UNITED STATES
                    SECURITIES AND EXCHANGE COMMISSION
                          Washington, DC  20549

                                Form 10-KSB
============================================================================

(Mark one)

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

        For the fiscal year ended May 31, 2006
        --------------------------------------

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

         For the transition period from ______________ to _____________


============================================================================

                     Commission File Number: 000-17058

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

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

                1750 Osceola Dr., West Palm Beach, Florida 33409
                ------------------------------------------------
                    (Address of principal executive offices)

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

============================================================================

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

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

============================================================================

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

       Yes  [X]                                    No [ ]

Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B contained in this form, and no disclosure
will be contained, to the best of Company's knowledge, in definitive
proxy or information statements incorporated by reference in Part III
of this Form 10-KSB or any amendment to this Form 10-KSB.  [   ]

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

       Yes  [ ]                                    No [X]


                                                                         1
<PAGE>


The issuer's revenues for the fiscal year ended May 31, 2006 were
$5,829,974

The aggregate market value of voting common equity held by non-
affiliates as of August 15, 2006 was approximately $72,000.00, based
upon 4,200,000 shares issued and outstanding and a closing market
price of $.03 per share.

As of August 15, 2006 there were 11,200,000 shares of Common Stock
issued and outstanding.

         Transitional Small Business Disclosure Format:

       Yes  [ ]                                    No [X]































                                                                         2
<PAGE>

                Epicus Communications Group, Inc.

                       Index to Contents

                                                                 Page Number
                                                                 -----------
Part I

Item 1    Description of Business                                     3
Item 2    Description of Property                                     7
Item 3    Legal Proceedings                                           7
Item 4    Submission of Matters to a Vote of Security Holders         8

Part II

Item 5    Market for Company's Common Stock and Related
            Stockholders Matters                                      8
Item 6    Management's Discussion and Analysis or
            Plan of Operation                                         9
Item 7    Financial Statements                                       F-1
Item 8    Changes in and Disagreements with Accountants
            on Accounting and Financial Disclosures                   15
Item 8A   Controls and Procedures                                     15

Part III

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

Signatures                                                            20






















                                                                         3
<PAGE>

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

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

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

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


                             PART I

Item 1 - Description of Business

Epicus Communications Group, Inc. (Epicus Group), is a holding
company, with primary interests in the telecommunications industry.
As of May 31, 2006, the Company consisted of Epicus Communications
Group, Inc. and two wholly owned subsidiaries, Moye & Associates
(a/k/a TheBest.Net), and Mic-Mac Investments, Inc.  Our two (2)
wholly-owned subsidiaries have been inactive for at least the past two
(2) years.

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

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

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

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

On July 21, 1997, we acquired 100% of the stock of HDX 9000, Inc.
("HDX"), a company specializing in compliance methodology for the Y2K
problem and for the various types of "ISO" compliance certification.

                                                                         4
<PAGE>

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

On April 9, 1998, we acquired 100% of the outstanding stock of Mic Mac
Investments, Inc., a long distance telephone service "reseller"
specializing in the hospitality industry.  Mic-Mac ceased to operate
by the end of the quarter ended February 28, 1999 and had no remaining
assets or liabilities as of May 31, 1999.  We abandoned and wrote off
any remaining investment in Mic Mac Investments, Inc. as of May 31,
1999.  We recognized a gain of $13,417 in connection with the write
off this investment.  Although it has ceased to operate, we have
maintained the corporate integrity of this entity in the event our
management identifies a suitable acquisition candidate that could be
placed in this subsidiary.

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

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

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

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

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

Under Chapter 11, certain claims against the Debtors in existence
prior to the filing of the petitions for relief under Federal
Bankruptcy Laws are stayed while the Debtors continue to operate their
businesses as debtors-in-possession under the jurisdiction of the
Bankruptcy Court and in accordance with the applicable provisions of
the Bankruptcy Code and the orders of the Bankruptcy Court.  These
claims were reflected in the Company's balance sheets as "Liabilities
Subject to Compromise."  Additional claims (liabilities subject to


                                                                         5
<PAGE>

compromise) may arise subsequent to the Petition Date resulting from
the rejection of executory contracts, including leases, and from the
determination of the court (or agreed to by parties in interest) of
allowed claims for contingencies and other disputed amounts.  Claims
secured against the Debtors' assets ("secured claims") are also
stayed, although the holders of such claims have the right to move the
Bankruptcy Court for relief from the stay.  Secured claims, if any,
are secured primarily by liens on the Debtors' property, plant and
equipment.

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

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

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


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

     Postpetition current liabilities                      $   643,824
     "New" common stock issued upon reorganization		10,000
     Liabilities deferred pursuant to Chapter 11
       proceeding                                            8,762,705
       Total postpetition liabilities and allowed claims     9,416,529
     Reorganization value                                   (1,395,488)
                                                           -----------
     Excess of liabilities over reorganization value       $ 8,021,041
                                                           ===========

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

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

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


                                                                         6
<PAGE>


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

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

Entries to record debt discharge
--------------------------------

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

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

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


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

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

The effect of the Plan of Reorganization on Epicus Communications
Group, Inc.'s balance sheet at December 8, 2005, is as follows:


                                                                         7
<PAGE>

<TABLE>
<CAPTION>
                                                               Adjustments to record confirmation of Plan
                                                               ------------------------------------------
                                                                                               Reorganized
                                     Pre-          Debt        Exchange of        Fresh          Balance
                                Confirmation     discharge        stock           start           Sheet
                                ------------   -------------   -----------     ------------    -----------
<S>                             <C>            <C>           <C>             <C>             <C>
Cash on hand and in bank              80,229           (660)        -               -               79,569
Accounts receivable
  Trade                            1,307,675          -             -               -            1,307,675
  Allowance for
   doubtful accounts                (225,000)         -             -               -             (225,000)
Prepaid expenses                     912,767     (1,020,724)        -               -             (107,957)
                                ------------   ------------    -----------     ------------    -----------
   Total current assets            2,075,671     (1,021,384)        -               -            1,054,287
                                ------------   ------------    -----------     ------------    -----------

Property and equipment               692,286          -             -              (606,286)        86,000
  Accumulated depreciation          (563,028)         -             -               563,028           -
                                ------------   ------------    -----------     ------------    -----------
   Net Property and Equipment        129,258          -             -               (43,258)        86,000
                                ------------   ------------    -----------     ------------    -----------

Other assets
  Deposits and other                 603,411       (348,210)        -               -              255,201
  Reorganization value in
   excess of amounts
   allocated to identifiable
   assets                              -              -             -             8,021,041      8,021,041
                                ------------   ------------    -----------     ------------    -----------
   Total other assets                603,411       (348,210)        -             8,021,041      8,276,242
                                ------------   ------------    -----------     ------------    -----------

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

Liabilities not subject
  to compromise
  Accounts payable and other       2,757,835     (2,114,011)        -                -             643,824
                                ------------   ------------    -----------     ------------    -----------

Liabilities subject to
  compromise                      13,226,818    (13,226,818)        -                -                -
IRS Note                               -            674,026         -                -             674,026
BellSouth Note                         -            328,702         -                -             328,702
State of Florida Note                  -             59,910         -                -              59,910
Convertible debentures             5,247,263        100,037         -                -           5,347,300
Convertible note                       -          2,352,767         -                -           2,352,767
                                  18,474,081     (9,711,376)        -                -           8,762,705
                                ------------   ------------    -----------     ------------    -----------
  Total Liabilities               21,231,916    (11,825,387)        -                -           9,406,529
                                ------------   ------------    -----------     ------------    -----------

Shareholders' equity (deficit)
  Common stock - new                   -              -             10,000           -              10,000
  Common stock - old                 661,404          -           (661,404)          -                -
  Additional paid-in capital      17,865,139          -            651,404      (18,516,543)          -
  Accumulated deficit            (36,950,119)    10,455,793         -            26,494,326           -
                                ------------   ------------    -----------     ------------    -----------
  Total shareholders'
   deficit                       (18,423,576)    10,455,793         -             7,977,783         10,000
                                ------------   ------------    -----------     ------------    -----------

Total Liabilities and
  Shareholders' Equity          $  2,808,340   $ (1,369,594)   $    -          $  7,977,783    $ 9,416,529
                                ============   ============    ===========     ============    ===========
</TABLE>

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

CLASS 1: is the Bell South secured claim in the amount of
$1,929,396.96, which is secured by a lien on the assets of Epicus.

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

                                                                         8
<PAGE>


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

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

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

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



                                                                         9
<PAGE>


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

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

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

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

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

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


                                                                         10
<PAGE>

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

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

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

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

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

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

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


                                                                         11
<PAGE>

services on one itemized bill.  Because of the expense and complexity
of the telecommunications 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 dependent upon outside
sources and clerical performance.

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

Moye & Associates, Inc. (a/k/a TheBest.Net)
-------------------------------------------

Moye's primary business was that of an Internet Service Provider (ISP)
known as TheBest.Net.  This acquisition was seen by management, at
that time, to be synergetic with the operations of TCCF.  Due to
capitalization, liquidity and other issues with the former owners of
Moye, who remained as Moye's senior management, on July 19, 2001, we
signed a Letter of Intent to sell the active clients of Moye.  The
buyer paid $133.33 for each existing "dial-up" and "domain hosting
client".  As of May 31, 2002, all amounts due under this sale of
assets contract had been satisfied.  During our year ended May 31,
2003, we issued approximately 500,000 shares of restricted,
unregistered common stock to Tully Moye in complete settlement of all
remaining obligations related to the acquisition and disposition of
Moye.

Mic-Mac Investments, Inc. (Mic-Mac)
-----------------------------------



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 aggregate
revenues of approximately $15,600 and expenses of $30,400.
Hospitality ceased to operate late in the third quarter of fiscal
1999, as their management claimed that they would be unable to meet
their business plan projections or continue without Epicus Group
acquiring a long distance telephone company.  Hospitality had
liquidated all assets or liabilities as of May 31, 1999, we wrote off
our remaining investment in them in that Fiscal year.  Although
Hospitality has ceased to operate, Mic- Mac, Inc., remains the
property of the Company until a decision is made as to its future.

Management is evaluating the necessity of maintaining these dormant
subsidiaries and may, at some future date, elect to dissolve one or
both of these entities.


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. This lease was renegotiated in
June 2005 and provides for annual payments of approximately $18,000
(approximately $1,500.00 per month).  We are responsible for all
utilities and other direct operating expenses.  The property is owned
by a corporation owned by Gerard Haryman, our President and Chief
Executive Officer.  We occupy the property on a month-to-month basis.

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

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


                                                                         12
<PAGE>

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

                                                 2007        $    262,906
                                                 2008             270,793
                                                 2009             278,917
                                                 2010             239,053
                                                             ------------
                                                 Total       $  1,051,669
                                                             ============


Item 3 - Legal Proceedings

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


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

NONE


                              PART II

Item 5 - Market for Common Equity and Related Stockholder Matters



Our common stock is quoted on the NASDAQ OTC Bulletin Board under the
symbol "EPCG".  During our time under the protection of the Bankruptcy
Court, our common stock traded under the symbol "EPUCQ.OB".  There can
be no assurance that quotations will not fluctuate greatly in the
future in the event trading activity increases or decreases.  The
information contained in the following table was obtained from the
NASD and from various broker-dealers and shows the range of
representative bid prices for our common stock for the periods
indicated. The prices represent quotations between dealers and do not
include retail mark, mark-down or commission and do not necessarily
represent actual transactions:

<TABLE>
<CAPTION>
                                                    BID
                                                    ---
                                        High                    Low
                                        ----                   -----
<S>                                     <C>                    <C>
Quarter ending

2002
  March 31                               .05                     .04
  June 30                                .05                     .03
  September 30                           .06                     .01
  December 31                            .05                     .01

2003
  March 31                               .03                     .01
  June 30                                .13                     .02
  September 30                           .12                     .05
  December 31                            .07                     .03

2004
  March 31                               .05                     .02
  June 30                                .03                     .01
  September 30                          .013                   .0012
  December 31                          .0034                   .0001
</TABLE>

                                                                         13
<PAGE>

Contd..

<TABLE>
<CAPTION>
                                                    BID
                                                    ---
                                        High                    Low
                                        ----                   -----
<S>                                     <C>                    <C>
2005
  March 31                             .0018                   .0004
  June 30                              .0035                   .0005
  September 30                         .0025                    .001
**December 31                           7.00                     .01

2006
  March 31                              1.10                     .08
  June 30                                .14                    .011
</TABLE>

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

Dividends
---------

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

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


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

Bankruptcy Filing

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

The Company submitted a Plan of Reorganization (Plan) for
consideration by the Bankruptcy Court and the affected creditors.  On
September 30, 2005, the Company received approval of the Plan of
Reorganization and it was funded and became effective on December 8,
2005.  Upon confirmation by the Bankruptcy Court and became binding
upon all Claimants and Interest holders.

Overview

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

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

                                                                         14
<PAGE>


Management, utilizing the tools available under the respective tariffs
within the Company's geographic operating boundaries, began to more
stringently evaluate the creditworthiness of prospective customers and
terminate relationships with customers that were less than responsible
in fulfilling their payment obligations.  Further, within the
limitations imposed by the Company's operating tariffs, management is
evaluating the availability of rate increases as soon as practicable.


As practicable, the Company, during future periods, as circumstances
and situations warrant, will continue to pursue its efforts to add
additional subsidiaries or become involved in attractive joint
ventures, primarily in the telecommunications industry.  The Company
intends to continue its strategic acquisition activities to promote
the products and the growth of Epicus as its primary subsidiary.

Results of Operations

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

For the period from December 8, 2005 (date of bankruptcy settlement)
through May 31, 2006, the Company reported net revenues of
approximately $5,830,000 with gross profit of approximately $987,000
(approximately 16,93%).  These revenues were solely derived from
telecommunication service sales.  We have experienced deteriorations
in gross margins as a result of various statutory changes and U. S.
Congressional legislation allowing the primary telecommunication
carriers, which provide the Company's backbone service, to raise rates
and diminish pricing margins on CLEC carriers, such as the Company.
Future tariff and pricing, as well as potential increases in rates
from our primary telecommunication carriers will have an impact on our
future revenues and gross profit levels, which at this time are
unpredictable.

The Company incurred selling and  marketing expenses of approximately
$363,000 and general and administrative expenses of approximately
$1,448,000 for the period from December 8, 2005 (date of bankruptcy
settlement) through May 31, 2006.

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

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

The Company experienced a net loss of approximately $(2,670,000) for
the period from December 8, 2005 (date of bankruptcy settlement)
through May 31, 2006.  A significant component of the net loss for
this period was the charge to operations for the recognition of bad
debts of approximately $1,116,000 and the recognition of interest
expense on the convertible notes and debentures of approximately
$491,000.  Concurrent with the Company's filing of a Petition for
Relief under Chapter 11, the Company adopted the policy of recording a
net accounts receivable balance equal to the actual cash collected
during the 30-day period subsequent to any reporting period.  Any


                                                                         15
<PAGE>


differential between the Company's actual accounts receivable and the
actual subsequent cash collections is recorded as bad debt expense in
the respective reporting period.

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

Results of Operations
---------------------

Proforma Year ended May 31, 2006 compared to the year ended May 31, 2005
------------------------------------------------------------------------

Concurrent with the effectiveness, on December 8, 2005, of the
Company's Plan of Reorganization under Chapter 11 of the U. S.
Bankruptcy Code, the Company adopted the tenets of "fresh start"
accounting as specified by AICPA Statement of Position No. 90-7
"Financial Reporting by Entities in Reorganization Under the
Bankruptcy Code".  The key criteria to being eligible to use "fresh
start" accounting is: 1) If the reorganization value of the assets of
emerging entity immediately before the date of confirmation is less
than the total of all postpetition liabilities and allowed claims, and
if holders of voting shares immediately before confirmation receive
less than 50 percent of the voting shares of the emerging entity.
Management's calculations, as presented in Item 1 and in the
accompanying financial statements, support the Company's meeting of
the required criteria for "fresh start" reporting.

Accordingly, the Company's accompanying financial statements present
the results of operations from the December 8, 2005 effectiveness of
the Plan of Reorganization through May 31, 2006.

To assist the reader of this filing in comparing the Company's Fiscal
2005 operations with those of the year ended May 31, 2006, management
elects to present the following unaudited table:
                                ---------
<TABLE>
<CAPTION>
                          06/01/2005         Paid at       12/08/2005      Proforma,
                              to            bankruptcy         to           Fiscal          Fiscal
                          12/07/2005         closing       05/31/2006        2006            2005
                          -----------     -------------   -----------    ------------    ------------
<S>                       <C>             <C>             <C>            <C>             <C>
Sales                     $ 7,276,659     $      -        $ 5,829,974    $13,106,633     $18,775,796

Cost of sales               5,862,298            -          4,843,177     10,705,475      15,288,616
                          -----------     ------------    -----------    -----------     -----------

Gross Profit                1,414,361            -            986,797      2,401,158       3,487,180

Operating Expenses
  Selling/Marketing            18,574            -            362,855        381,429       1,348,356
  General/Administrative
    Payroll/Personnel       1,083,236            -            987,193      2,070,429       2,720,681
    Other                     387,496            -            461,149        848,645       1,334,264
  Bad debt expense            960,119            -          1,116,217      2,076,336       5,139,138
  Depreciation                 24,458            -             10,597         35,055         133,875
  Compensation expense
    on sale of common
    stock below "fair
    value"                       -               -             83,753         83,753         742,254
                          -----------     ------------    -----------    -----------    ------------
  Total operating
    expenses                2,473,883            -          3,021,764      5,495,647      11,418,568
                          -----------     ------------    -----------    -----------    ------------

Loss from operations       (1,059,522)           -         (2,034,967)    (3,094,489)     (7,931,388)

Other income
  Interest expense         (1,100,482)           -           (491,006)    (1,591,488)       (413,541)
</TABLE>



                                                                         16
<PAGE>

Contd...
<TABLE>
<CAPTION>
                          06/01/2005         Paid at       12/08/2005      Proforma,
                              to            bankruptcy         to           Fiscal          Fiscal
                          12/07/2005         closing       05/31/2006        2006            2005
                          -----------     -------------   -----------    ------------    ------------
<S>                       <C>             <C>             <C>            <C>             <C>

  Reorganization &
    bankruptcy expenses          (500)        (758,226)      (126,055)      (884,761)        (50,000)
  Abandonment of
    name development             -               -            (23,524)       (23,524)           -
  Other income (expense)         -               -              5,804          5,804          14,612
                          -----------     ------------    -----------    -----------    ------------
Loss before income
  taxes                    (2,160,504)        (758,226)    (2,669,728)    (5,588,458)     (8,380,317)

Income tax expense               -               -               -              -               -
                          -----------     ------------    -----------    -----------    ------------

Proforma Net Loss         $(2,160,504)    $   (758,226)   $(2,669,728)   $(5,588,458)   $ (8,380,317)
                          ===========     ============    ===========    ===========    ============
</TABLE>


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

As of May 31, 2006, we had approximately $280,000 in cash in our
operating accounts.  To assist us in our cash flow requirements we may
determine, depending upon the prevailing stock price of our shares, to
seek subscriptions from the sale of securities to private investors,
although there can be no assurance that we will be successful in
securing any investment from private investors at terms and conditions
satisfactory to us, if at all.

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

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

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

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


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 July 14, 2006
on our consolidated financial statements as of May 31, 2006, which
includes an explanatory paragraph expressing substantial doubt about
our ability to continue as a going concern.  We have negative working
capital of approximately $(375,000) as of May 31, 2006 and we continue
to experience cash flow difficulties in matching our contractual
payment obligations, principally to BellSouth Corp. and Global
Crossing, to our revenue billing cycles.

These conditions raise substantial doubt about our ability continue as
a going concern.  We have a history of operating


                                                                         17
<PAGE>

losses and may continue to incur operating losses.  We will most
likely require additional financing and, if we are unable to raise
such funds, our operations may be adversely affected.

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

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 and Callable Convertible Secured Notes
-------------------------------------------------------------

As of May 31, 2006, the Company has outstanding aggregate balances on
convertible debentures and callable convertible secured notes:

  Convertible debentures                             $5,280,342
  Convertible debentures-Series 2006                    375,000
  Convertible secured notes                           3,750,000
                                                     ----------
                                                     $9,405,342
                                                     ==========


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

On December 8, 2005, the Company executed a $3,750,000 9.0% Asset
Backed Convertible Notes which funds were used for various settlement
payments and recapitalization of the Company as a result of the
affirmed Plan.  In January 2006, the Noteholder gave notice that this
debt would most probably be converted to newly to-be-authorized
Preferred Stock of the Company at the discretion of the Noteholder(s)
in future periods.  The document(s) associated with this debt were
filed in their entirety as exhibits in a Current Report on Form 8-K,
filed on December 14, 2005.

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

On January 31, 2006, the Board of Directors entered into a new 12.0%
convertible debenture agreement for up to an additional $625,000 in
funds under terms identical to the convertible debentures brought
forward in the December 2005 bankruptcy Plan affirmation and also
unanimously agreed to further amend the revised convertible debenture
agreement approved by the US Bankruptcy Court on September 30, 2005,
and made effective by that same court on December 7, 2005 as follows:

1)  The "fixed conversion rate" of the existing $5.2 million
convertible debenture note is adjusted downward from $0.15 per share
to $0.0625 per share.

2)  The Company and the NIR Group, Inc. have reached an agreement to
fund the Company with additional capital on a monthly basis,
beginning March/April 2006, on terms that are to be negotiated in
good faith between the parties.  Said funds will have a cap of
$625,000 and are to be dedicated for marketing purposes.


                                                                         18
<PAGE>

3)  One year interest relief for period 1-01-06 to 12-31-06 on the
referenced existing Convertible Debenture Notes and the Redeemable
Convertible Note.  During the "interest abatement period" of 1-01-06
to 12-31-06, interest on the notes will not accrue or be charged to
the Company in any manner.

For the period from December 8, 2005 (date of bankruptcy settlement)
through May 31, 2006, the Company has recognized approximately
$468,571 in additional paid-in capital for economic event related to
the suspended interest on all of the above listed convertible
debentures/notes.


Item 7 - Financial Statements

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


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

As previously disclosed in a Current Report on Form 8-K/A dated August
7, 2002 and in our Annual Reports on Form 10-KSB for the years ended
May 31, 2003 and 2004, respectively, our Board of Directors terminated
the accounting firm of Wieseneck, Andres and Company, P.A. (Wieseneck)
of North Palm Beach, Florida in a prior year..

As of the date of this filing, Wieseneck has not provided the required
exhibit letter to be included in our Form 8-K/A dated August 7, 2002,
stating that they agree or disagree with the disclosures therein
related to the change in auditors for the Company.  We will file an
additional 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.


Item 8A - Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management,
including our principal executive officer and principal financial
officer, we conducted an evaluation of our disclosure controls and
procedures, as such term is defined under Rule 13a-15(e) promulgated
under the Securities Exchange Act of 1934, as amended (Exchange Act),
as of May 31, 2006.  Based on this evaluation, our principal
executive officer and principal financial officer concluded that our
disclosure controls and procedures are effective in alerting them on
a timely basis to material information relating to our Company
required to be included in our reports filed or submitted under the
Exchange Act.

(b) Changes in Internal Controls

There were no significant changes (including corrective actions with
regard to significant deficiencies or material weaknesses) in our
internal controls over financial reporting that occurred during the
fourth quarter of Fiscal 2006 that has materially affected, or is
reasonably likely to materially affect, our internal control over
financial reporting.


                          PART III

Item 9 - Directors and  Executive Officers of the Registrant

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


                                                                         19
<PAGE>

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

<TABLE>
<CAPTION>
    Name              Age     Position Held and Tenure
    ----              ---     ------------------------
<S>                   <C>     <C>
Gerard Haryman        61      Chairman, President,
                              and Director

Mark Schaftlein       46      Chief Executive Officer
                              and Director

Thomas Donaldson      62      Vice President
</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.

Mark Schaftlein, Mark Schaftlein has been a Consultant with Ocean
---------------
Avenue Advisors for the past six years focusing on Corporate Finance,
Restructuring and Management Consulting. At Ocean Avenue Advisors, he
concentrated on Small and Microcap companies with an emphasis on
telecommunications, technology and finance.

Mr. Schaftlein sits on the Board of Directors of GlobalNet Corporation
and SP Holding Corporation. He spent 20 years at Citigroup with 8 of
those years spent in Mortgage Banking and Consumer Finance.

Thomas N. Donaldson, is currently the Company's Vice President of
-------------------
Corporate Operations.  Mr Donaldson, prior to the December 8, 2006
bankruptcy settlement date, served as both an officer and director of
the Company and it's predecessors since February 1993.  Prior to
joining the Company, he had 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.


Item 10 - Executive Compensation

The following table shows all the cash compensation paid or to be paid
by us or our subsidiaries, as well as certain other
compensation paid or accrued, during the fiscal years indicated, to
our chief executive officer and all other executive officers whose
total annual salary and bonus exceeded $100,000 in all capacities in
which the person served.


                                                                         20
<PAGE>

Summary Compensation Table
--------------------------

<TABLE>
<CAPTION>
Name and                (1)                Annual                 Restricted   Options/     All Other
Principal Positions     Year     Salary    Bonus   Compensation     Stock      SARs(#)    Compensation
-------------------     ----     ------   -------  ------------   ----------   --------   ------------
<S>                     <C>     <C>       <C>      <C>            <C>          <C>        <C>
Gerard Haryman          2006    $250,000    $-0-       $-0-         $-0-         $-0-         $-0-
President, Chairman     2005    $250,000    $-0-       $-0-         $-0-         $-0-         $-0-
of the Board            2004    $250,000    $-0-       $-0-         $-0-         $-0-         $-0-

Mark Schaftlein         2006    $180,000    $-0-       $-0-         $-0-         $-0-         $-0-
Chief Executive         2005    $-0-        $-0-       $-0-         $-0-         $-0-         $-0-
Officer                 2004    $-0-        $-0-       $-0-         $-0-         $-0-         $-0-

Thomas N. Donaldson     2006    $120,000    $-0-       $-0-         $-0-         $-0-         $-0-
Vice President          2005    $104,000    $-0-       $-0-         $-0-         $-0-         $-0-
                        2004    $104,000    $-0-       $-0-         $-0-         $-0-         $-0-
</TABLE>

(1)  Due to our cash position, Mr. Haryman and Mr. Donaldson deferred
     payment of all or part of their salaries and/or bonuses from June 1,
     2003 through December 8, 2005.  As a component of the bankruptcy
     settlement, all accrued and unpaid compensation due to Mr. Haryman
     and Mr. Donaldson were forfeited and no future obligation for
     payment exists.

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

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

There were no grants of stock options made during either Fiscal 2006
or Fiscal 2005 to our executive officers and/or directors.

Stock Options held at end of Fiscal 2006 and 2005

No stock options, stock appreciation rights or other compensation were
granted to our President or other corporate officers or directors
during either Fiscal 2006 and Fiscal 2005.

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

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


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

The following table sets forth information as of July12, 2004, with
respect to any person known by us to own beneficially more than 5% of
our common stock, common stock beneficially owned by each of our
officers named in "Executive Compensation," and each of our directors,
and the amount of common stock beneficially owned by our officers and
directors as a group.

                                                                         21
<PAGE>

<TABLE>
<CAPTION>
                                                         % of Class
   Name and address           Number of Shares        Beneficially Owned
   ----------------           ----------------        ------------------
<S>                           <C>                     <C>
Mark Schaftlein, CEO              5,250,000                 46.9%
1750 Osceola Drive
West Palm Beach, FL 33467

Gerard Haryman, President         2,600,000                 23.2%
1750 Osceola Drive
West Palm Beach, FL 33467

Thomas Donaldson, VP                400,000                  3.6%
1750 Osceola Drive
West Palm Beach, FL 33467

All Executive Officers            8,250,000                 73.7%
and Directors as a
Group (3 persons)
</TABLE>

(1)  Percentage of beneficial ownership is based upon the 11,200,000
     shares of our common stock outstanding as of August 14, 2006

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.

The mailing address for all the above individuals is the Company's
corporate office:  1750 Osceola Dr., West Palm Beach, Florida 33409.

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

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


Item 12 - Certain Relationships and Related Transactions

The Company was a party to and has a direct or indirect material
interest in the following transactions during the years ended May 31,
2006 and 2005, 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 2005, 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 $(1,223,880).


Item 13 - Exhibits

3     Articles of Incorporation and By-Laws

The Articles of Incorporation and Articles of Amendment to The
Articles of Incorporation and By-Laws of the Registrant were pre-filed
as Exhibits 3-1, 3.2, and 3.3, respectively, to our Form 10-KSB, for
the fiscal year 1995, filed April 1, 1998, with the Securities and


                                                                         22
<PAGE>


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.

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

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


Item 14 - Principal Accountants Fees and Services

The Company paid or accrued the following fees in each of the prior
two fiscal years to it's principal accountant, S.W. Hatfield, CPA of
Dallas, Texas:

<TABLE>
<CAPTION>
                               Year ended         Year ended
                              May 31, 2006       May 31, 2005
                              ------------       ------------
<S>                           <C>                <C>
1.      Audit fees              $43,800            $40,400
2.      Audit-related fees         -                  -
3.      Tax fees                  2,200              2,500
4.      All other fees             -                  -
                                -------            -------
        Totals                  $46,000            $42,900
                                =======            =======
</TABLE>

The Company has no formal audit committee.  However, as defined in
Sarbanes-Oxley Act of 2002, the entire Board of Directors is the
Company's defacto audit committee.

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

The Board discussed and reviewed with the independent auditors all
matters required to be discussed by auditing standards generally
accepted in the United States of America, including those described in
Statement on Auditing Standards No. 61, as amended, "Communication
with Audit Committees".

The Board reviewed the audited consolidated financial statements of
the Company as of and for the year ended May 31, 2006 and 2005, with
management and the independent auditors.  Management has the sole
ultimate responsibility for the preparation of the Company's financial
statements and the independent auditors have the responsibility for
their examination of those statements.


                                                                         23
<PAGE>

Based on the above-mentioned review and discussions with the
independent auditors and management, the Board of Directors approved
the Company's audited consolidated financial statements and
recommended that they be included in its Annual Report on Form 10-KSB
for the year ended January 31, 2005, for filing with the Securities
and Exchange Commission.

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

-----------------------------------------------------------------------

                          SIGNATURES

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

                                      Epicus Communications Group, Inc.


Dated: August 10, 2006                By:           /s/ Mark Schaftlein
                                         ------------------------------
                                                        Mark Schaftlein
                                            Chief Executive Officer and
                                         Acting Chief Financial Officer


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


Dated: August 10, 2006                By:           /s/ Gerard Haryman
                                         -----------------------------
                                                        Gerard Haryman
                                                President and Director


Dated: August 10, 2006                By:           /s/ Mark Schaftlein
                                         ------------------------------
                                                        Mark Schaftlein
                                               Chief Executive Officer,
                                         Acting Chief Financial Officer
                                                           and Director


                                                                         24
<PAGE>


        EPICUS COMMUNICATIONS GROUP, INC. AND SUBSIDIARIES

            INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


                                                                 Page
                                                                 ----

Report of Registered Independent Certified Public
  Accounting Firm                                                 F-2

Consolidated Financial Statements

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

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

 Consolidated Statement of Changes in Stockholders' Deficit
  for the period from December 8, 2005 (date of bankruptcy
   settlement) through May 31, 2006                               F-5

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

 Notes to Consolidated Financial Statements                       F-7






















                                                                        F-1
<PAGE>


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

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


Board of Directors and Stockholders
Epicus Communications Group, Inc.

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

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

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

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


                                              /s/S. W. HATFIELD, CPA

                                              S. W. HATFIELD, CPA
Dallas, Texas
July 14, 2006


                                                                        F-2
<PAGE>

         Epicus Communications Group, Inc. and Subsidiaries
                    Consolidated Balance Sheet
                           May 31, 2006


                                                                May 31, 2006
                                                                ------------
                              ASSETS
                              ------
Current Assets
 Cash on hand and in bank                                       $    279,726
 Accounts receivable - Trade, net of allowance
   for doubtful accounts of approximately $225,000                   790,172
 Prepaid expenses                                                     40,642
                                                                ------------
  Total current assets                                             1,110,540
                                                                ------------

Property and equipment - at cost or post-reorganization
  fair market value                                                   97,764
 less accumulated depreciation                                       (10,597)
                                                                ------------
  Net property and equipment                                          87,167
                                                                ------------

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

TOTAL ASSETS                                                    $  9,353,745
                                                                ============

              LIABILITIES AND STOCKHOLDERS' DEFICIT
              -------------------------------------

Current Liabilities
 Deferred customer revenue                                      $    512,433
 Current maturities of bankruptcy settlement debt                    397,821
 Accounts payable - trade                                            143,420
 Accrued taxes payable and other liabilities                         431,834
                                                                ------------
  Total current liabilities                                        1,485,508
                                                                ------------

Long-Term Liabilities
 Bankruptcy settlement debt, net of
   current maturities                                                503,342
                                                                ------------
  Total liabilities                                                1,988,850
                                                                ------------

Commitments and contingencies

Convertible Debentures                                             5,655,342
                                                                ------------

Callable Secured Convertible Note                                  3,750,000
                                                                ------------

Stockholders' Deficit
 Common stock - $0.001 par value.
  100,000,000 shares authorized.
  10,817,600 shares issued and outstanding                            10,818
 Additional paid-in capital                                          618,463
 Accumulated deficit                                              (2,669,728)
                                                                ------------
  Total stockholders' deficit                                     (2,040,447)
                                                                ------------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                     $  9,353,745
                                                                ============


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

                                                                        F-3
<PAGE>

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

                                                             Period from
                                                           December 8, 2005
                                                          (date of bankruptcy
                                                          settlement) through
                                                              May 31, 2006
                                                          -------------------

Revenues - net                                               $   5,829,974
Cost of Sales                                                   (4,843,177)
                                                             -------------
Gross Profit                                                       986,797
                                                             -------------

Operating Expenses
 Selling and marketing expenses                                    362,855
 General and administrative expenses
  Personnel                                                        987,193
  Other                                                            461,149
 Bad debt expense                                                1,116,217
 Depreciation and amortization                                      10,597
 Compensation expense related to
  common stock issuances at
  less than "fair value"                                            83,753
                                                             -------------
  Total operating expenses                                       3,021,764
                                                             -------------

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

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

Loss before income tax benefit                                  (2,669,728)

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

Net Loss                                                        (2,669,728)

Other comprehensive income                                               -

Comprehensive Loss                                           $  (2,669,728)
                                                             =============

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

Weighted-average number of shares
 of common stock outstanding                                    10,278,400
                                                                ==========


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

                                                                        F-4
<PAGE>

         Epicus Communications Group, Inc. and Subsidiaries
    Consolidated Statement of Changes in Shareholders' Deficit
   Period from December 8, 2005 (date of bankruptcy settlement)
                       through May 31, 2006

<TABLE>
<CAPTION>
                                       Common Stock       Additional
                                   -------------------     paid-in     Accumulated
                                   Shares       Amount     capital      deficit         Total
                                 ----------     -------   ----------   -----------   -----------
<S>                              <C>            <C>       <C>          <C>           <C>
Stock issued pursuant
 to Plan of Reorganization
 at Settlement Date on
 December 8, 2005                10,000,000     $10,000   $        -   $         -   $    10,000

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

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

Net loss for the period                   -           -            -    (2,669,728)   (2,669,728)
                                 ----------     -------   ----------   -----------   -----------
Balances at
 February 28, 2006               10,817,600     $10,818   $  618,463   $(2,669,728)  $(2,040,447)
                                 ==========     =======   ==========   ===========   ===========
</TABLE>






















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

                                                                        F-5
<PAGE>

           Epicus Communications Group, Inc. and Subsidiaries
                Consolidated Statements of Cash Flows
    Period from December 8, 2005 (date of bankruptcy settlement)
                          through May 31, 2006

                                                            Period from
                                                          December 8, 2005
                                                         (date of bankruptcy
                                                         settlement) through
                                                             May 31, 2006
                                                         -------------------

Cash Flows from Operating Activities
 Net loss for the period                                    $ (2,669,728)
 Adjustments to reconcile net loss to net cash
  provided by operating activities
   Depreciation                                                   10,597
   Bad Debt Expense                                            1,116,217
   Abandonment of name development costs                          23,524
   Compensation expense related to common stock
     issuances at less than "fair value"                          83,753
   Contribution of interest expense related to
     suspended interest payable on notes payable                 468,571
   (Increase) Decrease in
     Accounts receivable                                        (823,714)
     Deposits, intangible and other assets                       (51,920)
   Increase (Decrease) in
     Deferred customer revenue                                     7,180
     Accounts payable                                              4,849
     Accrued taxes payable and other liabilities                 431,834
                                                             -----------

Net cash used in operating activities                         (1,398,837)
                                                             -----------

Cash Flows from Investing Activities
 Cash paid on deposit for pending
   equipment acquisition                                         (11,764)
                                                             -----------

Cash Flows from Financing Activities
 Cash paid on bankruptcy settlement debt                        (161,475)
 Cash advances on new convertible debentures                     375,000
 Cash advances on callable secured convertible note            1,297,233
                                                             -----------
Net cash provided by financing activities                      1,610,758
                                                             -----------

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

Cash at end of period                                        $   279,726
                                                             ===========

Supplemental Disclosure of Interest and Income Taxes Paid
 Interest paid for the period                                $    22,435
                                                             ===========
 Income taxes paid for the period                            $         -
                                                             ===========

Supplemental Disclosure of Non-cash Investing
and Financing Activities
  Common stock issued for retirement of debt                 $    66,958
                                                             ===========



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

                                                                        F-6
<PAGE>

        Epicus Communications Group, Inc. and Subsidiaries

            Notes to Consolidated Financial Statements


NOTE A - Organization and Description of Business

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

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


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

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

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

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

   Current assets retained by the post-confirmation entity   $1,054,287
   Fair market value of property and equipment                   86,000
   Deposits with vendors and other assets transferred
     to the post-confirmation entity                            255,201
                                                             ----------
     Reorganization value                                    $1,395,488
                                                             ==========


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

   Postpetition current liabilities                         $   643,824
   "New" common stock issued upon reorganization                 10,000
   Liabilities deferred pursuant to Chapter 11 proceeding     8,762,705
                                                            -----------
     Total postpetition liabilities and allowed claims        9,416,529
   Reorganization value                                      (1,395,488)
                                                            -----------
   Excess of liabilities over reorganization value          $ 8,021,041
                                                            ===========


                                                                        F-7
<PAGE>

           Epicus Communications Group, Inc. and Subsidiaries

         Notes to Consolidated Financial Statements - Continued


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

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

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

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

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

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

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

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

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

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

Accumulated depreciation                         $    563,028
 Property and equipment                                           $    606,286
Additional paid-in capital                         18,516,543
 Accumulated deficit                                                26,494,326
Reorganization value in excess of amounts
  allocated to identifiable assets                  8,021,041
</TABLE>

                                                                        F-8
<PAGE>


          Epicus Communications Group, Inc. and Subsidiaries

      Notes to Consolidated Financial Statements - Continued


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

The effect of the Plan of Reorganization on Epicus Communications
Group, Inc.'s balance sheet at December 8, 2005, is as follows:

<TABLE>
<CAPTION>
                                                               Adjustments to record confirmation of Plan
                                                               ------------------------------------------
                                                                                               Reorganized
                                     Pre-          Debt        Exchange of        Fresh          Balance
                                Confirmation     discharge        stock           start           Sheet
                                ------------   -------------   -----------     ------------    -----------
<S>                             <C>            <C>           <C>             <C>             <C>
Cash on hand and in bank              80,229           (660)        -               -               79,569
Accounts receivable
  Trade                            1,307,675          -             -               -            1,307,675
  Allowance for
   doubtful accounts                (225,000)         -             -               -             (225,000)
Prepaid expenses                     912,767     (1,020,724)        -               -             (107,957)
                                ------------   ------------    -----------     ------------    -----------
   Total current assets            2,075,671     (1,021,384)        -               -            1,054,287
                                ------------   ------------    -----------     ------------    -----------

Property and equipment               692,286          -             -              (606,286)        86,000
  Accumulated depreciation          (563,028)         -             -               563,028           -
                                ------------   ------------    -----------     ------------    -----------
   Net Property and Equipment        129,258          -             -               (43,258)        86,000
                                ------------   ------------    -----------     ------------    -----------

Other assets
  Deposits and other                 603,411       (348,210)        -               -              255,201
  Reorganization value in
   excess of amounts
   allocated to identifiable
   assets                              -              -             -             8,021,041      8,021,041
                                ------------   ------------    -----------     ------------    -----------
   Total other assets                603,411       (348,210)        -             8,021,041      8,276,242
                                ------------   ------------    -----------     ------------    -----------

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

Liabilities not subject
  to compromise
  Accounts payable and other       2,757,835     (2,114,011)        -                -             643,824
                                ------------   ------------    -----------     ------------    -----------

Liabilities subject to
  compromise                      13,226,818    (13,226,818)        -                -                -
IRS Note                               -            674,026         -                -             674,026
BellSouth Note                         -            328,702         -                -             328,702
State of Florida Note                  -             59,910         -                -              59,910
Convertible debentures             5,247,263        100,037         -                -           5,347,300
Convertible note                       -          2,352,767         -                -           2,352,767
                                  18,474,081     (9,711,376)        -                -           8,762,705
                                ------------   ------------    -----------     ------------    -----------
  Total Liabilities               21,231,916    (11,825,387)        -                -           9,406,529
                                ------------   ------------    -----------     ------------    -----------

Shareholders' equity (deficit)
  Common stock - new                   -              -             10,000           -              10,000
  Common stock - old                 661,404          -           (661,404)          -                -
  Additional paid-in capital      17,865,139          -            651,404      (18,516,543)          -
  Accumulated deficit            (36,950,119)    10,455,793         -            26,494,326           -
                                ------------   ------------    -----------     ------------    -----------
  Total shareholders'
   deficit                       (18,423,576)    10,455,793         -             7,977,783         10,000
                                ------------   ------------    -----------     ------------    -----------

Total Liabilities and
  Shareholders' Equity          $  2,808,340   $ (1,369,594)   $    -          $  7,977,783    $ 9,416,529
                                ============   ============    ===========     ============    ===========
</TABLE>


                                                                        F-9
<PAGE>

         Epicus Communications Group, Inc. and Subsidiaries

       Notes to Consolidated Financial Statements - Continued


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

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

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

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

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

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

                                                                        F-10
<PAGE>

         Epicus Communications Group, Inc. and Subsidiaries

       Notes to Consolidated Financial Statements - Continued


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

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

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

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

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

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

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


            (Remainder of this page left blank intentionally)







                                                                        F-11
<PAGE>


<PAGE>
        Epicus Communications Group, Inc. and Subsidiaries

      Notes to Consolidated Financial Statements - Continued


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

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

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

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


NOTE C - Preparation of Financial Statements

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

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

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

                                                                        F-12
<PAGE>


         Epicus Communications Group, Inc. and Subsidiaries

      Notes to Consolidated Financial Statements - Continued


NOTE C - Preparation of Financial Statements - Continued

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

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

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


NOTE D - Going Concern Uncertainty

The Company experienced significant operating losses prior to it's
emergence from a Chapter 11 bankruptcy action.  In the period from the
emergence from bankruptcy protection on December 8, 2005 through May
31, 2006, the Company's operations remained in a negative cash flow
position.

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

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

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


NOTE E - Summary of Significant Accounting Policies

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

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

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


                                                                        F-13
<PAGE>

         Epicus Communications Group, Inc. and Subsidiaries

       Notes to Consolidated Financial Statements - Continued


NOTE E - Summary of Significant Accounting Policies - Continued

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

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

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

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

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

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

4.   Intangible Assets
     -----------------

  Monies paid in prior periods for the development of the trade name
  "Epicus", approximately $23,524, 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.  Subsequent to December 7,
  2005, the Company began to transition it's corporate market identity
  to "ECG" in lieu of the aforementioned "Epicus".  Accordingly during
  the quarter ended May 31, 2006, management has recorded a 100%
  charge to operations for the abandonment of the corporate identity
  related to the trade name "Epicus".

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

5.   Revenue Recognition
     -------------------

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

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

                                                                        F-14
<PAGE>


         Epicus Communications Group, Inc. and Subsidiaries

       Notes to Consolidated Financial Statements - Continued


NOTE E - Summary of Significant Accounting Policies - Continued

6.   Income Taxes
     ------------

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

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

7.   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.

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

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

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

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

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

9.   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.

10.   Recently Issued Pronouncements
      ------------------------------

  In November 2004, the Financial Accounting Standards Board (the
  "FASB") issued SFAS No. 151, "Inventory Costs, an amendment of ARB
  No. 43, Chapter 4." SFAS No. 151 clarifies the accounting for
  abnormal amounts of idle facility expense, freight, handling costs
  and wasted materials.  SFAS No. 151 is effective for inventory costs
  incurred during fiscal years beginning after June 15, 2005.  The
  initial application of SFAS No. 151 is not expected to have a
  significant impact on the Company's financial position or results of
  operations.

                                                                        F-15
<PAGE>

         Epicus Communications Group, Inc. and Subsidiaries

       Notes to Consolidated Financial Statements - Continued


NOTE E - Summary of Significant Accounting Policies - Continued

10.  Recently Issued Pronouncements - continued
     ------------------------------

  In December 2004, the FASB issued SFAS 123(R), "Share-Based
  Payment," which addresses the accounting for employee stock options.
  SFAS 123(R) revises the disclosure provisions of SFAS 123 and
  supersedes APB 25.  SFAS 123(R) requires that the cost of all
  employee stock options, as well as other equity-based compensation
  arrangements, be reflected in financial statements based on the
  estimated fair value of the awards.  In March 2005, the Securities &
  Exchange Commission (the "SEC") issued Staff Accounting Bulletin No.
  107, "Share-Based Payment," which summarizes the views of the SEC
  staff regarding the interaction between SFAS 123(R) and certain SEC
  rules and regulations, and is intended to assist in the initial
  implementation.  SFAS(R) is effective for all companies that file as
  small business issuers as of the beginning of the first interim or
  annual reporting period that begins after December 15, 2005.   The
  Company is currently evaluating the provisions of SFAS 123(R) and
  its effect on its financial statements.  The Company does not expect
  the adoption of this statement to have a material impact on its
  financial statements.

  In December 2004, the FASB issued SFAS 153, "Exchanges of
  Nonmonetary Assets, an amendment of APB 29, Accounting for
  Nonmonetary Transactions."  This statement's amendments are based on
  the principle that exchanges of nonmonetary assets should be
  measured based on the fair value of the assets exchanged.  Further,
  SFAS 153 eliminates the narrow exception for nonmonetary exchanges
  of similar productive assets and replaces it with a broader
  exception for exchanges of nonmonetary assets that do not have
  commercial substance.  Provisions of this statement are effective
  for fiscal periods beginning after June 15, 2005.  The Company does
  not expect the adoption of this statement to have a material impact
  on its financial statements.

  In March 2005, the FASB issued FASB Interpretation No. 47,
  "Accounting for Conditional Asset Retirement Obligations"("FIN 47"),
  which is an interpretation of SFAS 143, "Accounting for Asset
  Retirement Obligations."  FIN 47 clarifies terminology within SFAS
  143 and requires an entry to recognize a liability for the fair
  value of a conditional asset retirement obligation when incurred if
  the liability's fair value can be reasonably estimated.  FIN 47 is
  effective for fiscal years ending after December 15, 2005.  The
  Company does not expect the adoption of this statement to have a
  material impact on its financial statements.

  In June 2005, the FASB issued SFAS No. 154, "Accounting Changes and
  Error Corrections," which will require entities that voluntarily
  make a change in accounting principle to apply that change
  retroactively to prior periods' financial statements unless this
  would be impracticable.  SFAS No. 154 supersedes Accounting
  Principles Board Opinion No. 20, "Accounting Changes" ("APB No.
  20"), which previously required that most voluntary changes in
  accounting principle be recognized by including in the current
  period's net income the cumulative effect of changing to the new
  accounting principle.  SFAS No. 154 also makes a distinction between
  "retrospective application" of an accounting principle and the
  "restatement" of financial statements to reflect the correction of
  an error.  Another significant change in practice under SFAS No. 154
  will be that if an entity changes its method of depreciation,
  amortization, or depletion for long-lived, non-financial assets, the
  change must be accounted for as a change in accounting principle.
  SFAS No. 154 applies to accounting changes and error corrections
  that are made in fiscal years beginning after December 15, 2005.
  The provisions of SFAS No. 154 are not expected to affect the
  Company's consolidated financial statements.


NOTE F - Fair Value of Financial Instruments

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

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

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

                                                                        F-16
<PAGE>

         Epicus Communications Group, Inc. and Subsidiaries

       Notes to Consolidated Financial Statements - Continued


NOTE G - 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, 2006, 2005 and
2004, respectively, the various operating companies had deposits in a
financial institution with credit risk exposures in excess of
statutory FDIC coverage.  The Company has not incurred any losses as a
result of any of these unsecured situations.


NOTE H - Property and Equipment

Property and equipment consists of the following as of May 31, 2006,
respectively:

<TABLE>
<CAPTION>
                                                  May 31, 2006    Estimated life
                                                  ------------    --------------
<S>                                               <C>             <C>
     Computer equipment                             $ 30,000          3 years
     Office furniture and fixtures                    56,000          5 years
     Deposit on proposed equipment acquisition        11,764             -
                                                    --------
                                                      97,764
     Less accumulated depreciation                   (10,597)
                                                    --------
     Net property and equipment                     $ 87,167
                                                    ========
</TABLE>

Depreciation expense for the period from December 8, 2005 (date of
bankruptcy settlement) through May 31, 2006 was approximately $10,597.


NOTE I - Convertible Debentures and Callable Convertible Secured Notes

As of May 31, 2006, the Company has outstanding aggregate balances on
convertible debentures and callable convertible secured notes:

     Convertible debentures                     $5,280,342
     Convertible debentures-Series 2006            375,000
     Convertible secured notes                   3,750,000
                                                ----------
                                                $9,405,342
                                                ==========

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

On December 8, 2005, the Company executed a $3,750,000 9.0% Asset
Backed Convertible Notes which funds were used for various settlement
payments and recapitalization of the Company as a result of the
affirmed Plan.  In January 2006, the Noteholder gave notice that this
debt would most probably be converted to newly to-be-authorized
Preferred Stock of the Company at the discretion of the Noteholder(s)
in future periods.  The document(s) associated with this debt were
filed in their entirety as exhibits to the aforementioned December 14,
2005 Form 8-K.

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

                                                                        F-17
<PAGE>

        Epicus Communications Group, Inc. and Subsidiaries

      Notes to Consolidated Financial Statements - Continued


NOTE I - Convertible Debentures and Callable Convertible Secured Notes

On January 31, 2006, the Board of Directors entered into a new 12.0%
convertible debenture agreement for up to an additional $625,000 in
funds under terms identical to the convertible debentures brought
forward in the December 2005 bankruptcy Plan affirmation and also
unanimously agreed to further amend the revised convertible debenture
agreement approved by the US Bankruptcy Court on September 30, 2005,
and made effective by that same court on December 7, 2005 as follows:

     1)  The "fixed conversion rate" of the existing $5.2 million
     convertible debenture note is adjusted downward from $0.15 per
     share to $0.0625 per share.

     2)  The Company and the NIR Group, Inc. have reached an agreement
     to fund the Company with additional capital on a monthly basis,
     beginning March/April 2006, on terms that are to be negotiated in
     good faith between the parties.  Said funds will have a cap of
     $625,000 and are to be dedicated for marketing purposes.

     3)  One year interest relief for period 1-01-06 to 12-31-06 on
     the referenced existing Convertible Debenture Notes and the
     Redeemable Convertible Note.  During the "interest abatement
     period" of 1-01-06 to 12-31-06, interest on the notes will not
     accrue or be charged to the Company in any manner.

For the period from December 8, 2005 (date of bankruptcy settlement)
through May 31, 2006, the Company has recognized approximately
$468,571 in additional paid-in capital for economic event related to
the suspended interest on all of the above listed convertible
debentures/notes.


NOTE J - Income Taxes

The components of income tax (benefit) expense for the period from
December 8, 2005 (date of bankruptcy settlement) through May 31, 2006
is as follows:

                                                      Period from
                                                    December 8, 2005
                                                   (date of bankruptcy
                                                   settlement) through
                                                       May 31, 2006
                                                   -------------------
Federal:
         Current                                         $     -
         Deferred                                              -
                                                         -------
                                                               -
                                                         -------

State:
         Current                                               -
         Deferred                                              -
                                                         -------
                                                               -
                                                         -------

 Total                                                   $     -
                                                         =======


The Company has a net operating loss carryforward of approximately
$2,700,000 to offset future taxable income as a result of the
reduction requirements related to the Company's discharge from
bankruptcy.  The amount and availability of the net operating loss
carryforwards may be subject to limitations set forth by the Internal
Revenue Code. Factors such as the number of shares ultimately issued
within a three year look-back period; whether there is a deemed more
than 50 percent change in control; the applicable long-term tax exempt
bond rate; continuity of historical business; and subsequent income of
the Company all enter into the annual computation of allowable annual
utilization of the carryforwards.


        (Remainder of this page left blank intentionally)






                                                                        F-18
<PAGE>

        Epicus Communications Group, Inc. and Subsidiaries

      Notes to Consolidated Financial Statements - Continued


NOTE J - Income Taxes - Continued

The Company's income tax expense for the periods from December 8, 2005
(date of bankruptcy settlement) through May 31, 2006, differed from
the statutory federal rate of 34 percent as follows:

                                                            Period from
                                                         December 8, 2005
                                                        (date of bankruptcy
                                                        settlement) through
                                                            May 31, 2006
                                                        -------------------

Statutory rate applied to loss before income taxes          $  (907,700)
Increase (decrease) in income taxes resulting from:
  State income taxes                                                  -
  Non-deductible items:
   Compensation expense related to the sale of
   common stock at less than "fair value"                        28,500
  Other, including reserve for deferred tax asset               879,200
                                                            -----------
     Income tax expense                                     $         -
                                                            ===========

Temporary differences, consisting primarily of statutory recognition
of bad debt expenses, deferrals of expenses for organizational costs
and accrued, but unpaid, accruals for officer compensation and
statutory differences in the depreciable lives for property and
equipment, between the financial statement carrying amounts and tax
bases of assets and liabilities give rise to deferred tax assets and
liabilities as of May 31, 2006:

                                                            May 31, 2006
                                                        ------------------

   Deferred tax assets
     Net operating loss carryforwards                       $   879,200
     Less valuation allowance                                  (879,200)
   Net Deferred Tax Asset                                   -----------
                                                            $         -
                                                            ===========

During the period from December 8, 2005 (date of bankruptcy settlement)
through May 31, 2006, the valuation allowance (decreased) increased by
approximately $879,200.


NOTE K - Common Stock Transactions

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

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



        (Remainder of this page left blank intentionally)





                                                                        F-19
<PAGE>


        Epicus Communications Group, Inc. and Subsidiaries

       Notes to Consolidated Financial Statements - Continued


NOTE L - Stock Warrants

On December 8, 2005, pursuant to the confirmed Plan of Reorganization, the
Company amended and reissued the warrants issued in conjunction with the sale
of an aggregate of $3,300,000 in 8% secured convertible notes, the Company
issued warrants to purchase 3,300,000 shares of our common stock to four (4)
accredited investors.  The following table presents warrant activity through
May 31, 2006:

<TABLE>
<CAPTION>
                                                Weighted
                                                Average
                                                Number of      Exercise
                                                 Shares          Price
                                                ---------     ----------
<S>                                             <C>           <C>
   Balance at December 8, 2005                          -            -
   Issued                                       3,300,000        $0.03
   Exercised                                            -            -
   Expired                                              -            -
                                                ---------
   Balance at May 31, 2006                      3,300,000        $0.03
                                                =========
</TABLE>

NOTE M - Commitments and Contingencies

Leased facilities

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

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

<TABLE>
<CAPTION>
                                                Year ended
                                                  May 31,       Amount
                                                ----------    ----------
<S>                                             <C>           <C>
                                                   2007       $  262,906
                                                   2008          270,793
                                                   2009          278,917
                                                   2010          239,053
                                                              ----------
                                                 Total        $1,051,669
                                                              ==========
</TABLE>

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

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

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

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



                                                                        F-20
<PAGE>