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| **UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

Washington, DC 20549

**FORM 10-Q**

[X]   Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

**          For the quarterly period ended March 31, 2008**

[ ]   Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934

          For the transition period __________ to ___________

**Commission File Number    000-30797**

**EP Global Communications, Inc.**

(Exact name of small Business Issuer as specified in its charter) |
|                                                                                                                                                              |                                                   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------|
| **Delaware**

(State or other jurisdiction of              

incorporation or organization) | **14-1818396**

(IRS Employer Identification No.) |
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|-----------------------------------------------------------------------------------------------------------------------|-------------------------------------|
| **c/o Exceptional Parent Magazine**

**416 Main Street, Johnstown, PA**

**(Address of principal executive offices)** | **15901**

**(Postal or Zip Code)** |
| **(814) 361-3860**

**Issuer’s telephone number, including area code**                                          |                                |
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| **Indicate by check markwhether the issuer (1) filed all reports required to be filed bySection 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the          issuer wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days.**

**[X] Yes [  ] No**

**Indicate by check markwhether the registrant is a large accelerated filer, an acceleratedfiler, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”,“accelerated filer,” “accelerated filer” andsmaller reporting company” in Rule 12b-2 of the Exchange Act.**

**                Largeaccelerated filer [  ]                                     Acceleratedfiler [  ]**

**                Non-acceleratedfiler [  ]                                       Smallerreporting company [X]**

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

**Yes [  ] No [X]**

**State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:**

**495,118,753********shares of $0.0001 par value common stock outstanding as of May 15, 2008.** |

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**TABLE OF CONTENTS**
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|--------|-------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------|
|   | **Part I**  | **FINANCIAL INFORMATION (Unaudited)**                                                                                                                                     |      |
|   |        |                                                                                                                                                                      |      |
|   |        | **Item 1.  Financial Statements**                                                                                                                                    |      |
|   |        | **              Consolidated Balance Sheets**                                                       |      |
|   |        | **                    March31, 2008 and December 31, 2007 (audited)** | **2-3**   |
|   |        |                                                                                                                                                                      |      |
|   |        | **              Consolidated Statements of Operations**                                             |      |
|   |        | **                    Quarterended March 31, 2008 and 2007**          | **4**     |
|   |        |                                                                                                                                                                      |      |
|   |        | **              ConsolidatedStatement of Stockholders’ Deficiency**                           | **5**     |
|   |        |                                                                                                                                                                      |      |
|   |        | **              Consolidated Statements of Cash Flows**                                             |      |
|   |        | **                    Quartersended March 31, 2008 and 2007**         | **6-7**   |
|   |        |                                                                                                                                                                      |      |
|   |        | **               Notesto Consolidated Financial Statements**                                   | **8-29**  |
|   |        |                                                                                                                                                                      |      |
|   |        | **Item 2. Management’s Discussion and Analysis of Financial Conditionand           Resultsof Operations**    | **30-48** |
|   |        |                                                                                                                                                                      |      |
|   |        | **Item 3.  Quantitative and Qualitative Disclosures About Market Risk**                                                                                              | **48**    |
|   |        |                                                                                                                                                                      |      |
|   |        | **Item 4T.  Controls and Procedures**                                                                                                                                | **49**    |
|   |        |                                                                                                                                                                      |      |
|   | **Part II** | **OTHER INFORMATION**                                                                                                                                                     |      |
|   |        |                                                                                                                                                                      |      |
|   |        | **Item 1.  Legal Proceedings**                                                                                                                                       | **50-51** |
|   |        |                                                                                                                                                                      |      |
|   |        | **Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds**                                                                                             | **52**    |
|   |        |                                                                                                                                                                      |      |
|   |        | **Item 3.  Defaults Upon Senior Securities**                                                                                                                         | **52**    |
|   |        |                                                                                                                                                                      |      |
|   |        | **Item 4.  Submission of Matters to a Vote of Security Holders**                                                                                                     | **52**    |
|   |        |                                                                                                                                                                      |      |
|   |        | **Item 5.  Other Information**                                                                                                                                       | **52**    |
|   |        |                                                                                                                                                                      |      |
|   |        | **Item 6.  Exhibits**                                                                                                                                                | **52**    |
|   |        |                                                                                                                                                                      |      |
|   |        | **Signatures**                                                                                                                                                            | **53**    |
|   |        |                                                                                                                                                                      |      |
|   |        | **Certifications**                                                                                                                                                        |      |

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**EP GLOBAL COMMUNICATIONS, INC.**

**CONSOLIDATED BALANCE SHEET**

See accompanying footnotes to financial statements

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**EP GLOBAL COMMUNICATIONS, INC.**

**CONSOLIDATED BALANCE SHEET**

See accompanying footnotes to financial statements 

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**EP GLOBAL COMMUNICATIONS, INC.**

**CONSOLIDATED STATEMENTS OF OPERATIONS**

See accompanying footnotes to financial statements

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**EP GLOBAL COMMUNICATIONS, INC.**

**CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ DEFICIENCY**

See accompanying footnotes to financial statements

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**EP GLOBAL COMMUNICATIONS, INC.**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

statement continued next page

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**EP GLOBAL COMMUNICATIONS, INC.**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

See accompanying footnotes to financial statements

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**EP Global Communications, Inc. And Subsidiaries**

**Notes To Consolidated Financial Statements**

**March 31, 2008**

**1.  Description of Business And Summary Of Significant Accounting Policies**

Basis of Presentation

Theunaudited interim financial statements have been prepared in accordancewith U.S. generally accepted accounting principles and applicable SECrules and regulations pertaining to quarterly financial reporting, andinclude all adjustments necessary for a fair presentation.  Thesestatements should be read in combination with the consolidatedfinancial statements and notes included in the Company’s annualreport on Form 10-KSB for the year ended December 31, 2007.

On November28, 2003, East Coast Airlines, Inc.  ("East Coast") entered into ashare exchange agreement with Psy-Ed Corporation.  In connectionwith the share exchange, East Coast acquired the assets and assumed theliabilities of Psy-Ed Corporation.  For accounting purposes, theshare exchange agreement has been treated as a recapitalization ofPsy-Ed Corporation as the acquirer.  

Organization

EP GlobalCommunications, Inc., formerly East Coast Airlines, Inc., andSubsidiaries (“EP” or the “Company”), operatesits primary business through its subsidiary, Psy-Ed Corporation (d/b/aExceptional Parent Magazine).

EPpublishes and distributes Exceptional Parent Magazine, an internationalpublication, designed to serve the informational needs of families andprofessionals who are involved in the care and development of childrenand adults with disabilities and special health care needs.  EPalso develops and implements online accredited Continued MedicalEducation Programs; has its own library of over 2,500 disability booktitles and publishes clinical monographs which are disseminated tophysicians, researchers and allied health care professionals, as wellas families and caregivers all over the world.  

Significant Accounting Policies

Principles of Consolidation

Theconsolidated financial statements include the accounts of the Companyand its majority-owned subsidiaries.  All intercompanytransactions and balances have been eliminated.  

Use of Estimates

Thepreparation of the consolidated financial statements in conformity withaccounting principles generally accepted in the United States ofAmerica requires management to make estimates and assumptions thataffect the reported amounts of assets and liabilities and disclosure ofcontingent assets and liabilities at the date of the financialstatements and the reported amounts of revenues and expenses during thereporting period.  Actual results could differ from thoseestimates.

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**EP Global Communications, Inc. And Subsidiaries**

**Notes To Consolidated Financial Statements**

**March 31, 2008**

Cash

Cashincludes cash in banks, deposits with financial institutions, and allhighly liquid investments with a maturity of three months or less. Cash and Cash Equivalents were $98,368 and $124,058 at March 31,2008 and December 31, 2007, respectively.

Concentration of Credit Risk

Financialinstruments which potentially subject the Company to concentrations ofcredit risk consist principally of cash and trade receivables.

TheCompany's cash and cash equivalents are concentrated primarily in twobanks in the United States.  At times, such deposits could be inexcess of insured limits.  Management believes that the financialinstitutions that hold the Company's financial instruments arefinancially sound and, accordingly, minimal credit risk is believed toexist with respect to these financial instruments.

The Companygrants credit primarily to advertisers based on an evaluation of thecustomer’s financial condition, without requiring collateral. Exposure to losses on these receivables is principally dependenton each customer’s financial condition.  A majority of thesubscription income is received in advance and presents little risk tothe Company.  The Company controls its exposure to credit riskthrough monitoring procedures and establishes appropriate allowancesfor anticipated losses.  

The Companyhas a major customer that comprised 20% and 12% of the Company’srevenue in the quarters ended March 31, 2008 and 2007, respectively. A second major customer comprised 19% and 14% of theCompany’s revenue in the quarters ended March 31, 2008 and 2007,respectively.  There were no other customers that comprisedgreater than 10% of the total company revenues in those quarters.

Provision for Losses on Uncollectible Receivables

Theprovisions for losses on uncollectible trade receivables are determinedprincipally on the basis of specific identification and past collectionexperiences.  The allowance for doubtful accounts on accountsreceivable balances was $31,819 and $37,760 at March 31, 2008 andDecember 31, 2007, respectively.

Inventories

Inventories,consisting primarily of books, are stated at the lower of cost ormarket, determined on the first-in, first-out (FIFO) method.  

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**EP Global Communications, Inc. And Subsidiaries**

**Notes To Consolidated Financial Statements**

**March 31, 2008**

Revenue Recognition

The Companyrecognizes revenue in accordance with the guidance contained in SECStaff Accounting Bulletin No. 101, “Revenue Recognition inFinancial Statements” (“SAB101”), and StaffAccounting Bulletin No. 104, “Revenue Recognition in FinancialStatements” (“SAB104”).  Under thesepronouncements, revenue is recognized when persuasive evidence of anarrangement exists, delivery of services and/or products has occurred,the sales price is fixed or determinable, and collectibility of thesales price is reasonably assured. In addition to these general revenuerecognition criteria, the following specific revenue recognitionpolicies are followed:

Advertisingrevenue, which consists predominantly of graphic and text displays, isrecorded in the period corresponding to the presentation in thepublication. Online services advertising revenues, primarily derivedfrom the sale of banner advertisements and sponsorships on theCompany's web sites, is recognized in the period the advertising isdisplayed.  The costs to develop this internet income are periodcosts and are expensed when incurred. Print publication advertising andcirculation revenues are recognized, net of agency commissions,applicable discounts and estimated returns and allowances, whenpublications are issued.  List rental income is recognized, net ofcommission, when a list is sold or rented.

Subscriptionincome generated by both the private sector and the Military isrecognized based upon the monthly pro-ration of income within thereporting period for a given subscription.

Deferredsubscription income, net of agency commission, is recorded whensubscription orders are received.  The Company uses a fulfillmenthouse, which calculates the revenue to be recorded for all periods. Customers subscribe to the Company's magazine for periods rangingfrom one to three years.  Deferred subscription income representsthe portion of the prepaid subscription not earned by the Company andpaid for in advance of fulfillment by the Company to the customer. 

Revenuefrom the production of online educational seminars for both the privatesector and the Military is recorded at the time the seminar isconducted.

Book ordersare received over the internet, telephone, and via the mail; revenue isrecognized after the order has been fulfilled and shipped.

Specialproject revenue recognition occurs at the time of delivery of theproduct or service that constitutes the special project.  Specialprojects include such undertakings as custom communications as well asthe Company’s “Disability Awareness Night”(DANTM) program.

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**EP Global Communications, Inc. And Subsidiaries**

**Notes To Consolidated Financial Statements**

**March 31, 2008**

Cost of Sales

Cost ofsales consist of direct costs that are associated with the productionof income for a given business activity.  These costs includeprinting, design, circulation, fulfillment, salaries and benefitsdirectly associated with production, the cost of books, the cost oftickets associated with the DANTM program, and the costsassociated with online seminars.

Depreciation and Amortization

Propertyand equipment are stated at cost less accumulated depreciation andamortization.  Depreciation of property and equipment iscalculated on the straight-line method over the estimated useful livesof the respective assets, ranging from three to fifteen years.

Stock-Option Plan

In December2004, the FASB issued SFAS No. 123R, Share-Based Payment, whichestablishes standards for the accounting for transactions in which anentity exchanges its equity instruments for goods or services. A keyprovision of this statement is the requirement of a public entity tomeasure the cost of employee and non-employee services received inexchange for an award of equity instruments (including stock options)based on the grant-date fair value of the award. That cost will berecognized over the period during which an employee is required toprovide service in exchange for the award (i.e., the requisite serviceperiod or vesting period). This standard became effective on January 1,2006 for small business issuers. The Company adopted SFAS 123Rbeginning in the Company's first fiscal quarter of 2006.  

No compensatory options or warrants were granted during the quarters ended March 31, 2008 or 2007.  

Income Taxes

The Companyaccounts for income taxes using an asset and liability approach underwhich deferred income taxes are recognized by applying enacted taxrates applicable to future years to the differences between thefinancial statement carrying amounts and the tax bases of reportedassets and liabilities.  

Theprincipal items giving rise to deferred taxes are certain expenseswhich have been deducted for financial reporting purposes which are notcurrently deductible for income tax purposes and the future tax benefitof certain net operating loss carryforward.

  

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**EP Global Communications, Inc. And Subsidiaries**

**Notes To Consolidated Financial Statements**

**March 31, 2008**

Evaluation of Long-Lived Assets

The Companyreviews property and equipment for impairment whenever events orchanges in circumstances indicate the carrying value may not berecoverable in accordance with guidance in SFAS No. 144“Accounting for the Impairment or Disposal of Long-Lived Assets. ” If the carrying value of the long-lived asset exceeds thepresent value of the related estimated future cash flows, the assetwould be adjusted to its fair value and an impairment loss would becharged to operations in the period identified.

(Loss) Per Share** **

Basic(loss) per common share is computed by dividing net (loss) by theweighted average number of common shares outstanding during the year. Diluted (loss) per common share is computed by dividing net(loss) by the weighted average number of common shares and potentialcommon shares outstanding during the year.  The basic weightedaverage shares were used in calculating quarter ended March 31, 2008and 2007 diluted (loss) per share, as inclusion of the incrementalshares shown in this calculation would be antidilutive.  Potentialcommon shares used in computing diluted (loss) per share at March 31,2008 relate to common stock warrants convertible into 3,338,000 sharesof common stock and convertible preferred stock convertible into719,801 shares of common stock.  

Fair Value of Financial Instruments

Forfinancial instruments including cash, accounts payable and accruedexpenses and notes payable it was assumed that the carrying amountapproximated fair value because of the short maturities of suchinstruments.

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**EP Global Communications, Inc. And Subsidiaries**

**Notes To Consolidated Financial Statements**

**March 31, 2008**

New Financial Accounting Standards** **

In July2006, the FASB issued FASB Interpretation No. 48, “Accounting forUncertainty in Income Taxes, an interpretation of FASB Statement109” (“FIN 48”). FIN 48 requires that a positiontaken or expected to be taken in a tax return be recognized in thefinancial statements when it is more likely than not (i.e. a likelihoodof more than fifty percent) that the position would be sustained uponexamination by tax authorities. A recognized tax position is thenmeasured at the largest amount of benefit that is greater than fiftypercent likely of being realized upon ultimate settlement. Uponadoption, the cumulative effect of applying the recognition andmeasurement provisions of FIN 48, if any, shall be reflected as anadjustment to the opening balance of retained earnings. The effectivedate of this interpretation is for fiscal years beginning afterDecember 15, 2006.  FIN 48 did not have an impact on ourconsolidated financial statements.

InSeptember 2006, the FASB issued SFAS 158, "Employers’ Accountingfor Defined Benefit Pension and Other Postretirement Plans—anamendment of FASB Statements No. 87, 88, 106, and 132(R)."  ThisStatement requires an employer to recognize the overfunded orunderfunded status of a defined benefit postretirement plan (other thana multiemployer plan) as an asset or liability in its statement offinancial position and to recognize changes in that funded status inthe year in which the changes occur through comprehensive income of abusiness entity.  This pronouncement had no material effect on theCompany's financial position or results of operations.

InSeptember 2006, the SEC issued SAB No. 108 in order to eliminate thediversity of practice surrounding how public companies quantifyfinancial statement misstatements. In SAB No. 108, the SEC staffestablished an approach that requires quantification of financialstatement misstatements based on the effects of the misstatements oneach of the company’s financial statements and the relatedfinancial statement disclosures. SAB No. 108 is effective for fiscalyears ending after November 15, 2006. SAB No. 108 did not have animpact to our consolidated financial statements.

InSeptember 2006, the FASB issued SFAS No. 157, “Fair ValueMeasurement”. This statement defines fair value, establishes aframework for measuring fair value in generally accepted accountingprinciples, and expands disclosures about fair value measurements. Thisstatement applies under other accounting pronouncements that require orpermit fair value measurements. SFAS No. 157 is effective for fiscalyears beginning after November 15, 2007 and did not have an impact onour consolidated financial statements

In February2007, the FASB issued Statement No. 159, “The Fair Value Optionfor Financial Assets and Financial Liabilities – Including anamendment to FASB Statement No. 115”. This statement permitscompanies to choose to measure many financial instruments and otheritems at fair value. The objective is to improve financial reporting byproviding entities with the opportunity to mitigate volatility inreported earnings caused by measuring related assets and liabilitiesdifferently without having to apply complex hedge accountingprovisions. This Statement is expected to expand the use of fair valuemeasurement of accounting for financial instruments. The fair valueoption established by this statement permits all entities to measureeligible items at fair value at specified election dates. Thisstatement is effective as of the beginning of an entity’s firstfiscal year that begins after November 15, 2007. SFAS No. 159 did nothave an impact on our consolidated financial statements.

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**EP Global Communications, Inc. And Subsidiaries**

**Notes To Consolidated Financial Statements**

**March 31, 2008**

FASBInterpretation No. 39, “Offsetting of Amounts Related to CertainContracts” (“FIN 39”), specifies what conditions mustbe met for an entity to have the right to offset assets and liabilitiesin the balance sheet and clarifies when it is appropriate to offsetamounts recognized for forward interest rate swaps, currency swaps,options and other conditional or exchange contracts. FIN 39 alsopermits offsetting of fair value amounts recognized for multiplecontracts executed with the same counterparty under a master nettingarrangement. In April 2007, the FASB issued FASB Staff Position FIN No.39-1, “An Amendment of FIN 39, Offsetting of Amounts Related toCertain Contracts” (“FSP FIN 39-1”), which amendsportions of FIN 39 to make certain terms consistent with those used inSFAS No. 133. FSP FIN 39-1 also amends FIN 39 to allow for theoffsetting of fair value amounts for the right to reclaim collateralassets or liabilities arising from the same master netting arrangementas the derivative instruments. Adoption of FSP FIN 39-1 did not have amaterial impact on our consolidated financial position and results ofoperations.

In May2007, the FASB issued FASB Staff Position (“FSP”) FIN 48-1,"Definition of Settlement in FASB Interpretation No. 48" ("FSP FIN48-1"). FSP FIN 48-1 provides guidance on how to determine whether atax position is effectively settled for the purpose of recognizingpreviously unrecognized tax benefits. FSP FIN 48-1 is effectiveretroactively to January 1, 2007. The impact of this statement did nothave a material impact on the Company’s financial position orresults of operations.

In December2007, the FASB issued SFAS No. 160, “Noncontrolling Interests inConsolidated Financial Statements, an Amendment of ARB 51”(“SFAS No. 160”). SFAS No. 160 establishes accounting andreporting standards pertaining to ownership interests in subsidiariesheld by parties other than the parent, the amount of net incomeattributable to the parent and to the noncontrolling interest, changesin a parent’s ownership interest, and the valuation of anyretained noncontrolling equity investment when a subsidiary isdeconsolidated. SFAS No. 160 also establishes disclosure requirementsthat clearly identify and distinguish between the interests of theparent and the interests of the noncontrolling owners. SFAS No. 160 iseffective for fiscal years beginning on or after December 15, 2008.Management does not believe there will be a material impact from theadoption of SFAS No. 160 on our consolidated financial position andresults of operations.

In December 2007, the FASB issued SFAS No. 141(R), “BusinessCombinations” (“SFAS No. 141(R)”), which amends SFASNo. 141, and provides revised guidance for recognizing and measuringidentifiable assets and goodwill acquired, liabilities assumed, and anynoncontrolling interest in the acquiree. It also provides disclosurerequirements to enable users of the financial statements to evaluatethe nature and financial effects of the business combination. SFAS No.141(R) is effective for fiscal years beginning after December 15, 2008and is to be applied prospectively.  Management does not believethere will be a material impact from the adoption of SFAS No. 141(R) onour consolidated financial position and results of operations.In December 2007, the SEC issued Staff Accounting Bulletin ("SAB") No.110 "Share-Based Payment" ("SAB 110"). SAB 110 establishes thecontinued use of the simplified method for estimating the expected termof equity based compensation. The simplified method was intended to beeliminated for any equity based compensation arrangements granted afterDecember 31, 2007. SAB 110 is being published to help companies thatmay not have adequate exercise history to estimate expected terms forfuture grants. Management does not believe there will be a materialimpact from the adoption of SAB 110 on our consolidated financialposition and results of operations.

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**EP Global Communications, Inc. And Subsidiaries**

**Notes To Consolidated Financial Statements**

**March 31, 2008**

In March,2008, the FASB issued SFAS No. 161, “Disclosures about DerivativeInstruments and Hedging Activities – an amendment of FASBStatement No. 133.”  This Statement requires enhanceddisclosures about an entity’s derivative and hedging activitiesand is effective for financial statements issued for fiscal years andinterim periods beginning after November 15, 2008 and is not expectedto have any impact on our consolidated financial position and resultsof operations.

Basis of Presentation

Theaccompanying financial statements have been prepared assuming that theCompany will continue as a going concern. This basis of accountingcontemplates the recovery of the Company’s assets and thesettlement of its liabilities in the normal course of conductingbusiness.  

In thethree most recent years, the Company has obtained cash from variousdebt financings to fund existing operations.  From September 2005through January 2006, the Company used proceeds from a $3.0 millionloan to repay a substantial portion of its debt and to provide forcontinuing operations through the third quarter of calendar year 2006. In the third quarter of calendar 2006, the Company entered intoanother loan arrangement to provide proceeds of $2.0 million in theaggregate through November 2007.  (See Note 4.)

In thefourth quarter, 2006, the Company entered into an agreement with theUnited States Army for a U.S. Army Research Project entitled“Exceptional Family Training and Transitioning Program”,focusing on education and training in the developmental and specialhealth care needs arena.  The contract, which was worth over$800,000, was paid in installments and was effective from December 1,2006 through December 31, 2007. 

In thefourth quarter 2007, the Company entered into a continuation agreementwith the United States Army, to follow the same format as the previousyear’s contract.  The continuation contract, which is worth$799,005, will be paid in four installments and is effective fromNovember 26, 2007 through November 25, 2008.

The Company is continuing initiatives to produce significant increases in revenues and to enact cost reduction programs.

Reclassifications

Certainamounts reported for 2007 have been reclassified to conform to the 2008presentation.  Such reclassifications had no effect on reportedincome.

**2.  Property And Equipment**

Property and equipment at March 31, 2008 consisted of the following: 

Depreciation expense for the quarters ended March 31, 2008 and 2007 was $8,522 and $21,500 respectively.

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**EP Global Communications, Inc. And Subsidiaries**

**Notes To Consolidated Financial Statements**

**March 31, 2008**

**3.  Accrued Expenses**

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

**4.  Debt**

Long-Term Debt 

Long-term debt at March 31, 2008 consisted of the following:

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**EP Global Communications, Inc. And Subsidiaries**

**Notes To Consolidated Financial Statements**

**March 31, 2008**

The following are maturities of long-term debt:

OnSeptember 23, 2005, the Company completed financing agreements byexecuting a securities purchase agreement with the following entities:AJW Partners, LLC, AJW Offshore, Ltd., AJW Qualified Partners, LLC andNew Millenium Capital Partners II, LLC.

Under thesecurities purchase agreement, the Company will issue up to $3,720,000in callable secured convertible notes. The notes are convertible intoshares of our common stock. The conversion price is based on the lesserof $0.12 or the average of the lowest 3 intra-day trading prices duringthe 20 trading days immediately prior to the conversion date discountedby 40%. The timing of the conversion is at the option of the holder.The notes are secured by a grant of a general security interest in allof our assets both tangible and intangible. In addition, our ChiefExecutive Officer individually pledged 3,371,093 shares of common stock.

Inaddition, the Company is to issue 5,000,000 stock purchase warrantsconvertible into shares of our common stock on a one for one basis. The exercise price is $.15 and the term of the warrants is 5years.  As of December 31, 2005, 3,338,000 warrants had beenissued.  The remainder was issued in January, 2006.

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**EP Global Communications, Inc. And Subsidiaries**

**Notes To Consolidated Financial Statements**

**March 31, 2008**

A privateinvestment firm received a commission of $240,000 (8% of the aggregatenet proceeds of $3,000,000) for arranging for this financing.

ThroughDecember 31, 2005, the Company received net proceeds of $2,000,000under the terms of the securities purchase agreement.  The Companyalso received $1,000,000 on January 29, 2006 immediately following theeffectiveness of a registration statement filed by the Company with theSEC.  

The convertible debt instrument bears interest at 8% per annum and is due September 23, 2008.

Inaccordance with Emerging Issues Task Force Topic 00-27 and SFAS 150,“Accounting for Certain Financial Instruments withCharacteristics of both Liabilities and Equity”, the Companyperformed calculations allocating the proceeds from the issuance ofconvertible debt with detachable warrants and the beneficial conversionprivileges to each respective security at their fair values.  The Company referred to SFAS 133, “Accounting forDerivative Instruments and Hedging Activities,” and EITF 00-19,“Accounting for Derivative Financial Instruments Indexed to, andPotentially Settled in, a Company's Own Stock,” in determiningwhether the conversion option is an embedded derivative instrument. In the case of the detachable warrants and the beneficialconversion privileges, the Company concluded the fair value was nil;accordingly, the entire amount recorded as a liability was associatedwith the convertible debt. The calculated fair value of the convertibledebt of $3,339,299 was recorded as a liability as of March 31, 2008. The convertible debt will be accreted to its face value of $3.7million under the interest method until it is either converted ormatures. As of March 31, 2008, the accretion was $601,983 of which$66,183 was recorded in the first quarter of 2008, $257,684 wasrecorded in calendar year 2007 and $278,116 was recorded in prior years.

If theobligation had been settled on March 31, 2008, the Company would haveissued 27,827,493,316 shares of its common stock (with a fair value,based solely on the quoted market price per share as of March 31, 2008,of $5,565,499).  However, under the terms of the agreement, themaximum number of shares that could be required to be issued is206,666,666.

Providedthe Company is not in default under the financing documents, it has asufficient number of authorized shares of its common stock reserved forissuance upon full conversion of the promissory notes and its commonstock is trading at or below $.15 per share, the Company shall have theright, exercisable on not less than 10 trading days prior writtennotice to the holders of the promissory notes, to prepay all of theoutstanding promissory notes. If the Company exercises its right toprepay the promissory notes, it shall make payment to the holders of anamount in cash equal to either (i) 125% (for prepayments occurringwithin 30 days of the issue date of the promissory notes), (ii) 130%for prepayments occurring between 31 and 60 days of the issue date ofthe promissory notes, or (iii) 140% (for prepayments occurring afterthe 60th day following the issue date of the promissory notes,multiplied by the sum of the then outstanding principal amount of thepromissory notes plus default interest.

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**EP Global Communications, Inc. And Subsidiaries**

**Notes To Consolidated Financial Statements**

**March 31, 2008**

On August15, 2006, the Company completed a second financing agreement byexecuting a securities purchase agreement with the following entities:AJW Partners, LLC, AJW Offshore, Ltd., AJW Qualified Partners, LLC andNew Millenium Capital Partners II, LLC.

Under thesecond securities purchase agreement, the Company will issue up to$2,600,000 in callable secured convertible notes.  The notes areconvertible into shares of our common stock. The conversion price isbased on the lesser of $0.05 or the average of the lowest 3 intra-daytrading prices during the 20 trading days immediately prior to theconversion date discounted by 40%. The timing of the conversion is atthe option of the holder. The notes are secured by a grant of a generalsecurity interest in all of our assets both tangible and intangible. In addition, the Company issued 5,000,000 stock purchase warrantsconvertible into shares of our common stock on a one for one basis. The exercise price is $.01 per share and the term of the warrantsis seven years.

ThroughDecember 31, 2007, the Company received all of the $2,000,000 proceedsunder the terms of the securities purchase agreement. The funds werereceived in the amount of $500,000 upon signing the definitiveinvestment agreements and $100,000 monthly thereafter.

A private investment firm received 8% of the amount loaned as the funds were received.

The convertible debt instrument bears interest at 10% per annum and is due beginning in August, 2009.

Inaccordance with Emerging Issues Task Force Topic 00-27 and SFAS 150,“Accounting for Certain Financial Instruments withCharacteristics of both Liabilities and Equity”, the Companyperformed calculations allocating the proceeds from the issuance ofconvertible debt with detachable warrants and the beneficial conversionprivileges to each respective security at their fair values.  The Company referred to SFAS 133, “Accounting forDerivative Instruments and Hedging Activities,” and EITF 00-19,“Accounting for Derivative Financial Instruments Indexed to, andPotentially Settled in, a Company's Own Stock,” in determiningwhether the conversion option is an embedded derivative instrument. In the case of the detachable warrants and the beneficialconversion privileges, the Company concluded the fair value was nil;accordingly, the entire amount recorded as a liability was associatedwith the convertible debt. The calculated fair value of the convertibledebt of $2,251,857 was recorded as a liability as of March 31, 2008. The convertible debt will be accreted to its face value of $2.6million under the interest method until it is either converted ormatures.  As of March 31, 2008, the cumulative accretion was$251,857, of which $55,371 was recorded in the first quarter of 2008,$167,740 was recorded in calendar year 2007 and $28,746 was recorded incalendar year 2006.

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**EP Global Communications, Inc. And Subsidiaries**

**Notes To Consolidated Financial Statements**

**March 31, 2008**

If theobligation had been settled on March 31, 2008, under the formula forconversion, the Company would issue approximately 18,765,476,038 sharesof its common stock (with a fair value, based solely on the quotedmarket price per share as of March 31, 2008, of $3,753,095). However, under the terms of the agreement, the maximum number ofshares that could be required to be issued is 206,666,666, and themaximum number of shares of common stock that are authorized to beissued by the Company is 500,000,000.

Inconnection with the notes payable to AJW Partners, LLC, AJW Offshore,Ltd., AJW Qualified Partners, LLC and New Millenium Capital PartnersII, LLC, described above, the Company has deferred financing costs andfees, which are amortized over 36 months, as follows:

In thefirst quarter of 2008, the Company entered into discussion with the NIRGroup, LLC with the intent of restructuring all of the Company'soutstanding debt obligations to AJW Capital Partners, LLC, AJWOffshore, Ltd., AJW Qualified Partners, LLC and New Millenium CapitalPartners II, LLC.  The intended restructuring is to, among otherthings, extend the current maturity date of all principal amounts dueduring 2008 for an additional two years.  It is expected that theCompany and the NIR Group will formalize the restructuring through arevised financing agreement or an addendum to the current agreementwithin the next 60 days.

Short-Term Debt 

There was no short-term debt at March 31, 2008; at March 31, 2007 short-term debt was $12,760.

**5.  Related Party Transactions**

Amounts due to shareholders at March 31, 2008 consisted of the following: 

schedule continues next page

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**EP Global Communications, Inc. And Subsidiaries**

**Notes To Consolidated Financial Statements**

**March 31, 2008**

Thedeferred compensation amount due the Chief Executive Officer representsunpaid compensation due him based upon the normal annual compensationthat remains unpaid at the end of 2007. These balance is non-interestbearing.

Also, see Note 7 for information regarding common stock issued for services.

**6.  Income Taxes**

Theliability method, prescribed by SFAS No. 109, “Accounting forIncome Taxes”, is used by the Company in accounting for incometaxes.  Under this method, deferred tax assets and liabilities aredetermined based on differences between financial reporting and taxbasis of assets and liabilities and are measured using the enacted taxrates and laws that are expected to be in effect when the differencesare expected to reverse.  

ThroughMarch 31, 2008, the Company has recorded a deferred tax assetassociated with its net operating loss (“NOL”) carryforwardof approximately $2,276,259 that was fully offset by a valuationallowance due to the determination that it was more likely than notthat the Company would be unable to utilize these benefits in theforeseeable future.  The Company’s NOL carryforward expiresbeginning in 2010 through 2026.

There is noprovision for income taxes for the quarters ended March 31, 2008 and2007, as there was no taxable income in either year.

The typesof temporary differences between tax basis of assets and liabilitiesand their financial reporting amounts that give rise to the deferredtax liability and deferred tax asset and their approximate tax effectsare as follows:

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**EP Global Communications, Inc. And Subsidiaries**

**Notes To Consolidated Financial Statements**

**March 31, 2008**

Theprovision for income tax on earnings differs from the amount computedusing the federal statutory rate of 34% as a result of the following:

See Note 1regarding the Company's business combination pursuant to a shareacquisition agreement.  The business combination was a tax-freemerger pursuant to Internal Revenue Code Section 368. Accordingly, inconnection with this merger, the Company's ultimate recognition of itsNOL became subject to Internal Revenue Code Section 382.

The generaltax principle underlying Code Section 382 is that losses incurred by acorporation may be utilized by offsetting income it later generates, aslong as its separate existence and the identity of its majorshareholders are basically unchanged. However, significant limitationsto the use of the Company's NOL may apply if there is an ownershipchange.  The testing period is defined as the three-year periodending on the day of any shift involving a five-percent shareholder orthe equity structure.

While theCompany does not believe the ultimate realization of its NOLcarryforward will be impacted by the merger, it can give no assurancethat limitations that may exist under the prevailing, or future, CodeSection 382 will not apply.

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**EP Global Communications, Inc. And Subsidiaries**

**Notes To Consolidated Financial Statements**

**March 31, 2008**

**7.  Stock Issued for Services**

For thequarter ended March 31, 2008, the Company did not issue any of itscommon stock, except in connection with conversion if its debt; for thequarter ended March 31, 2007, the Company issued $15,866 for servicesrendered.

The Company accounts for the services using the fair market value of the services rendered.

**8.  Stockholders' Deficiency**

Common Stock

The Companyis authorized to issue 500,000,000 shares of $.0001 par value commonstock.  All the outstanding Common Stock is fully paid andnon-assessable.

Preferred Stock – Series A

The Companyis authorized to issue 5,000,000 shares of $ .01 par value PreferredStock – Series A.  All the outstanding Preferred Stock isfully paid and non-assessable. Each share of the Preferred Stock isconvertible, at the option of the holder at any time, into 190 sharesof the Company’s Common Stock.  The holders of Series Apreferred Stock have the following rights.

Dividends:

If anydividend is declared on the Company’s Common Stock in any fiscalyear, the holders of the Series A Preferred Stock first shall beentitled to receive a dividend of $200 per share in preference to thepayment of any dividends on the Company’s Common Stock.

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**EP Global Communications, Inc. And Subsidiaries**

**Notes To Consolidated Financial Statements**

**March 31, 2008**

Liquidation Preference:

In theevent of any liquidation or winding up of the Company, if the fundsavailable for liquidation are less than $4,000,000 the holders of theSeries A Preferred Stock shall be entitled to receive in full, prior toany other distribution made on the Company’s Common Stock, cashdividends in an amount of $25.00 per share (as adjusted for any stockdividends, combinations or splits with respect to such shares), on anequal basis with any distribution to be made to the holders of theSeries B Preferred Stock.

After thispreferred amount, if any, has been paid in full, any of theCompany’s remaining funds and assets legally available fordistribution to shareholders will be distributed on an as-convertedbasis to the holders of the shares of Series A and Series B PreferredStock and our Common Stock.  If the funds available fordistribution to stockholders on liquidation is greater than $4,000,000,then such funds will be distributed to the holders of the Series APreferred Stock and Series B Preferred Stock (on a pro rata basis basedon the number of shares of common stock into which all such shares ofpreferred stock are convertible) and the holders of the Company’sCommon Stock.

Redemption:

Upon thesale by the Company of its capital stock which results in 51% ofcapital stock being held by persons other than those who held itscapital stock on September 30, 1995 then the Company must offer toredeem the Series A Preferred Stock at a price equal to two times theconversion price of the Series A Preferred Stock (currently $25 pershare).  Notwithstanding the foregoing, if the Company does nothave sufficient funds to redeem the Series A Preferred Stock withoutcausing a material adverse effect on the Company’s ability tocarry out its business, only the funds that are available that will notcause such material adverse effect shall be used to redeem the Series APreferred Stock.  This redemption requirement will continue untilsuch time as all of the shares of Series A Preferred Stock have beenredeemed.

Conversion:

Each shareof Series A Preferred Stock is convertible into 190 shares of CommonStock (subject to adjustment) at any time at the option of the holder. The Preferred Stock automatically converts into theCompany’s Common Stock upon the consummation of a public offeringby the Company with aggregate proceeds or fair market value in excessof $4,000,000.  All rights incident to a share of Series APreferred Stock will terminate automatically upon any conversion ofsuch shares into Common Stock.  The conversion rate will besubject to appropriate adjustment upon any stock split, reverse stocksplit or stock dividend or similar transaction.

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**EP Global Communications, Inc. And Subsidiaries**

**Notes To Consolidated Financial Statements**

**March 31, 2008**

Anti-dilution Adjustments:

The SeriesA Preferred Stock provides for proportional adjustments to theconversion rate for stock splits, dividends, recapitalizations andsimilar transactions.

Voting Rights

Holders ofthe Series A Preferred Stock are entitled to vote on all matterssubmitted to the Company’s shareholders for a vote or consent. Each share of Series A Preferred Stock has voting rights equal tothe number of shares of Common Stock into which it converts (presently190 for 1).  Except when a separate class vote is required by law,the Series A Preferred Stock will vote with the Common Stock as asingle class.

Preferred Stock – Series B

The Companyis authorized to issue 5,000,000 shares of $1.00 par value cumulativePreferred Stock – Series B.  All the outstanding PreferredStock is fully paid and non-assessable. Each share of the PreferredStock is convertible, at the option of the holder at any time, into 277shares of the Company’s Common Stock.

Holders ofthe Series B Preferred Stock are entitled to 10% cumulative dividend ifdeclared by the Board of Directors. This class of stock holdsliquidation preferences and was redeemable in December 2005 for facevalue plus accrued dividends.

Dividends:

The holdersof the Series B Preferred Stock shall be entitled to cumulativedividends of 10% per share prior to the Company paying any dividends onthe Series A Preferred Stock or its Common Stock.

Liquidation Preference:

In theevent of any liquidation or winding up of the Company, if the fundsavailable for liquidation are less than $4,000,000 the holders of theSeries B Preferred Stock shall be entitled to receive in full, prior toany other distribution made on the Company’s Common Stock, cashdividends in an amount of $61.00 per share (as adjusted for any stockdividends, combinations or splits with respect to such shares), plusall accumulated and unpaid dividends, on an equal basis with anydistribution to be made to the holders of the Series A Preferred Stock.

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**EP Global Communications, Inc. And Subsidiaries**

**Notes To Consolidated Financial Statements**

**March 31, 2008**

After thispreferred amount has been paid in full, any of the Company’sremaining funds and assets legally available for distribution toshareholders will be distributed on an as-converted basis to theholders of the shares of Series A and Series B Preferred Stock and ourCommon Stock.

If thefunds available for distribution to stockholders on liquidation isgreater than $4,000,000, then such funds will be distributed to theholders of the Series A Preferred Stock and Series B Preferred Stock(on a pro rata basis based on the number of shares of common stock intowhich all such shares of preferred stock are convertible) and theholders of Company’s Common Stock on a pro rata basis.

Redemption:

Upon thesale by the Company of its capital stock which results in 51% ofcapital stock being held by persons other than those who held itscapital stock on September 30, 1995 then the Company must redeem theSeries B Preferred Stock at a price equal to two times the conversionprice of the Series B Preferred Stock (currently $61 per share). In addition, the Series B Preferred Stock was redeemable by theCompany in December 2005 for its issue price of $61 per share plusaccrued dividends.  Notwithstanding the foregoing, if the Companydoes not have sufficient funds to redeem the Series B Preferred Stockwithout causing a material adverse effect on the Company’sability to carry out its business, only the funds that are availablethat will not cause such material adverse effect shall be used toredeem the Series B Preferred Stock.  This redemption requirementwill continue until such time as all of the shares of Series BPreferred Stock have been redeemed.

Conversion:

Each shareof Series B Preferred Stock is convertible into 277 shares of CommonStock (subject to adjustment) at any time at the option of the holder. The Series B Preferred Stock automatically converts into theCompany’s Common Stock upon the consummation of a public offeringby the Company with aggregate proceeds or fair market value in excessof $4,000,000.  All rights incident to a share of Series BPreferred Stock will terminate automatically upon any conversion ofsuch shares into Common Stock.  The conversion rate will besubject to appropriate adjustment upon any stock split, reverse stocksplit or stock dividend or similar transaction.

Anti-dilution Adjustments:

The SeriesB Preferred Stock provides for proportional adjustments to theconversion rate for stock splits, dividends, recapitalizations andsimilar transactions.

Voting Rights:

Holders ofthe Series B Preferred Stock are entitled to vote on all matterssubmitted to the Company’s shareholders for a vote or consent. Each Share of Series B Preferred Stock has voting rights equal tothe number of shares of Common Stock into which it converts (presently277 for 1).  Except when a separate class vote is required by law,the Series B Preferred Stock will vote with the Common Stock as asingle class.

As a resultof the merger between East Coast Airlines and Psy-Ed Corporationcertain shareholders of record with preferred stock were notidentifiable and unknown.  The company presently believes that thepossibility of redemption of these shares is extremely remote andtherefore no accrual is deemed necessary.

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**EP Global Communications, Inc. And Subsidiaries**

**Notes To Consolidated Financial Statements**

**March 31, 2008**

On October1, 2007, we entered into an Investment Agreement (the “InvestmentAgreement”) with Dutchess Private Equities (the“Investor”). Pursuant to this Investment Agreement, theInvestor committed to purchase up to $10,000,000 of our common stockover the course of thirty-six (36) months. The amount that we shall beentitled to request from each purchase (“Puts”) shall beequal to, at our election, either (i) up to $250,000 or (ii) 200% ofthe average daily volume (U.S. market only) of the common stock for theten (10) trading days prior to the applicable Put Notice Date,multiplied by the average of the three (3) daily closing bid pricesimmediately preceding the Put Date. The Put Date shall be the date thatthe Investor receives a put notice of a draw down by us. The purchaseprice shall be set at ninety-three percent (93%) of the lowest closingBest Bid price of the Common Stock during the Pricing Period. ThePricing Period shall be the five (5) consecutive trading daysimmediately after the put notice date. There are put restrictionsapplied on days between the put date and the closing date with respectto that particular put. During this time, we shall not be entitled todeliver another put notice.

Inconnection with the Agreement, we entered into a Registration RightsAgreement with the Investor (the “Registration Agreement”).Pursuant to the Registration Agreement, we were obligated to file aregistration statement with the Securities and Exchange Commission(“SEC”) covering 80,016,826 shares of the common stockunderlying the Investment Agreement within 15 days after the closingdate. In addition, we were obligated to use all commercially reasonableefforts to have the registration statement declared effective by theSEC within 90 days after the closing date.  Such registrationstatement was filed and declared effective in a timely manner.

To date, we have not drawn any funds or paid anything on the Dutchess Line of Credit.

**9. Commitments and Contingencies**

Operating Leases

TheCompany has operating leases for temporary living space expiring in2008, for office space expiring in 2009, and for office equipmentexpiring in 2008.  Total operating lease expense amounted to$13,187 and $13,057 at March 31, 2008 and 2007, respectively. Subsequent operating lease payments are $40,461 in 2008 and$42,000 in 2009.

Legal Proceedings  

JosephBraumstein, Chapter 7 Trustee of The McCabe Group versus Joseph M.Valenzano, Jr. and Psy-Ed Corporation et al. Adversary proceeding No06-01351.  When The McCabe Group (TMG) ceased business operationsin October 2004, it entered into a Chapter 7 liquidation proceeding,under the terms of Title 11 of the U.S. Code (Bankruptcy).  TheChapter 7 Trustee of TMG, Joseph Braumstein in June 2006 brought alawsuit in the U.S. Bankruptcy Court alleging that the Company and itsPresident and CEO, jointly and severally, owed approximately $53,000for legal fees and expenses to TMG.  The Company and its CEO arevigorously defending this complaint.  The Company and Counselbelieves that further litigation should result in the ultimatedismissal of this Chapter 7 Trustee Claim.  The Company has madeall timely filings with the court and to date has heard nothing furtherwith regard to the position of the court.

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**EP Global Communications, Inc. And Subsidiaries**

**Notes To Consolidated Financial Statements**

**March 31, 2008**

Psy-EdCorporation, d/b/a Exceptional Parent, Plaintiff v. Stanley D. Kleinand Kimberly Schive, Superior Court in and for the County of Middlesex,in the Commonwealth of Massachusetts, Civil Action No. 99-6140;Counterclaims Brought by Klein Against Plaintiffs and Third-PartyDirectors (Kenneth Rossano, David Hirsch, MD, Robert Striano, Donald S.Chadwick, C. Kenneth Mehrling and Robert K. Hopkins, Jr.) ofExceptional Parent in Civ. No. 99-6140. This case was commenced onDecember 17, 1999. Psy- Ed is the plaintiff and counter-claimants inthis case. The Company and its president were previously successful indefending an action taken by Ms. Schive in 1996 for wrongfultermination. and successfully defended itself in three separate appealsmade by Ms. Schive alleging that the Company and its President and CEO“discriminated against people with disabilities, especiallypeople who were deaf” and that “the CEO orchestrated therelocation of the office from Brookline Massachusetts to New jersey forthe purpose of terminating her employment”.  At present,most of the claims by Kimberly Schive have been dismissed and are nolonger pending, either in any court proceeding or before the MCAD.Still pending are her claims for abuse of process and retaliation. Thecompany and its attorney’s feel that further litigation shouldresult in the ultimate dismissal of her claims

The employment ofStanley D. Klein, a former officer, director and shareholder of thecompany was terminated for cause in August of 1997. He filed acomplaint with the Massachusetts Commission Against Discrimination in2000 alleging that the Company, which had brought an action against himin December 1999 for misconduct, fraud and defamation causing damage tothe Company, had retaliated against him because of his support forKimberly Schive.

Mr. Klein filed anaction against the Company and Mr. Valenzano in the Superior Court forMiddlesex County, Massachusetts in December 2002 seeking payment ofunspecified damages. That lawsuit was dismissed in 2005. Mr. Klein thenfiled an action seeking precisely the same relief in a state court inNew Jersey which action was summarily dismissed by Superior Court inBergen County New Jersey. At the time of filing both of these actions,Mr. Klein was a defendant in an action brought by the Company againsthim in 1999.

During thenon-jury trial held in June of 2006, eight of Klein’s ten claimsagainst the Company were dismissed. The Company was found liable by thejudge with respect to abuse of process in the Schive case and tortuousinterference with respect to a promissory note. The balance on thatnote was approximately $124,000. The Company intends to rigorouslydefend against the decision and to date no decision with regard to anyaward of damages has been made, although a four and one half hourhearing on all positions regarding these matters was held on January 4,2008 with no decision being reached.  During that hearing,attorney’s for the Company presented oral arguments in support ofmotions for entry of judgment in favor of the Company, Mr. valenzanoand all former and present directors on all counts or, in thealternative, for a new trial.  Company counsel also opposed themotions of Stanley Klein and Kimberly Schive for entry of judgment intheir favor without the need for further proceedings concerning damagesor attorney’s fees.  The attorneys for Schive havespecifically sought an award of $426,661.31 for attorney’s feesand $125,000 in compensation for her alleged emotional distress. Attorney’s for Klein petitioned the court for an award of$124, 174.71 in principal on the portion of the Psy-Ed promissory Notethat remained unpaid (an amount that is incorrect and disputed) plusinterest from December 31, 1999 as well as $125,000 in emotionaldistress and $527,962.73 in attorney’s fees.  Companycounsel argued on behalf of the defendants that it would beprocedurally and substantively improper to award the plaintiffs theseamounts.  The matter is now under advisement by Judge SandraHamlin.  Counsel for the Company is unable to render an opinionconcerning how Judge Hamlin will resolve the motions for judgment infavor of the defendants and third-party defendants, nor, should some orall of those motions be denied, how the court will resolve the motionsfor judgment submitted by Klein and Schive.  It is theCompany’s position that it will prevail with respect to anyadverse findings although it is impossible to assert at this time thatthere is any certainty with respect to this position.

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**EP Global Communications, Inc. And Subsidiaries**

**Notes To Consolidated Financial Statements**

**March 31, 2008**

Heath & Associates and EP Global Communications, Inc.

American Arbitration Association Case No. 13 147 E 00538 08

The underlyingdemand for arbitration was filed by Heath & Associates(“Heath”) an independent sales contractor on or about March3, 2008.  Heath alleges sales commissions due from EP in theamount of $61,804 arising out of EP’s alleged breach of twoAdvertising Sales Representation Agreements (“Agreements”)between Heath and EP dated September 13, 2005 and October 1, 2006,respectively.  EP maintains that the Agreements were lawfully andproperly terminated for cause by EP.  EP further maintains thatthe demand from Heath is excessive, inaccurately and improperlycomputed and inappropriate.  In addition, while early discussionsinvolved an offer by the Company of a far lesser amount as asettlement, that offer was withdrawn once it became clear that Heathwas threatening arbitration.  Further, once the independent salesagreement was terminated for cause, The Company’s position isthat no commissions are due and owing.

EP has filed anAnswering Statement in the arbitration.  EP’s AnsweringStatement includes Counterclaims for defamation and tortuousinterference against Heath and its principal, James Heath, based on thefinancial damage and damage to the reputations of EP and itsprincipals, including but not limited to EP’s CEO, Joseph M.Valenzano, Jr., arising out of various false and slanderous statementsmade by Heath  EP maintains that such actions caused theresignation of one of EP’s most influential contributing writersin the assistive technology field and the loss of directly associatedadvertising revenue and was damaging to the strategic relationship withits on line interactive partner, Vemics, Inc. by virtue of slanderousand untrue comments made to Vemics, Inc employees and executives.

EP intends toaggressively present the facts and evidence it has, including witnesseswho directly heard Mr. Heath’s remarks and believes it willprevail in the arbitration proceeding and in its Counterclaims. 

Other than noted above, there is no litigation pending or threatened by or against us at March 31, 2008.

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**Item 2.  Management’s Discussion and Analysis or Plan of Operation**

In this section,“Management's Discussion and Analysis of Plan ofOperation,” references to “we,” “us,”“our,” and “ours” refer to EP GlobalCommunications, Inc. (EPGL), and its consolidated subsidiaries.

Operating Activity

EPGL continues its expansivegrowth, capitalizing upon its 37-year professional history, with newstreams of revenue and innovative projects under way that have thepotential for significantly and positively impacting, far into thefuture, the kind of proprietary information and support vital to peoplewith disabilities and special needs, and for the physicians, alliedhealthcare professionals, teachers, families, and other caregiversinvolved in their care and development. We believe that a key result ofthese initiatives will be the continued worldwide evolution of theawareness of the abilities and potential of people with disabilitiesand special needs. We anticipate that EP’s cutting-edgeeducational outreach programs and multiple forums for communication(e.g.: **EP***LiveOnline*TM; and Search & Respond in *EP* magazine and on the EPGL Web site *(*http://www.eparent.com))will continue to establish links among families and professionals toenhance knowledge bases regarding chronic disabilities and to providethe most up-to-date strategies for optimizing individual lives andwell-being.

Management intends to expandEPGL’s 37-year heritage of providing “Information ThatMatters from People Who Care” to the community of those withdisabilities and special needs. Our award-winning *EP* magazinerepresents the foundation and core of all that we do. Most of ourefforts and investment up to the beginning of 2008 have been directedto this purpose. Our focus is entirely in the arena of chroniclong-term conditions, not disease states. The significance of this isthat diseases for the most part can be cured with various medicalinterventions and surgery. Chronic life-long conditions are different.There are no cures for these and so the challenge is to improve uponthe quality of life and assist people with special needs to developinto the very best they can be and help make them contributing membersof our society. A corollary to this is to increase the awareness amongall Americans that we will become a stronger nation and a better peoplewhen we learn to regard those with specials needs as people to berespected, not problems to be confronted. That is both the spirit andphilosophy of our company.

Editorial

EPGL’s editorial team kicked off 2008 with the publication of its much-anticipated *2008 EP Annual Resource Guide*,the introduction of several new series, an additional new sub-theme forthe March issue, and with the conclusion of one of its most popularseries, wheelchair transportation, which began in 2007. EPGL alsowelcomed two new contributing editors to the editorial team.

**Monthly Editorial Themes and Feature Stories**

The first quarter of 2008 included several informative guides and themes:

·

January: 

*2008 EP Annual Resource Guide*

Bonus Assistive Technology Supplement

·

February: 

Diet and Nutrition

·

        March:

                Schools, Camps, and Residences

The Arts and Music

The month of January saw theunveiling of the Annual Resource Guide, a 192-page yearly premierreference tool and a compendium containing an exhaustive list ofnational and international resources for families, caregivers, andprofessionals seeking information about a plethora of organizations,professional societies, and resources on general and specificdisability-related topics. One of the items of particular significancethis year is the addition of a thirteen-page listing of Canadianorganizations. Highlighting EPGL’s global reach, the ResourceGuide’s cover featured a view of the earth from space and itscover story was an eight-page report on the Special OlympicsInternational Games recently held in Shanghai, China. The ResourceGuide also included a bonus 32-page supplement entitled, *The Consumer’s Guide to Assistive Technology*.

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This special insert included articles like, *Making Assistive Technology a Part of Your Child’s Education* and *How AT is Expanding Work-at-Home Opportunities for People with Disabilities*.It also featured highlights and registration information for AssistiveTechnology (AT) conferences occurring all over the United States in2008. Assistive technology, an ongoing subject of interest to *EP*readers, is covered in various feature articles throughout the year aswell as in two bonus supplements, the January supplement in theResource Guide, and another that will run in the September issue.EPGL’s editorial and sales teams communicate regularly about ATcontent slated for the magazine’s upcoming issues and ATcompanies that are advertising in the pages of *EP*. This two-way communication aids both teams, and ultimately *EP*’s readership, as companies highlighted in editorial content often also choose to advertise in *EP* and vice versa, companies that advertise in *EP* often have programs, products, and services that have excellent editorial angles and become stories in *EP*.The Resource Guide also featured a three-page feature at itsconclusion, a teaser of topics, series, and special features slated for*EP* in 2008.

February’s Diet and Nutrition issue included informative articles like *Snacking Smarts for the New Year* and *Medication-Nutrient Interactions and Individuals with Special Healthcare Needs*. February also featured the final installment of the popular and highly informative seven-part *Wheelchair Transportation Safety Series*. Two series continued in February: the *Medical Home Series* with an article on Special Education as it applies to the Medical Home and the *Feeding and Swallowing* series with information on pediatric gastroesophageal reflux (GER). February also saw the beginning of the *Aquatics Therapy and Recreation* series. The first installment of twelve was entitled, *Water – The Ideal Learning Environment*. Also particularly noteworthy in February were articles on sensory disorders and the monthly *Insight on Federal Policy*column, which introduced readers to the National InstructionalMaterials Accessibility Standard (NIMAS), a provision of theIndividuals with Disabilities Education Act 2004 (IDEA). NIMAS isdesigned to maximize access to the general education curriculum forchildren who are blind or have other print disabilities through thetimely provision of accessible instructional materials created fromNIMAS source files.

The month of March 2008 focusedon Schools, Camps, and Residences and a new theme, Music and the Arts,was added. Slippery Rock University and Friends’ Discover Campwere two of the programs highlighted. Attention was also given to a newdevelopmental learning center (DLC) for people with autism spectrumdisorders that recently opened in Warren, New Jersey. EPGL’sSenior Editor visited the DLC-Warren and describes the facility as“a public school program based on the principles of appliedbehavior analysis (ABA) ... designed to bring‘real-world’ experiences indoors, creating a communitywithin a self-contained, structured environment. This unique facilityfeatures a mock bank, grocery store, hardware store, etc., whereprogram participants can learn to function socially in true-to-lifesettings before testing their skills in the real world.” Underthe secondary theme of Music and the Arts in March were articles like *Tapping the Magic of Musical Theater for Exceptional Children* and *Shakespeare with Heart*. *EP*also reported on the first-ever Independence Starts Here PhiladelphiaDisability Arts Festival, a month-long initiative in the City ofBrotherly Love that highlighted the work of artists, musicians, andperformers with disabilities on a citywide basis. The Medical HomeSeries continued in March, as did the Aquatics Therapy and Recreationseries. Two new series were launched – the attention deficithyperactivity disorder (ADHD) series and the Spiritual and ReligiousSupports (SRS) series. The SRS series will run in three installmentsand is seen as quite groundbreaking. *EP* recognizes that faith,religion, and spirituality can be as important a consideration and asintegral a facet in the lives of exceptional families as healthcare,education, and the myriad of other topics that touch and involve *EP*readers. And yet, in the field at large, there has been something of ahands-off approach to the topic. Positive feedback is already coming inon this series, with one reader commenting, “Thank you so muchfor the article in the March 2008 issue of *EP* related tospiritual and religious supports. Somewhere along the way, the civilrights issues of people with developmental disabilities got ignoredagain – along with the right to religion as one wants to expressit and with the responsibility that goes with all of that. Most peopledo not want to talk about religion and spirituality much less how allof that relates to people with disabilities. We need to hear a greatdeal more, and I am hoping this is the first in a long line ofarticles. ...” Also, in March, *EP* began highlightingthe 2008 Disability Awareness NightTM (DANTM) schedule.Coverage on this dynamic EPGL program will be ongoing through theduration of 2008.

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***EP*’s Special Monthly Military Section**

During the first quarter of2008, EPGL’s EFTTP (Exceptional Family Transitional TrainingProgram) underwent some staff duty changes as EPGL continues to expand,evolve, and refine its staff support for the various military offeringsand efforts in which the company is involved. The former MilitaryManaging Editor is now serving as Chief Military Contracting andOperations Officer and the Eastern and Western Region Coordinators areworking directly with *EP*’s Managing Editor as Military Editors. These changes took effect in early March.

January’s 2008 AnnualResource Guide featured a significantly expanded military listingsection compared to 2007’s Resource Guide. The military resourcelistings totaled eleven pages and were divided into two categories:military listings and family organizations. The military listingsincluded: the Exceptional Family Member Program (EFMP) Managers of theUnited States Army; the Exceptional Family Member Coordinators of theU.S. Navy and the Marine Corps; and the Family Resource Specialists ofthe U.S. Coast Guard. This section also contained a comprehensivelisting of U.S. Department of Veterans Affairs hospitals and regionaloffices. The listing of Military Family Organizations containedorganizations that would be of special interest to military familieswho have a member with special needs.

The *Community of One...From our Families to Your Families*regular military section in the February issue contained some superbcontent. An article ran on the subject of Response to Intervention(RTI), currently a hot-button topic among parents, educators, and otheradvocates of people with disabilities. The article introduced thetheory and practice of RTI – i.e., how best to provide learningsupport to children before referral for special education. The articlewent on to summarize ten points for understanding the RTI model.February also featured an article on Project Devin, a program startedby Major Henry Pittman and his wife, Felecia, whose son, Devin, has arare mitochondrial disorder, epilepsy, and autism. Realizing thestruggles with which their family contends, they founded Project Devin,along with the help of Abilities Network, a local nonprofit in theirarea, to help other military families cope.

In March, the military sectionfeatured an innovative new program sponsored by the American EpilepsyFoundation called Operation Giveback, an educational campaign onpost-traumatic epilepsy in brain-injured soldiers. Additionally, anarticle on paraprofessionals in the classroom took a candid look at theusefulness and appropriateness of using these support staff forchildren with special needs. *EP* makes an ongoing effort tooffer support and help for exceptional families who are going through aPermanent Change of Station (PCS). This was evidenced by the article, *What You Need to Know When Your Family is Transferred During a Transition Phase in Your Child’s Care*.

In late March, one of *EP*’sMilitary Editors traveled to Lourdes, France, with the American SpecialChildren’s Pilgrimage Group (ASCPG), an organization based in NewJersey that takes children and young adults with disabilities toLourdes each year during Easter Week. One of the most striking aspectsof the pilgrimage was the development of many of the children and youngadults from uncertain and shy at the beginning of the journey to moreconfident, aware, and interactive throughout the week and bytravel’s end. An article detailing the trip will run in the Juneissue of *EP*.

Looking ahead to the comingmonths, the Editorial Team is pleased to begin a couple of new seriesin the military section. One multi-installment series, which will runevery other month beginning in May, will explore the incidence,diagnosis, and treatment of traumatic brain injury (TBI) as well asco-morbid conditions and federal legislation dealing with TBI,especially as it applies to servicemembers returning from Iraq andAfghanistan. The team is also forging new relationships andstrengthening existing ones with organizations like the Military ChildEducation Coalition (MCEC); the Veterans Health Administration (VA);Health Net Federal Services; and Specialized Training of MilitaryParents (STOMP), working to set up deadline dates and determine articletopics for submissions from these groups which are interested inserving as editorial content contributors through the remainder of 2008and into the next calendar year.

During the second quarter, ourMilitary Editors will be traveling to Washington, D.C. to followseveral story leads for articles which will appear through theremainder of 2008. In July, the Editorial Team will be participating inthe annual MCEC conference.

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**New Editorial Staff Members**

EPGL made additions****toits Editorial Department with two new Contributing Editors. One of thenew contributing editors is an award-winning writer whose work hasappeared in *Smithsonian, The New York Times, Parade, US Airways magazine*and many other publications. She is the author of *Able!**How One Company’s Disabled Workforce Became the Key to Extraordinary Success*(BenBellaBooks), which will be reissued this summer with endorsements from topbusiness executives and disability advocates. A member of The AuthorsGuild and the prestigious American Society of Journalists and Authors,she often writes about disability issues and people who are making adifference through their work. She will be filling several roles forEPGL, including that of book reviewer, producing *EP*’s monthly *Further Reading* column. Additionally, she will produce several feature stories as well as *EP*’s annual Toy and Gift Guide, which appears in the October issue of *EP* magazine. To read more about her, visit her Web site at http://www.nancyhendersonwurst.com. EPGL’s second new Contributing Editor is a young woman with quadriplegia. She joined *EP*’s editorial ranks as author of a quarterly column, *My Expressed Perspective*,that will offer insight and information into the challenges andstruggles, and the triumphs and goals that are all part of living witha disability. She is also contributing to *EP* as the author of the monthly column, *Organizational Spotlight*, and is now a regular blogger on the EPGL Web site (http://www.eparent.com). She is an inspirational speaker and recently completed her first memoir, *Life at Breakneck Speed*.  To read more about her and her nonprofit foundation, check out her Web site at http://www.spinaltimes.org.

**Seven Wonders of the Disabilities World Project**

EPGL’s Seven Wonders ofthe Disabilities World Project is moving ahead on schedule. Letterswent out to over seventy-five leaders in the disabilities field inmid-February, asking for nominees for the Seven Wonders of theDisabilities World, including events, people, groups or organizations,inventions, governmental legislation or programs or a combination ofthese that have shaped, defined, and/or advanced progress in the worldof disabilities. When all nominations have been received, the list willbe narrowed to 20 and these 20 will appear in ballot form in *EP*magazine and on the EPGL Web site. The ballot will ask readers and Website visitors to vote for what they feel are the top seven. These SevenWonders will then be highlighted in the magazine and on the Web sitethrough the remainder of 2008.

**EPGL Web Site  **

EPGL continues to expand its content-rich Web site (http://www.eparent.com).The site includes expanded features, such as its Blogs Channel, now upto five regularly contributing bloggers. The writers include a personwith disabilities, parent bloggers who share their experiences and theunique challenges of parenting a child with special needs as well astwo teachers. Parents, educators, healthcare professionals, and anyother person reading these blogs will come away with insight, empathy,gratefulness for progress in things both big and small, heartbreak attimes, heartfelt humor at others, and heartwarming, uplifting faith inthe ability of people to persevere in the face of mountainouschallenges. Medical thought and opinion leaders in virtually everydiscipline and therapeutic area as well as nurses, therapists, andother allied healthcare professionals will be added as blogcontributors in the coming months.

The EPGL site has 11 MainChannels, including: Education, Family and Community, FinancialPlanning, Healthcare, Investor Relations, Legal, Military, Mobility,Professional, Sports and Recreation, and Technology. These channelsfeature first-time-published editorial articles, with new content beingadded on a regular basis. Continuing its coordinated commitment toUnited States Military families, the site’s Military Channelincludes information especially pertinent to the thousands of militaryfamilies who are caring for a member with disabilities, includingSoldiers, Sailors, Airmen, and Marines who have children withdisabilities as well as Wounded Warriors returning home with specialneeds from Iraq, Afghanistan, and other locations where the U.S. has amilitary commitment.

Our popular Search and Respondfeature provides an opportunity for Web site visitors to exchangeinformation about their practical experiences in meeting the everydaychallenges of life with a child, adolescent, or adult who has adisability. All response entries are forwarded to the writers of theoriginal searches. Some are published in the print magazine and arefeatured on the Web site.

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The Organization Links Channelhighlights various organizations, agencies, and professional groupsfrom across the United States. that are serving the needs of peoplewith disabilities. The National Disability News and InternationalDisability News links round out the offerings on the site, and Internetusers are encouraged to visit often. The EPGL Web site is also linkeddirectly to **EP***LiveOnline*TM, EPGL’sstate-of-the-art, live, online, interactive, TV-quality StrategicMarketing Alliance with Vemics, Inc., which offers Category IContinuing Medical Education (CME) accredited programs to physicians.

Web site visitors also haveeasy access to the over 2,500 disability-related titles in EPBookstore, including books, videos, and DVDs available for purchase.

EPGL-Vemics, Inc. Strategic Marketing Alliance 

The Strategic MarketingAlliance between EPGL and Vemics (Visually Enhanced MultiPointInteractive Communications System) is barely two years old, having beensigned in late November 2005 for an initial two-year commitment on thepart of both companies. Work on the alliance, known as **EP***LiveOnline*(EPLO) did not commence until the first quarter of 2006 with the launchof four online interactive programs sponsored by Allergan, Inc. ofIrvine, California. The content of the four programs focused entirelyon spasticity associated with cerebral palsy. In October 2007, bothEPGL and Vemics mutually agreed to extend the agreement upon itsexpiration for three years, with an expiration date of December 31,2010.

One of the initial elements ofthe Strategic Marketing Alliance provided for EPGL to have a worldwideexclusive license to market and sell the Vemics LiveAccess Proprietarysystem in the medical and disabilities/special needs arena. EPGL hascollaborated with Vemics to co-promote and market online interactiveseminars in the disability and special needs arena, funded underunrestricted educational grants and/or marketing agreements frompharmaceutical and medical equipment device companies or from ourCooperative Agreement, entitled the Exceptional Family TransitionalTraining Program (EFTTP), with the United States. Army. We have foundthis approach to be very successful, largely because there is nocompetition for our services and because it was a logical way to extendand leverage EPGL’s very significant contacts in the specialneeds arena.

Thus far, over the past twoyears, we have developed, produced and implemented nineteen onlineinteractive seminars. The differentiating characteristics of **EP***LiveOnline*versus other systems used today are as follows:

1.

EPLOoffers live, interactive, real-time, TV-quality programs delivered withsynchronized voice over video and a full suite of educationalcapabilities designed to replicate anything that can be done in a liveclassroom setting to an audience who has downloaded the *Vemics LiveAccess* software and has an appropriate video camera and microphone installed.

2.

At the same time, any online interactive seminar is also offered to an infinite number of people via streaming

 video. Participation via this mode is also live and in real time except that there is no interactive capability ...

 but the participant can take advantage of every other feature and can communicate via text chat.

3.

Finally, all content of every seminar is digitized and stored electronically so that it can be accessed 

by anyone, usually for a period of ninety days following the end of a seminar.

4.

Clinical and medical seminars offer Category I Continuing Medical Education (CME) credits for physicians,

 usually through an accredited teaching hospital or university such as the University of Tennessee College

 of Medicine; The University of Pittsburgh School of Medicine; University of Medicine and Dentistry of

 New Jersey; or Rady Children’s Hospital San Diego.

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5.

Allclinical and medical programs are endorsed by a professional medicalsociety such as the Child Neurology Society (CNS) and the AmericanAcademy of Developmental Medicine and Dentistry (AADMD).

6.

Bothconsumers as well as physicians are encouraged to attend. Registrationand attendance is not restricted to physicians only for accreditedprograms. This approach is markedly different from traditionalapproaches, and reinforces and validates our belief system thatempowering parents and caregivers through quality education enhancesoverall care and positive outcomes.

7.

Accessto the online programs for consumers and professionals alike, includingphysicians, nurses, occupational and physical therapists, teachers,families and caregivers is completely free. Funding of all costs andprofit comes from the sale of sponsorship arrangements.

All revenues earned from thesale of sponsored programs to various pharmaceutical companies likeAllergan, Inc., Shire Pharmaceuticals, and Valeant Pharmaceuticals isrecorded in “Online Revenues.” 

Proceeds from the sale of sponsorships are recorded as earned revenues at the time the seminar is delivered.

Costs of any kits containingvideo cameras, microphones, etc., and initial training over the freesoftware downloads are recorded in costs of goods sold.

Operating costs such asadvertising and promotion, e-mail blasts to EPGL and Vemics databases,honoraria for faculty, streaming video costs (which are direct billedfrom an outside third party, Chorus Call, Inc.) and other marketingexpenses are all recovered out of the proceeds of the sponsorshipreceived. Sponsorship revenues flow through EPGL and are identified asEPLO related, along with any costs and expenses, including shipping,postage, etc.

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**EP*****LiveOnline*TM

EPGL and its Strategic Alliance partner in **EP***LiveOnline*,Vemics, Inc., have several major projects under way, including programsinvolving: The Diabetes Education Group, Shire Pharmaceuticals, andAllergan, Inc.

Special Projects

Disability Awareness NightTM (DANTM)

We continueto refine our Disability Awareness Night campaign by regularlyre-examining our mission statement. This mission statement guides ourevery action as we continue to expand our program into other sportsvenues.

DAN Mission Statement: *Themission of Disability Awareness Night is to recognize the 54.6 millionpeople in the United States classified as having some form ofdisability, and highlight their extraordinary persistence, dedication,passion, and commitment as well as their abilities to accomplish theirgoals and achieve their hopes and dreams in the face of adversity. DANalso strives to recognize the many people who care for and supportpeople with disabilities and special needs and who recognize them ascontributing, valued citizens of our nation. They are sources ofinspiration and motivation for us all.*

TheDisability Awareness Night campaign has grown substantially since itslaunch in 2002. In 2002, we started with two teams, the New YorkYankees and the Boston Red Sox, who embraced the idea that publicawareness about disabilities was important. In 2003, participationexpanded to fourteen teams. In 2004, we grew to twenty-seven teams, andin 2005, we held DAN events in thirty-one stadiums, including the Hallof Fame Game at Doubleday Field, in Cooperstown, New York. The Hall ofFame Game was the first Military Night of Distinction, where Soldiers,Sailors, Airmen, and Marines with disabling conditions as a result ofthe conflicts in Iraq and Afghanistan were honored. In 2005 and 2006,we benefited from the participation of our lead sponsor MassachusettsMutual Life Insurance Company (MassMutual), whose Special*Care*program has made significant contributions to the field of disabilitiesand whose financial commitment to the DAN program has been substantial.We also benefited from additional sponsorship provided by otherinternational corporations such as Genzyme, Shire Pharmaceuticals, CVS,and Volvo. In 2007, we secured the contractual participation of ournational sponsor, Massachusetts Mutual Life Insurance Company, andthree regional sponsors. In addition, we contracted for and receivedsponsorship for a DAN event prior to a National Association for StockCar Auto Racing (NASCAR) Nextel Cup Racing event at the New HampshireInternational Speedway (NHIS), where we held our annual Military Nightof Distinction. In 2007, as in 2006, we held nearly forty DAN events.

In 2008, EPhas been able to enlist a number of sponsors, both old and new, for DANevents. MassMutual has signed on again as our national sponsor,committing to thirty-five to forty DAN events. CVS has once againsigned on for five events across the country, with General MotorsCorporation, Erie Brewing Company, and Ride Away Corporation agreeingto be sponsors as well. Potential upcoming sponsors include Shire,Verizon, and FlagHouse as well as others.

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The working schedule of DAN events follows. Any additional games will be added when scheduled.
|                                      |
|--------------------------------------|
| **Upcoming DAN Events – 2008** |
|                               |                           |                |       |         |                            |
|-------------------------------|---------------------------|----------------|-------|---------|----------------------------|
| Date                          | Team                      | City           | State | Time    | Venue                      |
| Saturday, May 31, 2008        | Fort Worth Cats           | Ft. Worth      | TX    | 7:05 PM | LaGrave Field              |
| Tuesday, June 03, 2008        | Philadelphia Phillies     | Philadelphia   | PA    | 7:05 PM | Citizens Bank Park         |
| Friday, June 06, 2008         | Nashville Sounds          | Nashville      | TN    | 7:00 PM | Greer Stadium              |
| Saturday, June 07, 2008       | Boston Red Sox            | Boston         | MA    | 3:55 PM | Fenway Park                |
| Saturday, June 07, 2008       | Potomac Nationals         | Woodbridge     | VA    | 6:35 PM | Pfitzner Stadium           |
| Thursday, June 19, 2008       | New Hampshire Fisher Cats | Manchester     | NH    | 7:05 PM | Merchantsauto.com Stadium  |
| Thursday, June 19, 2008       | Midland RockHounds        | Midland        | TX    | 7:00 PM | Citibank Ballpark          |
| Friday, June 20, 2008         | Chattanooga Lookouts      | Chattanooga    | TN    | 7:15 PM | AT&T Field             |
| Wednesday, June 25, 2008      | New York Mets             | Flushing       | NY    | 7:10 PM | Shea Stadium               |
| Thursday, June 26, 2008       | Syracuse Sky Chiefs       | Syracuse       | NY    | 7:00 PM | Alliance Bank Stadium      |
| Friday, June 27, 2008         | Sarasota Reds             | Sarasota       | FL    | 7:00 PM | Ed Smith Stadium           |
| Saturday, June 28, 2008       | Rochester Red Wings       | Rochester      | NY    | 7:05 PM | Frontier Field             |
| Saturday, June 28, 2008       | Wilmington Blue Rocks     | Wilmington     | DE    | 6:05 PM | Frawley Stadium            |
| Wednesday, July 09, 2008      | Trenton Thunder           | Trenton        | NJ    | 7:05 PM | Waterfront Park            |
| Wednesday, July 09, 2008      | Salt Lake Bees            | Salt Lake City | UT    | 7:05 PM | Franklin Covey Field       |
| Friday, July 11, 2008         | Fort Wayne Wizards        | Fort Wayne     | IN    | 7:00 PM | Memorial Stadium           |
| Friday, July 11, 2008         | Charlotte Knights         | Fort Mill      | SC    | 7:15 PM | Knights Stadium            |
| Saturday, July 12, 2008       | Lake County Captains      | Eastlake       | OH    | 7:05 PM | Classic Park               |
| Thursday, July 17, 2008       | Peoria Chiefs             | Peoria         | IL    | 7:00 PM | O’Brien Field        |
| Sunday, July 20, 2008         | Cincinnati Reds           | Cincinnati     | OH    | 1:15 PM | Great American Ball Park   |
| Saturday, July 26, 2008       | Orange County Flyers      | Fullerton      | CA    | 5:05 PM | Goodwin Field              |
| Sunday, July 27, 2008         | Erie SeaWolves            | Erie           | PA    | 1:05 PM | Jerry Uht Park             |
| Wednesday, July 30, 2008      | Los Angeles Dodgers       | Los Angeles    | CA    | 7:10 PM | Dodger Stadium             |
| Thursday, July 31, 2008       | New York Yankees          | Bronx          | NY    | 7:05 PM | Yankee Stadium             |
| Thursday, July 31, 2008       | Kansas City T-Bones       | Kansas City    | KS    | 7:05 PM | Community America Ballpark |
| Saturday, August 02, 2008     | Frederick Keys            | Frederick      | MD    | 6:00 PM | Harry Grove Stadium        |
| Thursday, August 07, 2008     | Charleston RiverDogs      | Charleston     | SC    | 7:05 PM | Joseph P. Riley, Jr. Park  |
| Friday, August 15, 2008       | Detroit Tigers            | Detroit        | MI    | 7:05 PM | Comerica Park              |
| Sunday, August 17, 2008       | Buffalo Bisons            | Buffalo        | NY    | 1:05 PM | Dunn Tire Park             |
| Tuesday, August 19, 2008      | Greensboro Grasshoppers   | Greensboro     | NC    | 7:00 PM | NewBridge Bank Park        |
| Thursday, August 21, 2008     | Albuquerque Isotopes      | Albuquerque    | NM    | 6:35 PM | Isotopes Park              |
| Friday, August 22, 2008       | Jupiter Hammerheads       | Jupiter        | FL    | 7:05 PM | Roger Dean Stadium         |
| Thursday, August 28, 2008     | Indianapolis Indians      | Indianapolis   | IN    | 7:15 PM | Victory Field              |
| Wednesday, September 17, 2008 | Pittsburgh Pirates        | Pittsburgh     | PA    | 7:05 PM | PNC Park                   |

A universalreporting system has been created and will be distributed to EPGL staffprior to the first DAN event. This system includes a uniform AfterAction Report and helpful checklists to follow while attending a DANevent. Our public address script and press releases are currently beingrevised to assure the best possible presentation to convey our messageand mission. During the first quarter of 2008, EPGL brought anadditional person on staff to help garner media exposure for DAN eventsacross the country.

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During thesecond quarter, EPGL will continue to schedule DAN Major League andMinor League Baseball events, procuring additional sponsors, andexploring other sport arenas to enter. We are continuing discussionsregarding a relationship with National Collegiate Athletic Association(NCAA) Basketball and perhaps several National Basketball Association(NBA) franchises. We are also in discussion about bringing our annualDAN Military Night of Distinction event to the Army-Navy football game.We have established positive communication with both the United StatesMilitary Academy at West Point and the United States Naval Academy, andhope to see this come to fruition this year. We believe that 2008potentially stands to be the biggest year in DAN history.

Educational Online Programming

Beginningin December 2005 and through 2006, we launched over twelve live,online, interactive, TV-quality educational programs under unrestrictededucational grants from major pharmaceutical companies and othersources. In 2007, we contracted to implement a minimum of six programson spasticity management plus several others dealing with topics suchas Epilepsy, Hyperbaric Oxygen Therapy, Attention DeficitDisorder/Attention Deficit Hyperactivity Disorder (ADD/ADHD), AutismSpectrum Disorders, Respite Care, Asthma, and Expanded NewbornScreening utilizing Tandem Mass Spectronomy (MS/MS).   

In 2008,online seminars on Autism and Asperger’s  Syndrome, SeizureReadiness Plans, and Treatment Options for the Developmentally DelayedPatient with Epilepsy have already been scheduled for the secondquarter of 2008. Additional 2008 programs will be announced later inthe year.

United States Military: Exceptional Family Transitional Training Program (EFTTP)

In late2006, EPGL executed a U.S. Army Cooperative Agreement, entitled theExceptional Family Transitional Training Program (EFTTP). In 2007, wereceived approval for Army fiscal year 2007 continuation funding tocontinue this program. In December, 2007 we received the firstinstallment of $199,751, in February, 2008 we received the secondinstallment, and the remaining $399,500 will be received throughout2008. These funds continue to be used to provide education andinformational programs for military families caring for loved ones withdisabilities and special needs around the world as well as forphysicians and allied healthcare professionals such as nurses,occupational therapists, physical therapists, speech therapists,rehabilitation specialists, and others providing care. We continue todeliver Category I Continuing Medical Education (CME) credits to ArmyMedical Corps physicians, increasing accessibility to continuingmedical education for physician servicemembers, including those who aretransitioned or deployed.

EPGLcontinues to build on its strength and growth by diversifying itsworkforce in the EFTTP. During the first quarter, the Military ManagingEditor became the Chief Military Contracting and Operations Officer,and the Eastern and Western Region Coordinators were aligned asMilitary Editors within EPGL’s editorial department. These moveshave greatly enhanced the opportunity for EPGL to expand itscontracting, operations, and services efforts for the United StatesArmy and to seek other funding streams through all branches of themilitary as well as from state and local agencies,in addition to expanding its editorial coverage of issues vital tomilitary servicemembers and their families and to military healthcarepersonnel and leadership.

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The status of deliverables for the EFTTP fiscal year 2007 continuation funding follows:

·

EPGL continues to deliver its award-winning *EP*magazine to sixty-two Army installations worldwide. EPGL’s planis for worldwide delivery of the magazine to every Army installationthat identifies a need for the magazine

·

EPGL customized and produced 20,000 of its Pocket Resource Guides for the Army.

·

EPGL delivered over $1,200 worth of books from EP Bookstore to thirteen Army installations.

·

To expandoutreach and collaboration with other companies, EPGL subcontracted thedelivery of four Exceptional Family Member Program (EFMP) InteractiveMultimedia Training Modules to Camber Corporation of Huntersville,Alabama.

·

The EFMPInteractive Multimedia Training Modules program management plan wasdeveloped and EPGL is proud to announce the work order is movingforward on time. The following is a list of the four EFMP InteractiveMultimedia Training Modules:

1.

EFMP Overview

2.

                        EFMP Overseas

3.

                      EFMP Respite Care

4.

                        EFMP Advocacy

·

EPGLis collaborating with Defense Web Technologies, Inc. to deliver anonline directory for respite care centers in the continental UnitedStates (CONUS) early in the second quarter.   

The expanded delivery of *EP*magazine to sixty-two Army installations worldwide has providedincreased awareness of the over 2,500 books and other availableresources at EP Bookstore, offering an increased opportunity for salesand the ability of Army installations to stock onsite libraries andreference centers with materials for the families and staff they serve.

Inrecognition of the tremendous contributions that veterans in allbranches, reserve units, and corps of the U.S. Military have made, EPselected a special military cover for its April 2008 issue, whichhighlights the challenges and needs that military families with amember with special needs face.

**Military Initiatives**

EPGL is engaged in initiativesto expand our outreach to military servicemembers with special needsand to those who provide their healthcare. Listed below are the keyrelationships we now have or are pursuing toward this end:

·

Partneringwith Camber Corporation, our subcontractor in providing four EFMPInteractive Multimedia Training Modules, has provided support foracquisitions within the federal government. Camber Corporation is anemployee-owned company, founded in 1990. With over twenty offices,Camber provides daily interface on technical, programmatic, andoperations issues, offering “best value” management anddecision support; technical services; and products to governmentagencies, related industries, and clients.

·

Diversifyingthe Military Managing Editor’s position to the Chief MilitaryContracting and Operations Officer has leveraged the potential toincrease EPGL’s revenue. The Chief Military Contracting andOperations Officer is actively pursuing funding streams through theGovernment Services Administration (GSA), GSA Advantage, Multiple AwardSchedules (MAS) Program, Double O Corporation, and state and localgovernment programs. Contact with personnel within the U.S. Departmentof Veterans Affairs’ (VA) Business Development Office is key inlinking EPGL to these programs.

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·

Januarymarked the second consecutive year EPGL participated in the MilitaryHealth System (MHS) Annual Conference, the largest conference of themilitary healthcare system in the continental United States (CONUS).This year’s conference illustrated the MHS’s role in globalhealthcare delivery. Approximately 4,000 servicemembers and federalcivil servants representing top military leadership from all branchesof the United States Military worldwide attended this four-dayconference held in Washington, D.C. In addition, there were over 150vendors representing both military and civilian companies conductingbusiness with the military, including EPGL. This presented EPGL with aprime opportunity to develop and build relationships with vendors forfuture contracts. The following is a partial listing of the vendorswith whom EPGL had an opportunity to discuss our products and services:

·

Armed Forces Institute of Pathology

·

Army-Baylor Graduate Program in Health & Business Administration

·

Bristol-Myers Squibb Company

·

Defense Web Technologies, Inc.

·

Dell, Inc.

·

Delta Dental Plans Association

·

United States Department of Veterans Affairs, Business Development Office

·

General Dynamics Corporation

·

GlaxoSmithKline, Inc.

·

Health Net Federal Services

·

United States Medical Command (MEDCOM) Marketing Headquarters (HQ)

·

Humana Healthcare Services, Inc.

·

IBM Corporation

·

Lockheed Martin Corporation

·

Microsoft Corporation

·

Military Medical Technology

·

Northrop Grumman Corporation 

·

Wecontinue to expand our offerings through the Military Channel on theEPGL Web site (http://www.eparent.com/main_channels_military/index.asp)to help keep military families with special needs informed about theiravailable resources and options. And, of course, this feature opens upopportunities for sponsorship from companies and defense contractorswho have a vested interest in the arena of services and products thatEPGL offers.

·

Recognizingthe need for expanded awareness, care, and support for our servicemenand servicewomen returning from Iraq, Afghanistan, and other points ofconflict with often severe, life-changing injuries, EPGL is indiscussions to aid wounded warriors in the Army and Marine Corps, viapursuit of a separate funding stream.

·

EPGLis working with its contacts in the medical and scientific communitiesto develop programs that will support and enhance the efforts of theU.S. Military as it strives to address the unique needs of severelyinjured warriors, with physical and/or emotional healthcare needs. EPGLhas expanded its efforts in the areas of traumatic brain injury (TBI),post-traumatic stress disorder (PTSD), anxiety, depression, stress, andstress management, and is accessing its resources to provideinformation regarding the latest assistive technology devices andequipment to assist with limb loss and impaired physical function.

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Trade Shows

As aworldwide multimedia company, EPGL believes that having a companypresence at key trade shows and conferences around the nationrepresents an excellent opportunity to accomplish several marketingobjectives:

1.

Acost-effective way to meet our existing advertisers, to share ideas andexperiences with them, and to let them know of developments and newofferings from our company

2.

Acost-effective way to meet and establish working relationships with newadvertisers and potential clients who might not otherwise be aware ofthe varied products and services offered by EPGL

3.

A proven methodology for reaching out to readers of *EP* magazine, solidifying our reputation with them, and engaging them to help spread the word about *EP* and our mission, goals, and objectives.

EPGL hasfound over the years that trade shows and conferences are an excellentway to identify with speakers and presenters who, in turn, can beinvited to provide *EP* editorial contributions and become faculty members for our online, interactive educational seminars.

EPGL has also been successful in swapping advertising space in *EP*magazine in exchange for prime booth space and other valuableconsideration, thus minimizing drains on cash while maximizing exposureto the market we serve.

During the first quarter 2008, EPGL had a presence at the following trade shows and conferences:

·

Military Health System (MHS)/TRICARE Annual Conference

·

Assistive Technology Industry Association (ATIA) Annual Conference

·

Resources for Children with Special Needs, Inc.’s Special Camp Fair

·

Autism Today Conference

·

Toy Industry Association, Inc.’s Toy Fair

·

National Mobility Equipment Dealers Association (NMEDA) Annual Conference

·

Marine Corps Installation West and Naval Hospital Camp Pendleton Autism Conference

·

TAPPestry Annual Conference

·

Statewide Parent Advocacy Network (SPAN) Annual Conference

·

Women’s Showcase Annual Conference

·

California State University Northridge (CSUN) Annual International Conference on Technology and Persons with Disabilities

·

Abilities Expo

·

Council for Exceptional Children (CEC) Annual Convention & Expo

·

American Occupational Therapy Association (AOTA) Annual Conference & Expo

·

American Network of Community Options and Resources (ANCOR) Conference

By the endof the first quarter, EPGL had attended fifteen trade shows andconferences, marketing EPGL and its wide array of products to over50,600 attendees, consumers, physicians, allied healthcareprofessionals, educators, and caregivers.

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Strategic Initiatives

Our platform for growth is duein part to a number of marketing joint initiatives that have beenentered into that allow EPGL to address target markets in aconcentrated manner. Listed below are the key relationships we now havethat are intended to result in additional revenue for the Company.

American Academy of Developmental Medicine and Dentistry (AADMD)

Further internal growth is expected to result from *Exceptional Parent* (*EP*)magazine being designated as the official publication of the AmericanAcademy of Developmental Medicine and Dentistry (AADMD), a professionalmedical society and national organization of doctors and dentists whohave dedicated their efforts to providing “best practices”advice to caregivers on how to medically and dentally care for thespecial needs individual. Beginning with the July 2005 issue of *EP*magazine and continuing to the present, AADMD is providingpeer-reviewed articles for the magazine and the opportunity forphysicians to secure up to two credit hours of Continuing MedicalEducation (CME) per issue by completing a test that follows eachdesignated article. Management believes that *EP* magazine is thefirst special-interest consumer publication in America to ever offerCategory I CME credit to physicians. Our relationship with the AADMD isin addition to relationships we enjoy with numerous disabilities groupsthroughout the United States as well as with medical societies such asthe Child Neurology Society (CNS).

It shouldalso be noted that the AADMD and EPGL had an agreement to co-produceonline seminars in 2006 and 2007. No other entity has this opportunity.The AADMD fully endorses the work of EPGL and of EPLO, the StrategicMarketing Alliance between EPGL and Vemics, Inc. relating to technologyexclusivity in healthcare. 

Ofadditional significance is that our chief executive officer anddirector, Joseph M. Valenzano, Jr., is the only non-physician to hold aboard seat on the AADMD. Mr. Valenzano currently chairs the ExecutiveAdvisory Board of the AADMD. The Company is actively pursuing similaralliances with other professional medical societies. 

United States. Military: Exceptional Family Transitional Training Program (EFTTP)

Fundsreceived from the EFTTP Cooperative Agreement with the United StatesArmy have been used to provide ongoing education for military families,physicians and allied healthcare professionals caring for children withdisabilities and special healthcare needs. We look forward to thepossibility of development of this initiative to the other branches ofthe U.S. Military and to reserve components of the Department ofDefense as well as the Civilian Corps of the U.S. Military. We areactively pursuing this expansion.

It is ourintent with the EFTTP to build upon our existing relationships withinthe military community to bring timely and meaningful educationalcontent both in print and on a Web-based delivery system to familiesand also to the physicians and allied healthcare professionals chargedwith their care. In this regard, we continue the process of exploringways in which we can deliver high-quality educational content focusedin the chronic disability and special needs arena.

Thisinitiative with the U.S. Army is in the amount of $799,005, and suchrevenues would be recognized in accordance with the Company’sexisting accounting policy, which is to identify revenue streamsconsistent with our core services: subscriptions, page advertising, andspecial projects/custom communications and online, Web-basedprogramming.

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Circulation and Marketing

To improveefficiency, allow for greater promotion of our magazine to stimulatesubscription income, and to keep a pulse on progress in this area, weare increasing our in-house circulation efforts. Our business, with itsmultiple product lines and multimedia approach to publishing andcommunications, needs focused management of its circulation andsubscriber base and initiatives. Our goal is a significant increase inpaid circulation and related development activities, such as bundledadvertising and sponsored bulk distribution of the monthly magazine,which we believe should yield higher revenue performance for us. It isimportant to note that increases in unit circulation will also resultin increases in advertising, as we will be reaching a larger audience,which should justify increases in ad page sales from a larger number ofad page sales as well as ad page rate increases.

Ouraggressive and forward-thinking marketing efforts have begun to moveEPGL forward in its circulation growth patterns. Although ourcirculation staff is relatively new to EPGL, they have workeddiligently to improve efficiency and performance on multiple levels,affecting customer service, marketing and promotional efforts, andperformance reporting. While significant changes have been made to eachof these areas, ongoing evaluations and adjustments are anticipated aswe move toward a more streamlined circulation department.

A sampling of some of the actions EPGL is taking in this area follows:

·

Survey and analysis research to more closely capture audience needs

·

Increased personal contact with new subscribers as well as those considering non-renewal

·

Creation of campaigns to more closely accommodate the needs of special groups and organizations

·

Cross-promotion of the multiple resources offered by EPGL (e.g.: DAN events promoting **EP***LiveOnline*)

·

Sales team members bundling advertisement space with e-blast efforts

·

Subscription sales offering charity revenue in return

·

Increased media use (e.g.: radio, print news)

·

Enhanced direct mail campaigns that include pilot tests

·

Entrance into new markets, such as the film industry, through sponsorship and public relations support

·

Directedand individualized campaign efforts for each branch of EPGL (e.g.:specific marketing copy and promotional items for each of thefollowing: DAN events, **EP** LiveOnline, EP Bookstore, Subscription Donation Program, subscription promotions, etc.)

·

Telemarketing

·

E-blasting

·

Community involvement through participation in local events at various locations

·

Review, analysis, and reorganization of subscription renewal efforts

·

Re-evaluation of production schedules (subscriber processing) and adjustment of operations accordingly

·

Monitoring of events on daily/weekly tracks versus monthly/quarterly/annually

·

Acquiringaccess to vendors’ subscriber processing databases in order toestablish new operating procedures for each stage of thecirculation/subscriber series of events

EPGL iscontinuing its trajectory into a new era of productivity, efficiency,and growth. We expect high returns for our efforts in the upcomingquarters.

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Sales

We continue to train new salesstaff capable of marketing the complete package of services the Companynow offers, both via print and online. These new sales personnel arereceiving ongoing training to implement effective sales strategies andoutcomes for EPGL.

Additional Growth and Initiatives 

As mentioned earlier, in 2008,we have expanded our Disabilities Awareness Night (DAN) programs,principally conducted in Major League Baseball parks, from 2002 to2007, and continuing in 2008. Prior to this time, our programs weretaking place in a limited number of National Basketball Associationvenues, Minor League Baseball parks, and Minor League Hockey arenas. OnMay 23, 2005, and again in May 2006, in conjunction with the NationalBaseball Hall of Fame in Cooperstown, New York, we hosted prior to theannual Hall of Fame Game a ceremony honoring returning disabledveterans from Iraq and Afghanistan. This was done in conjunction withWalter Reed Army Medical Center and its Commanding General, whopresented awards to returning veterans and their families selected forthe honor. Also at that event, one of the honorees received his PurpleHeart for wounds received in Iraq. In July 2007, we held our first DANevent at a racetrack, at New Hampshire International Speedway (NHIS),in Loudon, New Hampshire, prior to the NASCAR Nextel Cup Race.Massachusetts Mutual Life Company sponsored this DAN event. The eventincluded a Day of Military Distinction, and involved returning woundedSoldiers, Sailors, Airmen, and Marines from Walter Reed Army MedicalCenter. We plan to continue this DAN expansion to racetracks associatedwith NASCAR, and are test-marketing programs with two NBA teams as wellas evaluating the feasibility of expanding into other sports venuessuch as National Collegiate Athletic Association (NCAA) Basketball. Weare also hopeful that launching the DAN Day of Military Distinction atthe Army-Navy football game in December will become a reality.

We continue to provideeducation regarding Assistive Technology for people with disabilities,both physical and intellectual (e.g.: cerebral palsy and autismspectrum disorders). This includes the launch of our Consumer’sGuide to Assistive Technology, written by leading authorities in thefield.

We continue to publish monthly in *EP*magazine and on our Web site valuable information regarding Financialand Estate Planning for people with special needs and for familiescaring for children and adults with disabilities.

We continue to provideeducation regarding Mobility, including via the National MobilityEquipment Dealers Association (NMEDA) Guide to Mobility Products, whichwe publish each year. NMEDA is the leading national authority onmobility products and services. (*The Consumer’s Guide to Mobility Equipment Dealers* will again be published in our June issue.)

Revenue Generation

Our revenues are generated from the following activities:

Sale of Advertising Space in *Exceptional Parent* (*EP*) Magazine

Thisis driven by a number of factors, including our editorial content andfocus. Our customers consist of large Fortune 500 companies: Ford,Chrysler, Kimberly Clark, Novartis Pharmaceuticals, Johnson &Johnson, Massachusetts Mutual Life Insurance Company, Verizon, andMerrill Lynch. All of these companies purchase ad space in ourpublications to enhance awareness and image for their products andservices and brand recognition for their names. Historically, revenuesgenerated from the sale of advertising space have ranged fromapproximately $1.6 million to as high as $2.2 million in the past(1998).   Budget projections for 2008 indicate advertisingrevenue of $1.75 million.

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Disability Awareness NightTM (DANTM) Programs at Major and Minor League Baseball Stadiums

Thisprogram generates revenue. Each of the DAN events is sponsored on anational basis by a leading sponsor, MassMutual Financial Group,followed by regional and local sponsorships. In 2006, for example,total revenues from this effort aggregated approximately $400,000. Wesigned a sponsorship agreement with our lead sponsor for 2008, and haveanticipated commitments from other sponsors that will yield revenues inexcess of $400,000 in 2008. This does not include any sponsorshiprevenues from other venues such as National Basketball Association(NBA) games, and National Hockey League (NHL) and Minor League Hockeygames, which are still under discussion.  

EP Bookstore

EP Bookstorehouses over 2,500 disability-specific books, DVDs, videos, and tapesdealing with a wide range of disability topics. We have been buildingthis base for quite some time and are now poised to leverage its growthwith some targeted marketing to specific market segments such asmilitary bases and libraries across the nation.

The bulk of ourbookstore has been built through negotiating with third-partypublishers such as Baker and Taylor and McGraw Hill. This has been doneover a period of years and with great selectivity and sensitivity. Weevaluate the extensive titles published by other book publishingcompanies and inquire about their sales. Based on the intelligence weobtain, we approach these companies, which roughly number about 90 andnegotiate with them for bulk purchases of certain titles our EditorialAdvisory Board indicates are consistent with our mission, goals, andobjectives.. All of this is possible because large book publishersreally do not have a good sense of the disability marketplace and/orthe needs of specific targeted audiences, whether consumer orprofessional in nature. We have this expertise and we went aboutbuilding our bookstore of titles in specific disciplines. In thecontinuing process of building this bookstore, we place importance onunderstanding the marketing requirements for reaching this audience andwhether or not we believe we can do so effectively through ourmagazine, Web site, and contacts within disability organizations andprofessional medical societies; and via distribution and sales at tradeshows and conferences. EP Bookstore also consists of book titles we ownoutright and exclusively. Examples of such titles include: *No Apologies for Ritalin*, by Vidya Bhushan Gupta, MD, and*Patient Persistence*,by Adele Gill, RN; as well as approximately five other titles. Whilenone of the titles has a material impact taken individually orcollectively, the profit margins earned on these sales areapproximately 30 percent while the profit margins on other titles arein the vicinity of 10 percent. Our decision to have a stake in bookpublishing is based on the fact that we receive countless numbers ofrequests to publish specific manuscripts as books. While most of theseare rejected, the pipeline for such valuable information is of highimportance to us because some of this can be turned into productivetitles we can publish while others can serve as useful content for someof our other multimedia publishing activities in print or online. We donot envision total revenues from our book operation to reach levelsmuch beyond $500,000 per year, with profit margins on the order of 15percent.

Custom Publishing & Contract Publishing

Over the years, we have taken educational editorial series published in *EP*magazine and had them reviewed by a panel of clinical thought andopinion leaders, edited and packaged into stand-alone monographsfocused on a specific subject area, and distributed to key targetmarket segments mutually identified by a project sponsor and EPGL. Allof this work is completely funded under unrestricted educational grantssecured from major pharmaceutical companies, medical equipment devicemanufacturers, consumer packaged goods companies, and financialservices companies. At all times, we adhere to strict AccreditationCouncil for Continuing Medical Education (ACCME) Standards for medicaleducation and strict standards that ensure the separation of that whichis educational and that which is promotional in nature.

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Online Interactive Educational Seminars

Another element in our product mix is the **EP***LiveOnline*TM(EPLO) interactive, TV-quality, educational seminars that we makeavailable through our Strategic Marketing Alliance with Vemics, Inc.This is a project that capitalizes on the relationships and credibilitywe have built with major professional medical societies as well as layand consumer organizations representing the interests of people withdisabilities. We have produced a total of twenty-five such seminarsover the past three years. We have offered these in concert withprofessional medical societies such as the AADMD and now are poised tooffer them with societies such as the Child Neurology Foundation (CNF)and CNS. We expect to conduct a total of over 30 such seminars in 2008.The fact that all of these seminars offer Continuing Medical Education(CME) accreditation for physicians, usually without fees, coupled withthe fact that the physicians do not have to travel but can insteadparticipate from the comfort of their homes or offices, helps to reducecosts and improve efficiency and educational results. To our knowledge,no other company in the United States offers the kind of comprehensive,authoritative, educational programming that is focused exclusively onchronic life-long conditions that we do. In addition, we do this byoffering real-time, live, interactive, TV-quality information utilizingproprietary software and delivery over the Internet. 

Results of Operations for the Quarter Ended March 31, 2008

Liquidity and Capital Resources

The cash flows from operations for the year to date ended March 31, 2008 were negative by approximately $10,000.

Management believes that withthe operational cash to be generated by military programs, as well asonline seminars, the overall cash requirements of operations areexpected to be met. While there is no absolute guarantee that we willgenerate the forecasted revenues, management believes that both therevenue generation forecasted will meet the liquidity requirements ofEPGL for 2008.

Results of Operations

Reflected in the tables thatfollow are comparisons of revenue and sales and general andadministrative expenses for the three months ended March 31, 2008 and2007. The Company continues to invest in methods of improvingadvertising revenue and these efforts are detailed below.

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Revenues for the three monthsended March 31, 2008, as compared to the same period in 2007, decreasedby approximately $119,000. Advertising revenue decreased by $39,000 forthe quarter.  This decrease occurred as a result of salesrepresentatives being replaced in two separate regions. Subscription revenue saw a decrease of approximately $16,000. Over the past year, EPGL has moved away from an outside vendorwho handled subscriptions, to an in-house staff position.  As aresult, there will be a turn-around, which has already started in thefirst quarter of 2008, capturing expired subscription and renewing themfor additional one, two, or three year period.  Online seminarsfor 2008 included the sale of $79,000 for the purchase of equipmentused in conferences and seminars; during 2007, a similar sale tookplace in the amount of approximately $82,000.  A marked increaseof approximately $26,000 in book sales took place as a result ofmilitary contracts.  

Special Project revenuedecreased by approximately $101,000 as a result of timing differencesrelated to Disability Awareness Night events and Pocket ResourceGuides.  Pocket Resource Guides were generated and distributedduring the first quarter of 2007; however, in 2008, the Pocket ResourceGuides were distributed during the second quarter; therefore, theincome will be reflected in the June 30, 2008 financials.

Operating Expenses Including Cost of Sales

The significant variations in the components of selling, general and administrative expense are discussed below.

For the quarter ended March 31,2008, cost of sales increased by approximately $4,600 as compared toMarch 31, 2007. The increase is primarily due to the hiring of twopart-time editorial contributors.

There was an increase insalaries and benefits of approximately $92,000 as a result of theincrease in staff at the corporate headquarters in Johnstown, PA. During the second quarter of 2008, three staff positions havebeen eliminated, which should be reflected positively in the resultsfor the period ended June 30.

Business travel has beenreduced by approximately $10,000 as a result of closer monitoring oftravel expenses and reduction in the number of employees being sent toconferences and trade shows.

Consulting fees have increasedby $9,000 over the same quarter of 2007.  EPGL has entered into anagreement for consulting services as several items under litigationdraw to a close.  Other General and Administrative expenses haveshown a decrease of approximately $65,000 over 2007 levels. Management continues to monitor all areas of expenses to keep allassociated costs below 2007 levels.

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Interest expense has increasedin the first quarter of 2008, by approximately $30,000 due to theaccretion of interest on funding debt to the NIR Group.  Thisfunding of $100,000 per month was completed in November, 2007

Depreciation and amortizationexpenses have decreased by approximately $7,600 in the first quarter of2008 as a result of several fixed assets being fully depreciated, butwhich are still utilized by the staff.

Taxes

We reflected no provision forincome taxes in the first quarter month of 2008 because of theavailability of a significant net operating loss carryforward to offsetany taxable income.

Debt Expenses

In accordance with EmergingIssues Task Force Topic 00-27 and SFAS 150, “Accounting forCertain Financial Instruments with Characteristics of both Liabilitiesand Equity,” the Company performed calculations allocating theproceeds from the issuance of convertible debt with detachable warrantsand the beneficial conversion privileges to each respective security attheir fair values.

The Company referred to SFAS133, “Accounting for Derivative Instruments and HedgingActivities,” and EITF 00-19, “Accounting for DerivativeFinancial Instruments Indexed to, and Potentially Settled in, aCompany’s Own Stock,” in determining whether the conversionoption is an embedded derivative instrument. In the case of thedetachable warrants and the beneficial conversion privileges, theCompany concluded the fair value was nil; accordingly, the entireamount recorded as a liability was associated with the convertibledebt. The calculated fair value of the convertible debt of $5,591,156was recorded as a liability as of March 31, 2008. The convertible debtwill be accreted to its face value of $6.32 million under the interestmethod until it is either converted or matures. As of March 31, 2008,the total accretion was $853,840 (of which $121,554 was recorded in thefirst quarter of 2008; $87,200 was recorded in the first quarter of2007). Separately, the holder of the note exercised conversionprivileges for 125,130,608 shares of common stock in 2008, therebyreducing the amount of the debt by $23,512.

We incurred debt issue costs of$524,000 relating to the convertible notes that will be expensed overthe term of the convertible debt.

**Off Balance Sheet Arrangements**

None

**Item 3.  Quantitative and Qualitative Disclosures about Market Risk**

Item 3 is not required by smaller reporting companies.

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**Item 4T.  Controls and Procedures**

Evaluation of Disclosure Controls and Procedures

The Company’s management has established disclosure controls andprocedures designed to ensure that information it is required todisclose in the reports that it files or submits under the SecuritiesExchange Act of 1934, as amended (the ‘‘ExchangeAct’’) is recorded, processed, summarized and reportedwithin time periods specified in the Securities and Exchange Commissionrules and forms. Such disclosure controls and procedures include,without limitation, controls and procedures designed to ensure thatinformation the Company is required to disclose in the reports that itfiles or submits under the Exchange Act is accumulated and communicatedto the Company’s 

Management to allow timely decisions regarding required disclosure.

Based on an evaluation of the Company’s disclosure controls andprocedures as of March 31, 2008 made by management, under thesupervision and with the participation of the Chief Executive Officerand Chief Financial Officer, the Chief Executive Officer and ChiefFinancial Officer have concluded that the Company’s disclosurecontrols and procedures (as defined in Rules 13a-15(e) and 15d-15(e)promulgated under the Exchange Act) were not effective as of March 31,2008 inasmuch as two material weaknesses existed in the Company'ssystem of internal control.  These are:

·

There is inadequate segregation of duties in certain areas without sufficient compensating controls. 

·

The company’s accounting software is currently being operated in a manner that permits previously recordedtransactions to be edited and modified. 

Our management is in theprocess of implementing plans intended to remediate the internalcontrol weaknesses and to strengthen our internal controls overfinancial reporting effective in the second quarter of calendar year2008.Changes in Internal Control Over Financial Reporting

No changes in our internal control over financial reporting occurredduring the quarter ended March 31, 2008 that has materially affected oris reasonably likely to materially affect our internal control overfinancial reporting.

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**PART II – OTHER INFORMATION**

**Item 1.  Legal Proceedings**

Joseph Braumstein, Chapter 7Trustee of The McCabe Group versus Joseph M. Valenzano, Jr. and Psy-EdCorporation et al. Adversary proceeding No 06-01351. When The McCabeGroup (TMG) ceased business operations in October 2004, it entered intoa Chapter 7 liquidation proceeding, under the terms of Title 11 of theU.S. Code (Bankruptcy). The Chapter 7 Trustee of TMG, Joseph Braumsteinin June 2006 brought a lawsuit in the U.S. Bankruptcy Court allegingthat the Company and its President and CEO, jointly and severally, owedapproximately $53,000 for legal fees and expenses to TMG. The Companyand its CEO are vigorously defending this complaint. The Company andCounsel believe that further litigation should result in the ultimatedismissal of this Chapter 7 Trustee Claim. The Company has made alltimely filings with the court and to date has heard nothing furtherwith regard to the position of the court.

Psy-Ed Corporation, d/b/aExceptional Parent, Plaintiff v. Stanley D. Klein and Kimberly Schive,Superior Court in and for the County of Middlesex, in the Commonwealthof Massachusetts, Civil Action No. 99-6140; Counterclaims Brought byKlein Against Plaintiffs and Third-Party Directors (Kenneth Rossano,David Hirsch, MD, Robert Striano, Donald S. Chadwick, C. KennethMehrling and Robert K. Hopkins, Jr.) of Exceptional Parent in Civ. No.99-6140. This case was commenced on December 17, 1999. Psy- Ed is theplaintiff and counter-claimants in this case. The Company and itspresident were previously successful in defending an action taken byMs. Schive in 1996 for wrongful termination. and successfully defendeditself in three separate appeals made by Ms. Schive alleging that theCompany and its President and CEO “discriminated against peoplewith disabilities, especially people who were deaf” and that“the CEO orchestrated the relocation of the office from BrooklineMassachusetts to New jersey for the purpose of terminating heremployment”.  At present, most of the claims by KimberlySchive have been dismissed and are no longer pending, either in anycourt proceeding or before the MCAD. Still pending are her claims forabuse of process and retaliation. The company and its attorney’sfeel that further litigation should result in the ultimate dismissal ofher claims

The employment of Stanley D.Klein, a former officer, director and shareholder of the company wasterminated for cause in August of 1997. He filed a complaint with theMassachusetts Commission Against Discrimination in 2000 alleging thatthe Company, which had brought an action against him in December 1999for misconduct, fraud and defamation causing damage to the Company, hadretaliated against him because of his support for Kimberly Schive.

Mr. Klein filed an actionagainst the Company and Mr. Valenzano in the Superior Court forMiddlesex County, Massachusetts in December 2002 seeking payment ofunspecified damages. That lawsuit was dismissed in 2005. Mr. Klein thenfiled an action seeking precisely the same relief in a state court inNew Jersey which action was summarily dismissed by Superior Court inBergen County New Jersey. At the time of filing both of these actions,Mr. Klein was a defendant in an action brought by the Company againsthim in 1999.

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During the non-jury trial heldin June of 2006, eight of Klein’s ten claims against the Companywere dismissed. The Company was found liable by the judge with respectto abuse of process in the Schive case and tortuous interference withrespect to a promissory note. The balance on that note wasapproximately $124,000. The Company intends to rigorously defendagainst the decision and to date no decision with regard to any awardof damages has been made, although a four and one half hour hearing onall positions regarding these matters was held on January 4, 2008 withno decision being reached.  During that hearing, attorney’sfor the Company presented oral arguments in support of motions forentry of judgment in favor of the Company, Mr. Valenzano and all formerand present directors on all counts or, in the alternative, for a newtrial.  Company counsel also opposed the motions of Stanley Kleinand Kimberly Schive for entry of judgment in their favor without theneed for further proceedings concerning damages or attorney’sfees.  The attorneys for Schive have specifically sought an awardof $426,661.31 for attorney’s fees and $125,000 in compensationfor her alleged emotional distress.  Attorney’s for Kleinpetitioned the court for an award of $124, 174.71 in principal on theportion of the Psy-Ed promissory Note that remained unpaid (an amountthat is incorrect and disputed) plus interest from December 31, 1999 aswell as $125,000 in emotional distress and $527,962.73 inattorney’s fees.  Company counsel argued on behalf of thedefendants that it would be procedurally and substantively improper toaward the plaintiffs these amounts.  The matter is now underadvisement by Judge Sandra Hamlin.  Counsel for the Company isunable to render an opinion concerning how Judge Hamlin will resolvethe motions for judgment in favor of the defendants and third-partydefendants, nor, should some or all of those motions be denied, how thecourt will resolve the motions for judgment submitted by Klein andSchive.  It is the Company’s position that it will prevailwith respect to any adverse findings although it is impossible toassert at this time that there is any certainty with respect to thisposition.

Heath & Associates and EP Global Communications, Inc.

American Arbitration Association Case No. 13 147 E 00538 08

The underlying demand forarbitration was filed by Heath & Associates (“Heath”)an independent sales contractor on or about March 3, 2008.  Heathalleges sales commissions due from EP in the amount of $61,804 arisingout of EP’s alleged breach of two Advertising SalesRepresentation Agreements (“Agreements”) between Heath andEP dated September 13, 2005 and October 1, 2006, respectively.  EPmaintains that the Agreements were lawfully and properly terminated forcause by EP.  EP further maintains that the demand from Heath isexcessive, inaccurately and improperly computed and inappropriate. In addition, while early discussions involved an offer by theCompany of a far lesser amount as a settlement, that offer waswithdrawn once it became clear that Heath was threatening arbitration. Further, once the independent sales agreement was terminated forcause, The Company’s positions is that no commissions are due andowing.

EP has accordingly filed anAnswering Statement in the arbitration.  EP’s AnsweringStatement includes Counterclaims for defamation and tortuousinterference against Heath and its principal, James Heath, based on thefinancial damage and damage to the reputations of EP and itsprincipals, including but not limited to EP’s CEO, Joseph M.Valenzano, Jr., arising out of various false and slanderous statementsmade by Heath  EP maintains that such actions caused theresignation of one of EP’s most influential contributing writersin the assistive technology field and the loss of directly associatedadvertising revenue and was damaging to the strategic relationship withits on line interactive partner, Vemics, Inc. by virtue of slanderousand untrue comments made to Vemics, Inc employees and executives. EPGL intends to aggressively present the facts and evidence ithas, including witnesses who directly heard Mr. Heath’s remarksand believes it will prevail in the arbitration proceeding and in itsCounterclaims.

Other than noted above, there is no litigation pending or threatened by or against us at March 31, 2008

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**Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds**

None

**Item 3.  Defaults Upon Senior Securities**

None

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

None

**Item 5.  Other Information**

None

**Item 6.  Exhibits and Reports on Form 8-K**

        A.  Exhibits
|        |        |                                                                                                                        |
|--------|--------|------------------------------------------------------------------------------------------------------------------------|
|   | 31     | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|   |   |                                                                                                                   |
|   | 32     | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |

        B.  Reports on Form 8-K
|        |        |        |
|--------|--------|--------|
|   | None   |   |
|   |   |   |
|   |   |   |

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**SIGNATURES**

In accordance with Section 13or 15(d) of the Securities Exchange Act of 1934, the Registrant hascaused this report to be signed on its behalf by the undersigned,thereunto duly authorized.

**EP Global Communications, Inc. (Registrant)**
|        |                                                                                                                         |
|--------|-------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                    |
|   |                                                                                                                    |
| By:    | /s/ Joseph M. Valenzano, Jr.

     Joseph M. Valenzano, Jr, President, Chief Executive Officer |
|   |                                                                                                                    |
|   | /s/ James McGinnis

     James McGinnis, Chief Financial Officer, Vice President of Operations |
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| Dated: | May 15, 2008                                                                                                            |

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