Unknown;

| **UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

Washington, D. C. 20549

**FORM 10-KSB/A**

**Amendment No. 2**

(Mark One)

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

**For the fiscal year ended December 31, 2004**

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

For the transition period from ___________ to ___________

Commission file number: 000-30797

**EP GLOBAL COMMUNICATIONS, INC.**

(Name of Small Business Issuer in its charter) |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **Delaware**                                                       | **14-1818396**                              |
|--------------------------------------------------------------------|---------------------------------------------|
| **(State or other jurisdiction of incorporation or organization)** | **(I.R.S. Employer Identification Number)** |
|                                                               |                                        |
| **C/O Exceptional Parent Magazine**                                | **15901**                                   |
| **551 Main Street, Johnstown, PA**                                 | **(Zip code)**                              |
| **(Address of principal executive offices)**                       |                                        |
|                                                               |                                        |

| **(814) 361-3860**            |
|-------------------------------|
| **Issuer's Telephone Number** |

|   |   |
|--------|--------|

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

| **Title of each class registered:** | **Name of each exchange on which registered:** |
|-------------------------------------|------------------------------------------------|
| **None**                            | **None**                                       |
|                                |                                           |

| **Securities registered under Section 12(g) of the Exchange Act:** |
|--------------------------------------------------------------------|
| **Common Stock, par value $.0001**

(Title of class)               |

|   |   |
|--------|--------|

Checkwhether the issuer (1) filed all reports required to be filed bySection 13 or 15(d) of the Exchange Act during the past 12 months (orfor such shorter period that the registrant was required to file suchreports), and (2) has been subject to such filing requirements for thepast 90 days. Yes [X] No [ ]

Checkif no disclosure of delinquent filers in response to Item 405 ofRegulation S-B is contained in this form, and no disclosure will becontained, to the best of registrant's knowledge, in definitive proxyor information statements incorporated by reference in Part III of thisForm 10-KSB or any amendment to this Form 10-KSB. [ ]

Registrant's revenues for its most recent fiscal year were $2,594,185

The Issuer's stock is trading on the OTC Electronic Bulletin Board under the symbol EPGL.OB.

As of April 12, 2005  the Registrant had 22,132,818 common shares outstanding.

Documents incorporated by reference: See Item 13. Exhibits and Reports on Form 8-K in Part III

**Explanatory Note:**

ThisForm 10-KSB/A is being filed to amend the EP Global Communicantions,Inc. (“Company”) Annual Report on Form 10-KSB for the yearended December 31, 2004. The amendment arose out of a letter of commentdated August 18, 2005 received from the staff of the Securities andExchange Commission.  

Generally,no attempt has been made in this Form 10-KSB/A to modify or updateother disclosures presented in the original report on Form 10-KSB orsubsequent amendments except as required to meet the staff’scomments.  This Form 10-KSB/A does not reflect events occurringafter the filing of the original Form 10-KSB or modify or update thosedisclosures.  Information not affected by the amendment isunchanged and reflects the disclosure made at the time of the originalfiling of the Form 10-KSB with the Securities and Exchange Commissionon April 13, 2005. The following items have been amended as a result ofthe restatement:

1.

Item6 - to include disclosure to discuss the potential consequences to theCompany if it is unable to successfully complete a private placementmemorandum to raise up to $2 million, and

2.

Item6 – to amend the description of cost of sales and income fromoperations for a change in the presentation of these items in theconsolidated statements of operations

3.

Item 7 -  torevise the Company’s consolidated financial statements, asdiscussed in Note 14 (“Restatement”) to correct an error inreporting the Company's sale of an interest in InforMedx, LLC. 

Inaddition, this amendment contains currently-dated certifications fromour Chief Executive Officer and Chief Financial Officer, as required bySection 302 of the Sarbanes-Oxley Act of 2002.

**Forward Looking Statements:**

Certaininformation contained herein should be considered "forward-lookingstatements" within the meaning of the Private Securities LitigationReform Act of 1995 which is subject to a number of risks anduncertainties. The preparation of forward-looking statements requiresthe use of estimates of future revenues, expenses, activity levels andeconomic and market conditions, many of which are outside the controlof EP Global Communications, Inc. ("Company") control. Specific factorsthat could cause actual results to differ materially from those setforth in the forward-looking statements include: economic conditions,labor costs; competitive pressures on pricing; consumer perceptions ofthe Company's products; other operational matters discussed herein andother risks and uncertainties. Other factors and assumptions notidentified above are also involved in the preparation offorward-looking statements, and the failure of such other factors andassumptions to be realized may also cause actual results to differmaterially from those discussed.

EP GLOBAL COMMUNICATIONS, INC.

CONTENTS

|                                                                                           | Page

Numbers |
|------------------------------------------------------------------------------------------------|---------------|
| PART I.                                                                                        |          |
| Item 1. Business                                                                               | 1             |
| Item 2. Properties                                                                             | 6             |
| Item 3. Legal Proceedings                                                                      | 7             |
| Item 4. Submission of Matters to a Vote of Security Holders                                    | 7             |
| PART II.                                                                                       |          |
| Item 5. Market for Registrant's Common Equity and Related Shareholder Matters                  | 7             |
| Item 6. Management's' Discussion and Analysis of Financial Condition and Results of Operations | 10            |
| Item 7. Financial Statements and Supplementary Data                                       | 15            |
| Item 8. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure   | 15            |
| Item 8A. Controls and Procedures                                                               | 16            |
| PART III.                                                                                      |          |
| Item 9. Directors and Executive Officers of the Registrant                                     | 17            |
| Item 10. Executive Compensation                                                                | 24            |
| Item 11. Security Ownership of Certain Beneficial Owners and Management                        | 26            |
| Item 12. Certain Relationships and Related Transactions                                        | 26            |
| Item 13. Exhibits and Reports on Form 8-K                                                      | 27            |
| Item 14. Principal Accountant Fees and Services                                                | 27            |
| PART IV                                                                                        |          |
| Signatures                                                                                     | 28            |
| Exhibit Index                                                                                  | 29            |

**PART I**

**ITEM 1. DESCRIPTION OF BUSINESS.**

Background

TheCompany was incorporated in the State of Delaware in November 1999under the name East Coast Airlines Inc. ("ECA") which was establishedto become a fully certified Federal Aviation Regulation Part 121 aircarrier. The original business plan was to provide scheduled airservice to small and medium sized markets which have experienced eithera total or partial loss of air service as a result of shifts inemphasis by major airlines and their regional counterparts. The Companyexpected to operate as an independent carrier and serve select marketsin the Northeast.

InJune 2000, the Company filed a Form 10-SB Registration Statement toregister its common stock under the Securities Act of 1933, as amended(the "1933 Act") which became effective in July 2000. As a result, theCompany began filing its quarterly and annual reports with theSecurities and Exchange Commission under the Securities Exchange Act of1934, as amended (the “1934 Act”). The Company believedthat ECA’s ability to raise capital with which to fund the ECAbusiness plan would be significantly enhanced by becoming a publicreporting company and listing ECA securities on a stock exchange inorder to provide investors with potential liquidity.

Thetragic events of September 11, 2001 severely affected the airlineindustry and impeded ECA’s efforts to finance its business plan.In the months following September 11th security concerns caused airlineridership to plummet and as a consequence reduced, in management'sopinion, the potential for a successful launch of the airline. Theensuing decline in the United States economy also created a significantimpairment to the successful implementation of the Company's originalbusiness plan.

Asa consequence of the events of September 11th, as first disclosed inECA’s Form 10-QSB for the quarter ended September 30, 2002,management commenced its new plan to identify a strategic partner withwhom the Company could develop a business relationship through either ajoint venture, acquisition, merger or share exchange transaction, thatcould present ECA shareholders with an opportunity to achieve potentialappreciation of their holdings. In the event the Company were toconsummate such a transaction with an identified strategic partner,such partner's business and economic fundamentals could enhanceECA’s financial condition and bring value to ECA shareholders. 

InFebruary 2003, preliminary discussions began with a private entity toenact a consolidation through either a merger or acquisitiontransaction.

1

OnNovember 28, 2003, pursuant to unanimous adoption by the Boards ofDirectors of Psy-Ed Corporation and East Coast Airlines, Inc., thecompanies entered into a Share Acquisition Agreement that authorizedECA to offer 173 shares of its Common Stock for each share of Psy-EdCorporation (“Psy-Ed”) Common Stock held of record by allPsy-Ed Stockholders.

A summary of the material terms and conditions of the Offering are as follows:

-

Psy-Ed Stockholders were offered 173 East Coast Common Shares for each Common Share of Psy-Ed owned of record.

-

ECA reduced its outstanding Common Shares to 7,265,932 from 19,113,400 Common Shares.

-

ECAamended its Certificate of Incorporation, increasing its authorizedCommon Shares from 20,000,000 to 60,000,000.                 

-

ECA, the new parent company, changed its corporate name to “EP Global Communications Inc.” 

-

Themembers of the Board of Directors of East Coast resigned and thenominees of Psy-Ed were appointed to the Board of Directors of the newparent company, with Mr. Joseph M. Valenzano Jr. becoming the Presidentand CEO.

-

Psy-Ed became a wholly owned subsidiary corporation of EP Global Communications, Inc., the new parent company.

-

Psy-EdStockholders owning 75,208 of the Psy-Ed Common Shares exchanged theirPsy-Ed Common Shares for East Coast Common Shares. East Coast issued anaggregate 13,010,984 East Coast Common Shares to the Psy-EdStockholders. The share exchange resulted in Psy Ed shareholders owningapproximately 65% of the ECA outstanding common stock. Psy-Ed hasbecome a subsidiary of ECA now EPGL, the “new parent”company.   On January 24, 2004, Donald Chadwick was appointedto the Company’s Board of Directors and Robert J. Salluzzo andCharles G.Youngblood resigned. At that time, Joseph M. Valenzano, Jr.and John F. Crowley were appointed Directors of the Company.Immediately thereafter, by unanimous written consent of the Board ofDirectors, the Company’s By-Laws were amended to increase theBoard of Directors to seven (7) members and David Hirsch, GreggLaPointe,  ADM Raymond C. Smith, USN (Ret) and Ed McCabe, Esq.were appointed to fill the new seats on the Board. 

2

The Company

Havingcompleted this acquisition, the Company became a global communicationscompany dedicated to providing quality, reliable information for peoplewith disabilities and special health care needs. The Company’smission, as it was for the 34 years prior to the combination, hasremained unchanged: to provide practical advice and emotional supportto families, physicians, allied health care providers, teachers andcaregivers who are involved in the care and development of people withspecial needs.

TheCompany’s 34 year old award winning publication provides thefoundation of what the Company does. In 2003, the Company continued itstradition of excellence, receiving the New Freedom Initiative Awardfrom the Jim Mullen Foundation in Chicago, symbolic of the BestPublication and Web Site in the Nation for People with Special Needs.Exceptional Parent Magazine was also the recipient of Three Gold Medalsfor Editorial Excellence from FOLIO: at the Magazine PublishersAssociation Awards Dinner in New York over the past four years andthree Gold Medals for Excellence in Journalism from the Consumer HealthPublishing Association of America for the Company’s work inEpilepsy, Newborn Screening and Mitochondrial and Metabolic Disorders.In November, 2003 Exceptional Parent Magazine received theDistinguished Service Award from the Epilepsy Foundation of New Jerseyfor the Company’s work on behalf of people with epilepsy. JoeValenzano, the Company’s President and CEO is the recipient ofnumerous awards for his efforts on behalf of people with disabilitiesand special needs including the Distinguished Service Award from theFragile X Foundation given to him by General James L. Jones, formerCommandant of the Marine Corps and now Supreme Allied Commander NATOForces. Working with the leaders in the field, the Company hasestablished strong strategic relationships with virtually every majorprofessional medical society and lay organization serving people withspecial needs.  In 2003, the Company focused our editorial content on the key issuesaffecting its audience and worked to provide them with need-to-haveinformation on topics such as the spectrum of autistic disorders, IDEAreauthorization, the No Child Left Behind Act, epilepsy and complexseizure disorders, ADHD, and the latest developments in mobility andcommunication devices. Feature stories included interviews with formerAssistant Secretary of Education for the Office of Special Educationand Rehabilitative Services Dr. Robert Pasternack, Major LeagueBaseball pitcher Tim Wakefield and technology leader and inventor RayKurzweil. 

TheCompany also expanded its coverage of key areas in the disability arenawith added columns including Tech- Scapes and IDEA Notebook as well ascontinuing series on autism, financial planning and adaptive physicalsports and recreation for people with disabilities. In addition, theCompany has continued its efforts to expand awareness of the benefitsof newborn screening using tandem mass spectrometry and theCompany’s President and CEO, Joe Valenzano has personally ledthis charge to have expanded newborn screening embraced by the U.S.Military.  His efforts were rewarded as the Navy and Marine Corpshave in fact added expanded newborn screening for Navy and Marine Corpsbirths in 2005.

3

Beyondthe Company’s monthly magazine, in 2004, the Company continued tointensify its efforts in other areas. The October 2004 World Congressand Exposition on Disabilities (WCD) in Orlando, FL was, in the opinionof management, a success and is now in its sixth consecutive year. Ascreators and developers of the entire program of educational seminarsoffered at the WCD numbering between 110 and 140, the Company played avital role in producing the largest exhibit and conference in the worldfocusing on special needs. The 2004 Show in Orlando, Florida offeredover 100 CME/CEU-accredited programs for physicians, allied health careprofessionals, special education and mainstream teachers, families andcaregivers, and included keynote speeches from the leaders in the fieldincluding Dr. Tim Shriver, President and CEO of Special OlympicsInternational, highly decorated Vietnam Veteran and Four Star GeneralJames “Tom” Hill, U.S. Southern Command and the father of adisabled young daughter, Meghan and Jim Kelley, Hall of FameQuarterback of the Buffalo Bills and the co-founder of Hunter’sHope Foundation named after his son who has Krabbe’s Disease, adevastating life threatening disorder without a known cure.

In2004 the Company also expanded the development of its relationship withMajor League Baseball (MLB) Teams.  The collaboration between EPand MLB Teams began in 2002, when management for the New York Yankeesand the Boston Red Sox embraced EP’s vision to promote awarenessof the disabilities population by reaching out to sports fans. Eachteam hosted a pre-game ceremony, during which people who had madesignificant contributions to the disabilities community were honored.The program expanded to 14 MLB teams in 2003. Honorees includedindividuals such as Eunice Kennedy Shriver, Travis Roy, Dr. Darryl DeVivo, Geri Jewell and others. In 2004, twenty-seven teams participatedin this unique awareness driven event, funded in large part byMassachusetts Mutual Life Insurance Company.Through the Company’s production of unique online CME/CEU-accredited seminars focused exclusively in the****arenaof chronic life-long disabilities and genetic disorders, EP hasestablished a valuable way to expand knowledge in this field, filling amajor void that exists because of the lack of such training in thenation’s medical schools. Over the past two years, the Companyhas delivered a total of twelve online seminars dealing with a range oftopics such as childhood movement disorders, the management and controlof refractory seizures in people with mental retardation anddevelopmental disabilities; managing pediatric gait deficienciesutilizing dynamic bracing, attention deficit/hyperactivity disorders,lysosomal storage disorders****and newborn screening. In2005, with Conemaugh Health Systems, and through the Company’sassociation with several leading professional medical societiesincluding the Child Neurology Society and American Academy ofDevelopmental Medicine and Dentistry as well as key lay organizationssuch as the Epilepsy Foundation and Family Resource Network as well asUnited Cerebral Palsy, the Company plans on delivering a total of 20CME/CEU online seminars, hopefully with the participation of the USMilitary.  All of these seminars offer Continuing MedicalEducation Credit for Physicians and Continuing Education Units fornurses, allied health care professionals and educators through academicaffiliations we have developed at institutions such as the Universityof Pittsburgh School of Medicine and, of course the American Academy ofDevelopmental Medicine and Dentistry (AADMD).  In January 2005 theAADMD

4

formally recognized Exceptional Parent Magazine as the *official publication of the AADMD*and the Company is embarking on an implementation plan to offer CMEaccreditation through the publication itself, something which shouldincrease the need for the Company’s publication by physicians aswell as allied health care professionals, hospitals and clinics.

Exceptional Parent Magazine was recently designated as the publisher of *ThePresidents Report on People with Intellectual Disabilities(PCPID-formerly known as the President’s Committee on People withMental Retardation), complete with the seal of the office of thePresident of the United States of America, which appears on the coverof our 2005 January Resource Guide.*

Overthe years, EPGL has become the leading authority in the disabilitiesand special health care needs arena and has in place the followingattributes:

-

Anauthoritative, proprietary monthly publication read by physicians,educators, nurses, therapists and families alike and endorsed byleading professional medical societies and lay organizations;

-

ACustom Communications Business with the capability of producing highquality clinical publications on a wide range of disorders. Examples ofthese include: *A Primary Care Physicians Guide to Mitochondrial and Metabolic Disorders*, *A Parent’s Guide to Mitochondrial and Metabolic Disorders*, *End Stage Renal Disease: A Primer for Nurses, Dieticians, Physicians and Patients*, *What Families Need to Know About Childhood Seizures*, *Epilepsy: New Patterns of Care for the Twenty-First Century*, *Childhood Movement Disorders, Positive Perspectives for Cerebral Palsy*, *Oral Health Care for People with Disabilities*, *Universal Newborn Screening* (which has won world-wide acclaim) *New Hope for People with Epilepsy: The Vagus Nerve Stimulator* and many others;

-

A web site (http://www.eparent.com) with over 1.5 million hits per month. 

-

TheCompany participates in a joint venture in an exhibit and conferencebusiness called the World Congress & Exposition on Disabilities. This is the defining event in the disabilities and special healthcare needs arena; the 2004 WCD took place in Orlando Florida October7th, 8th and 9th at the Orlando Convention Center and had over 6,000registrants and 200 + exhibitors.  The 2005 WCD will take place atthe Philadelphia Convention Center in Philadelphia PennsylvaniaDecember 1, 2 and 3.  One of its themes will be to honor returningveterans from the Iraq and Afghanistan Conflicts who have sustaineddisabilities as a result of their service.

-

Areference library - EP Library - available for sale to the public withone of the largest arrays of disability and special needs books in theindustry (over 1,500 titles).

5

-

StrategicAlliances with virtually every major professional society andconsumer/family support groups/organizations and associations in thefield including, The American Academy of Pediatrics (AAP); the ChildNeurology Society (CNS); the American Academy of Developmental Medicineand Dentistry; Special Care Dentistry; the International MedicalDystonia Research Foundation; Spina Bifida Association of America,Special Olympics International; United Cerebral Palsy Foundation forEducation and Research, Governmental bodies such as The NationalInstitutes of Health; the Centers for Disease Control & Prevention; U.S. Department of Education and the Office of Special Educationand Rehabilitation; Department of Defense and the U.S. MilitaryExceptional Family Member Program; the Military Child EducationCoalition; the International Dyslexia Association; The NationalMultiple Sclerosis Society; Family Voices; Fragile X Foundation, CureAutism Now, Autism Society of America, National Alliance for AutismResearch, Epilepsy Foundation, Children with Attention DeficitHyperactivity Disorder and a host of other organizations andassociations whose reach into the special health care needs market isenormous.  EP enjoys not only support from these prestigioussocieties and organizations but their endorsement as well.  

Managementconsiders the Company’s contracts to be a strategic advantage. Of major significance is the fact that the Company is the ownerof all its content and copyrights.

TheMission of Exceptional Parent is to continue to grow as an integratedcommunications company leveraging its core strengths and serving theinformation needs of specific Professional and Consumer target-nichemarket segments in the disabilities and special needs market sectors. Tactically the Company seeks to accomplish this utilizing amulti-media approach to communications that includes print, on-lineinteractive services and the internet, customized reports, exhibits andconferences and books.

Employees

Asof December 31, 2004, we had 17 employees, of which 1 was full-time. None of the employees are represented by any labor unions.

**ITEM 2. DESCRIPTION OF PROPERTY**

The Company rents its office space at the following locations:

 -   Approximately 5,500 square feet under a lease with aremaining term of 20 months at 551 Main Street, Johnstown,Pennsylvania. The monthly payment is $7,400 including utilities andtaxes.

6

 -  Approximately 5,500 square feet under a lease with a remainingterm of 15 months at 65 East Route 4, River Edge, New Jersey.  Themonthly payment is $9,400 plus utilities and escalation clauses for taxincreases. 

**ITEM 3. LEGAL PROCEEDINGS.**

TheCompany is a plaintiff against a former director and shareholder whohas not satisfied the terms of his agreement with the Company in April,1998. The action resulted in the Company suspending payments to himunder that agreement which at the time of suspension had a balance of$119,651. It is the opinion of the Company’s attorneys that theCompany will not be liable for the payments and that the amount ofdamages being sought as compensation to the Company far exceeds thecontract balance.

**ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.**

There were no matters submitted to security holders in the fourth quarter of the Company’s fiscal year.  

**PART II**

**ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.**

Market Information:

Ourcommon stock has been quoted on the OTC Bulletin Board under the symbol“EPGL” since December 15, 2004.  The following tablesets forth the range of high and low bid quotations for the last 16days of calendar year 2004 and for the first quarter of calendar year2005. These quotations as reported by the OTC Bulletin Board reflectinter-dealer prices without retail mark-up, mark-down, or commissionsand may not necessarily represent actual transactions.

|   |                                                                                               | High   | Low    |
|--------|----------------------------------------------------------------------------------------------------|--------|--------|
|   | Eleven trading days in calendar 2004 subsequent to the Company's listing on the OTC Bulletin Board | $0.75  | $0.68  |
|   | First Quarter, calendar year 2005                                                                  | $0.65  | $0.20  |
|   |                                                                                               |   |   |

TheCompany's common stock is subject to the provisions of Section 15(g)and Rule 15g-9 of the Securities Exchange Act of 1934, as amended (the'Exchange Act"), commonly referred to as 

7

the"penny stock" rule. Section 15(g) sets forth certain requirements fortransactions in penny stocks and Rule 15g9(d)(1) incorporates thedefinition of penny stock as that used in Rule 3a5l-l of the ExchangeAct. The Commission generally defines a "penny stock" as any equitysecurity that has a market price less than $5.00 per share, subject tocertain exceptions. Rule 3a5l-l provides that any equity security isconsidered to be a penny stock unless that security is:

registeredand traded on a national securities exchange meeting specified criteriaset by the Commission; authorized for quotation on The NASDAQ StockMarket; issued by a registered investment company; excluded from thedefinition on the basis of price (at least $5.00 per share) or theissuer's net tangible assets; or exempted from the definition by theCommission. If the Company's common shares are deemed to be a pennystock, trading in our shares will be subject to additional salespractice requirements imposed upon broker-dealers who offer to sellpenny stocks to persons other than established customers and"accredited investors" (generally, persons with a net worth in excessof $1,000,000 or annual income exceeding $200,000, or $300,000 togetherwith their spouse). In brokerage transactions covered by these rules,broker-dealers must make a special suitability determination for thepurchase of such securities and must have received the purchaser'swritten consent to the transaction prior to the purchase. Additionally,for any transaction involving a penny stock, unless exempt, the rulesrequire the delivery, prior to the first transaction, of a riskdisclosure document relating to the penny stock market. A broker-dealeralso must disclose the commissions payable to both the broker-dealerand the registered representative, and current quotations for thesecurities. As a result of the application of these rules, brokerdealers will encounter difficulty in trading and/or maintaining amarket in the Company's common stock. Consequently, such rules mayaffect the ability of shareholders to sell their shares.

Holders:

TheCompany has 158 shareholders, including management, who hold shares ofthe common stock of the Company.  However, we believe the numberof beneficial owners is significantly greater.

Dividends:

TheCompany has not declared or paid any cash dividends on its commonstock. Moreover, current management has no intention to declare anysuch dividends in the foreseeable future, but will retain earnings, ifany, to finance its operations and any expansion of its business.

Recent Sales of Unregistered Securities:

Fiscal Year 2002 - The Company did not issue any unregistered securities during fiscal year 2002.

Fiscal Year 2003 - The Company issued the following unregistered securities:

8

-

OnMarch 4, 2003, the Board of Directors authorized a forward stock splitof all of the issued and outstanding Company common shares on the basisof 25.2 common shares for 1 common share outstanding, issueable toholders of record as of March 5, 2003. Accordingly, the 754,500outstanding common shares held of record on March 5, 2003 were forwardsplit and resulted in 19,013,400 common shares outstanding as of thatdate. The 25.2 forward stock split was in the form of a stock dividend.

-

OnAugust 13, 2003, the Company received gross subscription proceeds inthe amount of $5,000 from an accredited investor and issued to it100,000 restricted common shares pursuant to a private placement,utilizing the exemption from the registration requirements of the 1933Act provided in Rule 506 of Regulation D. 

-

OnNovember 28, 2003, pursuant to unanimous adoption by the Boards ofDirectors of  Psy-Ed Corporation and East Coast Airlines, Inc.,the companies entered into a Share Acquisition Agreement thatauthorizes  East Coast Airlines, Inc. (the “Company”or “East Coast”) to offer  (the“Offering”) 173 shares of its Common Stock (the“Common Stock”) for each share of Psy-Ed Corporation(“Psy-Ed”) Common Stock held of record by all Psy-EdStockholders. This Offering resulted in the issuance of 13,010,984  shares of the Company’s common stock to 50Psy-Ed shareholders.

Fiscal Year 2004 - The Company issued the following unregistered securities:

-

In August 2004, the Company issued 800,000 shares of its common stock for financial services.

-

In August 2004, the Company issued 200,000 shares of its common stock for legal services.

-

In October 2004, the Company issued 6,000 shares of its common stock to its Directors for directors’ fees.

-

InDecember 2004, the Company issued 500,000 shares of its common stock toits Chief Executive Officer and 300,000 shares of its common stock toits Chief Operating Officer for management services.

Securities authorized for issuance under equity compensation plans:

None.

9

**ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION**

Critical Accounting Policies:

TheCompany's discussion and analysis of its financial condition andresults of operations are based upon the Company's financialstatements, which have been prepared in accordance with generallyaccepted accounting principles in the United States of America. Thepreparation of these financial statements requires the Company to makeestimates and judgments that affect the reported amount of assets,liabilities and expenses, and related disclosure of contingent assetsand liabilities. The Company bases its estimates on historicalexperience and on other various assumptions that are believed to bereasonable under the circumstances, the results of which form the basisform making judgments about carrying values of assets and liabilitiesthat are not readily apparent from other sources. Actual results maydiffer from these estimates under difference assumptions or conditions.

Plan of Operation:

Itis management’s intent to continue and expand the Company’s34 year heritage of providing “Information that matters fromthose who care” to the special needs market.  The Company in2004 began implementing a growth strategy that consists of athree-point initiative as outlined below to increase revenues andprofitability for 2005 and beyond.

-

Expansionof the revenue base relating to core services, those being increased adrevenue from it flagship publication, Exceptional Parent Magazine,increase in the sales of custom communications, increase in revenuefrom its special project segment including “DisabilitiesAwareness Night” in various sports mediums, the “WorldCongress and Exhibition on Disabilities” and greater integrationof web based initiatives with the sales of core services.

Inthis regard and as an example of the emphasis placed on aggressivelyimplementing its plan, the Company in the fourth quarter of 2004 beganstaffing up for these initiatives through the hiring of five newemployees dedicated to increased sales efforts as well as themanagement of its special projects expansion.

In2005 the Company has expanded its Disabilities Awareness Nightprograms, principally conducted in major league baseball parks in 2004and prior, to National Basketball Association venues as well as minorleague ball parks as well as minor league hockey. On May 23, 2005 theCompany in conjunction with the National Baseball Hall of Fame inCooperstown NY will host prior to the annual “Hall of Fame”game a ceremony honoring returning disabled veterans from Iraq andAfghanistan, this in conjunction with Walter Reed Army Medical Hospitaland its Commanding General who will be presenting awards to returning veterans and their families selected for the honor.

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On December 1st   through3rd, 2005 the annual World Congress and Exhibition on Disabilities isto be held in Philadelphia, PA. Previously, in October 2004, it hadbeen held in Orlando, Florida with approximately 6,000 attendees. In2005 attendance is forecast to be in the range of 10,000- 12,000attendees. The Company expects to conduct over 100 individual educationsessions during the event with world renowned guest lecturers providingeducation on topics including autism, ADHD, cerebral palsy, mentalretardation and many others.

Theseinternal growth efforts in 2005 are intended to increase overallrevenues from core services by approximately 50% over 2004 revenues.

Itshould also be noted that further internal growth is expected to resultfrom Exceptional Parent Magazine being designated as the officialpublication of the American Academy of Developmental Medicine andDentistry, an growing national organization of over 1,000 doctors anddentists who have dedicated their efforts to providing “bestpractices” advice to caregivers on how to medically and dentallycare for the special needs individual. Beginning with the June 2005issue of Exceptional Parent Magazine, AADMD will be providing articlesfor the magazine and the opportunity for physicians to secure up to 2credit hours of CME by completing a test that is to follow eacharticle. Management believes that Exceptional Parent Magazine is thefirst consumer publication ever to offer CME credits to physicians. TheCompany’s relationship with the AADMD is in addition torelationships it enjoys with every major disabilities group throughoutthe United States as well as with medical societies such as the ChildNeurology Society and several others of this caliber.

Itshould also be noted that the Company’s CEO, Joseph M. ValenzanoJr. is the only non-physician to hold a board seat on the AADMD.

InMarch 2005, the Company submitted an appropriations request to Congressthat, if approved, would be funded in 2006, for $1,000,000 with whichto increase its education and information programs to military familieswith special needs dependents and caregivers. If successful in havingthese funds committed, the Company intends to build upon its existingrelationships within the military community to bring timely andmeaningful educational content in both print and on a web baseddelivery system to this segment. This initiative would result inincreased revenue from subscription, on-line and custom communicationsales.

-

Identifyingprofitable synergistic acquisitions.  The Company in early 2005began discussions with two entities one a publication with a specialneeds focus and the other being engaged in conference and trade showactivities. While there is no guarantee that the Company will besuccessful in concluding on either acquisition it should be noted thatif these acquisitions are successfully concluded the Company may reportadditional revenue on 

11

aconsolidated basis in the range of $1,200,000 to $1,700,000 from theacquisitions.  It is the intent of the Company to utilize itscommon stock as the payment medium for any acquisition contemplatedthereby reducing the need to reduce working capital for this purpose.

-

Developmentof key strategic financial alliances. In 2004, the Company entered intoa joint venture agreement with the Informedx Corp. a for profitsubsidiary of the Conemaugh Health Systems of Johnstown, PA. This jointventure was established in concert with the Company’s move of itscorporate headquarters to Johnstown, PA, a move in part funded byInformedx through the provision of approximately 5,000 square feet ofoffice and storage space at no cost for a two year period. The purposeof the joint venture is to expand the Company’s alreadysuccessful on line seminar series through financial support as well asadministrative support from both Informedx and Conemaugh.

Informedxpurchased a 50% interest in the joint venture for $210,000 in the thirdquarter of 2004 as reported in the Form 10QSB for that period and asreflected in the statement of operations included herein for theresults of operations for 2004.

Insimilar fashion, the Company in 2005 has arrived at an agreement inprincipal with Johnstown, PA based experienced provider of coursewareto the military to team on the delivery of services to the militaryspecial needs community and its professional caregivers in 2006 andpossibly in 2005 should financial sponsorship be secured in 2005 forthat purpose.

TheCompany has incurred, and will continue to incur, expenses relating toits operations. Specifically, as long as the Company is required tofile reports under the Exchange Act, it will continue to incuraccounting and legal fees relating to the filing of current, quarterlyand annual reports with the Securities and Exchange Commission.

Liquidity:

Earningswere insufficient to meet the liquidity needs of operations in 2004.The net loss from operations and use of working capital in 2004 wasoffset in part through the conversion of a $250,000 trade payable and$250,000 of other short term debt into three year notes effectiveDecember 31, 2004.  Each of these notes will require interestpayments only in 2005 at 6% with amortization based on a five year termcommencing January 1, 2006 until the end of the three year term atwhich time any remaining the remaining balance will be due.

Inaddition, in the fourth quarter of 2004, the Company receivedapproximately $200,000 of prepayments for 2005 advertising and otherservices.  These funds improved liquidity but increased deferredrevenues. 

12

To support operations, the Company also received a short-term loan of $90,000 from its CEO in March 2005.  

In2004, the Company generated $210,000 of income through the sale of a50% interest in a venture that is producing on line educationalseminars.  The Company retains a 50% interest in the entity aswell as operational control. 

TheCompany continues to improve in 2005 its working capital position. InMarch 2005 the Company initiated a private placement memorandum toraise up to $2,000,000 through the issuance of a 6% convertibledebenture (conversion at $0.50 per share into the common stock of theCompany). The primary use of proceeds from this private placement isintended to fund the Company’s expansion strategy that includescertain acquisitions in addition to paying down existing debt. Were theCompany, for any reason, to be unable to raise the entire $2,000,000contemplated, or any portion thereof, it would reduce proportionatelyits acquisition plans to reflect the actual level of funding achievedwhile attempting to also pay down debt in a manner that is alsoproportionate to the actual level of funding achieved.

TheCompany is also seeking to generate additional capital with one or morefinancial partners for various web based educational endeavors.

TheCompany’s working capital line of credit of approximately$496,000 expired on February 15, 2005.  The lender has agreed inprincipal to extend the line for an additional eighteen months basedupon the following:

-

Prior to April 30, 2005 of a reduction in the outstanding amount of $50,000, and 

-

Additional reductions within twelve months of an additional $150,000.

TheCompany is to make payments of interest only for 120 days commencingMay 1, 2005 and then pay monthly amounts of $5,000 plus interest untilthe end of the term of the loan at which time any remaining balancewill become due.  The lender will retain its security positionthat consists of a lien against substantially all of the assets of theCompany.

ThroughApril 30, 2005, the modification to the terms of the line of credit andthe debt conversions described above allow the Company to decreasecurrent liabilities by approximately $1,000,000.

TheCompany was the recipient in 2004 of an “Opportunity Grant”from the state of Pennsylvania in the amount of $50,000.  Thegrant is for reimbursable costs associated with the administration ofthe World Congress and Exhibition on Disabilities.  It is expectedthat EPGL will collect this amount in 2005.

13

Results of Operations:

Fiscal year ended December 31, 2004 compared to 2003.

Sales

In 2004 the Company in 2004 reported a decrease in sales in relation to 2003 of approximately $670,000:

-

$104,000of the decrease was the result of the untimely death in the spring of2004 of a key independent salesperson whose market area waspredominantly the western United States.  The Company was not ableto replace this individual quickly enough to prevent the decline inrevenues.

-

$122,000 of the decline in revenues was from a decrease in subscription income. 

-

$176,000 of the decline was due to decreased space advertising sales.  

-

A decrease of $268,000 in special projects income.

InJune 2004, the Company engaged a representative firm experienced inmagazine advertising sales to provide national sales representation forall product lines.  However, in August 2004 it was necessary toterminate the relationship due to lack of performance. 

Inthe fourth quarter of 2004, the Company began a hiring process toestablish its own sales department with the intent of being able tohave improved control and management of this critical function. As aresult of this effort, the Company currently has eight employees inaddition to its CEO who comprise the majority of the sales force.

Asa result of these changes, Early indications are that Sales for thefirst quarter of 2005 will approximate $900,000 contrasted to $800,000for the first quarter of 2004.

Cost of Sales and Income From Operations

Incomefrom operations in 2004 approximated 52% as compared to 59% for theyear ended December 31, 2003, reflecting the result of a 21% decreasein sales together with cost of sales  comprising 53% in fixedcosts.

Selling, General and Administrative Expenses

TheCompany experienced an increase of approximately $390,000 in Selling,General and Administrative expenses in 2004 as compared with 2003. Theprimary categories of increase were as follows:

14

|   | Sales- Salary and Commission |  $   123,000                            |
|--------|------------------------------|--------------------------------------------------------|
|   | Administrative Salaries      |       100,000            |
|   | Legal                        |         40,000 |
|   | Administrative Travel        |         57,000 |
|   | HR Fees                      |         28,000 |
|   | Various                      |         42,000 |
|   |                         |                                                   |
|   | Total                        |  $   390,000                            |
|   |                         |                                                   |

Sales salaries and commissions increased due primarily to the addition of a national sales manager in February 2004.

Administrative salaries relate to the addition of a Chief Operating Officer/CFO in 2004.

Increasesin legal fees are predominantly due to increased work relating to SECcompliance requirements and other corporate matters.

Theincrease in administrative travel related in part to the travel costsassociated with pre-move travel in association with the relocation ofthe corporate headquarters to Johnstown PA as well as travel associatedwith the maintenance of relationships with disabilities organizationsthroughout the Northeast and across the United States as well asspeaking engagements undertaken in these locations.

HRfees relate to Administaff, a provider of HR services that wascontracted with in February 2004 to provide HR guidance as well ashealth insurance and other benefits to the organization.

**ITEM 7. FINANCIAL STATEMENTS**

The Company's Financial Statements and Notes to Financial Statements are attached hereto beginning with page F-1.

**ITEM 8. CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE**

Our accountant is Wiener, Goodman & Company P.C.  We do not presently intend to change

accountants. At no time has there been any disagreements with such accountantsregarding any matter of accounting principles or practices, financialstatement disclosure, or auditing scope or procedure.

15

**ITEM  8A. CONTROLS AND PROCEDURES**

Evaluation of disclosure controls and procedures

Ourchief executive officer and chief financial officer have each evaluatedour disclosure controls and procedures (as defined in rule 13a-14(c)and 15d-14(c) under the Securities Exchange Act of 1934, as amended) asof a date within 90 days before the filing of this annual report (theEvaluation Date).  Based on that evaluation, our principalexecutive officer and principal financial officer concluded that, as ofthe Evaluation Date, the disclosure controls and procedures in placewere adequate to ensure that information required to be disclosed byus, including our consolidated subsidiaries, in reports that we file orsubmit under the Exchange Act, is recorded, processed, summarized andreported on a timely basis in accordance with applicable rules andregulations.  Although our principal executive officer andprincipal financial officer believes our existing disclosure controlsand procedures are adequate to enable us to comply with our disclosureobligations, we intend to formalize and document the procedures alreadyin place and establish a disclosure committee.

Changes in internal controls

Wehave not made any significant changes to our internal controlssubsequent to the Evaluation Date.  We have not identified anysignificant deficiencies or material weaknesses or other factors thatcould significantly affect these controls, and therefore, no correctiveaction was taken.

Critical Accounting Policies

Ourfinancial statements and related public financial information are basedon the application of accounting principles generally accepted in theUnited States ("GAAP"). GAAP requires the use of estimates;assumptions, judgments and subjective interpretations of accountingprinciples that have an impact on the assets, liabilities, revenue andexpense amounts reported. These estimates can also affect supplementalinformation contained in our external disclosures including informationregarding contingencies, risk and financial condition. We believe ouruse if estimates and underlying accounting assumptions adhere to GAAPand are consistently and conservatively applied. We base our estimateson historical experience and on various other assumptions that webelieve to be reasonable under the circumstances. Actual results maydiffer materially from these estimates under different assumptions orconditions. We continue to monitor significant estimates made duringthe preparation of our financial statements.

Oursignificant accounting policies are summarized in Note 1 of ourfinancial statements. While all these significant accounting policiesimpact our financial condition and results of operations, Our viewscertain of these policies as critical. Policies determined to becritical are those policies that have the most significant impact onour financial statements and require management to use 

16

agreater degree of judgment and estimates. Actual results may differfrom those estimates. Our management believes that given current factsand circumstances, it is unlikely that applying any other reasonablejudgments or estimate methodologies would cause effect on ourconsolidated results of operations, financial position or liquidity forthe periods presented in this report.

**PART III**

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

The names of all directors and executive officers of the Company are as follows:

| **Name**                 | **Age** | **Position**              |
|--------------------------|---------|---------------------------|
| Joseph M. Valenzano, Jr. | 59      | President, CEO, Director  |
| David Hirsch             | 58      | Director                  |
| Gregg LaPointe           | 42      | Director                  |
| Raymond C. Smith         | 60      | Director                  |
| Ed McCabe                | 62      | Director                  |
| Donald Chadwick          | 53      | Director, Sec., Treasurer |
| John F. Crowley          | 37      | Director                  |
| Robert Salluzzo          | 57      | COO/CFO                   |
| Rick Rader, MD           | 56      | Editor in Chief           |

Theabove listed officers and directors will serve until the next annualmeeting of the shareholders or until their death, resignation,retirement, removal, or disqualification, or until their successorshave been duly elected and qualified. Vacancies in the existing Boardof Directors are filled by majority vote of the remaining Directors.Officers of the Company serve at the will of the Board of Directors .Tothe Company’s knowledge, there are no agreements orunderstandings for any officer or director to resign at the request ofanother person nor is any officer or director acting on behalf of or isto act at the direction of any other person other than in his fiduciarycapacity of and for the benefit of the Company and at its direction.

**Joseph M. Valenzano, Jr., MBA, APC** - **President / Chief Executive Officer / Director**

Mr.Valenzano, age 59, received his bachelor’s degree in economicsand history from Upsala College.  He also holds an MBA in Financeand Management from Fairleigh Dickinson University.  A CertifiedManagement Accountant (CMA), Mr. Valenzano was awarded an AdvancedProfessional Certificate (APC) in Accounting and Information Systemsfrom the Graduate School of Business at New York University.

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Mr.Valenzano is a frequent speaker at conferences, organizations andmedical and dental organizations serving people with disabilities andis on the board of a number of prestigious disability organizations. Heis the Founder and Member of the Board of Trustees of the EP Foundationfor Education, Inc., an IRS-approved 501(c)(3) not-for-profitcorporation.  He has served as Chairman of the Executive AdvisoryBoard for the Child Neurology Society and Child Neurology Foundationand as a member of the board of directors for the CNF. He is currentlyChairman of the Executive Advisory Board to the American Academy ofDevelopmental Medicine and Dentistry and a member of the board ofdirectors of that prestigious professional society.  He alsoserves on the board of directors of Oral Health America; CMRA ofTennessee and MOVE International. 

Mr. Valenzano has over 30 years experience in health care communications. 

Positions he has held include:

 ̈

ExecutiveVice President Operations at Medical Economics where, among others, heoversaw the Physicians Desk Reference, Medical Economics, ContemporaryPediatrics, Contemporary OB/GYN, and Contemporary Urology and businessand health

 ̈

Executive Vice President-Finance for The Thomson Corporation, one of the world’s largest communications companies; and 

 ̈

Vice President-Business Development with Elsevier-NDU of the Netherlands prior to its merger with Reed.

He is the father of five sons, one of whom has a disability.

**Rick Rader, M.D. Editor in Chief**

Dr.Rader, age 55, is Director of the Habilitation Center at Orange Grovein Chattanooga, Tennessee.  Established in 1953 the center is oneof the country’s premier community agencies providing medical,therapeutic, vocational, educational, and residential services toindividuals with developmental disabilities.  Dr. Rader isactively engaged in research projects involving biomechanics,ergonomics, bio-behavior, communications, mobility, and psychosocialmedicine as related to the special needs community.  Dr. Rader hasspearheaded the drive to train medical students and physicians intechniques of communicating the expression of pain with non-verbalretarded citizens.  He is Editor-in-Chief of Exceptional ParentMagazine, the leading journal for parents and professionals.  Heis active in creating national training standards for direct care staffin supported living, an outgrowth of de-institutionalization andcommunity integration. He is also the Chair of the Chattanooga RehabCluster.

Priorto coming to Chattanooga (Orange Grove) he was the Executive Directorof The American Institute of Stress (New York) with a focus on copingstrategies for children, post traumatic stress disorder andpsychoneuroimmunology.  He has been a featured speaker at theInternational Congress on Stress in Switzerland for several years. 

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Dr.Rader studied medical anthropology with a focus on the bioculturaldeterminants of health and disease models.  Upon completion of hismedical studies (internal medicine) in London Dr. Rader was appointedas the director of Operations at Surgical Aid to Children of the World. This group pioneered the creation of pediatric surgicalassistance teams and surgical training in the developing world. Projects were established in China, Africa, The Middle East,India and Central America. 

Dr.Rader has also served as the director of Medical Affairs at theInternational Medical News Group whose journals (Internal MedicineNews, Family Practice News, Ob-Gyn News, Pediatric News, Clinical PsychNews and Skin and Allergy News) is read by over 400,000 physicians. He was also the Medical director at (journals) Infections inMedicine, Complications in Surgery, Abstracts in Infectious Diseases,and The AIDS Reader. 

Heis a member of the Society of Teachers of Family Medicine and TheAmerican Association on Mental Retardation.  He is a Fellow of TheAmerican Academy for Cerebral Palsy and Developmental Medicine and TheAmerican Institute of Stress

**Donald S. Chadwick, CPA –Director, Secretary, Treasurer**

DonaldS. Chadwick, age 53, obtained his Bachelors Degree in Accounting fromBabson College in 1974 and has a Masters of Business Administration inStrategic Planning from the University of Pittsburgh. Mr. Chadwick iscurrently a financial and tax consultant.

Mr.Chadwick was employed by Price Waterhouse from 1974 to 1985 as anauditor and later joined the tax department. In 1985 he left PriceWaterhouse to establish a tax consulting practice serving individualsand corporations.

InOctober 1988, Mr. Chadwick formed Cardinal Debt Associates, L.P. (Debt)and Cardinal Equity Associates, L.P. (Equity) which are businessdevelopment companies providing capital to small growth orientedbusinesses. In September 2000, Debt provided a short-term loan and lineof credit to Psy Ed. In conjunction with the loan, Equity acquired awarrant position in Psy Ed which has been exchanged as a result of theshare exchange with East Coast Airlines (now EP Global CommunicationsInc.) for 220,754 common shares.

**Rear Admiral Raymond C. Smith, USN (ret.) – Director**

RearAdmiral Ray Smith, USN (Ret), age 60 is widely regarded as one of theNavy’s most inspirational leaders.   A Navy SEAL for 31years, Admiral Smith achieved extraordinary success through focused,participatory leadership.  During his four-year tenure asCommander of the 2300-men worldwide SEAL force, he raised personnelretention to a level three times the Navy average.  As a NavyCaptain, Admiral Smith led the Navy SEALs in Operation Desert

19

 Storm,conducting over 200 combat operations of strategic significance whileincurring no casualties.  Earlier in his career, Admiral Smithdirected Navy SEAL training, generally considered to be the mostchallenging military training in the world.  While in thisposition, Admiral Smith achieved the highest graduation rate in the50-year history of the course (55%).

AdmiralSmith has been recognized in numerous publications and books, mostrecently in Noel Tichy’s book, The Leadership Engine, in which heis cited as a leader closely involved with employees at every level ofhis organization.  Admiral Smith has also been recognized inNewsweek, Fortune, Readers Digest, and on the Discovery Channel, theHistory Channel, and CBS This Morning.  

AdmiralSmith was also awarded the California Distinguished Service Award whilea member of the Governor’s Council on Physical Fitness andSports.  Working directly for the Council Chair, now Governor ofCalifornia Arnold Schwarzenegger,****he and his SEALsfocused on inner-city at-risk youth, children with special needs, andsenior citizens.  The Admiral has spoken extensively on hisleadership experiences and the philosophical underpinning which hassupported his enormously successful career. Admiral Smith alsopublished two highly successful Navy SEAL manuals presently in print bythe Government Printing Office.  These two, The SEAL NutritionManual and The SEAL Physical Fitness Manual, focus on the specialnutritional and fitness needs of Navy SEALs, but have been extremelywell-received by the general population because of their application toall walks of life.

Priorto retiring from the U.S. Navy, Admiral Smith was assigned as theDirector of Assessment for the U.S. Navy.  As the first SEALAdmiral to serve in a general Navy assignment, Admiral Smith wasresponsible for developing the Navy’s first capability-basedassessment process.  He led 100 systems analysts in providingservice-level recommendations directly to the Chief of NavalOperations.  Incorporating computer modeling and risk assessment,he provided Navy leadership with $36B in analysis-based savings over asix-year period.

AdmiralSmith lives with his wife Kathy in Pasadena, California.  He hasthree sons, two of whom served as Navy SEALS.  He also served askeynote speaker at EP’s World Congress & Exposition onDisabilities in September 2001 in Atlanta, Georgia.

**John F. Crowley – Director**

JohnF. Crowley, age 36, a dynamic biopharmaceutical executive andentrepreneur, has an impressive track record in the development andmanagement of small and large companies.  He is the former CEO ofone of biotechnology’s leading success stories of the lastseveral years Novazyme Pharmaceuticals.  Growing Novazyme fromfive-person start-up company to 120-person leading biotechnologyR&D company, he helped raise $27 million in venture capital –culminating in the sale of Novazyme to Genzyme for a total purchaseprice of $225 million in just eighteen months from company inception. Featured on cover of The Wall Street Journal

20

(July31, 2001:  “When Drug Research is Personal”), on TheToday Show (November 2, 2001), as well as the subject of a HarvardBusiness School case study now taught at HBS in the second year“Innovating Health Care” course (A Father’s Love:Novazyme Pharmaceuticals, published October 22, 2002). Mr. Crowley wasagain featured on the front page of the Wall Street Journal on August26, 2003 a copy of which is attached.

From2001 to 2002, Crowley was Senior Vice President for Genzyme Corporationin Cambridge, MA and Princeton, NJ and General Manager for NovazymePharmaceuticals (a wholly owned subsidiary). At Genzyme, he served in asenior executive position for fifteen months following Genzyme’sacquisition of Novazyme in September 2001. Crowley was responsible forDrug Development Strategy & Planning; Manufacturing Strategy,Planning & Oversight; Clinical and Regulatory Development; P&LManagement and Accountability; Merger Integration; BusinessDevelopment; Investor Relations.

AtBristol-Myers Squibb Company in Princeton, NJ from 1998-2000, Crowleywas Director, Executive Committee for the U.S. Medicines Group. Heserved in this key leadership development role as special assistant tothe President, U.S. Medicines Group, with overall responsibility forcoordinating daily executive activities of this business for the GroupPresident and his six direct reports, all division presidents of theU.S. pharmaceutical and consumer medicines businesses.  U.S.Medicines Group sales in 1999 exceeded $9 Billion.

Heholds a Masters in Business Administration from Harvard UniversityGraduate School (1996-1997), where he was elected by Classmates todeliver Class Commencement Address. He received his Juris Doctor fromthe University Of Notre Dame Law School (1989-1992), with GraduationAwards for Outstanding Achievement in the Art of Oral Advocacy and forExcellence in Legal Writing. Previously, he graduated with a Bachelorof Science in Foreign Service from Georgetown University.  Mr.Crowley was nominated to the United States Naval Academy in Annapolis,Maryland by both Senator Bill Bradley and Congresswoman Marge Roukema(N.J.). There he completed three semesters of study. He earnedCommandant’s List honors and was ranked 2/36 Midshipman in hisPlebe year (freshman).

JohnCrowley is also founder of The Children’s Pompe Foundation, a501(c)(3) charitable organization dedicated to “driving sciencetoward a cure for Pompe’s Disease.”

**David Hirsch, MD – Director**

Apediatric physician, Dr. Hirsch, age 58 specializes in caring forchildren with special health care needs.  He is a partner inPhoenix Pediatrics, which has seven physicians and a medical andadministrative staff of almost forty.  Over the years he hasworked with hundreds of children with disabilities throughout Arizona. Dr. Hirsch is a fellow and is actively involved in the AmericanAcademy of Pediatrics (AAP) as a member in the section on Neurology,Home Health Care and Developmental Disabilities.  Dr. Hirschreceived three degrees in engineering from Carnegie-Mellon University,Pittsburgh, PA. Before earning his medical degree at the University 

21

ofCincinnati in 1975.  He did is residency in pediatrics at theUniversity of Michigan Affiliated Hospitals.   Dr. Hirschwrites a monthly column called “Ask the Doctor” forExceptional Parent and is active on several boards of foundations andnon-profit organizations.  He also serves as a member ofExceptional Parent’s Editorial Advisory Board.

**Mr. Gregg LaPointe – Director**

GreggLapointe has spent his entire professional career in operations andfinancial management.  He holds an MBA from the Fuqua School ofBusiness at Duke University with undergraduate degrees from McGillUniversity and Concordia University, both in Montreal, Canada.

He is a chartered accountant (Canada) as well as being a Certified Public Accountant (Illinois).

Hehas held positions of VP Finance leading to the position of ChiefOperating Officer at Sigma Tau Pharmaceuticals, Inc. in Gaithersburg,Maryland during the period 2001 to 2003.

He is the chairman of the audit committee for the Board of Directors. 

**Edward McCabe – Director**

EdwinMcCabe, age 62, is a 1963 graduate of Dartmouth College in Hanover, NewHampshire, JD Degree (with distinction) from The University of MichiganLaw School in Ann Arbor, Michigan, 1966.  Member of theMassachusetts Bar.  Active trial lawyer and a member of the First,Second, Fifth, Eighth, Ninth, Federal and District of Columbia CircuitCourts of Appeal.  Mr. McCabe has appeared pro hac vice in courtsin nineteen states in the course of his career as a trail lawyerincluding The Supreme Court of The United States.  Mr.McCabe’s professional accomplishments – defeats as well asvictories – have been extensively chronicled in The Boston Globe,The Boston Herald, The Wall Street Journal, The New York Times, TheAmerican Lawyer, The National Law Journal, Boston Magazine, and invarious other local and regional publications.

**Robert Salluzzo, CPA– COO/CFO**

Mr.Salluzzo, age 57, began his professional career with Price Waterhouse& Co. in 1969, specializing in all areas of taxation relevant tomultinational corporations, high net worth individuals and variouscharitable and personal benefit trusts. In 1976 he established his ownaccounting firm focusing on the needs of emerging businesses. In thiscapacity, he was involved in the structuring of multi-million dollarasset based credit facilities as well as integrating funding fromeconomic development agencies into capital formation plans fordevelopment stage companies.

22

In1985, he merged his firm into a major regional accounting firm locatedin Albany, New York. Mr. Salluzzo was one of six partners responsiblefor the substantial growth of the firm. In 1992 he retired to establisha consulting practice aimed solely at the needs of emerging anddevelopment stage companies with a concentration in aviation relatedactivities including business planning for airports.

Throughouthis professional career, Mr. Salluzzo has been actively involved inaviation pursuits, not only as a pilot but also as a consultant invarious aviation matters, including airline certification andmanagement.

Hewas primarily responsible in a consulting role for the construction ofa general aviation airport located in Canandaigua, New York State. Hehas consulted with numerous communities on air service needs as well asbeing a guest speaker at aviation seminars. He has also teamed withleading New York State engineering firms in relation to various airportprojects throughout New York State.

Mr.Salluzzo is a graduate of St. Bonaventure University and is anhonorably discharged Army officer having served in the US Army FieldArtillery.

**Other**

There are no family relationships among any of the directors or officers of the Company.

None of the foregoing Directors or Executive Officers has, during the past five years:

(a)Had any bankruptcy petition filed by or against any business of whichsuch person was a general partner or executive officer either at thetime of the bankruptcy or within two years prior to that time;

(b) Been convicted in a criminal proceeding or subject to a pending criminal proceeding;

(c)Been subject to any order, judgment, or decree, not subsequentlyreversed, suspended or vacated, of any court of competent jurisdiction,permanently or temporarily enjoining, barring, suspending or otherwiselimiting his involvement in any type of business, securities or banking

activities; and 

(d)Been found by a court of competent jurisdiction (in a civil action),the Commission or the Commodity Futures Trading Commission to haveviolated a federal or state securities or commodities law, and thejudgment has not been reversed, suspended, or vacated.

23

Compliance with Section 16(a) of the Securities Exchange Act of 1934

TheCompany knows of no person, who at any time during the period fromJanuary 1, 2003, to the present, was a director, officer, beneficialowner of more than ten percent of any class of equity securities of theCompany (a "Reporting Person"), that failed to file on a timely basisany reports required to be furnished pursuant to Section 16(a). Basedupon a review of Forms 3, 4 and 5 furnished to the Company under Rule16(a)-3(d) the Company knows of no Reporting Person that failed to filethe required reports within the required time limits.

Audit Committee and Audit Committee Financial Expert

TheCompany has established an audit committee of the Board of Directorscomprised of Mr. Gregg LaPointe and Mr. Donald Chadwick.  TheBoard has determined that Mr. Gregg LaPointe, who is an“independent” director, (as that term is used in Item7(d)(3)(iv) of Schedule 14A under Exchange Act) meets all of thecriteria required of an audit committee expert.  

Compliance With Section 16(a) of the Exchange Act

Section16(a) of the Securities Exchange Act of 1934, as amended, requires ourexecutive officers and directors and persons who own more than 10% of aregistered class of our equity securities to file with the Securitiesand Exchange Commission initial statements of beneficial ownership,reports of changes in ownership and annual reports concerning theirownership of our common stock and other equity securities, on Forms 3,4 and 5 respectively. Executive officers, directors and greater than10% shareholders are required by the Securities and Exchange Commissionregulations to furnish us with copies of all Section 16(a) reports theyfile.

Tothe best of our knowledge, all executive officers, directors andgreater than 10% shareholders filed the required reports in a timelymanner.

Code Of Ethics

TheCompany has adopted a Code of Ethics applicable to its Chief ExecutiveOfficer and Chief Financial Officer. This Code of Ethics is filedherewith as an exhibit.

**ITEM 10. EXECUTIVE COMPENSATION.**

Thefollowing table sets forth certain information regarding the annual andlong-term compensation for services in all capacities to the Companyfor the prior fiscal years ended December 31, 2004, 2003, and 2002 forthe chief executive officer during the last completed fiscal year. No other executive officers received more that $100,000.

24

OnMay 31, 2001, the Company entered into an Executive EmploymentAgreement with its President and Chief Executive Officer.  Theemployment agreement expires June 30, 2005 and requires annualcompensation of $120,000, increasing after the first year, annually, bya percentage equal to the increase in the consumer price index for theNew York/Metropolitan Area for the proceeding year. 

TheCompany has a Non-Qualified Stock Option Plan (the “Plan) whichprovides for granting of “Incentive Stock Options” to keyemployees within the meaning of Section 422 of the Internal RevenueCode of 1954 as amended.  The Plan provides for the issuance of5,000 shares. 

Substantiallyall of the options outstanding become exercisable twenty (20%) percentper year from the date of grant and twenty (20%) percent for each yearof the four years thereafter.  The price of the options grantedpursuant to the Plan is not to be less than 100 percent of the fairmarket value of the shares on the date of grant. The Company hasadopted the disclosure-only provisions of Statement of FinancialAccounting Standards No. 123 “Accounting for Stock-BasedCompensation”, (SFAS No. 123).  Accordingly no compensationcost has been recognized for the stock options granted.

Thefair value of each option and warrant grant is estimated on the date ofgrant using the Black-Scholes option-pricing model.  No shares orwarrants were granted for the year ending December 31, 2003 and sevenmonths ending December 31, 2002.

Information regarding the Company’s options and warrants for December 31, 2004 and 2003 is as follows:

|   |                                                       | December 31, 2004 |                            | December 31, 2003 |                            |
|--------|------------------------------------------------------------|-------------------|---------------------------------|-------------------|---------------------------------|
|   |                                                       | Shares            | Weighted Average Exercise Price | Shares            | Weighted Average Exercise Price |
|   | Options and warrants outstanding,

Beginning of period     | None              | $ -                             | 14,395            | $34.22                          |
|   | Options and warrants exercised                             |              |                            | (14,395)          | $34.22                          |
|   | Options and warrants granted                               | -                 | -                               | -                 | -                               |
|   | Options and warrants cancelled                             | -                 | -                               | -                 | -                               |
|   | Options and warrants outstanding, end of period            | None              | $ -                             | None              | $ -                             |
|   | Options and warrants price range, end of period            | N/A               | N/A                             | N/A               | N/A                             |
|   | Fair value of options and warrants granted during the year | None              |                            | None              |                            |
|   |                                                       |              |                            |              |                            |

InFebruary 2003, the options and warrants were converted into 6,121shares (2,039 shares from employees, 3,384 shares from EParent's chiefexecutive officer and 698 shares from Cardinal Debt Associates, L.P.)of EParent's common stock as part of a cashless exchange approved by 

25

Eparent'sBoard of Directors.  The cashless exchange was calculated usingthe fair value of the shares at the date of exercise as compared to theexercise price of the options.  The number of shares to be issuedwere reduced based on the calculation.  No cash was received uponexercise.

**ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.**

Thefollowing table sets forth the record and beneficial ownership ofCompany common stock, by each executive officer and director as a groupas well as for any person or group who is known to be the beneficialowners of more than five per cent (5%) of the commons shares of theCompany as of December 31, 2004:

| Name                                               | Office                                                        | Number of Shares | Percentage |
|----------------------------------------------------|---------------------------------------------------------------|------------------|------------|
| Joseph M. Valenzano Jr.                            | CEO and Director                                              | 4,371,048        | 18.90%*    |
| Robert J. Salluzzo                                 | Chief Operating Officer (COO) / Chief Financial Officer (CFO) | 717,566          | 3.10%*     |
| Donald Chadwick as Managing Partner or Director ** | Secretary, Treasurer

And

Director                           | 364,736          | 1.58%*     |
| Sigma Tau Pharmaceuticals                          | None                                                          | 2,206,615        | 9.54%*     |
| Officers and Directors as a Group                  |                                                          | 5,453,350        | 24.64%*    |

*     Based on 22,132,818 shares outstanding as of December 31, 2004. 

**   Mr. Chadwick owns 143,982 shares directly and is the general partner of Cardinal

                     EquityAssociates LP which owns 220,754.

**ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.**

Therehave been no related party transactions, or any other transactions orrelationships required to be disclosed pursuant to Item 404 ofRegulation S-B.

26

**ITEM 13: EXHIBITS AND REPORTS ON FORM 8-K**

(a) Exhibits

Theexhibits that are filed with this report or that are incorporated byreference are set forth in the Exhibit Index attached hereto.

(b) Reports on Form 8-K

1.

Current Report on Form 8-K dated and filed December 29, 2004, reporting an item 

                7. 01 - Regulation FD Disclosure.

2.

Current Report on Form 8-K,dated September 27, 2004 and filed October 1, 2004, 

                reporting an item 7. 01 - Regulation FD Disclosure.

**ITEM 14: PRINCIPAL ACCOUNTANT FEES AND SERVICES**

Audit Fees

Theaggregate fees billed for each of the last two fiscal years forprofessional services rendered by the principal accountant for theaudit of the registrant’s annual financial statements and reviewof financial statements included in the registrant’s Form 10-Q(17 CFR 249.308a) or 10-QSB (17 CFR 249.308b) or services that arenormally provided by the accountant in connection with statutory andregulatory filings or engagements for those fiscal years are:

2003 Audit fees - $51,247

2004 Audit fees - $37,837

Audit Related Fees.

Theaggregate fees billed in each of the last two fiscal years forassurance and related services by the principal accountant that arereasonably related to the performance of the audit or review of theregistrant’s financial statements and are not reported under Item9(e)(1) of Schedule 14A are: 

NONE

Tax Fees

Theaggregate fees billed in each of the last two fiscal years forprofessional services rendered by the principal accountant for taxcompliance, tax advice, and tax planning are:

27

NONE

All Other Fees

Theaggregate fees billed in each of the last two fiscal years for productsand services provided by the principal accountant, other than theservices reported in Items 9(e)(1) through 9(e)(3) of Schedule 14A. are:

NONE

**SIGNATURES**

Inaccordance with Section 13 or 15(d) of the Securities Exchange Act of1934 The Registrant has caused this report to be signed on its behalfby 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/ Robert J. Salluzzo

     Robert J. Salluzzo, Chief Operating (and Financial) Officer        |
|   |                                                                                                                                                                                                                    |                                                                                                                     |
|   |                                                                                                                                                                                                                    |                                                                                                                     |
|   |                                                                                                                                                                                                                    |                                                                                                                     |
|   | Inaccordance with the requirements of the Securities Exchange Act of1934, this Report has been signed below by the following persons onbehalf of the Registrant and in the capacities and on the datesindicated.
  |
|   |                                                                                                                                                                                                                    |                                                                                                                     |
|   |                                                                                                                                                                                                                    | /s/ Joseph M. Valenzano, Jr. 

     Joseph M. Valenzano, Jr, Director                           |
|   |                                                                                                                                                                                                                    |                                                                                                                     |
|   |                                                                                                                                                                                                                    | /s/ Donald S. Chadwick

     Donald S. Chadwick, Director                                       |
|   |                                                                                                                                                                                                                    |                                                                                                                     |
|   |                                                                                                                                                                                                                    | /s/ William Bleil

     William Bleil, Director                                                 |
|   |                                                                                                                                                                                                                    |                                                                                                                     |
|   |                                                                                                                                                                                                                    | /s/ Raymond Smith

     Raymond Smith, Director                                                 |
|   |                                                                                                                                                                                                                    |                                                                                                                     |
|   | Dated:                                                                                                                                                                                                                  | September 22, 2005                                                                                                       |

28

**EXHIBIT INDEX**

(3)(i) Certificate of Incorporation, Incorporated herein by reference to Company's Form 10SB 

          filed with the Commission on June 13, 2000.

(3)(ii) By-Laws of the Company, Incorporated herein by reference to Company's Form 10SB

          filed with the Commission on June 13, 2000.

(31.1) Rule 13a-14(A) Certification Of Chief Executive Officer

(31.2) Rule 13a-14(A) Certification Of Chief Financial Officer

(32.1) Certification Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906

           Of The Sarbanes-Oxley Act Of 2002

(32.2) Certification Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906

           Of The Sarbanes-Oxley Act Of 2002

(99.3) Corporate Code of Ethics and Conduct, Incorporateded herein by reference to 

           Company’sform 10-KSB filed with the Commission on April 13, 2005.

OTHER DOCUMENTS INCORPORATED HEREIN BY REFERENCE

(a) The Company's quarterly reports on Form 10-QSB for the periods ended March 31, 2004, 

       June 30, 2004 and September 30, 2004.

(b) All other reports filed by the Company pursuant to Section 13(a) or 15(d) of the Securities

       Exchange Act since the Company's fiscal year ended December 31, 2003.

29

**Financial Statements:**

**EP GLOBAL COMMUNICATIONS, INC. AND SUBSIDIARIES**

Index

|   |                                                                                                | Page                 |
|--------|-----------------------------------------------------------------------------------------------------|----------------------|
|   |  

 Report of Independent Registered Public Accounting Firm                               | F2                   |
|   |                                                                                                     |                 |
|   | Consolidated Balance Sheet December 31, 2004                                                        | F3  -  F4  |
|   | Consolidated Statements of Operations, for the Years Ended December 31, 2004 and 2003               | F5                   |
|   | Consolidated Statements of Stockholders' Deficiency, for the Years Ended December 31, 2004 and 2003 | F6                   |
|   | Consolidated Statements of Cash Flows, for the Years Ended December 31, 2004 and 2003               | F7  -  F8  |
|   | Notes to Consolidated Financial Statements                                                          | F9  -  F30 |
|   |                                                                                                |                 |

F-1

| Two Industrial Way West, Eatontown, NJ  07724  (732) 544-8111  Fax (732) 544-8788  E-Mail: tax@wgpc.net

              Wiener, Goodman

**& Company, P.C.**

Certified Public Accountants

            & Consultants

Joel Wiener, CPA

Gerald Goodman, CPA

Memberships

    SEC Practice Section of AICPA

    PCPS of AICPA

    American Institute of CPA

    New Jersey Society of CPA |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

EP Global Communications, Inc.

Wehave audited the accompanying consolidated balance sheets of EP GlobalCommunications, Inc. and subsidiaries (the “Company”) as ofDecember 31, 2004, and the related consolidated statements ofoperations, stockholders’ deficiency and cash flows for each ofthe two years in the period ended December 31, 2004.  Thesefinancial statements are the responsibility of the Company’smanagement.  Our responsibility is to express an opinion on thesefinancial statements based on our audits.

Weconducted our audits in accordance with the standards of the PublicCompany Accounting Oversight Board (United States).  Thosestandards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement.  An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financialstatements.  An audit also includes assessing the accountingprinciples used and significant estimates made by management, as wellas evaluating the overall financial statement presentation.  Webelieve that our audits provide a reasonable basis for our opinion.

Inour opinion, such consolidated financial statements present fairly, inall material respects, the financial position of EP GlobalCommunications, Inc. and subsidiaries as of December 31, 2004, and theresults of their operations and their cash flows for each of the twoyears in the period ended December 31, 2004, in conformity withaccounting principles generally accepted in the United States ofAmerica.  

Asdiscussed in Note 14 (“Restatement”) to the consolidatedfinancial statements, an error in reporting the Company's sale of aninterest in InforMedx, LLC was discovered by management as a result ofa regulatory review.  Accordingly, the consolidated financialstatements have been re-stated to correct the error.

WIENER, GOODMAN & COMPANY, P.C.

Eatontown, New Jersey

February 24, 2005, except as to notes 11, 13, 14 and 15 for which the date is August 5, 2005

F-2

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

**Consolidated Balance Sheet**

**ASSETS**

See notes to consolidated financial statements.

F-3

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

**Consolidated Balance Sheet**

**LIABILITIES AND STOCKHOLDERS’ DEFICIENCY**

See notes to consolidated financial statements.

F-4

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

**Consolidated Statements Of Operations**

See notes to consolidated financial statements.

F-5

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

**Consolidated Statement of Stockholders Deficiency**

See notes to consolidated financial statements.

F-6

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

**Consolidated Statements Of Cash Flows**

See notes to consolidated financial statements.

F-7

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

**Consolidated Statements Of Cash Flows - Continued**

See notes to consolidated financial statements.

F-8

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

**Notes To Consolidated Financial Statements**

**December 31, 2004**

**1.**

**      Description Of Business And Summary Of Significant Accounting Policies**

Basis of Presentation

OnNovember 28, 2003, East Coast Airlines, Inc.  ("East Coast")entered into a share exchange agreement with Psy-Ed Corporation. In connection with the share exchange, East Coast acquired theassets and assumed the liabilities of Psy-Ed Corporation.  Foraccounting purposes, the share exchange agreement has been treated as arecapitalization of Psy-Ed Corporation as the acquirer.  Thefinancial statements prior to November 28, 2003 are those of Psy-EdCorporation.  See Note 2 of Notes to Consolidated FinancialStatements.  

Organization

EPGlobal Communications, Inc., formerly East Coast Airlines, Inc., andSubsidiaries (“EP” or the “Company”), operatesits business through its subsidiary, Psy-Ed Corporation (d/b/aExceptional Parent Magazine).  EP publishes and distributesExceptional Parent Magazine, an international publication, designed toserve the information needs of families and professionals who areinvolved in the care and development of children and adults withdisabilities and special health care needs.  EP also develops andimplements online accredited Continued Medical Education Programs; hasits own library of over 1,000 disability book titles and publishesclinical monographs which are disseminated to physicians, researchersand allied health care professionals as well as families and caregiversall 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 financial 

F-9

statementsand the reported amounts of revenues and expenses during the reportingperiod.  Actual results could differ from those estimates.

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.

TheCompany grants credit primarily to advertisers based on an evaluationof the customer’s financial condition, without requiringcollateral.  Exposure to losses on these receivables isprincipally dependent on each customer’s financial condition. A majority of the subscription income is received in advance andpresents little risk to the Company.  The Company controls itsexposure to credit risk through monitoring procedures and establishesappropriate allowances for anticipated losses.  

Provision for Losses on Uncollectible Receivables

Theprovisions for losses on uncollectible trade receivables are determinedprincipally on the basis of specific identification and past collectionexperiences.  Allowances for doubtful accounts on accountsreceivable balances was approximately $41,000 at December 31, 2004.

Inventories

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

Revenue Recognition

TheCompany recognizes revenue in accordance with the guidance contained inSEC Staff Accounting Bulletin No.  104, “Revenue Recognitionin Financial Statements” (“SAB104”).  

F-10

Onlineservices advertising revenues, primarily derived from the sale ofbanner advertisements and sponsorships on the Company's web sites, isrecognized in the period the advertising is displayed.  The coststo develop this internet income are period costs and are expensed whenincurred.  Print publication advertising and circulation revenuesare recognized, net of agency commissions and estimated returns andallowances, when publications are issued.  List rental income isrecognized, net of commission, when a list is sold or rented.  

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 generally subscribe to the magazine for a three yearperiod of time.  Deferred subscription income represents theportion of the prepaid subscription not earned by the Company and paidfor in advance of fulfillment by the Company to the customer.  

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 five years. Leasehold improvements are amortized over the lesser of theuseful life of the asset or the term of the lease.  

Stock-Option Plan

TheCompany accounts for equity-based compensation issued to employees inaccordance with Accounting Principles Board (“ABP”) OpinionNo.  25 “Accounting for Stock Issued to Employees”. APB No.  25 requires the use of the intrinsic value method,which measures compensation cost as the excess, if any, of the quotedmarket price of the stock at the measurement date over the amount anemployee must pay to acquire the stock.  The Company makesdisclosures of pro forma net earnings and earnings per share as if thefair-value-based method of accounting had been applied as required bySFAS No. 123 “Accounting for Stock-Based Compensation.”

InDecember 2002, the FASB issued SFAS No. 148, “Accounting forStock-Based Compensation-Transition and Disclosure, an amendment ofFASB Statement No.  123”.  SFAS No. 148 providesalternative methods of transition for a voluntary change to the fairvalue based method of accounting for stock-based employee compensation. 

Italso requires disclosure in both annual and interim financialstatements about the method of accounting for stock-based employeecompensation and the effect of the method used on reported results.  The Company adopted the disclosure provisions of SFAS No.148 beginning with the year ended December 31, 2002.  The Company 

F-11

grantsstock options with exercise prices at fair market value at the date ofgrant.  The Company will continue to account for stock-basedemployee compensation under the recognition and measurement principleof APB Opinion No. 25 and related interpretations through December 31,2005.

InDecember 2004, the FASB issued SFAS No. 123R, Share-Based Payment,which establishes standards for the accounting for transactions inwhich an entity exchanges its equity instruments for goods or services.A key provision of this statement is the requirement of a public entityto measure 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 becomes effective on January1, 2006 for small business issuers. The Company will adopt SFAS 123Rbeginning in the Company's first fiscal quarter of 2006.  TheCompany is currently evaluating its position and will make itsdetermination to account for the compensation costs eitherprospectively or retroactively at the time of adoption.

TheCompany has adopted the disclosure-only provisions of SFAS No. 123,"Accounting for Stock-Based Compensation"(SFAS No. 123).  Hadcompensation cost for the Company's stock option plan been determinedbased on the fair value at the grant date for awards in 2003 consistentwith the provisions of SFAS No. 123, the Company's net earnings (loss)and earnings (loss) per share would have been reduced to the pro formaamounts indicated below:

No options or warrants were granted during the year ended December 31, 2004.

F-12

Income Taxes

TheCompany accounts for income taxes using an asset and liability approachunder which deferred income taxes are recognized by applying enactedtax rates 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.  

Evaluation of Long-Lived Assets

TheCompany reviews property and equipment for impairment whenever eventsor changes 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.

Earnings (Loss) Per Share  

Basicearnings (loss) per common share are computed by dividing net earnings(loss) by the weighted average number of common shares outstandingduring the year.   Diluted earnings per common share arecomputed by dividing net earnings by the weighted average number ofcommon shares and potential common shares outstanding during the year. The basic weighted average shares were used in calculating yearended December 31, 2004 diluted loss per share, as inclusion of theincremental shares shown in this calculation would be antidilutive. Potential common shares used in computing diluted earnings pershare relate to stock options, warrants and convertible preferred stockwhich, if exercised, would have a dilutive effect on earnings per share.

The following table includes a reconciliation of shares used in the calculation of basic and diluted earnings (loss) per share:

F-13

* Preferred stock convertible into 719,801 shares of common stock was not 

    included in the foregoing computation for 2004 because they were antidilutive.

Fair Value of Financial Instruments

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

New Financial Accounting Standards  

InDecember 2004, the Financial Accounting Standard Board(“FASB”) issued Statement on Financial Accounting Standards("SFAS") No. 123(R), "Share-Based Payment" (revised), that will requirecompensation costs related to share-based payment transactions to berecognized in the financial statements.  With limited exceptions,the amount of compensation cost will be measured based on thegrant-date fair value of the equity or liability instruments issued. In addition, liability awards will be remeasured each reportingperiod.  Compensation cost will be recognized over the period thatan employee provides service in exchange for the reward.  Thestatement also amends SFAS No. 95, "Statement of Cash Flows", torequire that excess tax benefits be reported as a financing cash inflowrather than as a reduction of taxes paid.  SFAS No. 123(R) iseffective as to the Company as of the beginning of the first interimperiod that begins after December 15, 2005.  The Company iscurrently evaluating its position and will make its determination toaccount for the compensation costs either prospectively orretroactively at the time of adoption.  The adoption of SFAS123(R) is not expected to have a material effect on the Company'sreported results of operations.****

InDecember 2004, the FASB issued SFAS No. 153 an amendment of APB OpinionNo. 29 "Exchanges of Nonmonetary Assets".  SFAS No. 153 amends APBOpinion No. 29 by eliminating the exception under APB No. 29 fornonmonetary exchanges of similar productive assets and replaces it witha general exception for exchanges of 

F-14

nonmonetaryassets that do not have commercial substance.  A nonmonetaryexchange has commercial substance if the future cash flows of theentity are expected to change significantly as a result of theexchange.  SFAS No. 153 is effective for periods beginning afterJune 15, 2005.  The adoption of SFAS No. 153 is not expected tohave a material effect on the Company's financial position or resultsof operations.

InNovember, 2004 the FASB issued SFAS No. 151, an amendment to ARB No. 43chapter 4 "Inventory Costs".  SFAS No. 151 requires that abnormalcosts of idle facility expenses, freight, handling costs and wastedmaterial (spoilage) be recognized as current-period charges.  SFASNo. 151 is effective for fiscal years beginning after June 15, 2005. Adoption of SFAS No. 151 is not expected to have a materialimpact on the Company's results of operations or financial position.

InDecember 2003, the FASB issued SFAS No. 132(R), “Employer’sDisclosure about Pensions and Other Postretirement Benefits" (revised). SFAS No. 132(R) retains disclosure requirements of the originalSFAS No. 132(R) and requires additional disclosures relating to assets,obligations, cash flows, and net periodic benefit cost.  SFAS No.132(R) is effective for fiscal years ending after December 15, 2003,except that certain disclosures are effective for fiscal years endingafter June 15, 2004.  Interim period disclosures are effective forinterim periods beginning after December 15, 2003.  The adoptionof SFAS No. 132(R) did not have a material effect on theCompany’s results of operations or financial position.

InMay 2003, the FASB issued SFAS No. 150, “Accounting for CertainFinancial Instruments with Characteristics of Both Liabilities andEquity.”  SFAS No. 150 clarifies the accounting for certainfinancial instruments with characteristics of both liabilities andequity and requires that those instruments be classified as liabilitiesin statements of financial position.  Previously, many of thosefinancial instruments were classified as equity.  SFAS No. 150 iseffective for financial instruments entered into or modified after May31, 2003, and otherwise is effective at the beginning of the firstinterim period beginning after June 15, 2/003.  The adoption ofthe provisions of SFAS No. 150 did not have a material effect on theCompany’s financial position.

InJanuary 2003, the FASB issued FASB Interpretation ("FIN") No. 46,"Consolidation of Variable Interest Entities."  In December 2003,the FASB issued FIN No. 46(R) (revised) to address certain FIN No. 46implementation issues.  This interpretation requires that theassets, liabilities, and results of activities of a Variable InterestEntity (“VIE”) be consolidated into the financialstatements of the enterprise that has a controlling interest in theVIE.  FIN No. 46(R) also requires additional disclosures byprimary beneficiaries and other significant variable interest holders. For entities acquired or created before February 1, 2003, thisinterpretation is effective no later than the end of the first interimor reporting period ending after March 15, 2004, except for thoseVIE’s that are considered to be special purpose entities, for 

F-15

whichthe effective date is no later than the end of the first interim orannual reporting period ending after December 15, 2003.  For allentities that were acquired subsequent to January 31, 2003, thisinterpretation is effective as of the first interim or annual periodending after December 31, 2003.  The adoption of FIN No. 46 didnot have a material impact on the Company's results of operations orfinancial position.

InNovember 2002, the FASB issued FIN No. 45, "Guarantor’sAccounting and Disclosure Requirements for Guarantees, IncludingIndirect Guarantees of Indebtedness of Others", and interpretation ofFASB Statements No. 5, 57 and 107 and Rescission of FASB InterpretationNo. 34.  FIN No. 45 clarifies the requirements of SFAS No. 5,Accounting for Contingencies, relating to the guarantor’saccounting for, and disclosure of, the issuance of certain types ofguarantees.  This interpretation clarifies that a guarantor isrequired to recognize, at the inception of certain types of guarantees,a liability for the fair value of the obligation undertaken in issuingthe guarantee.  The initial recognition and initial measurementprovisions of this Interpretation are applicable on a prospective basisto guarantees issued or modified after December 31, 2002, irrespectiveof the guarantor’s fiscal year-end.  The disclosurerequirements in this interpretation are effective for financialstatements of interim or annual periods ending after December 15, 2002. The Company adopted FIN No. 45 on January 1, 2003.  Theadoption of FIN No. 45 did not have a material impact on the Company'sresults of operations or financial position.

InJune 2002, the FASB issued SFAS No. 146, "Accounting for CostsAssociated with Exit or Disposal Activities."  This Statementrequires recording costs associated with exit or disposal activities attheir fair values when a liability has been incurred.  Underprevious guidance, certain exit costs were accrued upon management'scommitment to an exit plan.  The Company adopted SFAS No. 146 onJanuary 1, 2003.  The adoption of SFAS No. 146 did not have amaterial impact on the Company's result of operations or financialposition.

**2.**

**      Share Acquisition Agreement**

OnNovember 28, 2003, East Coast entered into a share acquisitionagreement with Psy-Ed Corporation d/b/a Exceptional Parent ("EParent"). See Note 1 of Notes to Consolidated Financial Statements.  

Asprovided for in the share acquisition agreement, the stockholders ofEParent received 190 shares of East Coast common stock in exchange foreach share of EParent common stock they held.   A total of13,010,984 shares of East Coast were issued to EParent stockholders inconnection with  the share acquisition exchange.  Immediately following the share acquisition exchange, EastCoast had a total of 20,326,818 shares of common stock issued andoutstanding excluding shares issuable upon conversion of Eparent'sSeries A and Series B Preferred Stock.

F-16

Inaddition, the resignations of Robert Salluzzo and Charles Youngbloodfrom the Board of Directors of East Coast and from their positions asPresident and Chief Executive Officer and a Secretary, respectively,took effect upon the close of the share acquisition exchange.  The EParent Board of Directors became the Board ofDirectors of East Coast and Joseph M.  Valenzano, Jr.  becamethe President and Chief Executive Officer.  

Thename of the new parent company was changed to EP Global Communications,Inc.   Assuming the EParent stockholders owning all of the3,642 EParent Series A and Series B preferred shares first convert themto EParent common shares and then exchange their common shares for630,066 East Coast common shares, the EParent stockholders will thenown approximately 65% of East Coast's outstanding common stock. While the former stockholders now own more than a majority of theissued and outstanding shares of East Coast, no individual stockholderholds enough shares to assert control over East Coast and neither EastCoast or EParent is aware of any group of stockholders that is actingtogether in order to assert control over East Coast.  

**3.**

**      Property And Equipment**

Property and equipment at December 31, 2004 consists of the following:

Depreciation expense for the years ended December 31, 2004 and 2003 was $21,675 and $15,990, respectively.  

**4.**

**      Accrued Expenses**

Accrued expenses at December 31, 2004 consist of the following:

        

F-17

**5.   Debt**

Long Term Debt

Long-term debt at December 31, 2004 consists of the following:

        

F-18

(1)

This note is subordinated to Provident Bank’s working capital line of credit.  

(2)

A shareholder of the Company collateralized the loan with shares of another public entity owned by the shareholder.  

The following are maturities of long-term debt:

Short-term debt

Short-term bank obligations at December 31, 2004, consists of the following:

        

(3)

Theline of credit is secured by the Company’s accounts receivable,inventory and property and equipment.   The line of credit isexpected to be continued subject to payments of $75,000 in both Marchand April 2005.  

**6.**

**      Capital Lease Obligation**

TheCompany is the lessee of equipment under one capitalized lease expiringDecember 2008.  Future minimum lease payments under the lease areas follows:

F-19

                    

**7.**

**      Related Party Transactions**

Note payable to officer/stockholder at December 31, 2004 consists of the following:

See Note 9 of the Notes to Consolidated Financial Statements for other related party transactions

**8.**

**      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.  

Duringthe year ended December 31, 2004, the Company recorded a deferred taxasset associated with its net operating loss (“NOL”)carryforwards of approximately $2,250,000 that was fully offset by avaluation allowance due to the determination that it was more likelythan not that the Company would be unable to utilize these benefits inthe foreseeable future.  The Company’s NOL carryforwardexpires beginning in 2010 through 2017.

F-20

Thereis no provision for income taxes for the years ended December 31, 2004and 2003 as there was no taxable income in either year.

Thetypes of temporary differences between tax basis of assets andliabilities and their financial reporting amounts that give rise to thedeferred tax liability and deferred tax asset and their approximate taxeffects are as follows:

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

SeeNote 2 regarding 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.

Thegeneral tax principle underlying Code Section 382 is that lossesincurred by a corporation may be utilized by offsetting income it latergenerates, as long as its separate existence and the identity of itsmajor shareholders are basically unchanged. However, significantlimitations to the use of the Company's NOL may apply if there is anownership change.  The testing period is defined as the three-yearperiod ending on the day of any shift involving a five-percentshareholder or the equity structure. 

F-21

Whilethe Company 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. 

**9.**

**      Stock Issued for Services**

Forthe year ended December 31, 2004, the Company issued 1,806,000 sharesof the Company's common stock to employees and non-employees asstock-based compensation in the amount of $16,254.  Of the amounts800,000 shares ($7,200) were issued to officers of the Company (arelated party transaction).  The Company accounts for the servicesusing the fair market value of the services rendered.

**  **

****

****

**10**

**    .  Stockholders' Deficiency**

****

Common Stock

TheCompany is authorized to issue 60,000,000 shares of $.001 par valuecommon stock.  All the outstanding Common Stock is fully paid andnon-assessable. 

Preferred Stock – Series A

TheCompany is authorized to issue 5,000,000 shares of $ .01 par valuePreferred Stock – Series A.  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 190shares of the Company’s Common Stock.  The holders of SeriesA preferred Stock  have the following rights.

Dividends:

Ifany dividend is declared on the Company’s Common Stock in anyfiscal year, 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. 

Liquidation Preference

Inthe event 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.

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Afterthis preferred 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

Uponthe sale 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  abilityto carry out its business, only the funds that are available that willnot cause such material adverse effect shall be used to redeem theSeries A Preferred Stock.  This redemption requirement willcontinue until such time as all of the shares of Series A PreferredStock have been redeemed.

Conversion

EachShare of Series A Preferred Stock is convertible into 190 shares ofCommon Stock (subject to adjustment) at any time at the option of theholder.  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.

Anti-dilution Adjustments:

TheSeries A Preferred Stock  provides for proportional adjustments tothe conversion rate for stock splits, dividends, recapitalizations andsimilar transactions.

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Voting Rights

Holdersof the 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(presently 190 for 1).  Except when a separate class vote isrequired by law, the Series A Preferred Stock will vote with the CommonStock as a single class.

Preferred Stock – Series B

TheCompany is authorized to issue 5,000,000 shares of $1.00 par valuecumulative Preferred Stock – Series B.  All the outstandingPreferred Stock is fully paid and non-assessable. Each share of thePreferred Stock is convertible, at the option of the holder at anytime, into 277 shares of the Company’s Common Stock.. Holders of the Series B Preferred Stock are entitled to 10%cumulative dividend if declared by the Board of Directors. This classof stock holds liquidation preferences and is redeemable in December2005 for face value plus accrued dividends.

Dividends:

Theholders of 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

Inthe event 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 B Preferred Stock.

Afterthis preferred 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.

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Ifthe funds 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

Uponthe sale 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 A Preferred Stock at a price equal to two times the conversionprice of the Series A Preferred Stock (currently $61 per share). In addition, the Series B Preferred Stock is 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

Eachshare of Series B Preferred Stock is convertible into 277 shares ofCommon Stock (subject to adjustment) at any time at the option of theholder.  The Series B Preferred Stock automatically converts intothe Company’s Common Stock upon the consummation of a publicoffering by the Company with aggregate proceeds or fair market value inexcess of $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:

TheSeries B Preferred Stock  provides for proportional adjustments tothe conversion rate for stock splits, dividends, recapitalizations andsimilar transactions.

Voting Rights

Holdersof the 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(presently 277 for 1).  Except when a separate class vote isrequired by law, the Series B Preferred Stock will vote with the CommonStock as a single class.

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**11.**

**      Sale Of Interest In LLC**

EPGlobal, during September 2004, entered into a joint venture with theInforMedx Group, LLC, (“InforMedx”) a  subsidiary ofthe Conemaugh Health System of Johnstown, Pennsylvania, to promote online educational seminars, using a web based medium presenting topicsthat relate to the care of special needs individuals.  The contentof the seminars is medically based in most instances.  Theintended audiences are professional, and aligned and family caregiversof special needs individuals.  

Toimplement the joint venture, EP has established a limited liabilitycompany, EP Educational Network LLC, (“Network”) andInforMedx agreed to pay $210,000 for a one half interest in this newlyestablished entity.  Of this amount $100,000 was received inSeptember 2004 with the balance due September 2005.  

All content used is to remain the property of EP with any****jointlydeveloped content being the property of seminars with each of theparties able to utilize the content in any manner so long as that useis not disruptive to the purpose, intent or in conflict with thebusiness activities of seminars.  Profits are to allocated basedon the ownership ratio.  

EP has recognized the transaction as an addition to minority interest.

InJune of 2005, InforMedx informed the Company that it had reconsideredits continuing participation in the joint venture and made adetermination that continued participation would not be consistent withConemaugh’s strategic goals.  Accordingly, InforMedx hasagreed to return its one-half interest to the Company and be releasedfrom its obligation to pay the Company $110,000 in September 2005.

**12.  Minority Interests**

Minorityinterests consist of a fifty percent (50%) ownership interest in EPEducational Network LLC, (see Note 11).  The income from theoperation of the entity and its respective minority interests have beenreflected in the Company’s statement of operations for the yearended 2004.  The amount on the Company’s balance sheetrepresents the minority interests at December 31, 2004

**13.**

**       Commitments and Contingencies**

Operating Leases

TheCompany has operating leases for office space expiring in 2006 and office equipment expiring in 2008.   Totaloperating lease expense amounted to $111,988 and $102,035 in 2004 and2003, respectively.  Subsequent lease payments are as follows:

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Legal Proceedings

TheCompany is a plaintiff against a former director and shareholder whohas not satisfied the terms of his agreement with the Company of April1998.  The action resulted in the Company suspending payments tohim under that agreement which at the time of suspension had a balanceof $119,651.  It is the opinion of the Company’s attorneysthat the Company will not be liable for the payments and that theamount of damages being sought as compensation to the Company farexceeds the contract balance.

OnJuly 27, 2005, the Company received notice that an action has beencommenced against the company alleging breach of contract and othercauses of action seeking specific performance and other unspecifieddamages.  The Company is continuing its evaluation of the claimand believes it has meritorious defenses.  The Company intends tocontest the claim vigorously.  While the claim is at an earlystage, the Company does not believe that an adverse outcome  wouldmaterially affect its financial statements.

OnAugust 3, 2005, as a result of a routine regulatory review by theSecurities and Exchange Commission, the Company’s board ofdirectors concluded that the financial statements for the year endedDecember 31, 2004 as issued in the Registrant's annual report on Form10K-SB required restatement because of an error in recognizing incomeassociated with the formation of EP Educational Network LLC (see Note11).  The error was corrected by recognizing funds received asadditional minority interest.

The following table shows the effect of the restatement on the consolidated balance sheet as of December 31, 2004.

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Thefollowing table shows the effect of the restatement on the consolidatedstatement of operations for the year ended December 31, 2004. (The restatement had no effect on the consolidated statement ofoperations for any other period.)

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Therestatement had no substantive effect on the consolidated statement ofchanges in stockholders’ deficiency for the year ended December31, 2004.  The restatement also had no substantive effect on theconsolidated statement of changes in stockholders’ deficiency forthe year ended December 31, 2003 except that the statement wasretroactively restated for the equivalent number of shares received inthe merger after giving effect to any differences in par value of theissuer’s and acquirer’s stock with an offset to paid incapital.  

The following table shows the effect of the restatement on the consolidated

statementof cash flows for the year ended December 31, 2004. (The restatementhad no effect on the consolidated statement of cash flows for any otherperiod.)

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**15.**

**      Subsequent Events**

InJune of 2005, the minority interest in the consolidated financialstatements informed the Company that it had reconsidered its continuingparticipation. See Note 11.

Asdescribed in Note 13, on July 27, 2005, the Company received noticethat an action has been commenced against the company alleging breachof contract and other causes of action seeking specific performance andother unspecified damages.  

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