $   563,028
  Property and equipment                                         $    606,286
 Additional paid-in capital                           18,516,543
  Accumulated deficit                                              26,494,326
 Reorganization value in excess of amounts allocated
    to identifiable assets                             8,021,041

The effect of the Plan of Reorganization on Epicus Communications
Group, Inc.'s balance sheet at December 8, 2005, is as follows:
<TABLE>
<CAPTION>
                                              Adjustments to record confirmation of Plan
                                              ------------------------------------------
                                                                                             Reorganized
                                 Pre-             Debt       Exchange of      Fresh            Balance
                              Confirmation     discharge       stock          start             Sheet
                              ------------     ----------     ----------     ----------      ----------
<S>                            <C>             <C>            <C>            <C>             <C>
Cash on hand and in bank           80,229            (660)             -              -          79,569
Accounts receivable
 Trade                          1,307,675               -              -              -       1,307,675
 Allowance for
  doubtful accounts              (225,000)              -              -              -        (225,000)
Prepaid expenses                  912,767      (1,020,724)             -              -        (107,957)
                               ----------      ----------     ----------     ----------      ----------
  Total current assets          2,075,671      (1,021,384)             -              -       1,054,287
                               ----------      ----------     ----------     ----------      ----------

Property and equipment            692,286               -              -       (606,286)         86,000
 Accumulated depreciation        (563,028)              -              -        563,028               -
                               ----------      ----------     ----------     ----------      ----------
  Net Property and Equipment      129,258               -              -        (43,258)         86,000
                               ----------      ----------     ----------     ----------      ----------
Other assets
 Deposits and other               603,411        (348,210)             -              -         255,201
 Reorganization value in
  excess of amounts
  allocated to identifiable
  assets                                -               -              -      8,021,041       8,021,041
                               ----------      ----------     ----------     ----------      ----------
  Total other assets              603,411        (348,210)             -      8,021,041       8,276,242
                               ----------      ----------     ----------     ----------      ----------

Total Assets                   $2,808,340     $(1,369,594)   $         -   $  7,977,783    $  9,416,529
                               ==========     ===========    ===========   ============    ============
</TABLE>




        (Remainder of this page left blank intentionally)



                                                                       F-9

<PAGE>


         Epicus Communications Group, Inc. and Subsidiary
      Notes to Consolidated Financial Statements - Continued
                      May 31, 2007 and 2006



NOTE B - Reorganization Under Chapter 11 of the U. S. Bankruptcy Code
- Continued
<TABLE>
<CAPTION>
                                                Adjustments to record confirmation of Plan
                                                ------------------------------------------
                                                                                               Reorganized
                                  Pre-            Debt         Exchange of       Fresh          Balance
                              Confirmation     discharge          stock          start           Sheet
                               ----------      ----------      ----------      ----------      ----------
<S>                            <C>             <C>             <C>             <C>             <C>
Liabilities not subject
 to compromise
 Accounts payable and other     2,757,835      (2,114,011)              -               -         643,824
                               ----------      ----------      ----------      ----------      ----------
Liabilities subject to
 compromise                    13,226,818     (13,226,818)              -               -               -
IRS Note                                -         674,026               -               -         674,026
BellSouth Note                          -         328,702               -               -         328,702
State of Florida Note                   -          59,910               -               -          59,910
Convertible debentures          5,247,263         100,037               -               -       5,347,300
Convertible note                        -       2,352,767               -               -       2,352,767
                               ----------      ----------      ----------      ----------      ----------
                               18,474,081      (9,711,376)              -               -       8,762,705
                               ----------      ----------      ----------      ----------      ----------
 Total Liabilities             21,231,916     (11,825,387)              -               -       9,406,529
                               ----------      ----------      ----------      ----------      ----------
Shareholders' equity (deficit)
 Common stock - new                     -               -          10,000               -          10,000
 Common stock - old               661,404               -        (661,404)              -               -
 Additional paid-in capital    17,865,139               -         651,404     (18,516,543)              -
 Accumulated deficit          (36,950,119)     10,455,793               -      26,494,326               -
 Total shareholders'
  deficit                     (18,423,576)     10,455,793               -       7,977,783          10,000
                               ----------      ----------      ----------      ----------      ----------
Total Liabilities and
 Shareholders' Equity        $  2,808,340     $(1,369,594)     $        -     $ 7,977,783      $9,416,529
                               ==========      ==========     ===========     ===========      ==========
</TABLE>

The Company's Plan of Reorganization was confirmed by the Bankruptcy
Court on September 30, 2005 and was effective on December 8, 2005.
The confirmed Plan provided for the following:

CLASS 1: is the Bell South secured claim in the amount of
$1,929,396.96, which is secured by a lien on the assets of Epicus.
 On the Effective Date, BellSouth shall receive (I) a cash payment in
 the amount of $1,278,000 and (ii) application of the deposit in the
 amount of $322,695 toward payment of the BellSouth Cure Claim.
 Following the Effective Date, the remaining balance due on the
 Be1lSouth Cure Claim (i.e. ($328,702) shall be paid over the next
 twelve months subsequent to the Effective Date, with interest at the
 rate of 8%, in equal monthly payments ($28,593.18) and Be1lSouth
 shall retain its lien upon the Epicus Collateral until the balance of
 the BellSouth Cure Claim is paid in fall and the Post Petition
 Deposit (defined in the Plan) equals two months of estimated
 billings, at which time Be1lSouth shall release its lien upon the
 Epicus Collateral.

CLASS 2: is compromised of all secured claims other than the BellSouth
Secured Claim, the NIR Group Debenture Claim and the IRS Secured
Claim.
 Except to the extent that a holder of an Allowed Other Secured Claim
 agrees to different treatment, on the later of (I) 10 business days
 after the Effective Date and the date on which such Allowed Other
 Secured Claim becomes an Allowed Other Secured Claim, or as soon
 thereafter as practicable; or (ii) such other date as may be fixed by
 the Bankruptcy Court whether fixed before or after the relevant date
 above, each holder of an Allowed Other Secured Claim shall receive,
 at Reorganized Epicus Communications' sole option, in full and final
 satisfaction of such Allowed Other Secured Claim the following: (I)
 the Collateral securing such Allowed Other Secured Claim; (ii) Cash
 from Reorganized Epicus Communications in the amount of the Allowed
 Other Secured Claim; or (iii) monthly principal payments over a term
 of thirty-six months with interest at me rate of 4% per annum.  Each
 holder of an Allowed Other Secured Claim shall retain any security
 interests held as of the Petition Date until such Allowed Other
 Secured Claim is paid in full.


                                                                       F-10

<PAGE>


         Epicus Communications Group, Inc. and Subsidiary
      Notes to Consolidated Financial Statements - Continued
                      May 31, 2007 and 2006



NOTE B - Reorganization Under Chapter 11 of the U. S. Bankruptcy Code
- Continued

CLASS 3: is the Debenture Claim of the NIR Group secured by a lien
upon the NIR Group Collateral.  The NIR Group is the company which is
the common ownership and management group associated with the hedge
funds that comprise the AJW Group.
 On the Effective Date, the Old Debentures and the accompanying
 registration rights agreement shall be reinstated, pursuant to the
 terms of the Old Debenture Documents, as may be modified by any post-
 Effective Date amendments by The NIR Group and Reorganized Epicus
 Communications.  The NIR Group shall retain, and to the extent
 necessary be granted, alien upon the NIR Group Collateral and the
 Epicus Collateral, subject only to the lien of BellSouth upon the
 Epicus Collateral and the liens of holders of Allowed Other Secured
 Claims until the Allowed NIR Group Debenture Claims are paid in full.

CLASS 4: are the priority claims against Epicus Communications.
 Except to the extent that a holder of an Allowed Priority Claim
 against Epicus Communications has been paid by the Debtor prior to
 the Effective Date or agrees to a different treatment, on the later
 of (I) 10 business days after the Effective Date and the date on
 which such Allowed Priority Claim against Epicus Communications
 becomes an Allowed Claim, or as soon thereafter as practicable; or
 (ii) such other date as may be fixed by the Bankruptcy Court whether
 fixed before or after the relevant date above, each holder of an
 Allowed Priority Claim against Epicus Communications, if any, shall
 receive, at Reorganized Epicus Communications' sole option, the
 following: (I) Cash from Reorganized Epicus Communications in the
 amount of such Allowed Claim; (ii) with respect to a claim of a kind
 specified in Section 507(a) of the Plan, deferred Cash payments, of a
 value, as of the Effective Date, equal to the amount of such Allowed
 Claim; or (iii) with respect to a claim of a kind specified in
 section 507(a)(8) of the Bankruptcy Code, Cash payments, over a
 period not exceeding six years after the date of assessment of such
 Allowed Claim, of a value, as of the Effective Date, equal to amount
 of such Allowed Claim.  Upon the payment of the Class 4 Allowed
 Priority Claims against Epicus Communications, no person holding or
 that could hold a Class 4 Claim against Epicus Communications shall
 have a claim against the Debtor inasmuch as any such liability shall
 be deemed discharged.

CLASS 5: are the priority claims against Epicus.
 Except to the extent that a holder of an Allowed Priority Claim
 against Epicus has been paid by the Debtor prior to the Effective
 Date or agrees to a different treatment, each holder of an Allowed
 Priority Claim against Epicus, if any, shall receive its Pro Rata
 share of the Plan Trust Assets (excluding the Haryman Payment, the
 NIR Group Payment, the proceeds of the Avoidance Actions and 7.5% of
 the Newly Authorized Capital Stock of Reorganized Epicus
 Communications), and in the event that Allowed Claims in Class 5 are
 paid in full, the remaining balance of the Plan Trust Assets shall be
 distributed Pro Rata to the holders of Allowed Claims in Class 9.
 Upon the payment of the Class 5 Allowed Priority Claim against
 Epicus, no person holding or that could hold ,a Class 5 Claim against
 Epicus shall have a claim against the Debtor inasmuch as any' such
 liability shall be deemed discharged.

CLASS 6: are the Convenience Claims against Epicus Communications.
 Each holder of an Allowed Convenience Claims against Epicus
 Communications shall receive Cash in an amount equal to the lesser of
 (I) its Allowed Claim or (ii) one thousand ($1,000) dollars, in full
 and complete satisfaction of such Allowed Claim.

CLASS 7: are the Convenience Claims against Epicus.
 Each holder of an Allowed Convenience Claims against Epicus shall
 receive Cash in an amount equal to the lesser of (I) its Allowed
 Claim or (ii) one thousand ($1,000) dollars, in full and complete
 satisfaction of such Allowed Claim.

CLASS 8: are the Claims of General Unsecured Creditors against Epicus
Communications.
 Except to the extent that a holder of an Allowed General Unsecured
 Claim against Epicus Communications has been paid by the Debtor prior
 to the Effective Date or agrees to a different treatment, each holder
 of an Allowed General Unsecured Claim against Epicus Communications,
 if any, shall receive its Pro Rata share of the balance remaining of
 the Old Equity Payment after the Allowed Claims in Class 4 are paid
 in full.  Upon the payment of the Class 8 Allowed General Unsecured
 Claims against Epicus Communications, no person holding or that could
 hold a Class 8 General Unsecured Claim against Epicus Communications
 shall have a claim against the Debtor inasmuch as any such liability
 shall be deemed discharged.


                                                                       F-11

<PAGE>


         Epicus Communications Group, Inc. and Subsidiary
      Notes to Consolidated Financial Statements - Continued
                      May 31, 2007 and 2006



NOTE B - Reorganization Under Chapter 11 of the U. S. Bankruptcy Code
- Continued

CLASS 9: are the General Unsecured Creditors against Epicus.
 Except to the extent that a holder of an Allowed General Unsecured
 Claim against Epicus has been paid by the Debtor prior to the
 Effective Date or agrees to a different treatment, the Plan Trustee
 shall pay the holders of Allowed Claims in Class 9 their Pro Rata
 share from a $175,000.00 contribution made by Gerard Haryman to the
 plan trust in exchange for releases for himself, Thomas Donaldson,
 Timothy Palmer, and Aptek, Inc. .  Unsecured creditors will also
 receive a Pro Rata share of a $25,000.00 payment from the NIR Group
 in exchange for a release and 7.5% of the capital stock of
 Reorganized Epicus Communications and the proceeds of Avoidance
 Actions, through a plan trust.  Upon the payment of the Class 9
 Allowed General Unsecured Claims against Epicus, no person holding or
 that could hold a Class 9 General Unsecured Claim against Epicus
 shall have a claim against the Debtor inasmuch as any such liability
 shall be deemed discharged.

CLASS 10: are the Insider Subordinated Debt Claims of Gerard Haryman,
Thomas Donaldson and Aptek.
 On the Effective Date, or as soon thereafter as is practicable, each
 holder of an Allowed Insider Subordinated Debt Claim shall receive on
 account of such claim the shares of Newly Authorized Capital Stock of
 Reorganized Epicus Communications as provided for in conjunction with
 the Class 11 claims.  Because holders of senior Allowed General
 Unsecured Claims against Epicus Communications in Class 8 will likely
 not be paid in full, the distribution to be received by the holders
 of Class 10 Insider Subordinated Debt Claims is in exchange for new
 value represented by the Old Equity Payment.

CLASS 11: are the Equity Interest in Epicus Communications, exclusive
of the equity interests of the Haryman Parties.
 Prior to the Effective Date, Epicus Communications will effect a
 reverse stock split of its outstanding common stock, par value $0.001
 per share, so that following the said reverse stock split, there
 shall be one share for every one thousand shares in existence prior
 to the said reverse stock split.  Also, prior to the Effective Date,
 immediately following the aforesaid reverse stock split, Epicus
 Communications will amend its certificate of incorporation to
 authorize the Newly Authorized Capital that will increase its
 authorized capital stock to 100,000,000 shares.  On the Effective
 Date, or as soon thereafter as is practicable, from the Newly
 Authorized Capital Stock, Reorganized Epicus Communications shall
 issue shares to effectuate the following capital structure:
 (I)    Ocean Avenue Advisors, LLC - 52.5%
 (ii)   Collectively, the Haryman Parties (including
        amount received for Old Equity Interests) - 30.4%
 (iii)  Old Equity (exclusive of the Old Equity
        Interests of the Haryman - 9.6%
 (iv)   Class 9 (General Unsecured Claims against Epicus) - 7.5%.

CLASS 12: are the Epicus Equity interests
 As of the Effective Date, all Class 12 Epicus Equity Interests shall
 be extinguished and the holder of such Equity Interests shall be
 forever precluded and permanently enjoined from asserting directly or
 indirectly against the Debtors, Reorganized Epicus Communications,
 The NIR Group or any of their respective successors and assigns or
 their respective heirs, directors, employees, shareholders, partners,
 members, agents, representatives, advisors or attorneys, or the
 properties of any of them, any further Claims, debts, rights, causes
 of action, remedies, liabilities or Equity Interests based upon any
 act, omission, document, instrument, transaction or other activity of
 any kind or nature that occurred prior to the Effective Date. The
 holder of any canceled Equity Interest shall have no rights arising
 from or relating to such Equity Interests, or the cancellation
 thereof, except the rights, if any, provided in the Plan.

CLASS 13: is the Secured Claim of the IRS.
 Except to the extent that a holder of the Allowed IRS Secured Claim
 agrees to different treatment, on the later of, (I) 10 business days
 after the Effective Date and the date on which such Allowed IRS
 Secured Claim becomes an Allowed IRS Secured Claim, or as soon
 thereafter as practicable; or (ii) such other date as may be fixed by
 the Bankruptcy Court whether fixed before or after the relevant date
 above, each holder of an Allowed IRS Secured Claim shall receive, at
 Reorganized Epicus Communications' sole option, in full and final
 satisfaction of such Allowed IRS Secured Claim the following (I) the
 Collateral securing such Allowed IRS Secured Claim; (ii) Cash from
 Reorganized Epicus Communications in the amount of the Allowed IRS
 Secured Claim; or (iii) monthly principal payments over a terms of
 one hundred and twenty (120) months, with interest at the rate of 4%
 per annum. The holder of the Allowed IRS Secured Claim shall retain
 any security interests held as of the Petition Date until such
 Allowed IRS Secured Claim is paid in full.


                                                                       F-12

<PAGE>


         Epicus Communications Group, Inc. and Subsidiary
      Notes to Consolidated Financial Statements - Continued
                      May 31, 2007 and 2006



NOTE C - Preparation of Financial Statements

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

The Company follows the accrual basis of accounting in accordance with
accounting principles generally accepted in the United States of
America and has adopted a year-end of May 31.

Management further acknowledges that it is solely responsible for
adopting sound accounting practices, establishing and maintaining a
system of internal accounting control and preventing and detecting
fraud.  The Company's system of internal accounting control is
designed to assure, among other items, that 1) recorded transactions
are valid; 2) valid transactions are recorded; and 3) transactions are
recorded in the proper period in a timely manner to produce financial
statements which present fairly the financial condition, results of
operations and cash flows of the Company for the respective periods
being presented.

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

These financial statements reflect the books and records of Epicus
Communications Group, Inc., Mic Mac, Inc. and Moye & Associates, Inc.
for the period from December 8, 2005 (date of bankruptcy settlement)
through May 31, 2006.  All significant intercompany transactions have
been eliminated in consolidation.  The consolidated entities are
referred to as either Company or Epicus Group.

The Company conducts business activities in only one distinct business
segment.


NOTE D - Going Concern Uncertainty

The Company experienced significant operating losses prior to it's
emergence from a Chapter 11 bankruptcy action.  In the period from the
emergence from bankruptcy protection on December 8, 2005 through the
period ended May 31, 2007, and subsequent thereto, the Company's
operations remain in a negative cash flow position.

The Company's liquidity, in periods prior to the bankruptcy filing,
was sustained through the sale of equity securities, restricted and
unrestricted, domestically and in international markets and
significant working capital advances have been made by members of
management or by entities owned or controlled by members of management
during the current and prior periods.  Subsequent to December 8, 2005,
liquidity was provided by the proceeds of a new convertible debenture
(Series 2006), proceeds of Callable Convertible Secured Notes and
collections of customer accounts receivable.  Future liquidity may be
dependent upon future offerings of debt and/or equity securities;
however, the availability of further liquidity from these sources is
uncertain.

Management continues to evaluate all customer accounts, their
respective credit ratings and customer payment history.  In accordance
with the Company's various operating tariffs in the States in which
the Company conducts business operations, as allowable,  management is
either raising service rates or discontinuing service to unprofitable
customers and service areas.  However, due to the Company's customer
base, the Company continues to experience significant charges for bad
debts which impair the related cash flows and the Company's continued
existence is principally dependent upon its ability to generate
sufficient cash flows from operations to support its daily operations
on a timely basis as well as provide sufficient resources to satisfy
the components of its proposed reorganization plan to retire pre-
petition liabilities and obligations.

There is no assurance that the Company's reorganization plan will be
successful.  Further the ability to obtain additional funding through
the sales of additional securities or, that such funding, if
available, will be obtained on terms favorable to or affordable by the
Company is uncertain.


                                                                       F-13

<PAGE>


         Epicus Communications Group, Inc. and Subsidiary
      Notes to Consolidated Financial Statements - Continued
                      May 31, 2007 and 2006



NOTE E - Summary of Significant Accounting Policies

1. Cash and cash equivalents
   -------------------------

  For Statement of Cash Flows purposes, the Company considers all cash
  on hand and in banks, certificates of deposit and other highly-
  liquid investments with maturities of three months or less, when
  purchased, to be cash and cash equivalents.

  Cash overdraft positions may occur from time to time due to the
  timing of making bank deposits and releasing checks, in accordance
  with the Company's cash management policies.

2. Accounts receivable
   -------------------

  In the normal course of business, the Company extends unsecured
  credit to virtually all of its customers which are principally
  concentrated in the southeastern quadrant of the country.  Because
  of the credit risk involved, management has provided an allowance
  for doubtful accounts which reflects its opinion of amounts which
  will eventually become uncollectible.  In the event of complete
  non-performance, the maximum exposure to the Company is the recorded
  amount of trade accounts receivable shown on the balance sheet at
  the date of non-performance.

3. Property and Equipment
   ----------------------

  Property and equipment in the Company's continued use as of the
  December 8, 2005 reorganization date was  recorded at fair market
  value, pursuant to the requirements of Statement of Position 90-7
  "Financial Reporting by Entities in Reorganization Under the
  Bankruptcy Code", as issued by the American Institute of Certified
  Public Accountants.  These assets are depreciated over the estimated
  useful lives, generally three (3) to five (5) years, of the
  individual assets using the straight-line method.

  Property and equipment acquired subsequent to December 7, 2005 is
  recorded at historical cost and is depreciated over the respective
  useful life, generally three (3) to five (5) years, of the
  individual assets using the straight-line method.

   Gains and losses from the disposition of property and equipment are
 included in operations as incurred.

4. Revenue Recognition
   -------------------

  Bundled telecommunications services and charges for combined
  packages of local and long-distance telephone services for business
  and residential customers are billed to the respective customer in
  advance at the initiation of each monthly billing cycle.  Separately
  billed long-distance telephone services, service commencement
  charges, service change fees and service charges for delinquent
  payments are billed in arrears in the month following the provision
  of the service.  Revenue for services billed in advance is
  recognized on a pro-rata basis over the course of the related
  billing cycle and revenues for all service and/or charges billed in
  arrears is recognized at the respective billing date.  Accordingly,
  the Company has recognized an unearned revenue item in the
  accompanying balance sheet for unearned advance billings for
  service.

  The cancellation or termination of service by a customer prior to
  the expiration of the completion of the monthly billing cycle
  results in a partial refund due to the customer.  These reductions
  of revenue, if any, due to the cancellation of service by a
  customer, are recognized at the point of service termination and are
  recognized as a component of trade accounts payable until final
  settlement of the customer's account balance.


        (Remainder of this page left blank intentionally)



                                                                       F-14

<PAGE>


         Epicus Communications Group, Inc. and Subsidiary
      Notes to Consolidated Financial Statements - Continued
                      May 31, 2007 and 2006



NOTE E - Summary of Significant Accounting Policies - Continued

5. Income Taxes - continued
   ------------------------

  The Company uses the asset and liability method of accounting for
  income taxes.  Deferred tax asset and deferred tax liability
  accounts, as recorded when material to the financial statements,
  arise from either the existence of temporary differences between the
  financial statement carrying amounts and the tax basis of assets and
  liabilities or the existence of net operating loss carryforwards.
  Temporary differences consist primarily of statutory treatment of
  bad debt expenses; deferrals of expenses for organizational costs;
  accrued, but unpaid, officer compensation; and the use of statutory
  depreciable lives for property and equipment, which may not equal
  management's estimate of the actual underlying functional life of
  the related asset.

  As of May 31, 2007 and 2006, the deferred tax asset related to the
  Company's net operating loss carryforward is fully reserved.

6. Advertising costs
   -----------------

  The Company does not conduct any direct response advertising
  activities.  For non-direct response advertising, the Company
  charges the costs of these efforts to operations at the first time
  the related advertising is published.

7. Earnings (loss) per share
   -------------------------

  Basic earnings (loss) per share is computed by dividing the net
  income (loss) available to common shareholders by the weighted-
  average number of common shares outstanding during the respective
  period presented in our accompanying financial statements.

  Fully diluted earnings (loss) per share is computed similar to basic
  income (loss) per share except that the denominator is increased to
  include the number of common stock equivalents (primarily
  outstanding options and warrants).

  Common stock equivalents represent the dilutive effect of the
  assumed exercise of the outstanding stock options and warrants,
  using the treasury stock method, at either the beginning of the
  respective period presented or the date of issuance, whichever is
  later, and only if the common stock equivalents are considered
  dilutive based upon the Company's net income (loss) position at the
  calculation date.

  At May 31, 2007 and 2006, the Company's issued and outstanding
  warrants, options and convertible debt, if any are outstanding, are
  considered antidilutive due to the Company's net operating loss
  position.

8. Employee Stock Options
   ----------------------

  The Company has adopted the policy of fair value based accounting
  for stock-based compensation in accordance with Statement of
  Financial Accounting Standards No. 123.

9. Pending and/or New Accounting Pronouncements
   --------------------------------------------

  In July 2006, the Financial Accounting Standards Board (FASB) issued
  Interpretation No. 48, "Accounting for Uncertainty in Income Taxes
  (FIN 48).  This interpretation requires the recognition and
  measurement of uncertain income tax positions using a "more-likely-
  than-not" approach.  The provisions of FIN 48 are effective for
  fiscal years ending after December 15, 2006.  The Company does not
  anticipate that the adoption of this accounting pronouncement will
  have a material effect on its financial statements.

  The Company is also of the opinion that any other pending accounting
  pronouncements, either in the adoption phase or not yet required to
  be adopted, will not have a significant impact on the Company's
  financial position or results of operations.


                                                                       F-15

<PAGE>


         Epicus Communications Group, Inc. and Subsidiary
      Notes to Consolidated Financial Statements - Continued
                      May 31, 2007 and 2006



NOTE F - Fair Value of Financial Instruments

The carrying amount of cash, accounts receivable, accounts payable and
notes payable, as applicable, approximates fair value due to the short
term nature of these items and/or the current interest rates payable
in relation to current market conditions.

Interest rate risk is the risk that the Company's earnings are subject
to fluctuations in interest rates on either investments or on debt and
is fully dependent upon the volatility of these rates.  The Company
does not use derivative instruments to moderate its exposure to
interest rate risk, if any.

Financial risk is the risk that the Company's earnings are subject to
fluctuations in interest rates or foreign exchange rates and are fully
dependent upon the volatility of these rates.  The company does not
use derivative instruments to moderate its exposure to financial risk,
if any.


NOTE G - Concentrations of Credit Risk

The Company and its subsidiary maintain their respective cash accounts
in a financial institution subject to insurance coverage issued by the
Federal Deposit Insurance Corporation (FDIC).  Under FDIC rules, the
Company and its subsidiary are entitled to aggregate coverage of
$100,000 per account type per separate legal entity per financial
institution.  During the years ended May 31, 2007 and 2006,
respectively, the various operating companies had deposits in a
financial institution with credit risk exposures in excess of
statutory FDIC coverage.  The Company has not incurred any losses as a
result of any of these unsecured situations.


NOTE H - Property and Equipment

Property and equipment consists of the following as of May 31, 2007
and 2006, respectively:
<TABLE>
<CAPTION>
                                                May 31, 2007   May 31, 2006   Estimated life
                                                ------------   ------------   --------------
     <S>                                         <C>           <C>               <C>
     Computer equipment                          $   74,736    $   30,000        3 years
     Office furniture and fixtures                   58,000        56,000        5 years
     Deposit on proposed equipment acquisition            -        11,764           -
                                                 ----------    ----------
                                                    132,736        97,764
     Less accumulated depreciation                  (38,451)      (10,597)
                                                 ----------    ----------

     Net property and equipment                  $   94,285    $   87,167
                                                 ==========    ==========
</TABLE>
Depreciation expense for the year ended May 31, 2007 and for the
period from December 8, 2005 (date of bankruptcy settlement) through
May 31, 2006 was approximately $27,854 and $10,597, respectively.


NOTE I - Convertible Debentures and Callable Convertible Secured Notes

As of May 31, 2007 and 2006 respectively, the Company has outstanding
aggregate balances on convertible debentures and callable convertible
secured notes:
<TABLE>
<CAPTION>
                                              May 31, 2007    May 31, 2006
                                              ------------    ------------
     <C>                                      <C>             <C>
     Convertible debenture                    $  5,165,397    $  5,280,342
     Convertible debentures-Series 2006          1,902,870         375,000
     Convertible secured notes                   3,750,000       3,750,000
                                              ------------    ------------

                                              $ 10,818,267    $  9,405,342
                                              ============    ============
</TABLE>



                                                                       F-16

<PAGE>


         Epicus Communications Group, Inc. and Subsidiary
      Notes to Consolidated Financial Statements - Continued
                      May 31, 2007 and 2006



NOTE I - Convertible Debentures and Callable Convertible Secured Notes
- Continued

On the December 8, 2005 effective date of the Company's Plan of
Reorganization, all pre-petition convertible debentures/notes were
restructured and assumed by the post-bankruptcy entity.

On December 8, 2005, the Company executed a $3,750,000 9.0% Asset
Backed Convertible Notes which funds were used for various settlement
payments and recapitalization of the Company as a result of the
affirmed Plan.  In January 2006, the Noteholder gave notice that this
debt would most probably be converted to newly to-be-authorized
Preferred Stock of the Company at the discretion of the Noteholder(s)
in future periods.  The document(s) associated with this debt were
filed in their entirety as exhibits to the aforementioned December 14,
2005 Form 8-K.  As of February 28, 2007, the Noteholder has affirmed
the intent to convert this debt to Preferred Stock; however, this
conversion has not been finalized.

On January 3, 2006, the Board of Directors unanimously agreed to amend
the revised convertible debenture agreement approved by the US
Bankruptcy Court on September 30, 2005, and made effective by that
same court on December 7, 2005 as follows: 1) the Company and the
Lender agreed that the $3.75 million ordinary note issued on or about
December 9, 2005 would be "repaid" through the conversion of the debt
to redeemable, convertible preferred stock at a 12.5% discount in a
future period at rates and amounts to be determined and 2) to amend
the conversion price of the previously existing $5.2 million
convertible debenture note held by the same Lender(s) from $0.47 to
$0.15 per share.  The entire above mentioned convertible debenture
agreement was included in the Company's Form 8-K filed on December 14,
2005 and is included herein by reference.

On January 31, 2006, the Board of Directors entered into a new 12.0%
convertible debenture agreement for up to an additional $625,000 in
funds under terms identical to the convertible debentures brought
forward in the December 2005 bankruptcy Plan affirmation and also
unanimously agreed to further amend the revised convertible debenture
agreement approved by the US Bankruptcy Court on September 30, 2005,
and made effective by that same court on December 7, 2005 as follows:
 1)  The "fixed conversion rate" of the existing $5.2 million
 convertible debenture note is adjusted downward from $0.15 per share
 to $0.0625 per share.
 2)  The Company and the NIR Group, Inc. have reached an agreement to
 fund the Company with additional capital on a monthly basis,
 beginning March/April 2006, on terms that are to be negotiated in
 good faith between the parties.  Said funds will have a cap of
 $625,000 and are to be dedicated for marketing purposes.
 3)  One year interest relief for period 1-01-06 to 12-31-06 on the
 referenced existing Convertible Debenture Notes and the Redeemable
 Convertible Note.  During the "interest abatement period" of 1-01-06
 to 12-31-06, interest on the notes will not accrue or be charged to
 the Company in any manner.

On April 4, 2007, the Company's Board of Directors unanimously agreed
to sell $250,000 in convertible debentures to its current primary
lender, a group of funds managed by "The NIR Group".  The new
debentures are convertible at the holder's option at a variable price
of $.25 per share or a 65% discount to the previous day's closing
market price, whichever is the lesser. In addition to supporting
operating expenses, these funds will be used to increase the public's
awareness of Epicus' subsidiary, ECG on the Net, LLC.

On May 11, 2007, the Board of Directors unanimously agreed to sell
$160,000 in convertible debentures to its current primary lender, a
group of funds managed by "The NIR Group", at a variable price of $.25
per share or a discount to the market of 65% whichever is the lesser.
In addition to supporting operating expenses, these funds will be used
to increase the public's awareness of Epicus' subsidiary, ECG on the
Net, LLC.

During the year ended May 31, 2007 and the period from December 8,
2005 (date of bankruptcy settlement) through February 28, 2006, the
Company has recognized approximately $621,962 and $219,364 in
additional paid-in capital for economic event related to the suspended
interest on all of the above listed convertible debentures/notes.


                                                                       F-17

<PAGE>


         Epicus Communications Group, Inc. and Subsidiary
      Notes to Consolidated Financial Statements - Continued
                      May 31, 2007 and 2006



NOTE J - Income Taxes

The components of income tax (benefit) expense for the year ended May
31, 2007 and for the period from December 8, 2005 (date of bankruptcy
settlement) through May 31, 2006 is as follows:
<TABLE>
<CAPTION>
                                                                Period from
                                                               December 8, 2005
                                                              (date of bankruptcy
                                               Year ended     settlement) through
                                              May 31, 2007        May 31, 2006
                                              ------------        ------------
<S>                                           <C>                 <C>
Federal: Current                              $          -        $          -
         Deferred                                        -                   -
                                              ------------        ------------
                                                         -                   -
                                              ------------        ------------
State:   Current                                         -                   -
         Deferred                                        -                   -
                                              ------------        ------------
                                                         -                   -
                                              ------------        ------------

     Total                                    $          -        $          -
                                              ============        ============
</TABLE>
The Company has a net operating loss carryforward of approximately
$5,600,000 to offset future taxable income as a result of post-
bankruptcy losses and the reduction requirements for pre-settlement
losses related to the Company's discharge from bankruptcy.  The amount
and availability of the net operating loss carryforwards may be
subject to limitations set forth by the Internal Revenue Code. Factors
such as the number of shares ultimately issued within a three year
look-back period; whether there is a deemed more than 50 percent
change in control; the applicable long-term tax exempt bond rate;
continuity of historical business; and subsequent income of the
Company all enter into the annual computation of allowable annual
utilization of the carryforwards.

The Company's income tax expense for the periods from December 8, 2005
(date of bankruptcy settlement) through May 31, 2006, differed from
the statutory federal rate of 34 percent as follows:
<TABLE>
<CAPTION>
                                                                          Period from
                                                                        December 8, 2005
                                                                      (date of bankruptcy
                                                      Year ended       settlement) through
                                                      May 31, 2007        May 31, 2006
                                                      ------------        ------------
<S>                                                   <C>                 <C>
Statutory rate applied to loss before income taxes    $(1,041,300)        $  (907,700)
Increase (decrease) in income taxes resulting from:
  State income taxes                                            -                   -
  Non-deductible items:
   Compensation expense related to the sale of
   common stock at less than "fair value"                  68,800              28,500
  Other, including reserve for deferred tax asset         972,500             879,200
                                                      ------------        ------------

     Income tax expense                               $         -         $         -
                                                      ============        ============
</TABLE>
Temporary differences, consisting primarily of statutory recognition
of bad debt expenses, deferrals of expenses for organizational costs
and accrued, but unpaid, accruals for officer compensation and
statutory differences in the depreciable lives for property and
equipment, between the financial statement carrying amounts and tax
bases of assets and liabilities give rise to deferred tax assets and
liabilities as of May 31, 2007 and 2006, respectively:
<TABLE>
<CAPTION>
                                                 May 31, 2007        May 31, 2006
                                                 ------------        ------------
   <S>                                           <C>                 <C>
   Deferred tax assets
     Net operating loss carryforwards            $ 1,900,000         $   879,200
     Less valuation allowance                     (1,900,000)           (879,200)
                                                 ------------        ------------
   Net Deferred Tax Asset                        $         -         $         -
                                                 ============        ============
</TABLE>


                                                                       F-18

<PAGE>


            Epicus Communications Group, Inc. and Subsidiary
      Notes to Consolidated Financial Statements - Continued
                      May 31, 2007 and 2006



NOTE J - Income Taxes - Continued

During the year ended May 31, 2007 and during the period from December
8, 2005 (date of bankruptcy settlement) through May 31, 2006, the
valuation allowance (decreased) increased by approximately $1,024,800
and $879,200, respectively.


NOTE K - Common Stock Transactions

On December 8, 2006, in compliance with the approved Plan of
Reorganization, the Company issued 10,000,000 shares of common stock
as previously discussed.

Between December 12, 2005 and May 31, 2006, in 13 separate
transactions, the Company issued an aggregate 817,600 shares of common
stock to the respective Debenture Holders as a result of the exercise
of the conversion of outstanding 12% debentures.  These transactions
were valued pursuant to the debenture terms.  In situations where the
conversion price, per the debenture terms, was less than the
discounted closing price of the Company's common stock on the NASDAQ
Electronic Bulletin Board on the date of each respective transaction,
the Company recognized a non-cash charge to operations.  The Company
recognized a cumulative non-cash charge of approximately $83,753 for
the differential between the "fair value" of these securities sold and
the contractual exchange price.

Between June 1, 2006 and August 31, 2006, in 8 separate transactions,
the Company issued an aggregate 2,000,000 shares of common stock to
the respective Debenture Holders as a result of the exercise of the
conversion of outstanding 12% debentures.  These transactions were
valued pursuant to the debenture terms.  In situations where the
conversion price, per the debenture terms, was less than the
discounted closing price of the Company's common stock on the NASDAQ
Electronic Bulletin Board on the date of each respective transaction,
the Company recognized a non-cash charge to operations.  The Company
recognized a aggregate non-cash charge of approximately $26,747 for
the differential between the "fair value" of these securities sold and
the contractual exchange price.

Between September 1, 2006 and November 30, 2006, in 15 separate
transactions, the Company issued an aggregate 7,085,000 shares of
common stock to the respective Debenture Holders as a result of the
exercise of the conversion of outstanding 12% debentures.  These
transactions were valued pursuant to the debenture terms.  In
situations where the conversion price, per the debenture terms, was
less than the discounted closing price of the Company's common stock
on the NASDAQ Electronic Bulletin Board on the date of each respective
transaction, the Company recognized a non-cash charge to operations.
The Company recognized a aggregate non-cash charge of approximately
$53,690 for the differential between the "fair value" of these
securities sold and the contractual exchange price.

Between December 1, 2006 and February 28, 2007, in 17 separate
transactions, the Company issued an aggregate 14,537,400 shares of
common stock to the respective Debenture Holders as a result of the
exercise of the conversion of outstanding 12% debentures.  These
transactions were valued pursuant to the debenture terms.  In
situations where the conversion price, per the debenture terms, was
less than the discounted closing price of the Company's common stock
on the NASDAQ Electronic Bulletin Board on the date of each respective
transaction, the Company recognized a non-cash charge to operations.
The Company recognized a aggregate on-cash charge of approximately
$81,785 for the differential between the "fair value" of these
securities sold and the contractual exchange price.

Between March 1, 2007 and May 31, 2007, in 19 separate transactions,
the Company issued an aggregate 29,649,210 shares of common stock to
the respective Debenture Holders as a result of the exercise of the
conversion of outstanding 12% debentures.  These transactions were
valued pursuant to the debenture terms.  In situations where the
conversion price, per the debenture terms, was less than the
discounted closing price of the Company's common stock on the NASDAQ
Electronic Bulletin Board on the date of each respective transaction,
the Company recognized a non-cash charge to operations.  The Company
recognized a aggregate non-cash charge of approximately $40,208 for
the differential between the "fair value" of these securities sold and
the contractual exchange price.


                                                                       F-19

<PAGE>


         Epicus Communications Group, Inc. and Subsidiary
      Notes to Consolidated Financial Statements - Continued
                      May 31, 2007 and 2006



NOTE L - Stock Warrants

On December 8, 2005, pursuant to the confirmed Plan of Reorganization,
the Company amended and reissued the warrants issued in conjunction
with the sale of an aggregate of $3,300,000 in 8% secured convertible
notes, the Company issued warrants to purchase 3,300,000 shares of our
common stock to four (4) accredited investors.  The following table
presents warrant activity through May 31, 2007:
<TABLE>
<CAPTION>
                                              Weighted
                                               Average
                                              Number of    Exercise
                                                 Shares      Price
                                              ---------    --------
   <S>                                        <C>          <C>
   Balance at December 8, 2005                                 -                   -
   Issued                                     3,300,000      $0.03
   Exercised                                          -        -
   Expired                                            -        -
                                              ---------
   Balance at May 31, 2006                    3,300,000      $0.03
   Issued                                             -        -
   Exercised                                          -        -
   Expired                                            -        -
                                              ---------

   Balance at May 31, 2007                    3,300,000      $0.03
                                              =========
</TABLE>

NOTE M - Commitments and Contingencies

Leased facilities
-----------------

The Company executed a long-term operating lease agreement for office
space in Lake Mary, Florida to house its operations and administrative
functions.  The lease commenced on September 20, 2004 and expires on
March 19, 2010.  The lease requires initial minimum monthly payments
of approximately $20,800 per month, plus the applicable state sales
taxes.  The monthly rental rate increases by 3.0% in each successive
twelve-month period.    Additionally, the Company is responsible for
it's proportional share of increases in "operating expenses" (as
defined) over the base calendar year as defined in the Lease
Agreement.

Future non-cancellable minimum lease payments due under this operating
lease agreement are as follows:

                                        Year ended
                                          May 31,      Amount
                                        ----------   ----------

                                           2008       $270,793
                                           2009        278,917
                                           2010        239,053

                                           Total      $788,863
                                                      ========

Employment agreements
---------------------

On December 8, 2005, the Company executed new Employment Contracts
with Gerard Haryman as President, Thomas Donaldson as Vice President
and Mark Schaftlein as Chief Executive Officer.  These contracts were
filed in their entirety as exhibits to the aforementioned December 14,
2005 Form 8-K and expire on December 31, 2006.

 Effective January 1, 2007, by mutual consent and a resolution of the
Board of Directors, the Employment Contracts with Messrs. Schaftlein
and Donaldson were extended for a period of 12 months, expiring on
December 31, 2007, with  equivalent terms to the aforementioned
Agreements.


                                                                       F-20

<PAGE>


         Epicus Communications Group, Inc. and Subsidiary
      Notes to Consolidated Financial Statements - Continued
                      May 31, 2007 and 2006



NOTE M - Commitments and Contingencies - Continued

Contingent Liabilities
----------------------

Pursuant to the Affirmed Plan, certain post-petition liabilities that
were not related to the Transferred Assets are set aside by Bankruptcy
Court order.  However, the Company may retain a contingent liability
of approximately $1,500,000 for unpaid payroll, excise and service
taxes/fees accrued during the Company's operations as a Debtor-in-
Possession.


NOTE N - Subsequent Events

On June 15, 2007, the Company's Board of Directors unanimously agreed
amend the Convertible Debenture Agreement dated December 7, 2005
between the Company and a group of funds managed by "The NIR Group" as
follows: the Company agrees to sell an additional $260,000 in
convertible debentures to its current primary lender, a group of funds
managed by "The NIR Group", at a variable price of $.25 per share or a
discount to the market of 65% whichever is the lesser.  The original
convertible debenture agreement was included in the Company's Current
Report on Form 8-K filed on December 14, 2005.  In addition to
supporting operating expenses, these funds will be used to increase
the public's awareness of Epicus' subsidiary, ECG on the Net, LLC.

On July 11, 2007, the Company's Board of Directors unanimously agreed
to sell $160,000 in convertible debentures to its current primary
lender, a group of funds managed by "The NIR Group", at a variable
price of $.25 per share or a discount to the market of 65% whichever
is the lesser."  With the exception of the amount of $160,000 and the
"due and payable" date of July 16, 2010, the terms of the sale are the
same as the Convertible Debenture Agreement dated December 7, 2005,
filed on December 14, 2005 in the Company's Current Report on Form 8-
K.  In addition to supporting operating expenses, these funds will be
used to increase the public's awareness of Epicus' subsidiary, ECG on
the Net, LLC.

On August 15, 2007, the Company's Board of Directors unanimously
agreed to sell $250,000 in convertible debentures to its current
primary lender, a group of funds managed by "The NIR Group", at a
variable price of $.25 per share or a discount to the market of 65%
whichever is the lesser."  The sale was executed and the funds were
received on August 31, 2007.  With the exception of the amount of
$250,000 and the "due and payable" date of August 15, 2010, the terms
of the sale are the same as the Convertible Debenture Agreement dated
December 7, 2005, filed on December 14, 2005 in the Company's Current
Report on Form 8-K.  In addition to supporting operating expenses,
these funds will be used to increase the public's awareness of Epicus'
subsidiary, ECG on the Net, LLC.



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                                                                       F-21

<PAGE>