U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-KSB

               Annual Report pursuant to Section 13 or 15(d)
                   of the Securities Exchange Act of 1934

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

                 For the fiscal year ended MAY 31, 2003
                                           ------------

  TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE EXCHANGE ACT OF 1934

       For the transition period from ___________ To _________________


                        Commission File No.000-17058

                      EPICUS COMMUNICATIONS GROUP, INC.
    ----------------------------------------------------------------
    Exact name of small business issuer as specified in its charter,

                                FLORIDA
      --------------------------------------------------------------
      (State or Other Jurisdiction of incorporation or organization)

                               59-2564162
                    ---------------------------------
                    (IRS Employer Identification No.)


            1750 OSCEOLA DR. WEST PALM BEACH, FLORIDA 33409
            -----------------------------------------------
               (Address of Principal Executive Offices)

                              561-688-0440
          --------------------------------------------------
          (Issuer's telephone - number, including area code)

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

                     Yes [ ]               No [X]

State the number of shares outstanding of each of the issuer's classes
of common equity as of the latest practicable date:

                      May 31, 2003 - 113,817,571
                      --------------------------

Transitional Small Business Disclosure Format

                     Yes [ ]               No [X]

Common Stock, $.001 par value


<PAGE>


                EPICUS COMMUNICATIONS GROUP, INC.
                         INDEX TO 10-KSB

                                                                       PAGE
                                                                       ----
PART I

        ITEM 1  DESCRIPTION OF BUSINESS                                  3
        ITEM 2  DESCRIPTION OF PROPERTY                                  4
        ITEM 3  LEGAL PROCEEDINGS                                        5
        ITEM 4  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS      5

PART II

        ITEM 5  MARKET FOR COMMON EQUITY AND
                  RELATED STOCKHOLDER MATTERS                            5
        ITEM 6  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS                    6
        ITEM 7  FINANCIAL STATEMENTS                                    10
        ITEM 8  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
                  ON ACCOUNTING AND FINANCIAL DISCLOSURE                10

PART III

        ITEM 9  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
                  CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a)
                  OF THE EXCHANGE ACT                                   11
        ITEM 10 EXECUTIVE COMPENSATION                                  11
        ITEM 11 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
                  AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS        12
        ITEM 12 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS          13
        ITEM 13 EXHIBITS AND REPORTS ON FORM 8-K                        13
        ITEM 14 CONTROLS AND PROCEDURES                                 13

SIGNATURES                                                              14




                                                                            2

<PAGE>


                              PART I

          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.

                ITEM 1 - DESCRIPTION OF BUSINESS

Epicus Communications Group, Inc. (hereinafter also referred to as
"Epicus Group"), (formerly known as  Phoenix International Industries,
Inc.), is a holding company, with primary interests in the
telecommunications industry.  During the years ending on May 31, 2003 and
2002, the Company consisted of Epicus Communications Group, Inc.
(formerly Phoenix International Industries, Inc.), the parent company and
three wholly owned subsidiaries, EPICUS, Inc., which is the primary, and
only active operating subsidiary, Moye & Associates (dba "TheBest.Net"),
and Mic-Mac Investments, Inc.  Moye & Associates and Mic-Mac Investments,
Inc are currently inactive.  For Fiscal 2003, our total cash resources
were derived from telecommunication service revenues and the sale of
Epicus Group common stock.

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, our 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.

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 200,000,000 shares of common stock,
$0.001 par value, and up to 5,000 shares of Preferred Stock, $0.001 par
value, for use as needed.  From January 1996 through May 31, 1997, we
sought suitable acquisition targets.

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 late
in the third quarter of fiscal 1999, and had no remaining assets or
liabilities as of May 31, 1999, and Epicus Group wrote off its remaining
investment in them in that fiscal year.  Although this subsidiary has
ceased all operating activities, Mic-Mac, Inc., remains a subsidiary of
the Company until a decision is made as to its future.

During Fiscal 2000, we acquired 100% of the 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.  At the start of our acquisition
negotiations, TCCF was operating under the protection of Chapter 11 of
the Federal Bankruptcy Act.  The effective date of the closing 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.  We acquired TCCF within
ten days of the Confirmation Order.  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. of St. Simons Island Georgia. Moye & Associates' primary business
was that of an Internet Service Provider (ISP) known as "TheBest.Net".
This move was seen by the company as synergetic with, and a possible
future merger into TCCF.   On July 19, 2001, the Company 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



                                                                           3
<PAGE>


$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 had been
satisfied.

During Fiscal 2003, the Company 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 & Associates, Inc. (dba TheBest.Net).

BUSINESS OF AFFILIATES

EPICUS, Inc.

Our primary and currently only active subsidiary, EPICUS, Inc., is a
multi-service telecommunications company with approximately 30,000 active
accounts incorporating approximately 50,000 lines, 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.  We are currently supplying local and long
distance service to customers in 7 of the 9 states in the BellSouth
System.  Additionally, we have long distance customers in 40 of the 48
states in which we are certified.

We have built our company by primarily focusing on being in the vanguard
of new telecommunication products and services such as our "Freedom
Rings[TM] and AccessNOW[TM] 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, it is that major
expense which has led to the demise of many emerging telephone companies.
Instead, we have built 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.  We can bill all of
a customers telecommunication services on one itemized bill.

Because of the expense and complexity of the business, we have focused
on improving our performance through automation.  We believe one of the
greatest accomplishments in building our business over the past three
years was the development of our own operational support systems ("OSS").
It is these systems that allow us to rapidly execute our customers
orders, for example: orders for new service and repair orders, plus real
time information on billing and collections.  It is more economic, more
efficient and more accurate than being totally dependant upon outside
sources and clerical performance.

MOYE & ASSOCIATES, INC. (TheBest.Net)

Moye & Associates, dba "TheBest.Net" (a Georgia corporation) was
primarily an Internet Service Provider (ISP).  To raise additional
operating capital, in July 2001, Epicus Group sold the customers of The
Best.Net. for $200,000 to another Internet Service Provider.  Epicus
Group plans to keep the corporation current, but inactive, until a
suitable use can be found for it.

MIC-MAC INVESTMENTS, INC. ("Mic-Mac")

Mic-Mac Investments, Inc. and Hospitality Telecom (together
"Hospitality") were acquired on April 1, 1998.  Hospitality ceased to
operate late in the third quarter of fiscal 1999, claiming they could not
meet their business plan projections or continue without Epicus Group
acquiring a long distance telephone company, and since it had no
remaining assets or liabilities as of May 31, 1999, we wrote off our
remaining investment in them in that fiscal year.  Although it has ceased
to operate, Mic-Mac, Inc. remains the property of the Company until a
decision is made as to its future.

EMPLOYEES

As of May 31, 2003, including our affiliates, we had 56 employees.

PATENTS

The Company owns two patents for solidification of environmental waste,
which were acquired when the Company was involved in that business.
However, the Company is no longer in such business and it is believed by
the Company that these patents are of very little value today, as they
have been rendered obsolete due to the rapid development of the
environmental clean-up industry.



                                                                           4
<PAGE>

                 ITEM 2  DESCRIPTION OF PROPERTY

Our principal executive offices are located at 1750 Osceola Drive, West
Palm Beach, Florida 33409 and our telephone number is (561) 688-0440.
This space is approximately 1,500 square feet including three offices and
a conference room. The annual lease cost is $3,500.00 per month, plus
expenses and expired in August 2002.  The property is owned by a
corporation owned by the Company's President and Chief Executive Officer.
The Company continues to occupy the property on a month to month basis
while a new lease is being negotiated.

The Company's operating subsidiary, Epicus, has entered into sublease
agreement for office space in Lake Mary, Florida.  The lease expires
September 24, 2004 and requires monthly rental payments of approximately
$11,500 per month for the first 12 months of the sublease term and
$11,845 for the remainder of the term.  Epicus also has a first right of
refusal to acquire additional space contiguous to the new space.
Further, the Company has an option to acquire certain office furnishings
left in the space by the former tenant at a bargain price if said option
is exercised by December 31, 2003.  Future payments under this sublease
are as follows: year ending December 31, 2003 - approximately $138,000;
year ending December 31, 2004 - approximately $106,600.


                   ITEM 3 - LEGAL PROCEEDINGS

In June of 2002, AT&T filed suit against Epicus Group in the amount of
$480,796 alleging non-payment of charges.  Epicus Group has consistently
denied responsibility for the charges and negotiations have been ongoing
in an attempt to resolve this dispute.  The matter has gone to mediation
and a verbal agreement for a settlement in the amount of $120,000 has
been reached.  The matter is awaiting final written approval and
agreement on the settlement and its terms of payment.

One of our subsidiaries, EPICUS, has been involved in a dispute with one
of its former carriers, Sprint Florida, regarding a default in payment
for services. On August 23, 2000, Sprint filed suit in the Circuit Court
of the Ninth Judicial Circuit in and for Orange County Florida. We
believed that the accusation was incorrect, however after obtaining
advice from legal counsel, we decided not to litigate the matter and on
December 21, 2000, the carrier was awarded by that court, a default
judgment against EPICUS in the amount of $321,587.52. In accordance with
a Judgment Payment Agreement dated February 15, 2001, EPICUS agreed to
pay Sprint as follows: Principal payments of $10,000 each will be due
commencing March 15, 2001 through September 15, 2002 (18 months). The
final balloon payment of $142,000 is payable on October 15, 2002.

On June 22, 2000, EXL Information of Vancouver, BC, Canada filed suit in
the Supreme Court of British Columbia, Canada, for payment of "royalty
fees" it claims were owed by EPICUS for the use of their billing program.
EPICUS denies owing EXL any money maintaining that the program was
supposed to be adapted by EXL to meet EPICUS's needs, which they never
did, thereby nullifying the agreement. EXL is seeking relief in the
amount of US$184,761. The matter is still being litigated. The outcome
of this litigation is not determinable at this time. Management intends
to aggressively defend this action to conclusion.


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

During Fiscal 2003,  there were no matters submitted to a vote of the
shareholders of Epicus Communications Group, Inc. (formerly Phoenix
International Industries, Inc.).


                             PART II

ITEM 5 - MARKET  FOR COMMON  EQUITY AND RELATED STOCKHOLDERS MATTERS

There are 200,000,000 shares of Common Stock authorized for issuance. Of
this amount, 113,817,571 shares are currently issued and outstanding.
There are 5,000 shares of Preferred Stock authorized, the designation and
rights of which are to be determined by the Board of Directors.

The following table sets forth the range of high and low bid prices as
reported on the OTCBB during the periods commencing:

<TABLE>
<CAPTION>
                                         Closing Bid            Closing Ask
                                        High       Low         High      Low
<S>                                     <C>        <C>         <C>       <C>
 Calendar 2001
   01/01/01 through 03/31/01            .26        .03         .23       .032
   04/01/01 through 06/30/01            .129       .06         .145      .072
   07/01/01 through 09/30/01            .10        .06         .11       .07
   10/01/01 through 12/31/01            .08        .04         .09       .05
</TABLE>



                                                                           5
<PAGE>

<TABLE>
<CAPTION>

<S>                                     <C>        <C>         <C>       <C>
 Calendar 2002
   01/02/02 through 03/31/02            .04        .05         .05       .06
   04/01/02 through 06/30/02            .05        .03         .06       .04
   07/01/02 through 09/30/02            .06        .01         .05       .02
   10/01/02 through 12/31/02            .05        .01         .04       .01

 Calendar 2003
   01/02/03 through 03/31/03            .03        .01         .03       .01
   04/01/03 through 06/30/03            .13        .02         .08       .04
</TABLE>


The price of shares have been adjusted for all stock splits, and are
based on inter-dealer prices as the company is listed on the electronic
over the counter bulletin board.

DIVIDENDS

The Company has paid no 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.

STOCK OPTION PLAN

On May 31, 1998, the Company's Board of Directors adopted a Stock Option
Plan far its employees, directors and consultants.  On April 24, 2001
file a form S-8 to register 5,000,000 underlying shares of that stock
option plan.  To date 4,296,277 shares of the current stock plan amount
of 5,000,000 have been issued.

With the exception of historical facts, the matters discussed above
include forward-looking statements that may involve a number of risks and
uncertainties.  Actual results may vary based upon a number of factors,
including, but not limited to, risks in product and technology
development, market acceptance of new products and technology, continuing
demand, the impact of competitive products and pricing, and changing
economic conditions.


  ITEM 6 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                       AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

Years ending May 31, 2003 and May 31, 2002

For the year ending May 31, 2003, the Company reported revenues of
$10,412,586, with a gross profit of $4,370,190 with operating expenses
of $5,883,333 and an operating loss of $(1,513,143) versus the year ending
May 31, 2002 with revenues of $6,029,792 and a gross profit of $2,849,333
with operating expenses of $6,516,117 and an operating loss of
$(3,666,784).  These revenues were solely derived from telecommunication
service sales generated by Epicus Group's operating subsidiary, Epicus,
Inc., as disclosed in the combined financial statement which is included
in this filing.

The year 2003's increase in gross profit was primarily attributable to
an increase in revenue coupled with lower cost of sales resulting from
more favorable pricing from several suppliers.  The reduction in our net
loss was primarily the result of the decrease in staffing of both sales and
operational personnel.  If we can maintain the current revenue growth and
favorable profit ratios, we anticipate the net loss to be eliminated and
to earn a net profit for the year ending May 31,
2004.

Our current high profit ratio is a direct result of increased
computerization of billing and provisioning, plus increased independent
agent sales which are only commissioned, not salaried plus commission.
Our "in house" sales staff has also been greatly reduced as more emphasis
is placed on developing our independent agent sales network.

During the year ended May 31, 2003, we incurred a net loss of $(1,630,372)
compared to net losses of $(5,246,444) for the preceding year. A
significant portion of our net loss for the year ended May 31, 2003,
continue to be the result of paying down previously incurred long and
short term debts and the debt service associated with those debts.

Also contributing to our loss during the period are the continued
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.  We also
incurred non-cash expenses associated with the issuance of 17,384,592
shares of stock to the holders of our convertible debenture.

In order for us to pay our operating expenses, including office rents,
communication expenses, accounting and bookkeeping fees, printing and
EDGAR preparation costs, publication costs, and other general and
administrative expenses, we have been dependent upon the funds provided
by non-interest bearing loans from our executive officers, directors and



                                                                           6
<PAGE>


shareholders, and the sale of stock in prior periods under the terms and
conditions of Regulation S of the Securities Act of 1933.

We still continue to be dependent upon the willingness of our executive
officers/directors and consultants to accept shares and/or defer
compensation for continued services to us, which services we consider to
be valuable and necessary to our continued operations.

In Fiscal 2000, under the Bankruptcy "Plan of Reorganization", we
purchased and acquired 100% of the common stock of Epicus, Inc., and as
the "Reorganized Debtor" we operate Epicus, Inc's. business.  In addition
to the payment of $570,000 ten days after the Plan of Reorganization was
approved by the Court; a "Creditors Trust" was established for all
"Allowed Unsecured Claims in excess of $1,000, into which we paid an
initial deposit of $100,000 and are to continue to make semi-annual
deposits of $100,000 each to a maximum of $500,000.  In July of 2001 an
agreement was made with the Creditors Committee to reduce the semi-annual
payment to $50,000, on which the company is currently in arrears.  There
remains a balance due to the Creditors Trust of $350,000.  For "Priority
Claims" we agreed to pay a maximum of $300,000 over a 6 year period plus
8% simple interest with an initial deposit of $25,000.  There is no
structured payment amount scheduled for the priority claims.  There is
a balance remaining for Priority Claims of $275,000 plus interest of 8%.
The total balance due on the purchase of EPICUS is $625,000 plus
applicable interest.

Discontinued Operations

In addition to EPICUS, we plan to continue to increase our presence in
the telecommunications industry. With that plan in mind on August 8,2000,
we announced the purchase of Moye & Associates, Inc., of St. Simons,
Georgia, the owner/operator of "The Best Net" an Internet Service
Provider, Web Site Host and E-commerce Company.

On July 27,2001 in order to solve a need for additional operating
capital, The Best Net's customer base was sold, the balance of its assets
were merged into EPICUS, and it became a discontinued operation. Although
it has ceased to operate, Moye & Associates, Inc. remains the property
of the Company until a decision is made as to its future.

Mic-Mac Investments, Inc. and Hospitality Telecom (together
"Hospitality") were acquired on April 1, 1998. For the period from the
date of acquisition through May 31, 1998, Hospitality had revenues
of$15,634 and expenses of $30,404.

Hospitality ceased to operate late in the third quarter of fiscal 1999,
claiming they could not meet their business plan projections or continue
without Epicus capitalizing them far above the initial plan.  Hospitality
Telecom had no remaining assets or liabilities as of May 31, 1999, and
Epicus Group wrote off its remaining investment in them in that fiscal
year.

Although it has ceased to operate, Mic-Mac, Inc., remains the property
of the Company until a decision is made as to its future.

LIQUIDITY AND CAPITAL RESOURCES

As of May 31, 2003, Epicus Group had $65,191 in cash in its operating
account.  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.

During the years ending May 31, 2003 and 2002, respectively, we issued
39,485,244 and 25,430,770 shares of common stock to settle acquisitions,
various financial and business consulting services, exercise of options
granted under our employee stock option plan, executive and employee
compensation, an offshore investment under "Regulation S", and conversion
of our outstanding convertible debenture and payment of accrued interest
thereon.

Previously, the Company has funded its capital requirements for operating
cash flow, by loans against its accounts receivable, loans from
shareholders, sales of equity securities and the issuance of equity
securities in exchange for assets acquired and services rendered.  During
the 12 months ended May 31, 2003, the Company has been and is continuing
to attempt to attract new investment capital, which the Company believes
will be necessary to sustain its ongoing operations and to facilitate
growth.

To that end on July 11, 2001, the Company sold $2,000,000 in convertible
debentures.  On May 1, 2003, as reported on Form 8-K,  filed with the SEC
on May 7, 2003, the Company entered into a "Debenture Redemption
Agreement" with the holders of the convertible debentures.  This was done
in order to extend the "due date" of the loans backed by the debentures
and to obtain a more favorable method of paying off the notes.
Additional detail on the "Debenture Redemption Agreement" is presented
below.

The Company continues to explore opportunities to raise private equity
capital and, in conjunction therewith, to provide credit support for the
Company's operations and potential acquisitions.  Although the Company
has in the past been, and continues to be, in discussions with potential
investors, there can be no assurance that its efforts to raise any
substantial amount of private capital will be successful.  Any
substantial private equity investment in the Company will result in



                                                                           7
<PAGE>

voting dilution of the Company's existing stockholders and could also
result in economic dilution.  If the Company is unable to obtain new
capital, the Company will be unable to carry out its strategy of growth
through acquisitions and the long-term ability of the Company to continue
its operations may be in doubt.

Our monthly operating expenses reflect the accrual of salaries due to
Gerard Haryman and Thomas  Donaldson, our executive officers, at the rate
of $20,833 and $8,600 per month respectively, which have not been paid.
We do not contemplate commencing full salary payments to Messrs. Haryman
and Donaldson unless and until we begin to generate positive cash flow
from operations.

COMPETITION

We have many competitors ranging from the very large like McLeod
Communications of with over 500,000 lines and ICG Communications with
over 700,000 lines to the very small who have less than 10,000 lines.
Those companies, both large and small, offer similar services as we and
our subsidiaries offer.  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 advantage, as does our almost
total automation in provisioning of new services and billing.  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.

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 August 21, 2003
on our consolidated financial statements as of May 31, 2003, which
includes an explanatory paragraph expressing substantial doubt about our
ability to continue as a going concern.  Among the reasons cited by the
independent auditors as raising substantial doubt as to our ability to
continue as a going concern are the following: we have experienced
cumulative operating losses for the previous three-year period of
approximately $15,600,000 and has used cash in operating activities for
the same period of approximately $4,636,000, have insufficient working
capital and will continue to incur selling, general and administrative
expenses.  Additionally, realization of certain assets is dependent upon
our ability to meet our future financing requirements, the success of
future operations and our continued funding by our CEO and the sale of
common stock.

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.

At May 31, 2003, we had current assets of $3,085,078 and total assets of
$3,838,694.  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.  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 twelve months.  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.

CONVERTIBLE DEBENTURES

On September 28, 2001, a consortium of four (4) separate investment
entities under common management purchased 12% convertible debentures
from the Company and were issued the right to receive warrants to
purchase an aggregate of 3,500,000 shares of common stock from the
Company in a future private placement transaction.

As of May 31, 2003, the Company has issued and outstanding approximately
$1,255,128 in 12.0% convertible debentures (Debentures).  Interest on the
debentures is payable on a quarterly basis on March 31, June 30,
September 30 and December 31 of each year while such Debentures are
outstanding and on each Conversion Date, whichever occurs earlier.
Interest may be paid, at the Company's option, in either cash or
restricted, unregistered common stock.  The Debentures must be prepaid
if an event of default occurs under the Debentures and at the Company's
option may be prepaid within thirty days of the original issue date of
the Debentures.  Management is of the opinion that the Company has
sufficient authorized common shares to cover the conversions.  In the
event that the Company does not have adequate authorized and unissued



                                                                           8
<PAGE>


shares of common stock to effect the maximum shares needed to effect the
conversion, the Company may need to seek shareholder consent to increase
our amount of authorized shares.  If we do not have enough authorized
shares to cover the conversions and are unable to obtain shareholder
approval to increase our authorized shares, such failure would be
considered a breach of certain relevant provisions and representations
and warranties under the Debenture documents and could result in the
acceleration of all amounts due under the Debentures.

On May 1, 2003, the Company and the Debenture Holders entered into a
Debenture Redemption Agreement (Redemption Agreement).  The Redemption
Agreement sets forth the following terms and conditions related to the
Debentures on an ongoing basis:

  a. Redemption Schedule; Payment of Net Redemption Amount: The
     Company shall pay the Net Redemption Price to the Debenture
     Holders in monthly installments in the amount of $40,000 (the
     "Monthly Redemption Payment"), with the first installment thereof
     due on July 1, 2003 and subsequent installments thereof due on
     the first business day of each succeeding month (each, a "Payment
     Date") until the Net Redemption Amount has been paid in full.
     The Company shall pay the Debenture Holders by wire transfer of
     immediately available funds pursuant to the Debenture Holders'
     written instructions.  The Monthly Redemption Payment shall be
     applied with respect to the Debenture Holders in the following
     order: (i) Accrued Interest, (ii) Redemption Premium, and (iii)
     outstanding principal balance of the Owned Debentures.

  b. Prohibited Conversions: The Debenture Holders shall not convert
     the Owned Debentures into shares of the Company's common stock,
     par value $0.001 per share (the "Shares") during the period
     commencing on the date hereof and ending on June 30, 2003 (the
     "Prohibited Period").

  c. Permitted Conversions: Following the Prohibited Period, the
     Debenture Holders shall be permitted to convert its Owned
     Debentures, to the extent such Owned Debentures have not been
     previously redeemed hereunder, into Shares in accordance with the
     terms and subject to the conditions of the Owned Debentures,
     subject to the following restrictions:

       (1)     If the last reported sale price of the Shares on the
               Over-the-Counter Bulletin Board as reported by Bloomberg
               (the "Price") is less than $.10 per Share, then the
               Debenture Holders shall have the right to convert their
               Owned Debentures into not more than an aggregate of
               300,000 Shares every thirty (30) days during the period
               in which the Price remains less than $.10 per Share,
       (2)     If the Price is equal to or exceeds $.10 per Share but
               is less than $.20 per Share, then the Debenture Holders
               shall have the right to convert their Owned Debentures
               into not more than an aggregate of 500,000 Shares every
               thirty (30) days during the period that the Price is
               equal to or exceeds $.10 per Share but is less than $.20
               per Share,
       (3)     If the Price is equal to or exceeds $.20 per Share but
               is less than $.30 per Share, then the Debenture Holders
               shall have the right to convert their Owned Debentures
               into not more than an aggregate of 750,000 Shares every
               thirty (30) days during the period that the Price is
               equal to or exceeds $.20 per Share but is less than $.30
               per Share, and
       (4)     If the Price is equal to or exceeds $.30 per Share, then
               the Debenture Holders shall not be restricted by the
               Company hereunder with respect to the number of Shares
               into which the Debentures may be converted during the
               period that the Price is equal to or exceeds $.30 per
               Share, provided, however, that if the Company fails to
               (i) make the Monthly Redemption Payment pursuant to
               Section 2 hereof within five (5) business days following
               the Payment Date or (ii) pay any delinquent amounts that
               are due and owing under this Agreement, then the
               foregoing restrictions on the Debenture Holders' right
               to convert their Owned Debentures into Shares shall be
               suspended until the first day of the next month
               following the date that the Monthly Redemption Payment
               is received in full by the Debenture Holders.

  d. Issuance of Additional Shares: The Company shall issue and
     deliver to the Debenture Holders shares of common stock
     representing, in the aggregate, one percent (1%) of the
     outstanding shares of the Company on the earlier to occur of: (i)
     the date of full conversion by the Debenture Holders of all of
     the Owned Debentures and (ii) the date of payment by the Company
     of the total Aggregate Redemption Price (collectively, the
     "Additional Shares").

  e. Interest: Interest on the outstanding balance of the Owned
     Debentures shall continue to accrue following the date hereof as
     specified in the respective Owned Debenture and shall be payable
     in cash or Shares in accordance with the terms thereof.

  f. Effectiveness of the Registration Statement: The Company shall
     take all necessary actions, including the preparing and filing
     of one or more registration statements of the Company and any
     amendments or supplements thereto (the "Registration Statement")
     required under the Securities Act of 1933, as amended, and the
     rules and regulation thereunder, to cause the Shares issuable
     upon conversion of the Owned Debentures to be registered for
     resale pursuant to an effective Registration Statement.  If (i)
     the Company fails to respond to all comments made by the
     Securities and Exchange Commission (the "SEC") in connection with
     the Registration Statement within ten (10) business days of
     receipt from the SEC or (ii) the SEC has not declared the
     Registration Statement effective on or before July 10, 2003, then
     the Company shall immediately pay to each Debenture Holders an



                                                                           9
<PAGE>

     amount equal to five percent (5%) of the sum of (a) the
     outstanding balance of the Debenture Holders's Owned Debentures,
     (b) accrued interest on the Debenture Holders's Owned Debentures
     and (c) a premium equal to thirty percent (30%) of the sum of (a)
     and (b) (the "Registration Penalty").  The Registration Penalty
     shall be payable either in cash or Shares, the number of which
     shall be based on the conversion price set forth in the Owned
     Debentures, at each Debenture Holders's option.  If a Debenture
     Holders elects to receive the Registration Penalty in cash, then
     the full amount of the Registration Penalty shall be paid to such
     Debenture Holders by wire transfer of immediately available funds
     in accordance with the instructions set forth on attached
     Schedule II.

  g. Effect of Breach:  In the event of a breach by the Company of any
     of the provisions of this Agreement, either by a failure to
     timely make any payment or failure to effect any conversion by
     the Debenture Holders or otherwise, in addition to any other
     remedies available to the Debenture Holders in law or equity with
     respect to such breach, the applicable discount to the market
     price of the Owned Debentures shall permanently be amended from
     fifty percent (50%) to seventy-five percent (75%).

In conjunction with the issuance of the convertible debentures, the
debentures were issued with an equivalent per share value of common stock
below the ending quoted market price of the Company's common stock on the
issue date.  This difference created a Beneficial Conversion Feature
Discount of approximately $300,000.  This discount was then amortized
over the unexpired time period between the date of issue of the eligible
shares and the maturity date of the underlying debentures.  Approximately
$141,177 and $158,823 was amortized to operations during the years ended
May 31, 2003 and 2002, respectively.

                  ITEM 7 - FINANCIAL STATEMENTS

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


ITEM 8 - CHANGES IN, AND DISAGREEMENT WITH, ACCOUNTANTS ON ACCOUNTING
                     AND FINANCIAL DISCLOSURE

The Company's financial statements for the fiscal years ended May 31,
2001, 2000 and 1999 were audited by the firm of Wieseneck, Andres and
Company, P.A. (Wieseneck) of North Palm Beach, Florida.

On July 15, 2002, the Company's Board of Directors made a decision to
terminate the services of Wieseneck as the Company's independent
auditors.  The termination of Wieseneck resulted from a business decision
made by the Board of Directors.

The Company informally notified Wieseneck of the Board's decision,
concurrent with the Board action.  The Company confirmed the dismissal
of Wieseneck in writing on August 7, 2002.  The Company furnished
Wieseneck with a copies of the Form 8-K and Form 8-K/A, as filed by the
Company and requested Wieseneck to provide a letter addressed to the SEC
stating that it agrees with the statements in the immediately preceding
paragraph.

Wieseneck's audit opinion on the financial statements for either of the
past two (2) years contained an adverse opinion or a disclaimer of
opinion or was qualified or modified as to uncertainty, audit scope or
accounting principles, except for a going concern opinion expressing
substantial doubt about the ability of the Company to continue as a going
concern.

During the Company's fiscal years ended May 31, 2001 and 2000 and from
May 31, 2001 to the date of the filing of the respective Form 8-K or Form
8-K/A, there were no disagreements with Wieseneck on any matter of
accounting principles or practices, financial disclosure, or auditing
scope or procedure.  Additionally, there were no reportable events, as
described in Item 304(a)(1)(v) of Regulation S-K, during the Company's
fiscal years ended May 31, 2001 and 2000 and from May 31, 2001 to the
date of the filing of the respective Form 8-K or Form 8-K/A.

On July 16, 2002, the Company's Board of Directors approved the retention
of the accounting firm of S. W. Hatfield, CPA of Dallas, Texas as its
independent auditors for the fiscal year ending May 31,2002 and
subsequent periods.  During the Company's two most recent fiscal years
ended May 31, 2002, and the subsequent interim periods through the date
of the filing of the respective Form 8-K or Form 8-K/A, the Company did
not consult with S. W. Hatfield, CPA regarding any of the matters or
events set forth in Item 304(a)(2)(i) and (ii) of Regulation S-K.

As a result of the change in independent accountants, the Company found
it necessary to file a Form 12b-25, Notice of Late Filing, dated August
28, 2002.  At that time the Company believed its form 10-KSB would have
been successfully completed and filed within the 15 day extension period
as required.  However, Wieseneck did not respond to our successor
auditor's inquiries, made in accordance with Statement of Auditing
Standards No. 84, nor did they fully cooperate with the Company in
transmitting copies of all requested workpapers and schedules prepared
by them that could be construed as Company records necessary for S. W.
Hatfield, CPA to complete the 2002 audit, resulting in the Company not
being able to file its 10-KSB within the additional allocated time
period.  This change in the Company's independent auditors, and the lack
of cooperation caused delay in the filing of its 2002 Annual Report.



                                                                          10
<PAGE>


Additionally, as of this date, Wieseneck has not yet provided a letter,
as is required, to be included as an exhibit on our Form 8-K/A dated
August 7, 2002, stating that they agree or disagree with the Company's
statement that of during the period Wieseneck, Andres & Company, P.A.,
were acting as our independent accountants, there were no disagreement(s)
with them on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure.  The Company will
file a further amendment to that Form 8-K/A upon receipt of that letter.
As of the date of this filing, Wieseneck has not complied with the
requirements of the SEC.

























                                                                          11
<PAGE>


  ITEM 9 - DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
             COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

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.

<TABLE>
<CAPTION>
         Name                    Age          Position Held and Tenure
         ----                    ---          ------------------------
<S>                              <C>          <C>
   Gerard Haryman                59              President, CEO,
                                                  acting CFO &
                                              Chairman of the Board

   Thomas Donaldson              60           Vice President, Secretary
                                                    & Director

   Timothy Palmer                57                  Director
</TABLE>


Gerard Haryman, has served as our Chairman of the Board, President and
Chief Executive Officer since January of 1996. Previously and
concurrently, since 1981 to the present, Mr. Haryman has been President
and Chief Executive Officer of SA, Sitmo, developers and builders of
commercial and residential properties throughout Europe, with corporate
offices in Paris, France. Mr. Haryman has also been involved in the
development of residential property in the Palm Beach area since 1988,
and during that period has also served on the Board of Directors of
several other companies, both public and private . Mr. Haryman attended
the "Institute General de Finance" in Paris, France majoring in finance
and administration.

Thomas N. Donaldson, since February of 1993, Mr. Donaldson has been and
officer and director of Epicus Group (fka) Phoenix International
Industries, Inc., and of Trident Environmental Systems, Phoenix's
predecessor.   Prior to his entering the public company arena, he had an
extremely successful background in the electronic media, both television
and radio.  Before being promoted to executive level management, 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.

Timothy Palmer, since October 1993 Mr. Palmer has been President of HDX
9000, Inc., of New York and West Palm Beach, Florida, a computer and
business consulting firm.  He has been  a Director of the Company since
July 1997.  From March 1997 to the present, he has been President of
Quality Advantage, Ltd. of Kingston, Jamaica, a computer and business
consulting firm. Prior to October 1993, he was manager of the Palmer
Family Trust in London, England.  Mr. Palmer holds a Bachelor of Commerce
Degree from McGill University in Montreal, Canada.


                 ITEM 10 - EXECUTIVE COMPENSATION

The following table sets forth the cash compensation of our executive
officers and directors during each of the last three fiscal years. The
remuneration described in the table does not include the cost we incurred
in furnishing benefits to the named executive officers, including
premiums for health insurance and other benefits provided to such
individual that are extended in connection with the conduct of  our
business. The value of such benefits cannot be precisely determined, but
the executive officers named below did not receive other compensation in
excess of the lesser of $25,000 or 10% of such officer's cash
compensation.

Summary Compensation Table

<TABLE>
<CAPTION>
Name and
Principal                                    Annual                   Restricted   Options/    LTIP
Position               Year       Salary     Bonus    Compensation      Stock      SARs(#)
<S>                    <C>      <C>          <C>      <C>             <C>          <C>         <C>

Gerard Haryman         2003     250,000(1)    -0-         -0-            -0-         -0-       -0-
Pres./CEO/Dir.         2002     250,000(1)    -0-         -0-            -0-         -0-       -0-
                       2001     250,000(1)    -0-         -0-            -0-         -0-       -0-

Thomas Donaldson       2003     104,000(1)    -0-         -0-            -0-         -0-       -0-
VP/COO/Dir.            2002     104,000(1)    -0-         -0-            -0-         -0-       -0-
                       2001     104,000(1)    -0-         -0-            -0-         -0-       -0-
</TABLE>

(1) Due to our cash position, Mr. Haryman and Mr. Donaldson have
    deferred payment of all or part of their salaries and bonuses.


                                                                          12
<PAGE>


(2) Mr. Haryman received a grant of 1,400,000 shares of our common
    stock on April 8, 2000 valued at $1,484,000 and 2,000,000 shares on
    February 1, 2001 valued at $538,000 and 300,000 shares on July 16,2001
    valued at $21,000.

(3) Mr. Donaldson received a grant of 250,000 shares of our common
    stock on April 8, 2000 valued at $265,000 and 300,000 shares on
    February 1, 2001 valued at $134,500 and 300,000 shares on July 16, 2001
    valued at $21,000.

No additional shares have been issued to our executive officers since
July 16, 2001.

For the year ended May 31, 2002 we issued 4,296,277 shares of stock under
the Employee Stock Option Plan.


EMPLOYMENT AGREEMENTS

We currently have no Employment Contracts in effect.


COMPENSATION OF DIRECTORS

Each of our Directors is to receive 12,000 shares of common stock for
each year cumulative of service plus reimbursement of out-of-pocket
expenses.


OUTSIDE DIRECTORS

Currently, the Company has only one outside Director, Timothy Palmer.


ITEM 11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

<TABLE>
<CAPTION>
                                                    Percentage of
Name and Address              Common Stock           Class(1)(2)
<S>                           <C>                   <C>
Gerard Haryman
President/CEO
1750 Osceola Drive
West Palm Beach, FL  33409     4,273,948(3)              3.8%

Thomas Donaldson
VP/COO, Director
1750 Osceola Drive
West Palm Beach, FL  33409        100,000                 *

Timothy Palmer, Director
1750 Osceola Drive
West Palm Beach, FL  33409        500,000                 *

All Directors and Executive
Officers as a Group             4,873,948                4.2%

* less than 1%
</TABLE>

(1)  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.

(2)  Percentage based on 113,817,571 shares outstanding as of May 31,
     2003.

(3)  Includes 280,000 shares owned by Mr. Haryman's wife that are deemed
     beneficially to be owned by him.


BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

The following persons failed to file Form 5 for the fiscal year:

 Gerard Haryman
 Thomas Donaldson
 Timothy Palmer


                                                                          13
<PAGE>


     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 years ended May 31, 2003 and
2002, respectively:

The Company leases it's executive offices in West Palm Beach, Florida
from a corporation owned by Gerard Haryman, the Company's President and
Chief Executive Officer.  The terms and conditions of this arrangement
are discussed in Item 2 - Description of Property.

During Fiscal 2003 and 2002, respectively, the Company received (repaid)
interest bearing advances either directly from Gerard Haryman,  the
Company's President and Chief Executive Officer or entities affiliated
with Gerard Haryman in the net amounts of approximately $(105,715) and
$469,718.


            ITEM 13 - EXHIBITS AND REPORTS ON FORM 8-K

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 the registrant's Form I 0-KSB, for
the fiscal year 1995, under the Securities and Exchange Act of 1934,
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,
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.


23.1  Consent of Independent Certified Public Accountants

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


Reports on Form 8-K
-------------------

May 5, 2003  Announcing the name change from Phoenix International
             Industries, Inc. to Epicus Communications Group, Inc.

May 7, 2003  Announcing the execution on May 1, 2003 of a "Debenture
             Redemption Agreement" with the holders of the Company's
             outstanding convertible  debentures.


                ITEM 14 - CONTROLS AND PROCEDURES

As required by Rule 13a-15 under the Exchange Act, within the 90 days
prior to the filing date of this report, the Company carried out an
evaluation of the effectiveness of the design and operation of the
Company's disclosure controls and procedures. This evaluation was carried
out under the supervision and with the participation of the Company's
management, including the Company's President, Chief Executive and
Financial Officer.  Based upon that evaluation, the Company's President,
Chief Executive and Financial Officer concluded that the Company's
disclosure controls and procedures are effective.  There have been no
significant changes in the Company's internal controls or in other
factors, which could significantly affect internal controls subsequent
to the date the Company carried out its evaluation.

Disclosure controls and procedures are controls and other procedures that
are designed to ensure that information required to be disclosed in
Company reports filed or submitted under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in
the Securities and Exchange Commission's rules and forms.  Disclosure
controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed
in Company reports filed under the Exchange Act is accumulated and
communicated to management, including the Company's Chief Executive and
Financial Officer as appropriate, to allow timely decisions regarding
required disclosure.



                                                                          14
<PAGE>


                            SIGNATURES

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

                                         EPICUS COMMUNICATIONS GROUP, INC.

Date: September 10, 2003                         By:    /s/ Gerard Haryman
                                                    ----------------------
                                                    Gerard Haryman
                                       President, Chief Executive Officer,
                                        Acting Chief Financial Officer and
                                                                  Director


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

Date: September 10, 2003                         By:    /s/ Gerard Haryman
                                                    ----------------------
                                                            Gerard Haryman
                                       President, Chief Executive Officer,
                                        Acting Chief Financial Officer and
                                                                  Director


Date: September 10, 2003                       By: /s/ Thomas N. Donaldson
                                                  ------------------------
                                                       Thomas N. Donaldson
                                                 Vice President, Secretary
                                                              and Director


Date: September 10, 2003                          By:   /s/ Timothy Palmer
                                                     ---------------------
                                                            Timothy Palmer
                                                                  Director












                                                                          15
<PAGE>

          EPICUS COMMUNICATIONS GROUP, INC. AND SUBSIDIARIES
    (formerly Phoenix International Industries, Inc. and Subsidiaries)

            INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


                                                                  Page
                                                                  ----

Report of Independent Certified Public Accountants                F-2

Consolidated Financial Statements

 Consolidated Balance Sheets
   as of May 31, 2003 and 2002                                    F-3

 Consolidated Statements of Operations and Comprehensive Loss
  for the years ended May 31, 2003 and 2002                       F-5

 Consolidated Statement of Changes in Stockholders' Equity
  for the years ended May 31, 2003 and 2002                       F-7

 Consolidated Statements of Cash Flows
  for the years ended May 31, 2003 and 2002                       F-8

 Notes to Consolidated Financial Statements                       F-10














                                                                         F-1
<PAGE>



S. W. Hatfield, CPA                                 P.O. Box 820395
Use our past to assist your future.[sm]       Dallas, TX 75382-0395

(214) 342-9635 (voice)                         (214) 342-9601 (fax)


        REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
        --------------------------------------------------


Board of Directors and Stockholders
Epicus Communications Group, Inc.
 (Formerly Phoenix International Industries, Inc.)

We have audited the accompanying consolidated balance sheet of Epicus
Communications Group, Inc. (formerly Phoenix International Industries,
Inc.) (a Florida corporation) and Subsidiaries as of May 31, 2003 and
2002 and the related statements of operations and comprehensive loss,
changes in stockholders' equity and cash flows for each of the years
ended May 31, 2003 and 2002, 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 audits in accordance with auditing standards generally
accepted in the United States of America.  Those standards require that
we plan and perform the audit to obtain reasonable assurance about
whether the consolidated financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial
statements.  An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall consolidated financial statement presentation.  We believe
that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of Epicus Communications Group, Inc. (formerly Phoenix
International Industries, Inc.) as of May 31, 2003 and 2002 and the
results of its operations and its cash flows for each of the years ended
May 31, 2003 and 2002, respectively, 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 C to the consolidated financial statements, the Company continues
to experience operating losses and negative cash flow from operating
activities.  Liquidity during this period has been provided by management
and/or significant shareholders to provide sufficient working capital to
maintain the integrity of the corporate entity.  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/ S. W. Hatfield, CPA
                                          ------------------------------
                                              S. W. HATFIELD, CPA
Dallas, Texas
August 21, 2003



                                                                         F-2
<PAGE>


         EPICUS COMMUNICATIONS GROUP, INC. AND SUBSIDIARIES
(formerly Phoenix International Industries, Inc. and Subsidiaries)
                   CONSOLIDATED BALANCE SHEETS
                      May 31, 2003 and 2002

<TABLE>
<CAPTION>
                                                        May 31, 2003   May 31, 2002
                                                        ------------   ------------
<S>                                                     <C>            <C>
                              ASSETS
                              ------
Current Assets
 Cash on hand and in bank                               $     65,191   $        850
 Accounts receivable - Trade
  net of allowance for doubtful accounts
  of approximately $750,000 and $185,000, respectively     3,004,887      1,353,660
 Advances due from officer                                    15,000         15,000
                                                        ------------   ------------
  Total current assets                                     3,085,078      1,369,510
                                                        ------------   ------------

Property and equipment - at cost                             574,833        562,355
 Less Accumulated depreciation                              (291,039)      (228,659)
                                                        ------------   ------------
  Net property and equipment                                 283,794        333,696
                                                        ------------   ------------

Other Assets
 Deposits                                                    214,717        207,898
 Restricted cash                                             201,296        203,798
 Assets held for sale                                         30,285              -
 Trademark and corporate name development costs               23,524         23,524
                                                        ------------   ------------
   Total other assets                                        469,822        435,220
                                                        ------------   ------------

TOTAL ASSETS                                            $  3,838,694   $  2,138,426
                                                        ============   ============
</TABLE>



                          - Continued -











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

                                                                         F-3
<PAGE>


        EPICUS COMMUNICATIONS GROUP, INC. AND SUBSIDIARIES
(formerly Phoenix International Industries, Inc. and Subsidiaries)
             CONSOLIDATED BALANCE SHEETS - CONTINUED
                      May 31, 2003 and 2002

<TABLE>
<CAPTION>
                                                        May 31, 2003   May 31, 2002
                                                        ------------   ------------
<S>                                                     <C>            <C>

               LIABILITIES AND STOCKHOLDERS' EQUITY
               ------------------------------------

Current Liabilities
 Bank overdraft                                         $          -   $     74,206
 Notes payable to banks and other                          1,308,878      1,363,093
 Accounts payable - trade                                  3,880,830      2,531,854
 Accrued sales and service taxes payable                   1,268,450        623,677
 Accrued payroll and payroll taxes payable                   494,551        286,719
 Accrued rent payable to affiliate                           132,067         90,468
 Accrued interest payable                                    884,148        527,243
 Accrued officer compensation                              2,472,372      2,119,176
                                                        ------------   ------------
  Total current liabilities                               10,441,296      7,616,436
                                                        ------------   ------------


Long-term debt
 Advances from controlling shareholder/officer             1,267,608      1,373,323
                                                        ------------   ------------
  Total liabilities                                       11,708,904      8,989,759
                                                        ------------   ------------


Commitments and contingencies


Convertible debentures                                     1,255,128      1,429,697
                                                        ------------   ------------

Stockholders' Equity (Deficit)
 Preferred stock - $0.001 par value
  5,000 shares authorized
  None issued and outstanding                                      -              -
 Common stock - $0.001 par value.
  200,000,000 shares authorized.
  113,817,571 and 74,332,327 shares
   issued and outstanding, respectively                      113,818         74,332
 Additional paid-in capital                               13,891,580     13,145,002
 Accumulated deficit                                     (23,130,736)   (21,500,364)
                                                        ------------   ------------
  Total stockholders' equity                              (8,125,338)    (8,281,030)
                                                        ------------   ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY              $  3,838,694   $  2,138,426
                                                        ============   ============
</TABLE>



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

                                                                         F-4
<PAGE>


         EPICUS COMMUNICATIONS GROUP, INC. AND SUBSIDIARIES
(formerly Phoenix International Industries, Inc. and Subsidiaries)
              CONSOLIDATED STATEMENTS OF OPERATIONS
                      AND COMPREHENSIVE LOSS
                Years ended May 31, 2003 and 2002


<TABLE>
<CAPTION>
                                                         Year ended     Year ended
                                                        May 31, 2003   May 31, 2002
                                                        ------------   ------------
<S>                                                     <C>            <C>

Revenues - net                                          $ 10,412,856   $  6,029,792
Cost of Sales                                             (6,042,666)    (3,180,459)
                                                        ------------   ------------
Gross Profit                                               4,370,190      2,849,333
                                                        ------------   ------------

Operating Expenses
 Selling expenses                                          1,560,021        780,645
 General and administrative expenses                       4,245,968      3,483,632
 Bad debt expense                                            842,174      1,969,657
 Depreciation and amortization                               105,023        197,620
 Compensation expense related to common
  stock issuances at less than "fair value"                   77,344         84,563
                                                        ------------   ------------
  Total operating expenses                                 5,883,333      6,516,117
                                                        ------------   ------------

Loss from operations                                      (1,513,143)    (3,666,784)
                                                        ------------   ------------

Other income
 Interest and other income (expense) - net                    27,524        (78,627)
 Interest expense                                           (415,691)      (414,807)
 Accretion of Beneficial Conversion
  Feature Discount on Convertible Debentures                (141,177)      (158,823)
 Impairment adjustment of reorganization
  value in excess of amounts allocated to
  identifiable assets                                              -       (643,020)
 Abandonment and impairment of property and equipment        (33,962)      (305,656)
                                                        ------------   ------------
Loss before provision for income taxes,
 discontinued operations and extraordinary item           (2,076,449)    (5,267,357)

Provision for income taxes                                         -              -
                                                        ------------   ------------
Loss before discontinued operations and
  extraordinary item                                      (2,076,449)    (5,267,357)

Discontinued operations
 Loss on final settlement and disposition of
   assets and operations in closed subsidiaries,
   net of income taxes                                             -         20,913
 Income from operations of discontinued subsidiary,
   net of income taxes                                             -              -
                                                        ------------   ------------
Loss before extraordinary item                            (2,076,449)    (5,246,444)
Extraordinary item
 Forgiveness and extinguishment of accounts payable          446,077              -
                                                        ------------   ------------
Net Loss                                                  (1,630,372)    (5,246,444)
Other comprehensive income                                         -              -
                                                        ------------   ------------
Comprehensive Loss                                      $ (1,630,372)  $ (5,246,444)
                                                        ============   ============
</TABLE>


                          - Continued -


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

                                                                         F-5
<PAGE>


           EPICUS COMMUNICATIONS GROUP, INC. AND SUBSIDIARIES
 (formerly Phoenix International Industries, Inc. and Subsidiaries)
                 CONSOLIDATED STATEMENTS OF OPERATIONS
                   AND COMPREHENSIVE LOSS - CONTINUED
                   Years ended May 31, 2003 and 2002

<TABLE>
<CAPTION>
                                                         Year ended     Year ended
                                                        May 31, 2003   May 31, 2002
                                                        ------------   ------------
<S>                                                     <C>            <C>

Loss before provision for income taxes,
 discontinued operations and extraordinary item         $ (2,076,449)  $ (5,267,357)

Provision for income taxes                                         -              -
                                                        ------------   ------------
Loss before discontinued operations
 and extraordinary item                                   (2,076,449)    (5,267,357)

Discontinued operations                                            -         20,913
                                                        ------------   ------------

Loss before extraordinary item                            (2,076,449)    (5,246,444)

Extraordinary item                                           446,077              -
                                                        ------------   ------------

Net Loss                                                  (1,630,372)    (5,246,444)

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

Comprehensive Loss                                      $ (1,630,372)  $ (5,246,444)
                                                        ============   ============


Net loss per weighted-average share
 of common stock outstanding, calculated
 on Net Loss - basic and fully diluted
  From continuing operations                                  $(0.03)        $(0.08)
  Discontinued operations                                          -              -
  Extraordinary item                                            0.01           0.00
                                                              ------         ------
                                                              $(0.02)        $(0.08)
                                                              ======         ======
Weighted-average number of shares
 of common stock outstanding                              88,673,078     64,444,538
                                                          ==========     ==========
</TABLE>




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

                                                                         F-6
<PAGE>

         EPICUS COMMUNICATIONS GROUP, INC. AND SUBSIDIARIES
 (formerly Phoenix International Industries, Inc. and Subsidiaries)
     CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                Years ended May 31, 2003 and 2002

<TABLE>
<CAPTION>
                                                                 Additional
                                            Common Stock           paid-in      Accumulated
                                        Shares         Amount      capital        Deficit           Total
                                      ----------      --------   -----------    ------------    ------------
<S>                                   <C>             <C>        <C>            <C>             <C>

Balances at June 1, 2001              48,901,557      $ 48,902   $11,524,369    $(16,253,920)   $ (4,680,649)

Issuance of common stock
   For cash pursuant to a private
         placement in accordance
         with Regulation S             2,000,000         2,000        98,000               -         100,000
   For cash pursuant to options
         granted and exercised by
         non-officer employees         3,067,777         3,068       298,088               -         301,156
   For services rendered, interest
         and debt conversion          16,950,493        16,950     1,121,082               -       1,138,032
   For compensation to
         officers                      1,212,500         1,212        83,663               -          84,875
   For final settlement on
         disposition of Moye &
         Associates, Inc.              2,200,000         2,200        19,800               -          22,000

Net loss for the year                          -             -             -      (5,246,444)     (5,246,444)
                                      ----------      --------   -----------    ------------    ------------
Balances at May 31, 2002              74,332,327        74,332    13,145,002     (21,500,364)     (8,281,030)

Issuance of common stock
   For payment of interest and
         retirement of debt           32,963,022        32,963       462,041               -         495,004
   For services rendered               2,222,222         2,223        68,660               -          70,883
   For compensation
         to employees                  4,300,000         4,300        74,700               -          79,000
Accretion of Beneficial
   Conversion Discount Feature                 -             -       141,177               -         141,177

Net loss for the year                          -             -             -      (1,630,372)     (1,630,372)
                                     -----------      --------   -----------    ------------    ------------
Balances at May 31, 2003             113,817,571      $113,818   $13,891,580    $(23,130,736)   $ (9,125,338)
                                     ===========      ========   ===========    ============    ============
</TABLE>




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

                                                                         F-7
<PAGE>


         EPICUS COMMUNICATIONS GROUP, INC. AND SUBSIDIARIES
 (formerly Phoenix International Industries, Inc. and Subsidiaries)
                CONSOLIDATED STATEMENTS OF CASH FLOWS
                  Years ended May 31, 2003 and 2002


<TABLE>
<CAPTION>
                                                         Year ended     Year ended
                                                        May 31, 2003   May 31, 2002
                                                        ------------   ------------
<S>                                                     <C>            <C>
Cash Flows from Operating Activities
 Net loss for the year                                  $ (1,630,372)  $ (5,246,444)
 Adjustments to reconcile net loss to net cash
  provided by operating activities
   Depreciation                                              105,023        102,951
   Amortization                                                    -         94,669
   Bad debt expense                                          842,174      1,969,657
   Expenses paid with common stock                           149,884        664,197
   Forgiveness and extinguishment of accounts payable        446,077              -
   Impairment and abandonment charges to operations           33,962        948,676
   Compensation expense related to common stock
     issuances at less than "fair value"                      77,344         84,563
   Accretion of Beneficial Conversion Feature
     Discount on Convertible Debentures                      141,177        158,823
  (Increase) Decrease in
     Accounts receivable                                  (2,493,401)    (2,248,490)
     Prepaid expenses                                              -          2,875
     Deposits, intangible and other assets                    (6,819)       294,516
 Increase (Decrease) in
     Accounts payable                                      1,746,519        764,860
     Accrued liabilities                                     894,204        675,816
     Accrued interest payable                                395,780        277,010
     Accrued officer compensation                            353,196        353,196
                                                        ------------   ------------
Net cash used in operating activities                       (162,594)    (1,103,125)
                                                        ------------   ------------

Cash Flows from Investing Activities
 (Increase) Decrease in restricted cash                        2,502           (433)
 Purchase of property and equipment                          (70,834)       (50,255)
                                                        ------------   ------------
Net cash used in investing activities                        (68,332)       (50,688)
                                                        ------------   ------------

Cash Flows from Financing Activities
 Increase (Decrease) in cash overdraft                       (74,206)        70,290
 Proceeds from sale of common stock                                -        328,905
 Cash paid to raise capital                                        -        (30,727)
 Proceeds from convertible debentures                        150,000        155,000
 Cash advanced from (paid to) affiliated entities           (105,715)       469,758
 Repayments of advances from stockholder                           -              -
 Proceeds from notes payable                                       -        150,000
 Cash to repay notes payable                                       -        (47,128)
                                                        ------------   ------------
Net cash used in financing activities                        (29,921)     1,096,098
                                                        ------------   ------------

Increase (Decrease) in Cash                                   64,341        (57,715)
Cash at beginning of period                                      850         58,568
                                                        ------------   ------------
Cash at end of period                                   $     65,191   $        850
                                                        ============   ============
</TABLE>

                            -Continued-



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

                                                                         F-8
<PAGE>


         EPICUS COMMUNICATIONS GROUP, INC. AND SUBSIDIARIES
 (formerly Phoenix International Industries, Inc. and Subsidiaries)
         CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
                  Years ended May 31, 2003 and 2002

<TABLE>
<CAPTION>
                                                         Year ended     Year ended
                                                        May 31, 2003   May 31, 2002
                                                        ------------   ------------
<S>                                                     <C>            <C>

Supplemental Disclosure of
 Interest and Income Taxes Paid
    Interest paid for the period                        $     19,911   $          -
                                                        ============   ============
  Income taxes paid for the period                      $          -   $          -
                                                        ============   ============

Supplemental Disclosure of Non-cash
 investing and financing activities
  Common stock issued for retirement of debt            $    378,784   $    440,303
                                                        ============   ============
  Common stock issued in payment of accrued interest    $     38,875   $    137,797
                                                        ============   ============
</TABLE>























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

                                                                         F-9
<PAGE>


        EPICUS COMMUNICATIONS GROUP, INC. AND SUBSIDIARIES
(formerly Phoenix International Industries, Inc. and Subsidiaries)

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE A - ORGANIZATION AND DESCRIPTION OF BUSINESS

Phoenix International Industries, Inc. (Company) was 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 the Company's primary
business was in various types of products and systems for use in the
environmental clean-up industry.  On October 2, 1996, the Company's name
was changed to Phoenix International Industries, Inc.  From January 1996
through May 31, 1997, the Company sought acquisitions as it wound down
and closed its original environmental clean-up business.

In May 2003, Phoenix International Industries Inc. changed the company's
name to Epicus Communications Group, Inc. (Epicus Group).  The name
change was effected to better reflect the Company's business emphasis on
the telecommunications sector and to better create consistent name
branding with the Company's wholly-owned operating subsidiary, EPICUS,
Inc.

During Fiscal 2000, the Company acquired control of Telephone Company of
Central Florida, Inc. (TCCF), an entity then operating under Chapter 11
of the United States Bankruptcy Court.  As an integral component of
TCCF's Plan of Reorganization, the Company recapitalized TCCF, effective
on the effective date of TCCF's discharge from bankruptcy.  On July 9,
1999, the U. S. Bankruptcy Court issued an Order of Confirmation related
to TCCF's Plan of Reorganization and the Company recapitalized TCCF
within ten days of the Confirmation Order.  TCCF is a "competitive local
exchange carrier ("CLEC") telephone company and a reseller of other
telecommunications services.  On January 17, 2001 the corporate name of
TCCF was changed to EPICUS, Inc.  (Epicus).

On July 28, 2000, the Company acquired 100% of the stock of Moye &
Associates, Inc. (Moye) of St. Simons Island Georgia.  Moye's primary
business was that of an Internet Service Provider (ISP) known as
TheBest.Net.  This move was seen by management as being synergetic with
the operations of TCCF.  On July 19, 2001, the Company sold all operating
assets of Moye to an unrelated party and, effectively, discontinued all
operations within this subsidiary.

On April 9, 1998, the Company acquired 100% of the outstanding stock of
Mic Mac Investments, Inc. (Mic Mac), a South Carolina corporation.  Mic
Mac at the time of acquisition was a  long distance telephone service
"reseller" specializing in services to the hospitality industry.  All
operations related to Mic Mac were discontinued by February 1999.


NOTE B - 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.


                                                                        F-10
<PAGE>


        EPICUS COMMUNICATIONS GROUP, INC. AND SUBSIDIARIES
(formerly Phoenix International Industries, Inc. and Subsidiaries)

      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE B - PREPARATION OF FINANCIAL STATEMENTS - Continued

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., EPICUS, Inc., Mic Mac, Inc. and Moye &
Associates, Inc. for the years ended May 31, 2003 and 2002, respectively.
All significant intercompany transactions have been eliminated in
consolidation.  The consolidated entities are referred to as either
Company or Epicus Group.

The Company conducted business activities in only one distinct business
segment during Fiscal 2003 and 2002.


NOTE C - GOING CONCERN UNCERTAINTY

The Company has experienced cumulative operating losses for the previous
three-year period of approximately $15,600,000 and has used cash in
operating activities for the same period of approximately $4,636,000.
In a effort to control costs and better manage the Company's key
operating subsidiary, Epicus, Inc., the Company discontinued all
operations within Mic Mac and Moye during the year ended May 31, 2002 and
has sold or otherwise disposed of all operating assets of these
subsidiaries.

The Company's liquidity has been sustained through the sale of equity
securities, restricted and unrestricted, domestically and in
international markets.  Further, significant working capital advances
have been made by members of management or by entities owned or
controlled by members of management.

Management is of the opinion that Epicus became cash flow positive during
the third quarter of Fiscal 2003 (year ending May 31, 2003).  This event
contributed significantly to the improvement of relations with the
Company's vendors to relieve daily operational pressures and should
continue to provide sufficient cash to support the Company's day-to-day
liquidity requirements as well as retire outstanding debt and delinquent
trade payables during future periods.

The Company's continued existence is dependent upon its ability to
generate sufficient cash flows from operations to support its daily
operations as well as provide sufficient resources to retire existing
liabilities and obligations on a timely basis.

Because of the Company's lack of positive cash flows, the Company's
continuance is fully dependent either future sales of securities or upon
its current management and/or advances or loans from significant
stockholders or corporate officers to provide sufficient working capital
to preserve the integrity of the corporate entity.




                                                                        F-11
<PAGE>


         EPICUS COMMUNICATIONS GROUP, INC. AND SUBSIDIARIES
 (formerly Phoenix International Industries, Inc. and Subsidiaries)

       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE C - GOING CONCERN UNCERTAINTY - Continued

There is no assurance that the Company will be able 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.

It is the intent of management and significant stockholders to provide
sufficient working capital necessary to support and preserve the
integrity of the corporate entity.  However, there is no legal obligation
for either management or significant stockholders to provide additional
future funding.


NOTE D - 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, including accounts in book overdraft positions,
   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 located throughout the
   United States and 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 are recorded at historical cost.  These costs
   are depreciated over the estimated useful lives, generally three to
   ten 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. Intangible Assets
   -----------------

   Monies paid for development of the trade name "Epicus", approximately
   $23,525, were capitalized as a component of Other Assets on the
   Company's consolidated balance sheet.  In accordance with Statement of
   Financial Accounting Standards No. 144, "Accounting for the Impairment
   or Disposal of Long-Lived Assets", the Company follows the policy of
   evaluating all qualifying assets as of the end of each reporting
   quarter.  For each of the years ended May 31, 2003 and 2002, no
   charges to operations were made for impairments in the future benefit
   of this trade name.

   Other intangible assets are amortized over the estimated useful life
   of the underlying asset using the straight-line method.



                                                                        F-12
<PAGE>


         EPICUS COMMUNICATIONS GROUP, INC. AND SUBSIDIARIES
 (formerly Phoenix International Industries, Inc. and Subsidiaries)

       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE D - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

5. Goodwill and Reorganization Value in Excess of Amounts Allocable to
   Identifiable Assets
   -------------------------------------------------------------------

   Goodwill represents the excess of the purchase price paid for a
   subsidiary over the fair market values of the underlying assets and
   liabilities assumed in the acquisition transaction.  These amounts are
   amortized over a five to ten year period using the straight-line
   method.  As of May 31, 2002, all goodwill has been charged to
   operations as a result of the discontinuing of all operations in
   acquired subsidiaries.

   Reorganization Value in Excess of Amounts Allocable to Identified
   Assets represents the excess of the recapitalized value of Epicus over
   the fair market value of the assets acquired upon final settlement of
   Epicus' filing under Chapter 11 of the United States Bankruptcy Code.
   This amount was originally being amortized over a forty year term
   using the straight-line method.  In accordance with Statement of
   Financial Accounting Standards No. 144, "Accounting for the Impairment
   or Disposal of Long-Lived Assets", the Company follows the policy of
   evaluating all qualifying assets as of the end of each reporting
   quarter.

   As of May 31, 2002, management, upon realization that the Fiscal 2002
   operational objectives were not met, recorded an impairment of future
   recoverability of the recorded reorganization value in excess of
   amounts allocated to identifiable assets equivalent to 100.0% of the
   unamortized goodwill remaining at May 31, 2002.

6. Revenue Recognition
   -------------------

   Local telephone services for business and residential service are
   billed to the respective customer in advance at the initiation of each
   monthly billing cycle.  Long distance telephone services are billed in
   arrears in the month following the provision of the service.  All
   revenue for both local and long distance services are  recognized at
   the respective date of billing.

   In the event of cancellation 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,
   due to cancellation of service, 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.

7. Income Taxes
   ------------

   The Company uses the asset and liability method of accounting for
   income taxes.  At May 31, 2003 and 2002, the deferred tax asset and
   deferred tax liability accounts, as recorded when material to the
   financial statements, are entirely the result of temporary
   differences.  Temporary differences represent differences in the
   recognition of assets and liabilities for tax and financial reporting
   purposes, primarily accumulated depreciation and amortization,
   allowance for doubtful accounts and vacation accruals.

   As of May 31, 2003 and 2002, the deferred tax asset related to the
   Company's net operating loss carryforward is fully reserved.

8. 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.




                                                                        F-13
<PAGE>


         EPICUS COMMUNICATIONS GROUP, INC. AND SUBSIDIARIES
 (formerly Phoenix International Industries, Inc. and Subsidiaries)

       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE D - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

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

    Basic earnings (loss) per share is computed by dividing the net income
    (loss) by the weighted-average number of shares of common stock and
    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.  The calculation of fully diluted earnings
    (loss) per share assumes the dilutive effect of the exercise of
    outstanding options and warrants at either the beginning of the
    respective period presented or the date of issuance, whichever is
    later.  As of May 31, 2003 and 2002, the Company's issued and
    outstanding, warrants, options and convertible debt are considered
    antidilutive due to the Company's net operating loss position.

10. 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.


NOTE E - 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 F - CONCENTRATIONS OF CREDIT RISK

The Company and its Epicus 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 subsidiaries are entitled to aggregate coverage of
$100,000 per account type per separate legal entity per financial
institution.  During the years ended May 31, 2003 and 2002, respectively,
the various operating companies had deposits in a financial institution
with credit risk exposures in excess of statutory FDIC coverage.  The
Company has incurred no losses during Fiscal 2003 or 2002 as a result of
any of these unsecured situations.














                                                                        F-14
<PAGE>


         EPICUS COMMUNICATIONS GROUP, INC. AND SUBSIDIARIES
 (formerly Phoenix International Industries, Inc. and Subsidiaries)

       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE G - BUSINESS COMBINATIONS

On July 28, 2000, in accordance with an Agreement and Plan of Share
Exchange, the Company acquired 100% of the outstanding shares of common
stock of Moye and Associates, Inc., a Georgia Corporation, doing business
as TheBest.Net (Moye).  The Company exchanged an aggregate 600,000 shares
of restricted, unregistered common stock for 100.0% of the issued and
outstanding stock of Moye.  The transaction was accounted for using the
purchase method of accounting.  Goodwill is normally recorded when the
purchase price exceeds the fair value of the net assets and liabilities
acquired.  Management reviewed the prospects of recovery of goodwill that
was recorded on the date of purchase and determined that the goodwill was
100% impaired based on the Letter of Intent to sell Moye & Associates
(see below).  The excess of the fair value of the liabilities assumed
over the fair value of the assets acquired (negative book value) was not
recorded as negative Goodwill.

On July 19, 2001, the Company 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 had been
satisfied.

During Fiscal 2003, the Company 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 & Associates, Inc. (dba TheBest.Net).


NOTE H - RESTRICTED CASH

As collateral for a standby letter of credit securing telephone service
provided by BellSouth Corp., the Company has placed on deposit with the
financial institution issuing the standby letter of credit approximately
$201,000 in an interest bearing certificate of deposit.


NOTE I - ADVANCES DUE FROM OFFICER

The Company has advanced approximately $15,000 to a corporate officer.
This amount is non-interest bearing and is unsecured.  The advance is
repayable upon demand and may, at the officer's discretion, be used to
offset accrued, but unpaid, compensation.


NOTE J - PROPERTY AND EQUIPMENT

Property and equipment consists of the following as of May 31, 2003 and
2002, respectively:

<TABLE>
<CAPTION>
                                                May 31, 2003    May 31, 2002   Estimated life
                                                ------------    ------------   --------------
<S>                                             <C>             <C>            <C>
     Computer equipment                           $385,668        $349,980         5 years
     Office furniture and fixtures                  44,126          67,336        7-10 years
     Software and system programming               145,039         145,039          5 years
                                                  --------        --------
                                                   574,833         562,355
     Less accumulated depreciation                (291,039)       (228,659)
                                                  --------        --------
     Net property and equipment                   $283,794        $333,696
                                                  ========        ========
</TABLE>



                                                                        F-15
<PAGE>


             EPICUS COMMUNICATIONS GROUP, INC. AND SUBSIDIARIES
(formerly Phoenix International Industries, Inc. and Subsidiaries)

      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE J - PROPERTY AND EQUIPMENT - Continued

Depreciation expense for the years ended May 31, 2003 and 2002, was
$105,023 and $102,951, respectively.

During the fourth quarter, management performed a complete physical
inventory of all property and equipment, reevaluated the estimated useful
lives of all property and equipment remaining in service at May 31, 2002,
and evaluated the potential recoverability of all property and equipment
pursuant to Statement of Financial Accounting Standards No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets".  On May
31, 2002, the Company recognized an abandonment of certain previously
capitalized property and equipment resulting in a charge to operations
of approximately $305,656.  Additionally, management established new
estimated useful lives of property and equipment as follows:

<TABLE>
<CAPTON>
                                          As of            As of
                                       May 31, 2002     May 31, 2001
                                       ------------     ------------
<S>                                    <C>              <C>
     Computer equipment                  5 years          12 years
     Office furniture and fixtures      7-10 years        12 years
     Software development                5 years          12 years
</TABLE>


The effect of this change in estimate was recognized in the fourth
quarter for Fiscal 2002 and prospectively for all remaining balances to
be depreciated.


NOTE K - ACCRUED OFFICER COMPENSATION

As of May 31, 2003 and 2002, respectively, the Company has accrued
approximately $2,472,372 and $2,119,176 for earned, but unpaid,
compensation to it's Chief Executive Officer and Chief Operating Officer,
at a rate of approximately at the rate of approximately $20,833 and
$8,600 per month respectively.

In July 2001, the Company's Board of Directors approved the issuance of
a bonus to the Company's Chief Executive Officer and Chief Operating
Officer, to be paid in the form of common stock registered pursuant to
a Registration Statement on Form S-8, as additional compensation for the
Company's inability to provide consistent cash compensation to these
officers.  In July 2001, the Company issued 600,000 shares of common
stock in a transaction valued at approximately $36,000, which equaled the
closing quoted price of the Company's equivalent securities on the date
of the transaction.


NOTE L - NOTES PAYABLE TO BANKS AND OTHERS

Notes payable to banks and others at May 31, 2003 and 2002 are as
follows:

<TABLE>
<CAPTION>
                                                May 31, 2003     May 31, 2002
                                                ------------     ------------
<S>                                             <C>              <C>
$750,000 note payable to a foreign corporation.
  Interest at 13.0%. Accrued interest payable
  quarterly.  Final maturity due in June 2003
  and automatically renewable for one-year
  periods upon written notice by the Company
  prior to the maturity date.  Collateralized
  by 3,000,000 shares of restricted,
  unregistered common stock of the Company.     $    750,000     $    750,000

</TABLE>


                                                                        F-16
<PAGE>


        EPICUS COMMUNICATIONS GROUP, INC. AND SUBSIDIARIES
(formerly Phoenix International Industries, Inc. and Subsidiaries)

      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE L - NOTES PAYABLE TO BANKS AND OTHERS - Continued

<TABLE>
<CAPTION>
                                                May 31, 2003     May 31, 2002
                                                ------------     ------------
<S>                                             <C>              <C>
$400,000 note payable to creditor trust fund.
  Interest at 8.0%. Payable in quarterly
  installments of $25,000 plus accrued
 interest.  Final maturity in April 2004. In
 the event the Company fails to make any
 scheduled quarterly payment, the Creditors'
 Trust is entitled to an immediate entry of
 judgment for any remaining amounts due upon
 the filing of an Affidavit of Non-Payment by
 the Creditors' Trust.                            $  350,000        $ 350,000

$150,000 note payable to an individual.
  Principal and unpaid interest due upon
  demand.  Unsecured                                 111,000          111,000

$97,878 note payable to an unrelated entity.
  Non-interest bearing.  Unsecured.  Due upon
  demand                                              97,878           97,878

$100,000 note payable to former employee
  pursuant to an employment agreement for
  advances made by former owner of an acquired
  subsidiary.  Non-interest bearing.  Paid in
  May 2003 with the issuance of 500,000 shares
   of restricted, unregistered common stock.               -           54,215
                                                ------------     ------------
 Total notes payable to banks and others        $  1,308,878     $  1,363,093
                                                ============     ============
</TABLE>


NOTE M - LONG-TERM DEBT

Long-term debt consists of the following at
  May 31, 2003 and 2002:

<TABLE>
<CAPTION>
                                                May 31, 2003     May 31, 2002
                                                ------------     ------------
<S>                                             <C>              <C>
Unsecured advances made by the Company's
  Chief Executive Officer and/or entities
  controlled by either Company officers
  and/or individuals related to the Company's
  Chief Executive Officer.  Interest at 6.25%.
  Due upon demand.  Unsecured                   $  1,267,608     $  1,373,323
                                                ============     ============
</TABLE>


        (Remainder of this page left blank intentionally)













                                                                        F-17
<PAGE>


        EPICUS COMMUNICATIONS GROUP, INC. AND SUBSIDIARIES
(formerly Phoenix International Industries, Inc. and Subsidiaries)

      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE N - CONVERTIBLE DEBENTURES

On September 28, 2001, a consortium of four (4) separate investment
entities under common management purchased 12% convertible debentures
from the Company and were issued the right to receive warrants to
purchase an aggregate of 3,500,000 shares of common stock from the
Company in a future private placement transaction.

As of May 31, 2003, the Company has issued and outstanding approximately
$1,255,128 in 12.0% convertible debentures (Debentures).  Interest on the
debentures is payable on a quarterly basis on March 31, June 30,
September 30 and December 31 of each year while such Debentures are
outstanding and on each Conversion Date, whichever occurs earlier.
Interest may be paid, at the Company's option, in either cash or
restricted, unregistered common stock.  The Debentures must be prepaid
if an event of default occurs under the Debentures and at the Company's
option may be prepaid within thirty days of the original issue date of
the Debentures.  Management is of the opinion that the Company has
sufficient authorized common shares to cover the conversions.  In the
event that the Company does not have adequate authorized and unissued
shares of common stock to effect the maximum shares needed to effect the
conversion, the Company may need to seek shareholder consent to increase
our amount of authorized shares.  If we do not have enough authorized
shares to cover the conversions and are unable to obtain shareholder
approval to increase our authorized shares, such failure would be
considered a breach of certain relevant provisions and representations
and warranties under the Debenture documents and could result in the
acceleration of all amounts due under the Debentures.

On May 1, 2003, the Company and the Debenture Holders entered into a
Debenture Redemption Agreement (Redemption Agreement).  The Redemption
Agreement sets forth the following terms and conditions related to the
Debentures on an ongoing basis:

1.   Redemption Schedule; Payment of Net Redemption Amount: The Company
     shall pay the Net Redemption Price to the Debenture Holders in
     monthly installments in the amount of $40,000 (the "Monthly
     Redemption Payment"), with the first installment thereof due on July
     1, 2003 and subsequent installments thereof due on the first
     business day of each succeeding month (each, a "Payment Date") until
     the Net Redemption Amount has been paid in full.  The Company shall
     pay the Debenture Holders by wire transfer of immediately available
     funds pursuant to the Debenture Holders' written instructions.  The
     Monthly Redemption Payment shall be applied with respect to the
     Debenture Holders in the following order: (i) Accrued Interest, (ii)
     Redemption Premium, and (iii) outstanding principal balance of the
     Owned Debentures.

2.   Prohibited Conversions: The Debenture Holders shall not convert the
     Owned Debentures into shares of the Company's common stock, par
     value $0.001 per share (the "Shares") during the period commencing
     on the date hereof and ending on June 30, 2003 (the "Prohibited
     Period").

3.   Permitted Conversions: Following the Prohibited Period, the
     Debenture Holders shall be permitted to convert its Owned
     Debentures, to the extent such Owned Debentures have not been
     previously redeemed hereunder, into Shares in accordance with the
     terms and subject to the conditions of the Owned Debentures, subject
     to the following restrictions:

     a) If the last reported sale price of the Shares on the
        Over-the-Counter Bulletin Board as reported by Bloomberg (the
        "Price") is less than $.10 per Share, then the Debenture Holders
        shall have the right to convert their Owned Debentures into not
        more than an aggregate of 300,000 Shares every thirty (30) days
        during the period in which the Price remains less than $.10 per
        Share,




                                                                        F-18
<PAGE>

             EPICUS COMMUNICATIONS GROUP, INC. AND SUBSIDIARIES
   (formerly Phoenix International Industries, Inc. and Subsidiaries)

        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE N - CONVERTIBLE DEBENTURES - Continued

     b) If the Price is equal to or exceeds $.10 per Share but is less
        than $.20 per Share, then the Debenture Holders shall have the
        right to convert their Owned Debentures into not more than an
        aggregate of 500,000 Shares every thirty (30) days during the
        period that the Price is equal to or exceeds $.10 per Share but
        is less than $.20 per Share,
     c) If the Price is equal to or exceeds $.20 per Share but is less
        than $.30 per Share, then the Debenture Holders shall have the
        right to convert their Owned Debentures into not more than an
        aggregate of 750,000 Shares every thirty (30) days during the
        period that the Price is equal to or exceeds $.20 per Share but
        is less than $.30 per Share, and
     d) If the Price is equal to or exceeds $.30 per Share, then the
        Debenture Holders shall not be restricted by the Company
        hereunder with respect to the number of Shares into which the
        Debentures may be converted during the period that the Price is
        equal to or exceeds $.30 per Share, provided, however, that if
        the Company fails to (i) make the Monthly Redemption Payment
        pursuant to Section 2 hereof within five (5) business days
        following the Payment Date or (ii) pay any delinquent amounts
        that are due and owing under this Agreement, then the foregoing
        restrictions on the Debenture Holders' right to convert their
        Owned Debentures into Shares shall be suspended until the first
        day of the next month following the date that the Monthly
        Redemption Payment is received in full by the Debenture Holders.

4.   Issuance of Additional Shares: The Company shall issue and deliver
     to the Debenture Holders shares of common stock representing, in the
     aggregate, one percent (1%) of the outstanding shares of the Company
     on the earlier to occur of: (i) the date of full conversion by the
     Debenture Holders of all of the Owned Debentures and (ii) the date
     of payment by the Company of the total Aggregate Redemption Price
     (collectively, the "Additional Shares").

5.   Interest: Interest on the outstanding balance of the Owned
     Debentures shall continue to accrue following the date hereof as
     specified in the respective Owned Debenture and shall be payable in
     cash or Shares in accordance with the terms thereof.

6.   Effectiveness of the Registration Statement: The Company shall take
     all necessary actions, including the preparing and filing of one or
     more registration statements of the Company and any amendments or
     supplements thereto (the "Registration Statement") required under
     the Securities Act of 1933, as amended, and the rules and regulation
     thereunder, to cause the Shares issuable upon conversion of the
     Owned Debentures to be registered for resale pursuant to an
     effective Registration Statement.  If (i) the Company fails to
     respond to all comments made by the Securities and Exchange
     Commission (the "SEC") in connection with the Registration Statement
     within ten (10) business days of receipt from the SEC or (ii) the
     SEC has not declared the Registration Statement effective on or
     before July 10, 2003, then the Company shall immediately pay to each
     Debenture Holders an amount equal to five percent (5%) of the sum
     of (a) the outstanding balance of the Debenture Holders's Owned
     Debentures, (b) accrued interest on the Debenture Holders's Owned
     Debentures and (c) a premium equal to thirty percent (30%) of the
     sum of (a) and (b) (the "Registration Penalty").  The Registration
     Penalty shall be payable either in cash or Shares, the number of
     which shall be based on the conversion price set forth in the Owned
     Debentures, at each Debenture Holders's option.  If a Debenture
     Holders elects to receive the Registration Penalty in cash, then the
     full amount of the Registration Penalty shall be paid to such
     Debenture Holders by wire transfer of immediately available funds
     in accordance with the instructions set forth on attached Schedule
     II.




                                                                        F-19
<PAGE>

            EPICUS COMMUNICATIONS GROUP, INC. AND SUBSIDIARIES
   (formerly Phoenix International Industries, Inc. and Subsidiaries)

          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE N - CONVERTIBLE DEBENTURES - Continued

7.   Effect of Breach:  In the event of a breach by the Company of any
     of the provisions of this Agreement, either by a failure to timely
     make any payment or failure to effect any conversion by the
     Debenture Holders or otherwise, in addition to any other remedies
     available to the Debenture Holders in law or equity with respect to
     such breach, the applicable discount to the market price of the
     Owned Debentures shall permanently be amended from fifty percent
     (50%) to seventy-five percent (75%).

In conjunction with the issuance of the convertible debentures, the
debentures were issued with an equivalent per share value of common stock
below the ending quoted market price of the Company's common stock on the
issue date.  This difference created a Beneficial Conversion Feature
Discount of approximately $300,000.  This discount was then amortized
over the unexpired time period between the date of issue of the eligible
shares and the maturity date of the underlying debentures.  Approximately
$141,177 and $158,823 was amortized to operations during the years ended
May 31, 2003 and 2002, respectively.


NOTE O - INCOME TAXES

The components of income tax (benefit) expense for the years ended May
31, 2003 and 2002, respectively, are as follows:

<TABLE>
<CAPTION>
                                    May 31, 2003          May 31, 2002
                                    ------------          ------------
<S>                                 <C>                   <C>
   Federal:
     Current                           $     -              $     -
     Deferred                                -                    -
                                       -------              -------
                                             -                    -
                                       -------              -------

   State:
     Current                                 -                    -
     Deferred                                -                    -
                                       -------              -------
                                             -                    -
                                       -------              -------
     Total                             $     -              $     -
                                       =======              =======
</TABLE>


The Company has a net operating loss carryforward of approximately
$14,000,000 to offset future taxable income.  Subject to current
regulations, this carryforward will begin to expire in 2006.  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 years ended May 31, 2003 and
2002, respectively, are as follows:

<TABLE>
<CAPTION>
                                                       May 31, 2003     May 31, 2002
                                                       ------------     ------------
<S>                                                    <C>              <C>

Statutory rate applied to loss before income taxes     $   (554,326)    $ (1,784,000)
Increase (decrease) in income taxes resulting from:
  State income taxes                                              -                -
  Other, including reserve for deferred tax asset           554,326        1,784,000
                                                       ------------     ------------
     Income tax expense                                $          -     $          -
                                                       ============     ============
</TABLE>



                                                                        F-20
<PAGE>


             EPICUS COMMUNICATIONS GROUP, INC. AND SUBSIDIARIES

(formerly Phoenix International Industries, Inc. and Subsidiaries)

      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE O - INCOME TAXES - Continued

Temporary differences, consisting primarily of statutory 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, 2003 and 2002, respectively:

<TABLE>
<CAPTION>
                                                       May 31, 2003     May 31, 2002
                                                       ------------     ------------
<S>                                                    <C>              <C>
   Deferred tax assets
     Net operating loss carryforwards                  $  4,760,000     $  5,195,000
     Less valuation allowance                            (4,760,000)      (5,195,000)
                                                       ------------     ------------
   Net Deferred Tax Asset                              $          -     $          -
                                                       ============     ============
</TABLE>

During the year ended May 31, 2003 and 2002, respectively, the valuation
allowance (decreased) increased by approximately $(435,000) and
$1,482,000.


NOTE P - PREFERRED STOCK

Our Articles of Incorporation authorize the issuance of up to 5,000
shares of Preferred Stock, $0.001 par value per share, the designation
and rights of which are to be determined by our Board of Directors.
There are no shares of Preferred Stock issued and outstanding at May 31,
2003 or 2002, respectively.

Our Board of Directors has authority, without action by the shareholders,
to issue all or any portion of the authorized but unissued Preferred
Stock in one or more series and to determine the voting rights,
preferences as to dividends and liquidation, conversion rights, and other
rights of such series.  We consider it desirable to have Preferred Stock
available to provide increased flexibility in structuring possible future
acquisitions and financings and in meeting corporate needs which may
arise.  If opportunities arise that would make desirable the issuance of
Preferred Stock through either public offering or private placements, the
provisions for Preferred Stock in our Articles of Incorporation would
avoid the possible delay and expense of a shareholder's meeting, except
as may be required by law or regulatory authorities.  Issuance of the
Preferred Stock could result, however, in a series of securities
outstanding that will have certain preferences with respect to dividends
and liquidation over the common stock that would result in dilution of
the income per share and net book value of the common stock.  Issuance
of additional common stock pursuant to any conversion right that may be
attached to the terms of any series of Preferred Stock may also result
in dilution of the net income per share and the net book value of the
common stock.  The specific terms of any series of Preferred Stock will
depend primarily on market conditions, terms of a proposed acquisition
or financing, and other factors existing at the time of issuance.
Therefore, it is not possible at this time to determine in what respect
a particular series of Preferred Stock will be superior to our common
stock or any other series of Preferred Stock which we may issue. Our
Board of Directors may issue additional Preferred Stock in future
financings, but has no current plans to do so at this time.





                                                                        F-21
<PAGE>

          EPICUS COMMUNICATIONS GROUP, INC. AND SUBSIDIARIES
  (formerly Phoenix International Industries, Inc. and Subsidiaries)

        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE Q - COMMON STOCK TRANSACTIONS

On September 28, 2001, the Company filed a Registration Statement under
The Securities Act of 1933 on Form S-8 registering an aggregate 5,000,000
shares of common stock.  During Fiscal 2002, the Company issued an
aggregate 4,500,000 shares to individuals providing consulting , legal
and financial services to the Company.  These transactions were valued
at the closing quoted price of the Company's common stock at the
transaction date.  An aggregate $270,000 was charged to operations as a
result of these transactions.

On May 6, 2002, the Company filed a Registration Statement under The
Securities Act of 1933 on Form S-8 registering an aggregate 5,000,000
shares of common stock.  During Fiscal 2002, the Company issued an
aggregate 3,325,000 shares to individuals providing various consulting,
legal  and financial services to the Company.  These transactions were
valued at the closing quoted price of the Company's common stock at the
transaction date.  An aggregate $133,000 was charged to operations as a
result of these transactions.

During Fiscal 2002, the Company issued an aggregate 4,998,013 shares of
common stock as a result of the exercise of the conversion of outstanding
12% debentures.  Additionally, the Company issued 1,347,465 shares in
payment of accrued interest on these debentures.  These transactions were
valued pursuant to the debenture terms.

In February 2002, the Company sold an aggregate 2,000,000 shares of
common stock to foreign investors, pursuant to Regulation S, for gross
proceeds of $100,000.  The Company also incurred fees for capital
placement services of approximately $31,000.

In June 2001 and October 2001, the Company issued an aggregate 2,200,000
shares of common stock to former shareholders of Moye & Associates, Inc.
in final settlement of all outstanding issues, payments and compensation
related to this acquisition in a prior period.  Approximately $22,000 was
charged to operations on this transaction.

During Fiscal 2002, the Company issued an aggregate 1,700,000 shares of
restricted, unregistered common stock as payment for various business and
financial consulting services.  These transactions were valued on the
respective transaction date at the discounted closing quoted market price
of the Company's common stock.  As a result of these transactions,
approximately $54,000 was charged to operations.

On June 10, 2002, the Company issued an aggregate 150,000 (50,000 each)
shares of restricted, unregistered common stock to three unrelated
individuals as payment for various business and financial consulting
services.  This transaction was valued on the respective transaction date
at the discounted closing quoted market price of the Company's common
stock.  As a result of this transaction, approximately $3,000 was charged
to operations.

On July 29, 2002, the Company issued 100,000 shares of restricted,
unregistered common stock to an employee of Epicus, Inc. as payment of
a retirement bonus.  This transaction was valued on the respective
transaction date at the discounted closing quoted market price of the
Company's common stock.  As a result of this transaction, approximately
$2,000 was charged to operations.

During the period from September 25, 2002 through November 13, 2002, the
Company issued an aggregate 3,104,832 shares of common stock to the
respective Debenture Holders as a result of the exercise of the
conversion of outstanding 12% debentures.  Additionally, the Company
issued 1,375,000 shares in payment of accrued interest on these
debentures.  These transactions were valued pursuant to the debenture
terms.



                                                                        F-22
<PAGE>

          EPICUS COMMUNICATIONS GROUP, INC. AND SUBSIDIARIES
  (formerly Phoenix International Industries, Inc. and Subsidiaries)

        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE Q - COMMON STOCK TRANSACTIONS - Continued

On February 2, 2003, the Company issued an aggregate 1,800,000 shares
(200,000 shares each) of restricted, unregistered common stock nine (9)
separate employees of Epicus, Inc. for performance bonuses.  Further, the
Company issued 1,000,000 shares of restricted, unregistered common stock
to the Chief Information Officer of Epicus, Inc. as a performance bonus.
These aggregate transactions were valued on the respective transaction
date at approximately the closing quoted market price of the Company's
common stock.  As a result of this transaction, approximately $56,000 was
charged to operations.

On February 20, 2003 and April 15, 2003, the Company, in separate
transactions, issued 500,000 and 972,222 shares of restricted,
unregistered common stock, respectively,  to an unrelated corporation for
business and financial consulting services.  This transaction was valued
on the transaction date at approximately the closing quoted market price
of the Company's common stock.  As a result of these transactions,
approximately $42,083 was charged to operations.

During the period from September 25, 2002 through February 28, 2003, the
Company issued an aggregate 17,384,592 shares of common stock to the
respective Debenture Holders as a result of the exercise of the
conversion of outstanding 12% debentures.  Additionally, the Company
issued 3,375,000 shares in payment of accrued interest on these
debentures.  These transactions were valued pursuant to the debenture
terms.

On March 7, 2003, the Company issued an aggregate 300,000 (100,000 each)
shares of common stock previously registered on Form S-8 to the three
individuals receiving common stock in the June 10, 2002 transaction
listed above.  As a result of this transaction, approximately $6,300 was
charged to operations.

During the period from March 14, 2003 through April 11, 2003, the Company
issued an aggregate 11,003,034 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.


NOTE R - STOCK WARRANTS

On September 28, 2001, in conjunction with the sale of an aggregate of
$700,000 of 12% convertible debentures, the Company issued the right to
receive warrants to purchase an aggregate 3,500,000 shares of common
stock at a price to be determined at the time of the warrant(s) issue.
As of May 31, 2003, and subsequent thereto, the Company has not issued
any warrants.


NOTE S - STOCK OPTIONS

On May 31, 1998, the Company's Board of Directors adopted a Stock Option
Plan far its employees, directors and consultants.  On April 24, 2001,
the Company filed a Registration Statement under the Securities Act of
1933 on Form S-8 to register 5,000,000 underlying shares of the stock
option plan.


                                                                        F-23
<PAGE>

          EPICUS COMMUNICATIONS GROUP, INC. AND SUBSIDIARIES
  (formerly Phoenix International Industries, Inc. and Subsidiaries)

        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE S - STOCK OPTIONS - Continued

The purpose of the plan is to promote success of the Company by providing
a method whereby eligible employees, directors and independent
contractors and consultants providing services to the Company may be
awarded additional remuneration for services rendered and invest in the
capital stock of the Company.   The plan will be administered by the
Compensation Committee of the Board of Directors and will consist of not
less than two people.  This committee shall have the full power and
authority to grant to eligible persons options under the plan.  Persons
eligible to participate in the plan include officers and directors,
employee, non-employee directors, independent contractors and consultants
of the Company, as the Committee shall select.  The plan includes and
participants may receive Incentive Stock Options or Nonqualified Stock
Options.  An option granted under the plan shall remain exercisable
during the term of the option to the extent provided in the applicable
agreement and the plan.  Shares of Common Stock delivered in payment in
connection with the exercise of an Option, and shares of Common Stock
withheld for such payment, shall be valued for such purpose at their Fair
Market Value as of the exercise date.  By acceptance of an Award, the
Award is a special incentive compensation that will not be taken into
account, in any manner, as salary, compensation or bonus in determining
the amount of any payment under any pension, retirement or other employee
benefit plan, program or policy of the Company or any Subsidiary.

Employees of the Company who have been granted options are authorized by
the Committee to purchase the shares at a price equal to 55% of the three
day average closing bid price prior to the date of written election to
exercise.  Through May 31, 2003, options to purchase a cumulative
4,296,277 shares of common stock of the 5,000,000 shares authorized in
the Plan have been granted and concurrently exercised.  As of May 31,
2003, there are no granted and outstanding options.


NOTE T - COMMITMENTS AND CONTINGENCIES

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

The Company leases its corporate offices from an entity owned by the
Company's President and Chief Executive Officer.  The lease, which
provides for annual rentals of approximately $42,400.  Rent expense for
the years ended May 31, 2003 and 2002 was $42,400 and $42,400,
respectively.

The Company's operating subsidiary, Epicus, has entered into sublease
agreement for office space in Lake Mary, Florida.  The lease expires
September 24, 2004 and requires monthly rental payments of approximately
$11,500 per month for the first 12 months of the sublease term and
$11,845 for the remainder of the term.  Epicus also has a first right of
refusal to acquire additional space contiguous to the new space.
Further, the Company has an option to acquire certain office furnishings
left in the space by the former tenant at a bargain price if said option
is exercised by December 31, 2003.  Future payments under this sublease
are as follows: year ending December 31, 2003 - approximately $138,000;
year ending December 31, 2004 - approximately $106,600.



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                                                                        F-24
<PAGE>


          EPICUS COMMUNICATIONS GROUP, INC. AND SUBSIDIARIES
  (formerly Phoenix International Industries, Inc. and Subsidiaries)

        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE T - COMMITMENTS AND CONTINGENCIES - Continued

Litigation
----------

EPICUS, Inc. (Epicus) has been involved in a dispute with one of its
former carriers, Sprint Florida, regarding a default in payment for
services.  On August 23, 2000, Sprint filed suit in the Circuit Court of
the Ninth Judicial Circuit in and for Orange County Florida.  The Company
believed that the accusation was incorrect, however after obtaining
advice from legal counsel, we decided not to litigate the matter and on
December 21, 2000, the carrier was awarded by that court, a default
judgment against Epicus in the amount of $321,587.52.  In accordance with
a Judgment Payment Agreement dated February 15, 2001, Epicus agreed to
pay Sprint as follows: Principal payments of $10,000 each will be due
commencing March 15, 2001 through September 15, 2002 (18 months). The
final balloon payment of $142,000 was payable on October 15, 2002.  While
the scheduled payment(s) have not been demanded by Sprint, as of the date
of this filing, Management of the Company intends to enter negotiations
to renew and/or restructure the payment agreement in order to mitigate
any potentially negative effect on the Company's cash flow while
satisfying this obligation.

A suit has been filed against Epicus in the Supreme Court of British
Columbia in Vancouver, Canada by EXL Information Corporation, a Canadian
corporation, in the amount of $184,761 for alleged breach of contract
regarding a licensing fee for the use of their billing software.  Epicus
used the software for a short period of time and found that, contrary to
the vendor's representations, it did not meet our specific needs and
therefore stopped payment.  EXL Information Corporation is seeking
damages for the loss of revenue that would have been earned over the life
of the agreement.  The outcome of this litigation is not determinable at
this time.  Management intends to aggressively defend this action to
conclusion.

In June 2002, AT&T Corporation filed a lawsuit against Epicus Group in
the amount of $480,796 alleging non-payment of charges.  Epicus Group has
consistently denied responsibility for the charges and negotiations have
been ongoing in an attempt to resolve this dispute.  The matter has gone
to mediation and a verbal agreement for a settlement in the amount of
$120,000 has been reached.

During the quarter ended May 31, 2003, there has been no significant
change in any of the above listed litigation, except as noted.



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                                                                        F-25
<PAGE>


          EPICUS COMMUNICATIONS GROUP, INC. AND SUBSIDIARIES
  (formerly Phoenix International Industries, Inc. and Subsidiaries)

      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE U - SELECTED FINANCIAL DATA (Unaudited)

The following is a summary of the quarterly results of operations for the
years ended May 31, 2003 and 2002, respectively:

<TABLE>
<CAPTION>
                           Quarter ended    Quarter ended    Quarter ended     Quarter ended      Year ended
                             August 31,     November 31,      February 28,        May 31,           May 31,
                           -------------    -------------    -------------     -------------     ------------
<S>                        <C>              <C>              <C>               <C>               <C>
Fiscal 2003
-----------
 Telecommunication
  revenues                 $   1,700,256    $   2,547,832    $   3,210,507     $   2,954,261     $ 10,412,856
 Gross profit              $     975,655    $   1,440,695    $   1,647,117     $     306,723     $  4,370,190
 Net earnings (loss)
  after provision
  for income taxes         $     (22,197)   $     261,431    $      10,645     $  (1,880,251)    $ (1,630,372)
 Basic and fully diluted
  earnings per share                 nil              nil              nil            $(0.02)          $(0.02)
 Weighted average
  number of shares
  issued and outstanding      74,504,610       76,328,926       87,967,274       109,572,103       88,673,078

Fiscal 2002
-----------
 Telecommunication
  revenues                 $   1,486,709    $   1,750,264    $   1,357,342     $   1,435,477     $  6,029,792
 Gross profit              $     643,841    $     660,276    $     569,514     $     975,702     $  2,849,333
 Net earnings (loss)
  after provision
  for income taxes         $    (950,503)   $    (808,795)   $    (179,755)    $  (3,307,391)    $ (5,246,444)
 Basic and fully diluted
  earnings per share             $(0.02)           $(0.01)             nil            $(0.05)          $(0.08)
 Weighted average
  number of shares
  issued and outstanding     56,460,200        66,398,818       70,438,085        71,336,540       64,444,538
</TABLE>











                                                                        F-26
<PAGE>