UNITED STATES SECURITIES EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

                [X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d)
                  OR (G) OF THE SECURITIES EXCHANGE ACT OF 1934

For fiscal year ended September 30, 2004             Commission File No. 0-30801

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

                 For the transition period from ______ to ______

                               MIAD Systems, Ltd.
              ----------------------------------------------------
                 (Name of small business issuer in its charter)

          Canada                                                     N/A
          ------                                                     ---
 (State or other jurisdiction                                (I.R.S. Employer of
incorporation or organization)                               Identification No.)

                        43 Riviera Drive, Unit 6
                        Markham, Ontario, Canada         L3R 5J6
               ---------------------------------------- ----------
               (Address of principal executive offices) (Zip Code)

                    Issuer's telephone number (905) 479-0214
                                              --------------

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

                          Common Stock, $.001 par value
                          -----------------------------
                                (Title of Class)

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

Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [ ]

         Issuer's revenues for its most recent fiscal year $6,984,990
(Canadian).

         The aggregate market value of the voting common stock held by
non-affiliates of the Registrant as of September 30, 2004: Not Determinable


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ITEM 1.  DESCRIPTION OF BUSINESS

(A)      BUSINESS DEVELOPMENT

         Our company, MIAD Systems Ltd., is a Canadian company. We were formed
in March 1993 and began operating our business at that same time. Our senior
management has been substantially the same since we began business. We are
located in the Toronto, Ontario, Canada area.

         We are an established full-line supplier of business computer systems
as well as a provider of computer maintenance, installation and networking
services. MIAD does not sell to individuals. We provide these goods and services
to our major clients who are primarily engaged in the corporate, institutional,
municipal, utilities and education fields, typically as part of their computer
networks.

         On July 10, 2001 we filed a Form 10-SB registration statement with the
Securities and Exchange Commission ("SEC") which became effective on September
8, 2001. Since such time, we have become subject to the reporting requirements
of the Securities Exchange Act of 1934.

(B)      BUSINESS OF THE COMPANY

         PRINCIPAL PRODUCTS AND SERVICES AND THEIR MARKETS

         MIAD Product Strategy

         In Canada, MIAD offers its clients an extensive range of business
computer systems and related products. Our broad product offering includes:

         o        desktop and notebook personal computers ( "PCs" ), servers,
                  and workstations;
         o        mass storage devices ;
         o        monitors ;
         o        printers ;
         o        network interface cards ;
         o        networking hubs, routers, and switches ;

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         o        modems ;
         o        wireless devices ;
         o        personal digital assistants ;
         o        software ;
         o        computer supplies and accessories.

         MIAD's strategy, in selling business computer systems, consists of
combining, in Canada, the disparate strategies adopted by the major computer
system vendors in the United States for sales to the large corporate and
institutional markets.

         MIAD offers its customers both custom assembled and mass produced
systems. Mass produced systems which have predetermined features are sold to
customers through MIAD as an authorized reseller of the manufacturer (also known
as a "business partner" or "solutions partner" in the industry). Custom assembly
systems with features ordered by the customer are assembled by MIAD and sold by
MIAD directly to the customer. MIAD does not engage in any manufacturing.

         MIAD's material product sales revenue streams are comprised of the
following:

         1)       Reselling of major brands. MIAD has formed strategic
                  partnerships with the major systems vendors such as IBM,
                  Hewlett-Packard/Compaq, Toshiba, etc. by becoming
                  qualified/authorized to resell their pre-configured products
                  to MIAD's existing and prospective customers. MIAD has made
                  such arrangements with the major peripheral, communications
                  and software vendors such as 3Com, Cisco, Microsoft, etc. MIAD
                  was appointed a major reseller and service provider, in
                  Canada, for Itronix Corporation. Itronix is a world-class
                  developer of wireless, rugged computing solutions for mobile
                  workers. Itronix distinguishes itself, in the market, through
                  its superior implementation capabilities and supporting
                  services. Itronix has a full range of wireless field computing
                  systems, from handhelds, to laptops to tablet PC's, in
                  addition to providing award-winning iCare (TM) Implementation
                  Services. Itronix serves mobile workers in markets such as
                  commercial field service, telecommunications, utilities,
                  insurance, government, public safety, and meter reading.

         2)       MIAD custom assembly. For clients who require a custom
                  configured system with their choice of features and
                  peripherals, MIAD has the capabilities and has been selling
                  and assembling the MIAD ULTRA (R) system to meet these unique
                  requirements. MIAD does not use refurbished or used products
                  in its ULTRA (R) system or any of its other products. MIAD
                  assembles its custom systems using components obtained from
                  outside sources.

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         MIAD Services Strategy

         To complement our core competencies, increase our customer satisfaction
as well as expand our revenue base into areas closely related to our sales of
computer systems, we are very actively involved in the computer services
business.

         MIAD has been continuously upgrading the skills of its technical staff
in order to qualify as an authorized service provider to provide maintenance and
related services for the systems and equipment it sells .

         We currently offer the following services:

         o        computer depot warranty and non-warranty repair
         o        computer on-site warranty and non-warranty repair
         o        preventative maintenance programs
         o        prepaid two-way courier computer depot repair
         o        advance computer/peripherals exchange programs
         o        data and password recovery
         o        software imaging and custom software loading
         o        hardware configuring, consulting and installation
         o        network configuring, consulting and installation

         These services are a very important focus of our long-term strategy.
Although, they have contributed less than 10% of revenues currently and in the
past and may not reach that level in the near term, they have allowed us to
solidify our relationships with our clients and major resellers and opened new
doors for computer product sales to prospects where we have previously only
provided computer maintenance/repair services.

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         MIAD Sales Strategy

                  MIAD's highly trained staff understands information technology
         and its use in solving automation problems. MIAD is more than a company
         that just fills orders; we specialize in developing creative,
         cost-effective solutions for our clients. MIAD has hired experienced
         computer industry veterans who can, early in a sales cycle, understand
         and review the business application that the prospect is attempting to
         solve through automation. The MIAD representative, based on years of
         experience, can recommend the appropriate product (whether from IBM,
         Compaq/HP, MIAD, etc.) and the appropriate model/features, as well as
         the services of installation/networking/maintenance-depot or on-site
         that are best suited to meet the customer's requirements.

         Because MIAD has the capabilities and appropriate authorizations from
major vendors to act as a reseller of their products, it can offer customers a
choice between major brand and custom. In the ruggedized wireless marketplace,
MIAD can provide the Itronix solution to meet the requirements of mobile workers
working in hostile environments. MIAD can provide the best product solution as
industry, market and economic trends change. MIAD continues to expand the
availability of services that it can provide its customers base from warranty
maintenance and repair on-site or depot, advance exchange programs, site and
network planning and installation and customized repair functions.

         The depth of MIAD's product and service offerings is integral to the
Company's strategy of diversification and cross-selling to the customer and
prospect base.

         MIAD has, over the years, invested the time, effort and funds to
develop personnel, infrastructure, credentials, recognition and authorizations
in both computer products and service offerings. With this investment and the
success achieved to-date MIAD is, now, positioned to capitalize on IT
opportunities in the Canadian marketplace.

         We do not sell products to individual end-users. Our customers are
primarily corporate and institutional and include many well-known companies as
well as healthcare institutions, utilities, municipalities, private schools and
community colleges in Ontario. All of these clients purchase from us on an "as
needed" basis and although they have made volume purchases in the past, there
are no current at will or long-term commitments with them.

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<PAGE>

(C)      INDUSTRY AND MARKET OVERVIEW

         The Canadian IT industry is key to the economic health of Canada,
enabling business to be more efficient and effective and helping consumers reap
the benefits of the on-going advances in communications and computing. No other
force has, in recent years, influenced the future of Canada's economy as
information technology according to "Industry Canada", a report published by the
Canada Department of Industry. Canada, in general, is one of the world leaders
in technology development and technology implementation as reported in Industry
Canada.

         MIAD acts as a solutions partner for our clients by working with them
to analyze and then provide to them, either directly or through independent
outside corporations which have very specific technical expertise, the goods and
services that they need to compete effectively in the marketplace. Our clients
require that we understand their business, their marketplace and what drives
their decisions. MIAD works with clients to review their business requirements,
understand technology and recommend the solutions which are best suited to their
needs. Our team members have extensive industry and technology knowledge and
expertise.

         Over the past four years generally and in Canada specifically, the
information technology sales and service industry has undergone significant
consolidation. Reduction in total client orders during the recession, more
restrictive terms and conditions from vendors, reductions in the number of
vendor-authorized resellers and increased price competition have driven several
of the weaker competitors from the market. For the remaining vendors such as
MIAD, the competition for a smaller business base has been very costly and
intense.

         IBM Canada has prepared a sales brochure featuring MIAD's success in
providing quality products and services in the municipal government marketplace.
MIAD has been appointed by the Canadian Association of Independent Schools
(CAIS) Group Purchasing Committee as supplier to the CAIS schools for computer
hardware, software, networking and related products.

         We have successfully implemented our "just-in-time" purchasing and
"build-to-order" model for our private label MIAD ULTRA(R) line of business
computers. This concept is based on the successful model originated by Dell in
the United States. We believe that the significant market penetration by Dell in
the U.S. is an indicator of the market potential for our "build-to- order" model
in Canada, particularly as the economy improves.

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         We have consolidated our expertise in the major vendor products that we
resell and continue to train our technical staff to obtain the additional (and
difficult to obtain) service authorizations. This allows MIAD to become a
full-line and full-service provider to the client and prospect base. As we
introduce new service offerings to the marketplace, generally, we put ourselves
in a better position to be recognized in the product sale environment as a most
viable supplier for new accounts.

         We have been appointed a major reseller and service provider for
Itronix Corporation. Itronix is a world-class developer of wireless rugged
computing solutions for mobile workers.

         In spite of very difficult economic times, we continue actively
soliciting and selling to new accounts. This is in addition to working
diligently at maintaining and increasing the revenue from existing accounts. The
growth through sales to new clients and additional sales to existing clients is
frequently referred to as "organic growth". We expect our organic growth to be
accomplished in three ways:

         1)       continued top-level service to existing clients in order to be
                  uniquely positioned for their on-going systems and services
                  acquisitions, and

         2)       intensify penetration in the five specific major market
                  segments where we already have a presence which include major
                  corporate accounts, as well as the institutional, municipal,
                  utilities and educational fields

         3)       introduce new products such as the Itronix rugged wireless
                  computing solution for mobile workers in Canada.

         We intend to continue to build our presence as a supplier of IT
solutions in Canada as an authorized reseller of products purchased from our
major vendors for resale to end users and by the custom assembly of our computer
systems. In addition, we will focus on expanding the number of clients for the
MIAD service offerings in maintenance and repair as well as increasing the
number and diversity of service offerings that we provide. In doing so, we
expect to focus on several priorities:

         1)       growing revenue from the existing customer base;
         2)       enlarging our customer base in Ontario through prospecting
                  activities
         3)       possibly increasing the number of sales personnel;
         4)       continuing to enhance the quality of our technology
                  operations;
         5)       developing additional partnerships in the high-end computer
                  and data communications marketplace;
         6)       attempt to bolster our financial resources.

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(D)      "BUILD-TO-ORDER" MODEL --- THE MIAD ULTRA(R) LINE

         We have distinguished ourselves from other "build-to-order" companies
such as Dell because we are also an approved reseller of brand name vendors. In
addition, we employ our "just-in-time" purchasing and "build-to-order" model of
private label personal computers, the MIAD ULTRA(R) line, to satisfy the custom
requirements of our customer base. We carry a minimal amount of finished goods
but no raw materials inventory. Instead, we acquire our component parts
specifically for our customer orders. We are authorized by IBM pursuant to a
licensing agreement, to use IBM's licensed patents in assembling MIAD personal
computer systems and servers. MIAD does not use IBM components in its custom
assembled systems. MIAD does not have agreements with but does select and
purchase components for use in these systems from a list of qualified suppliers
in the industry. These include, but are not limited to, processors from Intel,
memory from Toshiba, Hitachi, Siemens, hard disk drives from Fujitsu, CD ROM
drives from Acer and Mitsumi, floppy disk drives from Panasonic and Mitsumi and
CPU boards from ASUS and Acer.

         Our custom manufacturing approach allows our customers to choose from a
wide range of options to be custom assembled by MIAD. These may include options
for memory size, processor type and speed, cache memory, video cards, network
interface, communication speeds, video memory and disk storage among others.
These options are coupled with increased reliability, quality control and a
rapid delivery cycle. Currently, our MIAD ULTRA(R) line represents less than 10%
of our total annual revenues.

         Our ability to rapidly deliver a MIAD ULTRA(R) custom system allows us
to keep inventory levels at a minimum due to our "just in time" purchasing while
still being able to deliver the systems exactly to the customer's specifications
with a delivery time, including "burn-in" of three days or less. Our technical
and manufacturing expertise permits us to give our customers better service, not
only on our own products but those of our authorized partners.

         The seven major steps involved in the "build-to-order" process include:

         1)       Customization which involves a technical review of the request
                  confirming that all critical information is available,
                  component availability and a proper instruction set for the
                  technician to build the system.

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         2)       Logistics which involves procurement of system components and
                  peripheral devices tailored for the order and arranging for
                  its timely delivery.

         3)       Unpacking of all the parts of a system delivered by suppliers
                  which are then prepared for building the system.

         4)       Assembly and System Check requires following the specific
                  instruction code and a quality check of the system. The system
                  is then fitted with any additional hardware or software
                  requested by the customer and a final quality check is
                  performed for the whole product.

         5)       Final Check requires that all systems pass a strict
                  quality-check and "burn-in" procedure before shipment.

         6)       Packaging in its original box occurs after the assembly is
                  completed and the testing process and the system pass
                  inspection.

         7)       Shipment occurs after the assembled systems are weighed .

         Customer Advantages

         The "build-to-order" model for our MIAD ULTRA(R) line of systems
provides extensive advantages to clients in cost savings, quality control,
flexible configuration and fast response to industry trends. The main features
of the "build-to-order" model include:

                  o        Reduction of Delivery Cycle
                           By its nature, our manufacturing approach permits
                  flexibility of customization combined with very short delivery
                  cycles. We are able to customize systems to clients' needs
                  with our "just-in-time" purchasing and "build-to-order"
                  approach.

                  o        Cost Savings
                           Working with suppliers to provide "just-in-time"
                  delivery of components reduces overhead costs of warehousing
                  large quantities of components. This overhead cost reduction
                  is enhanced by fast inventory turnover. Costs are further
                  reduced by having the ability to quickly respond to industry
                  trends, thus avoiding obsolete inventory as technologies
                  change. These cost reductions are reflected in our pricing to

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                  our clients. These cost savings have, in the past two years,
                  eroded somewhat by the competitive pressures of having many
                  vendors chasing a diminishing prospect base.

                  o        Ability to Manage Technology Change
                           Purchasing components, on an "as needed" basis allows
                  us to better react to the constant change in technology and
                  price.

                  o        Increased Reliability and Quality
                           Quality control of our MIAD ULTRA(R) line is one of
                  the major reasons that users select the system. After
                  assembling the client's unique configuration, we subject the
                  system to extensive "burn-in" and system testing. Since most
                  failures occur in the first 24- 48 hours of use, this testing
                  attempts to make the system fail before shipping to the
                  client. This leads to better service and fewer repairs.

                  o        Better Serviceability
                           We choose our components with great care. After-sale
                  serviceability is taken into account and given great weight.
                  This concern facilitates not only warranty repair but also
                  provides for better customer support which contributes to
                  customer satisfaction and repeat business.

         We strive for quality and consistency in our MIAD ULTRA(R) line of
computers. We use only name brand quality components. As part of our quality
control program, we work in concert with our suppliers to provide consistency of
components. Whether a client orders ten systems or 300 systems, components will
be the same.

(F)      RESELLING

         We are an established supplier of computer systems from vendors for
which we act as resellers. We also provide maintenance, installation and
networking services to our major clients in the corporate, institutional and
education fields. In order to become approved and authorized to resell systems
of a name brand vendor such as IBM, Compaq/Hewlett-Packard or Toshiba, among
others, the vendor will qualify the proposed reseller on factors such as current
sales volume, number of sales personnel, industry knowledge, geographical
territory, other authorizations and references. The approved authorization
typically requires that a reseller only sell to end users of the product, take
responsibility for pre- and post-sale support (which includes responding to
technical and software issues and offering training and web consulting services)
and commit not to engage in activities contrary to law. The authorization does
not include maintenance which is a separate authorization and typically consists
of providing repair services either under or out of warranty. There are no other


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material limitations in the reseller authorizations. A high volume reseller with
the proper technical qualifications may also qualify for service authorization
from the vendor. Reseller authorizations are typically reviewed by the vendor on
an annual basis. To date, neither MIAD nor any vendor has terminated any
reseller agreement.

         Our MIAD ULTRA(R) line system for workstations and other servers
provides our clients with rapid delivery, custom configuration, cost savings and
enhanced quality control. However, for clients who require high-end servers, we
are an authorized reseller of Compaq, Toshiba, Hewlett Packard, IBM, Microsoft
and other well-recognized brands as described below.

         We have been authorized to resell products from major vendors. We have
authorizations from 3Com Systems, Acer, Cisco Systems, Hewlett-Packard/Compaq,
IBM, Intel, Lexmark, Microsoft, Novell and Toshiba. These reseller
authorizations are referred to in the promotional materials of these vendors as
"business partnerships".

         MIAD'S responsibilities as an authorized reseller includes securing
orders for the vendor's product and to provide pre- and post-sale support to the
client. This support does not include maintenance which is a separate
authorization which must be independently applied for and approved. The vendor
also has certain responsibilities under the reseller agreement which include
providing authorization to resell products, providing technical product
assistance, direct communication and providing the reseller with advance
confidential information on upcoming product announcements, access to literature
and product/sales training.

         We have also been authorized by Itronix Corporation to resell their
ultra-rugged wireless mobile computers. Itronix is one of the two major
providers of these specialized products in a rapidly growing segment of the
industry.

         In addition, we are authorized by Microsoft for all software in
addition to being certified as an original equipment manufacturer (OEM) for all
Microsoft products used in the MIAD ULTRA(R) line sold to MIAD customers.

         We have arrangements with the major distributors in Canada to acquire
products. Although we are authorized by the manufacturer to resell their
products, we deal directly with their distributors from whom we actually
purchase the products which we resell to end users. Our acquisition of products
from Ingram-Micro and Synnex, the two largest distributors from whom we acquire
approximately 90 % of our products, is based on product availability, price,
credit availability and service. We currently have General Security Agreements
with Ingram Micro and Synnex which secure payment for all goods and services we
purchase from them for resale.

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         As a reseller, we earn our revenues through the resale of the products
and services we purchase from our vendors, such as IBM, Toshiba,
Hewlett-Packard/Compaq, etc. through their distributors. We then resell the
products and services to our customers at our price which is higher than the
price we pay the distributor.

(G)      SERVICES AND SUPPORT

         In order to provide technology solutions for our clients, we complement
our computer assembly and distribution with value-added services and support.

Depot and On-Site computer repair

         As one of a small number of authorized service facilities in Ontario
for IBM, Toshiba, Hewlett-Packard/ Compaq, etc., we are authorized to provide
warranty and repair maintenance for desktops, notebooks, servers, peripherals,
etc. We provide these services to the client base where we have sold the
hardware. In other instances, the computer user has acquired his computer from
one of the many non service-authorized vendors and now needs warranty or
maintenance repair. The vendor, IBM, for instance will recommend that the client
deal with an authorized service provider such as MIAD. Not only do we generate
revenue from the service provided, we also acquire a new prospect for other
services and future computer sales.
         We have expanded our penetration of the depot market to the point that
we now have over 300 computers per month ( principally notebooks) brought in to
our depot for repair. We have recently become authorized by Epson Canada to
provide repair and warranty service for their Point-of-Sale (POS) printers. We
have already commenced providing these repair and warranty services to a number
of corporate, institutional and municipal organizations.

Networking Services

         As a provider of IT solutions, we have the personnel, expertise,
experience and partners to provide turn-key network solutions, from peer-to-peer
networks to 200+ station Novell or Microsoft NT and XP networks. We provide
network design and consultation, facility cabling, project management, network
implementation and support. We work with our clients to provide solutions that
not only meet their current requirements, but will allow integration of future
growth and technology.

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Customized Service and Support

         We have developed customized solutions for specific clients which are
now available to our total client base. The services include: prepaid two-way
courier service for depot repair; customer advance exchange programs for
specific devices/peripherals; software imaging and custom software loading; data
recovery; etc.

Technical Procedures

         We believe that on-going service and support is the basis for any
long-term partnership with clients.

         At our Markham facility, we have a permanent repair facility with test
equipment, anti-static procedures, a testing LAN set up for product testing and
problem recreation. Our tests can be run under XP, NT, Novell or Windows
95/98/2000.

         For depot repair, the client's system is registered with the service
co-ordinator at the reception area, transferred to the service department where
diagnosis is performed by the MIAD technician. Repair is effected or new parts
are ordered from the manufacturer and installed on the system to replace the
defective components. Turnaround time depends on parts availability from the
manufacturer (IBM, H-P/Compaq, etc.) But generally averages 2 working days.

         For on-site service, initial support calls are placed to our 1-(800)
toll-free number or local phone lines are directed to the technical support
team. We currently have Certified Novell- Netware Engineer ("CNE") and Microsoft
Certified Engineer ("MSCE") personnel along with technicians who specialize in
the manufacturing and support of our ULTRA(R) Series computers. Calls are
answered immediately or a technician will return a call within 30 minutes.
Problem escalation is directed to the service manager. We provide telephone
technical support as well as on-site service. Our on-site service offerings are
from 8:30 a.m. to 5:00 p.m. with after hours and weekend service available upon
request.

         We use a customized service tracking program to track service calls.
With this tracking program, we track customer information, service issues,
problem resolution, parts usage and serial numbers. This information is then
transferred to our accounting system for invoicing.

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         MIAD has also added a new service database that provides customers with
secure remote access to query the status of a repair. This allows them the
facility to pre-plan their service and preventative maintenance needs from their
own site.

(H)      MARKETING AND DISTRIBUTION

         Demand for computer systems in the corporate and institutional
marketplace is driven by many factors, the most significant being price, brand
name recognition, the ability of the system to be customized to the client's
needs and desires, and delivery in a timely manner. Management is not aware of
any manufacturer that currently has a computer system which can meet all of a
client's requirements and desires. The major computer vendors such as IBM,
Hewlett-Packard/Compaq do not custom build computer systems. They do, however,
generally have available 100 to 300 models of reasonably priced pre-configured
computer systems. Conversely, other vendors such as Dell (and MIAD in Canada) do
not typically provide mass produced pre-configured systems but, rather, custom
build systems. For those large users whose businesses require a custom
configured system, a brand name system from a manufacturer such as IBM, Hewlett-
Packard/Compaq is typically not an option due to the fixed nature of their mass
produced computer systems. It is the build-to-order system available from Dell
(and MIAD in Canada) that provides these customers with the unique custom
configuration they need with reasonable pricing and rapid delivery.

         We are significantly smaller than Dell and do not have the name
recognition that they enjoy. This is a competitive disadvantage which is
difficult to overcome due to their greater financial resources. Due to our
smaller size, however, we are able to deal face-to-face with our customers and
develop personal relationships which does provide us with an advantage that our
competitors lack due to their size. In addition, we can usually offer faster
delivery, if necessary, and carry no inventory.

         Our current client base is primarily focused in five major market
segments. This includes (1) major corporate accounts; (2) institutional accounts
to acute care facilities ; (3) utilities (4) municipalities and (5) educational
which includes many of the top private schools and community colleges in
Ontario.

         At this stage of our development, we are still a relatively small
player in the Canadian marketplace. However, we believe that we have the
structure and the strategic plan which we hope will allow us to become a
significant player in the Canadian IT systems and services business. We are not
yet measuring market share in either the corporate, utility, municipal, or
institutional fields. We have had significant success in penetrating the Ontario


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private school and community college markets. Although we have secured many of
the top name institutions as our clients, our market share is also still in the
single digit range.

         We intend, during the coming fiscal year, resources permitting, to add
sales representative(s) to the Toronto territory, focus on new accounts
generally and the Itronix product line specifically and increase exposure on our
service offerings featuring IBM, H-P/Compaq warranty and repair service, refine
and improve our electronic presence with emphasis on small and medium business.

(I)      COMPETITIVE BUSINESS CONDITIONS

         Our marketplace is a highly competitive environment. The IT product and
services selling industry is characterized by intense competition based
primarily on: price; product and services availability; speed and accuracy of
delivery; effectiveness of sales programs; credit terms and availability;
ability to tailor specific solutions to customer needs; knowledge of client
interface personnel; quality and breadth of product lines and services. We
believe that we compete favorably with each of these factors.

         We have the ability to provide our clients with either a MIAD custom
assembled system or with name brand resales. We do not typically compete with
major name brand companies such as IBM, Hewlett-Packard/Compaq or Toshiba in a
situation where the client requires a custom assembled system to meet its unique
specifications. In such situations, it is the customization package and not
price considerations that enable us to attract and maintain customers. When we
do compete with a Dell, they have certain competitive advantages such as their
materially greater financial resources, name recognition and buying power. Size,
however, does have its limitations. Unlike our major, well-financed and
well-known competitors, we are able, due to our smaller size, to work
face-to-face with our customers and develop working, personal relationships. We
do not have the additional expense of carrying inventories and we can, if
necessary, provide a faster delivery time in many instances.

         When our role is reselling, high-end name-brand services (such as IBM
and H- P/Compaq, etc.), to clients and potential clients, we find ourselves
competing with other resellers such as NexInnovations (formerly
EDS/Systemshouse), Quiet Touch Computers, GE Capital Corp., Microage, Compugen,
etc. We believe that we are competitive with these resellers because of our
authorizations to service the brand name lines such as IBM, Toshiba, H-P/Compaq
and our ability to provide technical support, repair, education, networking and
installation services. These factors enable us to effectively compete with
larger, better financed companies. We also work closely with our educational
clients to experiment with new technologies for their businesses and work with
educational associations to secure special prices and configurations for these


                                       15
<PAGE>

clients. We believe that these additional services provide us with a competitive
edge over our competitors and that sets us apart.

(J)      SOURCES OF SUPPLY

         For our "build-to-order" MIAD ULTRA(R) line of business computers, we
purchase name brand quality products from manufacturers such as Intel, Quantum,
ATI, Seagate, Maxtor, Panasonic, Acer, LG Electronics, Fujitsu, and others. Our
purchase of these components is based on price, service and availability from
among a number of distributors based in the Toronto area. These distributors
include Synnex Canada, Supercom, Scan Tech, Bell Micro Products, Ingram Micro
Canada, GB Micro, Tech Data Canada.

         When we supply high end servers from IBM, Hewlett-Packard / Compaq,
Toshiba and others, we also acquire the products based on prices, service and
availability primarily from the larger international distributors in the Toronto
area (Synnex Canada, Ingram Micro Canada, Tech Data Canada, etc.). Supplies for
brand name products from major vendors such as IBM, Compaq, etc. are readily
available from the major distribution companies in Canada, including Ingram
Micro Canada which is the largest in Canada. The major vendors supply the
distributors who, in turn, supply major vendor approved resellers such as MIAD.

         For components required for the ULTRA(R) "build-to-order" model, some
of the peripheral products are identical to those found on the IBM and Compaq
systems and are available from the distributors. More unique devices, such as
cases and memory, are available from component suppliers. The computer products
and accessories that we provide our clients are obtained by us directly from the
manufacturer. This is similar to the manner in which an automobile dealer
acquires service parts and products from the automobile manufacturer such as
Ford or General Motors.

         Shortages of supply typically are not company specific but rather
industry-wide and are generally caused by natural disasters such as the
earthquakes in Taiwan and Japan a few years ago that affected chip production on
a worldwide basis.

(K)      DEPENDENCE ON MAJOR CUSTOMERS

         Our current customer-base is well diversified and spans multiple
industry groups. These include major corporate, institutional, municipal,
utility and educational customers.

                                       16
<PAGE>

         With a focus on specific industries, we have grown our client-base by
concentrating on diversifying our penetration of each of the specific industry
groups. In the fiscal year ended September 30, 2003, Lambton County represented
approximately 16% of our revenue. For the current fiscal year, ending September
30, 2004 no single client represented 10% or more of our revenue.

(L)      INTELLECTUAL PROPERTY

         We do not have any patents but rely upon licenses from the companies
whose products we purchase. For our MIAD ULTRA(R) line of "build-to-order"
business computers, we are authorized by a non-exclusive license agreement with
IBM to use IBM's licensed patents for personal computers and servers for which
we pay IBM an annual fee.

         The name of our "build-to-order" business computer, the MIAD ULTRA(R),
is trademarked in Canada. There are currently no plans to trademark the MIAD
ULTRA(R) line in the United States although we may decide to do so at a later
date.

(M)      GOVERNMENT APPROVAL REGULATION AND ENVIRONMENTAL COMPLIANCE

         In Canada, computer systems and computer components must be CSA
(Canadian Standards Association ) certified. This certification is similar to
the Underwriters Laboratories (UL) certification in the United States. We only
purchase systems and components that are CSA certified.

         We are subject to Canadian provincial and federal laws governing our
relationship with employees, including minimum wage requirements, overtime,
working and safety conditions requirements. We presently are not the subject of
any governmental proceeding and we are currently in compliance with provincial
and federal regulations in Canada.

(N)      RESEARCH AND DEVELOPMENT

         We do not perform research and development ("R & D") in the traditional
sense. Rather, our R&D activities are primarily focused on
researching/evaluating/sourcing, and quality improvements for the products that
we integrate into our MIAD ULTRA(R) "build-to-order" business computer systems.
This R&D activity is conducted in the technical lab on our premises.

                                       17
<PAGE>

(O)      EMPLOYEES

         As of the date of this filing, we employ 10 persons (all of which are
full-time employees). None of our employees are covered by a collective
bargaining agreement. We believe that our employee relations are satisfactory.

ITEM 2.  PROPERTIES

         Our facilities are located at 43 Rivera Drive, Unit 6, Markham,
Ontario, Canada. The facility is a modern, secure, industrial brick and concrete
block building. We currently occupy 9,800 square feet of warehouse, assembly,
service and office space. The current lease expires in November 2005. Our
monthly rent is $7,200 (Canadian including taxes) per month.

ITEM 3.  LEGAL PROCEEDINGS

         From time to time, the Company may be a party to certain claims, suits
and complaints which arise in the ordinary course of business. Currently, there
are no such claims, suits or proceedings, which, in the opinion of management,
if decided against the Company would have a material adverse effect on the
Company's financial position.

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         Our common stock currently trades on the over-the-counter bulletin
board (OTC:BB) under the trading symbol "MIADF". From June 1999 until our
listing on the OTC:BB in November 2001, we traded in the "pink sheets" under the
trading symbol "MIAD". The following table sets forth the high and low bid
prices of our common stock (USD) for each calendar quarter and subsequent
interim period since our common stock commenced actual trading, as reported by
the National Quotation Bureau and represents inter dealer quotations, without


                                       18
<PAGE>

retail mark-up, mark- down or commission and may not be reflective of actual
transactions:

1999                                   High           Low
----                                   ----           ---
Quarter ended June 30                 $1.00          $1.00
Quarter ended September 30             1.50           1.00
Quarter ended December 31              2.375          1.375

2000
----
Quarter ended March 31                 2.375          2.1875
Quarter ended June 30                  3.25           2.375
Quarter ended September 30             2.80           2.6825
Quarter ended December 31              2.75           2.75

2001
----
Quarter ended March 31                 2.00           1.25
Quarter ended June 30                  2.00           1.96
Quarter ended September 30             2.25           1.75
Quarter ended December 31              2.25           1.75

2002
----
Quarter ended March 31                 1.90           1.01
Quarter ended June 30                  2.00           1.05
Quarter ended September 30             1.50           0.29
Quarter ended December 31              0.25           0.15

2003
----
Quarter ended March 31                 0.19           0.07
Quarter ended June 30                  0.35           0.09
Quarter ended September 30             0.35           0.18
Quarter ended December 31              0.25           0.12

2004
----
Quarter ended March 31                 0.12           0.13
Quarter ended June 30                  0.25           0.08
Quarter ended September 30             0.12           0.08
Quarter ended December 15              0.08           0.06

          There can be no assurances that an active public market for the common
stock will develop or be sustained.

                                       19
<PAGE>

Holders:

         As of September 30, 2004 there were 3,711,400 shares issued and
outstanding and 51 shareholders of record.

Dividends:

         We have not declared any dividends. There are no restrictions on the
common stock that limit the ability of us to pay dividends if declared by the
Board of Directors and the loan agreements and general security agreements
covering the Company's assets do not limit its ability to pay dividends.

          The holders of common stock are entitled to receive dividends when and
if declared by the Board of Directors, out of funds legally available therefore
and to share pro-rata in any distribution to the stockholders. Generally, the
Company is not able to pay dividends if after payment of the dividends, it would
be unable to pay its liabilities as they become due or if the value of the
Company's assets, after payment of the liabilities, is less than the aggregate
of the Company's liabilities and stated capital of all classes.

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

         Except for the historical information contained herein, the matters
discussed in this report are by their nature forward-looking. For the reasons
stated in this report or our SEC filings, or for various unanticipated reasons,
actual results may differ materially. Our operating results may fluctuate on a
quarter-to-quarter basis as a result of a number of factors, including the
competitive and economic factors affecting the Canadian market, production and
assembly delays or difficulties, and the degree of acceptance that the Company's
products achieve during the year.

          The following discussion and analysis provide information that we
believe is relevant to an assessment and understanding of our results of
operation and financial condition for the fiscal year ended September 30, 2004.

          The following discussion should be read in conjunction with the
Financial Statements and related Notes appearing elsewhere in this Form 10-KSB..

         All figures stated herein are in Canadian dollars.

                                       20
<PAGE>

RESULTS OF OPERATIONS

Twelve months ended September 30, 2004 compared to same period in 2003.

         Revenues

         For the fiscal year ended September 30, 2004 our revenues decreased by
19.4% from $8,668,856 in the same period in 2003 to $6,984,990. IDC and ERC, the
largest industry watchers in Canada report that, despite a rebound in the US
economy in 2003 and 2004, and numerous signs both in Canada and internationally
that IT spending is trending up, the last two years go down as a bleak years for
Canadian resellers's (MIAD's industry). MIAD's revenue decline for the current
fiscal year is a very disappointing result of the company's marketing plan that
was targeted to combat the lacklustre economy and of our strong focus on finding
and closing new account business.

          During the downturn in the economy since 2001, MIAD took steps which
management believed would reduce the impact of the declining economy on its
business and prepare for an anticipated upturn and a corresponding upswing in
demand for MIAD products. These steps included maintaining relationships and
authorizations with the major vendors of servers, desktop and laptop systems, as
well as seeking and securing additional service and product authorizations from
top name suppliers and investing in additional technical staff training.

           The economic downturn has contributed to competitive pressures on
pricing and margins. MIAD has a lower profit margin on major vendor products
which it resells, particularly laptop computers. Management expects that
revenues from service activities such as repair, maintenance, networking and web
design will, to a limited extent, offset some of the lost revenues from product
sales. Further, since margins from service activities are currently higher than
those from product sales, it is anticipated that current gross margins as a
percentage of total sales can be maintained or improved, although this cannot be
assured.

         As previously noted, the largest computer industry watchers in Canada
reported that the years 2003 and 2004 went down as very bleak years for Canadian
computer resellers. MIAD's results, particularly for the current fiscal year
2004, are very disappointing , yet are somewhat representative of the industry's
ongoing economic difficulties in this country. Canadian corporations, including
MIAD's prospects, which had been contemplated computer systems purchases, simply
continue to put these decisions on hold. Although the year 2004 was forecasted
to generate an economic recovery, in Canada, and a resumption of demand for
computer systems, it certainly did not occur for MIAD . In addition there was
significant pricing pressure caused by an increasing number of vendors chasing a
declining number of purchase opportunities. There can be no assurances for the
computer industry generally, nor for MIAD more specifically, that these purchase
decisions will be resumed in the future; nor that MIAD will have the resources
to effectively continue its operations should this level of business volume
persist.

         MIAD continues its aggressive program to service its existing client
base and seek to secure new clients. The Company is maintaining relationships
and authorizations with the major manufacturers, investing in additional staff
technical training and focusing on the growth of its service activities,
particularly repair and maintenance as well as developing new prospects for

                                       21
<PAGE>

the Itronix line of ruggedized computer systems. There is currently no assurance
that customer orders will resume at any level that would sustain the Company on
a profitable basis.

         Cost of Sales and Gross Profit

         Our gross profit on product sales decreased 26.4% to $963,544 in the
fiscal year ended September 30, 2004 from $1,308,996 in the comparable period in
the previous fiscal year. The decrease in total gross profit is a direct result
of our 19.4% decrease in total revenue coupled with the reduced margin on sales.
The gross profit margin on product sales decreased to 13.8 % in the fiscal year
ended September 30, 2004 as compared to 15.1 % in the same fiscal year period
ended September 30, 2003 as a result of continuing strong competitive pricing
pressures in the industry.

           Cost of sales includes the cost of materials for MIAD's custom
assembled systems, cost of purchases for products which are resold by MIAD and
the cost of parts in MIAD's service revenue. MIAD does not separately quantify
any of these costs.

         Operating Expenses

         Operating expenses increased from 14.8% of revenue in the fiscal year
period ended September 30,2003 to 17.4% of revenue in the current fiscal year.
The operating expense ratio is much higher in the current fiscal year primarily
because of the minimum level of expenditures for items such as payroll, etc.
that are required to operate the business, in spite of our revenue decline.
Operating expenses, in total, were marginally decreased from $1,279,750 in the
fiscal year ended September 30, 2003 to $1,215,220 in the current fiscal. This
marginal total dollar decrease is primarily attributable to a significant
decline in payroll expenses incurred (from $876,970 in the last fiscal year to
$791,836 in the current fiscal year) as a result of employee reductions.
Remaining expense levels for combined office expenses of rent, general,
telephone and utilities as well as depreciation expenses remained essentially
unchanged. The payroll economies were partially offset by the increase in bank
charges and interest expense which increased from $30,033 in the fiscal year
ended September 30, 2003 to $50,259 in the fiscal year ended September 30, 2004.
Interest expense was payable to our major suppliers based on the total amount
and days outstanding of our accounts payable. The continuing difficulties in the
economy caused a delay in MIAD collecting from its clients and conversely in
remitting its outstanding balances to its major suppliers.

LIQUIDITY AND CAPITAL RESOURCES

         As of September 30, 2004, we had cash on hand of $71,361 compared to
$93,240 as of year-end, September 30, 2003. The net working capital as of
September 30, 2004 was ($387,297) compared to the net working capital as of


                                       22
<PAGE>

year-end September 30, 2003 of ($155,861) reflecting a decrease in net working
capital of $231,436. This decrease is primarily caused by our operating loss of
$251,656. During the fiscal year ended September 30, 2004, we used $187,355 for
operating activities compared to generating $79,128 for the same period in the
previous fiscal year. Cash from financing activities increased from ($140,000)
in the comparable twelve-month period in the last fiscal year to $190,000 in the
twelve-month period ended September 30, 2004 due to director advances. MIAD
added $24,524 of capital assets in the twelve-month period ended September 30,
2004 compared to $37,333 of capital asset additions in the previous fiscal year.

         Two suppliers have security interests which are subordinate to any bank
security interest for all of the assets of MIAD. The total amount owed to the
two suppliers at September 30, 2004 was $1,036,729. MIAD's president has
personally guaranteed all the debts owing to these suppliers, Ingram Micro
Canada, Inc.and Synnex Canada Inc.

         MIAD does not require the addition of any material capital assets and
does not currently have any material commitments for capital expenditures or
material purchase commitments for the coming fiscal year ending September 30,
2005. MIAD's liquidity is derived primarily from cash flow from sales, advances
from director and external sources. Unless the Canadian economy for computer
products generally and MIAD's products and services specifically improve
shortly, MIAD's operations will continue to be a drain on financial resources;
there can be no assurances that the director has the capability nor the
willingness to fund the ongoing money-losing operations of the Company. MIAD's
external sources of liquidity consist of a possible increase in the lines of
credit with major distributors and possible bank financing. Such increases in
lines of credit with major distributors or bank or other debt financing, if
sought, may not be available, or if available, the terms may not be satisfactory
to the Company.

RECENT ACCOUNTING PRONOUNCEMENTS

         In November 2004, the Financial Accounting Standards Board (FASB)
released revised FASB Statement no. 151 (FAS 151) , "Inventory Costs- an
amendment of ARB no.43". The new standard requires amounts of idle facility
expense, freight, handling costs, and wasted material (spoilage) to be
recognized as current period charges. It also requires that allocation of fixed
production overheads to the costs of conversion be based on the normal capacity
of the production facilities. The requirements of the standard will be effective
for inventory costs incurred during the fiscal years beginning after June 15,
2005.
         MIAD is currently evaluating the adoption of FAS 151 but does not
expect that it will have a material impact on its financial position, results of
operations, or cash flows.

FORWARD-LOOKING STATEMENTS

         In connection with the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995(the "Reform Act"), the Company is providing
cautionary statements identifying important factors that could cause the


                                       23
<PAGE>

Company's actual results to differ materially from those projected in
forward-looking statements made herein. Any statements that express, or involve
discussions as to, expectations, beliefs, plans, objectives, assumptions of
future events or performance are not statements of historical facts and may be
forward-looking. These forward- looking statements are based largely on the
Company's expectations and are subject to a number of risks and uncertainties,
including but not limited to, economic, competitive, regulatory, growth
strategies, available financing and other factors discussed elsewhere in this
report and in documents filed by the Company with the SEC. Many of these factors
are beyond the Company's control. Actual results could differ materially from
the forward-looking statements made. In light of these risks and uncertainties,
there can be no assurance that the results anticipated in the forward-looking
information contained in this report will, in fact, occur. Any forward-looking
statement speaks only as of the date on which such statement is made, and the
Company undertakes no obligation to update any forward-looking statement or
statements to reflect events or circumstances after the date on which such
statement is made or to reflect the occurrence of unanticipated events. New
factors emerge from time to time and it is not possible for management to
predict all of such factors, nor can it assess the impact of each such factor on
the business or the extent to which any factor, or combination of factors, may
cause actual results to differ materially from those contained in any
forward-looking statements.

ITEM 7.  FINANCIAL STATEMENTS

         The financial statements of the Company required by Regulation S-B are
attached to this report. Reference is made to Item 13 below for an index to the
financial statements an financial statement schedules.

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE MATTERS

         There have been no changes or disagreements with our accountants on
accounting and financial disclosure.

                                       24
<PAGE>

                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

         (A)      IDENTIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS

         As of September 30, 2004, the directors and executive officers of the
Company, their ages, positions in the Company, the dates of their initial
election or appointment as director or executive officer and the expiration of
their terms as directors are as follows:

                                                              Period Served as
Name                Age      Position                         Director
----                ---      --------                         --------
Michael Green       61       President, Chief Executive       Since
                             Officer and Director             September 1998

John Pryce          43       Vice-President, Senior                N/A
                             Sales Executive

         Michael Green has been our President and Chief Executive Officer and
Managing Director of our Board of Directors since September 1998. A chartered
accountant by training, Mr. Green has extensive experience in sales, marketing
and finance of computer products in Canada. From 1993 until September 1998, Mr.
Green was our Business Development Manager and was our only direct sales
representative in our early years of development. Mr. Green was President of
Technical Logistics Systems, a Canadian distributor of specialized printers and
computers from 1983 to 1992 when he joined Adrienne Green, his sister, to form
MIAD Systems Ltd. in 1993. From 1977 to 1983 he was one of the founders of ESSNA
Ltd., the distributor of Epson printers in Canada. From 1968 to 1972, Mr. Green
was an accountant with Price Waterhouse. After completing his required program
for licensing as a chartered accountant at Price Waterhouse, Mr. Green became
controller of Mercedes-Benz Canada from 1972 to 1974, then Controller of Memorex
Canada (a computer peripheral products company) from 1974 to 1977. Mr. Green
obtained his Bachelor of Arts degree from the University of Toronto and his
Chartered Accountant Certification in Ontario with Price Waterhouse.

         John Pryce is Vice-President and Senior Sales Executive since January
15, 2002. Prior to joining MIAD, Mr. Pryce was Vice-President of Micro
Alternative Solutions responsible for managing the day-to-day operations
including partnership relations, sales and marketing strategies, staffing,
profitability, direction and growth. Mr. Pryce's career includes ten years as a
systems account manager for NEC Canada and Filbitron Marketing, followed by five
years at Electrolab Systems as Western Canadian Sales Manager. Mr. Pryce is a
graduate of Centennial College of Arts and Technology in Marketing Management.

                                       25
<PAGE>

         All directors hold office until the next annual meeting of shareholders
of the Company and until their successors are elected and qualified. Officers
hold office until the first meeting of directors following the annual meeting of
shareholders and until their successors are elected and qualified, subject to
earlier removal by the Board of Directors.

         INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS:

         None of our officers, directors, promoters or control persons have been
involved in the past five (5) years in any of the following:

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

         (2)      Any conviction in a criminal proceedings or being subject to a
                  pending criminal proceeding (excluding traffic violations and
                  other minor offenses);

         (3)      Being subject to any order, judgment or decree, not
                  subsequently reversed, suspended or vacated, or any court of
                  competent jurisdiction, permanently or temporarily enjoining,
                  barring, suspending or otherwise limiting his involvement in
                  any type of business, securities or banking activities; or

         (4)      Being found by a court of competent jurisdiction (in a civil
                  action), the SEC or the U.S. Commodity Futures Trading
                  Commission to have violated a federal or state securities laws
                  or commodities law, and the judgment has not been reversed,
                  suspended, or vacated.

         (B)      DIRECTORSHIPS

         None of the Company's executive officers or directors is a director of
any company with a class of equity securities registered pursuant to Section 12
of the Securities exchange Act of 1934 (the "Exchange Act") or subject to the
requirements of the Exchange Act or any company registered as an investment
company under the Investment Company Act of 1940.

                                       26
<PAGE>

         (C)      FAMILY RELATIONSHIPS

         Michael Green, our President and Chief Executive Officer and a
director, and Adrienne Greene, a holder of more than 10% of our common stock,
are brother and sister.

ITEM 10. EXECUTIVE COMPENSATION

         The following table sets forth the compensation of our management for
the past four fiscal years. Michael Green, our President and Chief Executive
Officer is the only member of our current management that earned $100,000 or
more in each of the last four fiscal years.

                           Summary Compensation Table
<TABLE>
<CAPTION>
                                                                                       Long Term Compensation
                                                                                       ----------------------
                                     Annual Compensation                    Awards                         Payouts
                                     -------------------                    ------                         -------
Name and                                                  Annual                                                          Other
principal        Fiscal       Base                        compen-         Restricted        Under-lying     LTI           Comp-
position         Year         Salary        Bonus         sation          Stock Awards      Options         Pay-outs      ensation
---------        ------       ------        -----         -------         ------------      ------------    --------      --------
<S>              <C>          <C>           <C>           <C>             <C>               <C>             <C>           <C>
Michael          2004         100,000       none          100,000         none              none            none          none
Green            2003         100,000       16,000        116,000         none              none            none          none
President        2002         100,000       none          100,000         none              none            none          none
CEO and          2001         180,000       15,000        195,000         none              none            none          none
Director

John Pryce       2004         75,000        35,000        110,000         none              none            none          none
Vice             2003         75,000        85,000        160,000         none              none            none          none
President(1)     2002         53,125        10,000         63,125         none              25,000          none          none
</TABLE>
----------
(1) Mr. Pryce did not join us until January 2002.His bonus payments are actually
    commissions earned as per his sales plan.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

         All reports required by Section 16(a) of the Exchange Act were not
timely filed by all directors and beneficial owners of more than ten (10%)
percent of any class of equity securities of the Company registered pursuant to
Section 12 of the Act. The Form 3 for each of Mr. Green and for Ms. Green were
filed in November 2001.

OPTION GRANTS IN 2004

         The Board of Directors granted no options in 2004.

AGGREGATED OPTION/ EXERCISES AND FISCAL YEAR-END OPTIONS/EXERCISES
<TABLE>
<CAPTION>
                                 OPTIONS                                     EXERCISE
                                 -------                                     --------        Shares
                           Shares       Option                Start            Expiry        Exercised
Grant Month       Year     Optioned     Price                 Date             Date          9/30/04
-----------       ----     --------     ------                -----            ------        ---------
<S>               <C>      <C>           <C>                  <C>              <C>           <C>
June              1999     160,000       $ 0.20               June/01          June/06       none

September         2001      40,000       $ 1.75               Sept/02          Sept/06       none

September         2002      25,000       $ 0.69               Sept/03          Sept/07       none
</TABLE>

                                                   Stock Options
                                                    Outstanding

Outstanding at beginning of year                       225,000
Granted during year                                         --
Exercised                                                   --
Canceled                                                    --
                                                       -------
Outstanding at end of year (9/30/04)                   225,000
Exercisable at end of year (9/30/04)                   225,000

                                       27
<PAGE>

LONG TERM INCENTIVE PLAN ("LTIP") AWARDS TABLE

         None

COMPENSATION OF DIRECTORS

         None

EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND
CHANGE OF CONTROL ARRANGEMENTS

         (A)      EMPLOYMENT AGREEMENTS

         Mr. Green currently has a one year employment agreement that provides
for an annual salary of $200,000 (Canadian) per year. He also is entitled to
earn a sales commission at the rate of $5,000 for each $1,000,000 of sales
achieved by us in the fiscal year up to the first $10,000,000 of sales. If sales
exceed $10,000,000, he will receive a bonus of $20,000. For sales above
$10,000,000, his bonus will be $12,000 for each $1,000,000 of sales. Mr. Green
also will be entitled to receive a bonus of 4% of our pre-tax profit. The
employment agreement also provides a covenant by Mr. Green that he will not
compete with or solicit any business of MIAD for a three year period from
employment termination. This employment agreement has been extended for
additional one year terms and expires in October 2004. Mr. Green did not receive
the full amount to which he was entitled , as per his compensation agreement, in
the fiscal year ended September 30, 2003. In addition, Mr. Green has personally
guaranteed all debts owing to Ingram Micro Canada, Inc.and Synnex Canada MIAD's
major suppliers.

         Mr. Pryce has a one year employment agreement that provides for an
annual salary of $75,000 (Canadian per year). He is entitled to earn sales
commission based on his personal sales and a bonus based on the profitability of
business closed. This employment agreement commenced on January 16, 2002 and
expired on December 31, 2002.This agreement has been extended for an additional
one year term and expires in December 2004.

         (B)      TERMINATION OF EMPLOYMENT AGREEMENTS

                  None

          (C)     CHANGE OF CONTROL ARRANGEMENTS

                  None

                                       28
<PAGE>

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         (A)      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

         The following information relates to those persons who are the
beneficial owners of five percent or more of our outstanding voting common
stock:
<TABLE>
<CAPTION>
Title of         Name and Address of                 Amount and Nature of
Class            Beneficial Owner                    Beneficial Owner(1)            Percentage of Class(2)
-----            ----------------                    -------------------            ----------------------
<S>              <C>                                     <C>                             <C>
Common           Michael Green                           1,960,000                       52.8%
                 178 Ridley Blvd.
                 Toronto, Ontario, Canada

Common           Adrienne Green                            490,000                       13.2%
                 5096 Bloomington Road
                 Stouffville, Ontario, Canada
</TABLE>
----------
(1) These shares are directly owned by each individual.
(2) Percentage is based upon 3,711,400 shares of common stock outstanding on
    September 30, 2004.

         (B)      SECURITY OWNERSHIP OF MANAGEMENT

         The following table has been completed for each of the shares of common
stock beneficially owned by our directors, nominees, and executive officers and
all officers and directors as a group:
<TABLE>
<CAPTION>
Title of         Name and Address of                 Amount and Nature of
Class            Beneficial Owner                    Beneficial Owner(1)            Percentage of Class(2)
-----            ----------------                    -------------------            ----------------------
<S>              <C>                                     <C>                             <C>
Common           Michael Green                           1,960,000                       52.8%
                 178 Ridley Blvd.
                 Toronto, Ontario,
                 Canada

All officers and                                         1,960,000                       52.8%
directors as a
group (1 person)
</TABLE>
----------
(1) These shares are directly owned by the individual.
(2) Percentage is based upon 3,711,400 shares of common stock outstanding on
    September 30, 2004.

                                       29
<PAGE>

STOCK OPTION PLAN

         In June 1999 the Board of Directors approved a Stock Option Plan (the
"Plan") which authorizes that up to a maximum of 15% of the Company's issued and
outstanding common stock is available to be issued under the Plan to those
persons who can participate in the Plan in accordance with its terms. Options to
purchase an aggregate of 160,000 shares of our common stock (the "Options") were
approved by the Board of Directors in June 1999 for two persons and ratified by
our shareholders when they approved the Plan at our shareholders meeting held on
April 24, 2001. The Options have an exercise price of $.20 (USD) per share and
are exercisable, in part, at any time from June 17, 2001 until June 17, 2006.
The exercise price was determined by the Board at a time prior to the Company's
common stock being listed for trading in the "pink sheets". Options to purchase
an aggregate of 40,000 shares of our common stock were approved by the Board of
Directors on September 24, 2001. These options have an exercise price of $1.75
(USD) per share and are exercisable, in part, at any time from September 24,
2002 until September 24, 2006. In addition, options to purchase an aggregate of
25,000 shares of our common stock were approved by the Board of Directors on
September 20, 2002. The options have an exercise price of $0.69(USD) per share
and are exercisable, in part, at any time from September 20,2003 until September
20,2007. In both of these latter instances, the exercise price per share of
common stock was the fair market value on the date on which the option was
granted The Plan provides that no resident of the United States may be a
participant in the Plan unless such participation would not violate any
applicable securities or other laws of the United States or any state, territory
or possession of the United States.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         During the past two (2) years, we have not entered into a transaction
with a value in excess of $60,000 with an officer, director or beneficial owner
of 5% or more of our common stock except as described under Item 9(c) entitled
"Identification of Certain Significant Employees" and Item 4. entitled
"Employment Agreements" and as follows:

         In July 2000, we entered into security agreements with each of our two
major suppliers. Our President, Michael Green, has personally guaranteed all of
the debts owing to Ingram Micro Canada, Inc. and Synnex Canada.. The amount of
the debt guaranteed by Mr. Green to Ingram Micro at September, 2004 was $129,116
(Canadian) and to Synnex Canada was $907,613(Canadian).

ITEM 13. EXHIBITS, FINANCIAL STATEMENTS AND REPORTS ON FORM 10-K

         (A)      DOCUMENTS FILED AS A PART OF THIS REPORT

                  See Part F/S below for an index to the Financial Statements
                  attached which are included as an integral part of this
                  Report.

         (B)      REPORTS ON FORM 10-K

                  None

                                       30
<PAGE>

              PART F/S. FINANCIAL STATEMENTS OF MIAD SYSTEMS, LTD.

         Independent Auditor's Report

         Audited Balance Sheet as of September 30, 2004 and 2003

         Audited Statements of Operations
           for the year ended September 30, 2004 and  2003

         Audited Statement of Shareholders' Equity
           for the year ended September 30, 2004 and 2003

         Audited Statements of Cash Flows
           for the year ended September 30, 2004 and 2003

         Notes to Audited Financial Statements


                                       31
<PAGE>

                            INDEX TO EXHIBITS

         3.0      Articles of Incorporation of MIAD Systems Ltd.*
         3.1      Articles of Amendment of Articles of Incorporation*
         3.2      Bylaws*
         4.0      Warrant Certificate*
         10.0     Office Lease dated November 14, 1996*
         10.1     Lease Renewal Agreement dated September 13, 2001**
         10.2     Employment Agreement for Michael Green dated October 1, 1999*
         10.3     Renewal Employment Agreement for Michael Green dated
                  October 1, 2004
         10.4     Employment Agreement for John Pryce dated
                  November 22, 2001 ***
         10.5     Renewal Employment Agreement for John Pryce dated
                  January 2, 2004
         10.6     Stock Option Plan*
         10.7     Security Agreement with Merisel Canada, Inc.*
         10.8     Security Agreement with Ingram Micro Canada, Inc.*
         31.1     Certification by Chief Executive Officer
         31.2     Certification by Chief Financial Officer

----------
*   Filed as an exhibit to Form 10-SB filed with the SEC on July 10, 2001
**  Filed as an exhibit to Form 10-KSB filed with the SEC on January 14, 2002
*** Filed as an Exhibit to Form 10-KSB filed with the SEC on December 19, 2002

                                       32
<PAGE>

                                 SIGNATURE PAGE


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



                                              MIAD  SYSTEMS, LTD.


Date:   December 16, 2004                     By: /s/ Michael A.S. Green
                                                  ----------------------
                                              Michael A. S. Green, President
                                                and Principal Financial Officer




         In accordance with the exchange Act, this Report has been signed by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.






/s/ Michael A.S. Green                                        December 16, 2004
----------------------                                        -----------------
President and Director

                                       33

<PAGE>

                                MIAD SYSTEMS LTD.

                              FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED SEPTEMBER 30, 2004 AND 2003

                                       AND

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


<PAGE>

                                MIAD SYSTEMS LTD.

                          INDEX TO FINANCIAL STATEMENTS


                                                                          PAGE
--------------------------------------------------------------------------------

    Report of Independent Registered Public Accounting Firm                F-2
    Comments by Auditors for U.S. Readers on Canada - U.S.
      Reporting Differences                                                F-3
    Balance Sheet                                                          F-4
    Statement of Income                                                    F-5
    Statement of Shareholders' Equity                                      F-6
    Statement of Cash Flows                                                F-7
    Notes to the Financial Statements                                    F-8-14





                                      F-1
<PAGE>


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors and Shareholders of
MIAD SYSTEMS LTD.

We have audited the balance sheet of MIAD Systems Ltd. as at September 30, 2004,
and the statements of income, shareholders' equity and cash flows for the year
then ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

In our opinion, these financial statements present fairly, in all material
respects, the financial position of the MIAD Systems Ltd. as of September 30,
2004 and the results of its operations and its cash flows for the year then
ended in accordance with Canadian generally accepted accounting principles.

The financial statements for the year ended September 30, 2003 were audited by
another firm of Chartered Accountants, who expressed an opinion without
reservation on those financial statements in their report dated December 18,
2003.





                                                              Sloan Partners LLP
Thornhill, Ontario                                         Chartered Accountants
December 10, 2004



                                      F-2
<PAGE>


                      COMMENTS BY AUDITORS FOR U.S. READERS
                     ON CANADA - U.S. REPORTING DIFFERENCES

In the United States, reporting standards for auditors require the addition of
an explanatory paragraph (following the opinion paragraph) when the financial
statements are affected by conditions and events that cast substantial doubt on
the Company's ability to continue as a going concern, such as those described in
Note 2 to the financial statements.

The opinion on page 1 is expressed in accordance with Canadian reporting
standards, which do not permit a reference to such events and conditions in the
auditors' report when these are adequately disclosed in the financial
statements.





                                                              Sloan Partners LLP
Thornhill, Ontario                                         Chartered Accountants
December 10, 2004



                                      F-3
<PAGE>



                                MIAD SYSTEMS LTD.

                                  BALANCE SHEET
                           SEPTEMBER 30, 2004 AND 2003
                   (ALL AMOUNTS EXPRESSED IN CANADIAN DOLLARS)
<TABLE>
<CAPTION>

                                      ASSETS                                             2004              2003
------------------------------------------------------------------------------------------------------------------
<S>                                                                                  <C>             <C>
CURRENT ASSETS
    Cash and cash equivalents                                                         $    71,361      $    93,240
    Accounts receivable (Notes 4 and 5)                                                   770,438        1,580,541
    Inventory (Note 6)                                                                     39,100           96,937
    Prepaid expenses                                                                       15,000           30,029
    Advances from director                                                                     --          140,000
                                                                                      -----------      -----------

                                                                                          895,899        1,940,747

CAPITAL ASSETS (Note 7)                                                                   200,655          220,895
                                                                                      -----------      -----------

                                                                                      $ 1,096,554      $ 2,161,642
                                                                                      ===========      ===========

                                   LIABILITIES
------------------------------------------------------------------------------------------------------------------

CURRENT LIABILITIES
    Accounts payable and accrued liabilities (Note 8)                                 $ 1,233,196      $ 2,096,608
    Loan payable - related party (Note 9)                                                  50,000               --
                                                                                      -----------      -----------

                                                                                        1,283,196        2,096,608
                                                                                      -----------      -----------

                              SHAREHOLDERS' EQUITY
------------------------------------------------------------------------------------------------------------------

CAPITAL STOCK (Note 10)

  First Preference shares without par value, authorized - unlimited; issued
           and outstanding - Nil
  Common shares without par value, authorized - unlimited; issued and outstanding
           3,711,400 at September 30, 2004 and 2003                                       590,299          590,299

DEFICIT                                                                                  (776,941)        (525,265)
                                                                                      -----------      -----------

                                                                                         (186,642)          65,034
                                                                                      -----------      -----------

                                                                                      $ 1,096,554      $ 2,161,642
                                                                                      ===========      ===========
</TABLE>


 On Behalf of the Board:

        "Michael Green"                        Director
----------------------------------------------



The accompanying notes form an integral part of these financial statements.


                                      F-4
<PAGE>


                                MIAD SYSTEMS LTD.

                               STATEMENT OF INCOME
                 FOR THE YEARS ENDED SEPTEMBER 30, 2004 AND 2003
                   (ALL AMOUNTS EXPRESSED IN CANADIAN DOLLARS)

                                                        2004             2003
--------------------------------------------------------------------------------

SALES
    Hardware and software                           $ 6,862,606      $ 8,543,359
    Website design and service                          122,384          125,497
                                                    -----------      -----------

                                                      6,984,990        8,668,856
                                                    -----------      -----------

COST OF SALES
    Hardware and software                             5,939,676        7,058,036
    Website design and service                           81,770          301,824
                                                    -----------      -----------

                                                      6,021,446        7,359,860
                                                    -----------      -----------

GROSS MARGIN                                            963,544        1,308,996
                                                    -----------      -----------


OPERATING EXPENSES
    Wages and benefits                                  791,836          876,970
    Salesmen's auto, travel and promotion               123,034          125,311
    Rent                                                 85,609           79,826
    Office and general                                   37,642           29,305
    Telephone                                            32,502           41,718
    Professional fees                                    26,882           26,571
    Interest                                             25,770           24,062
    Bank charges                                         24,489            5,971
    Utilities                                            10,934            9,154
    Advertising                                           6,769           14,382
    Insurance                                             4,989            2,900
    Depreciation                                         44,764           43,580
                                                    -----------      -----------

                                                      1,215,220        1,279,750
                                                    -----------      -----------

INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES        (251,676)          29,246

PROVISION FOR INCOME TAXES                                   --               --
                                                    -----------      -----------

NET INCOME (LOSS) FOR THE YEAR                      $  (251,676)     $    29,246
                                                    ===========      ===========


NET EARNINGS (LOSS) PER COMMON SHARE
    Basic and fully diluted                         $     (0.07)     $      0.01

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
    Basic and fully diluted                           3,711,400        3,711,400



The accompanying notes form an integral part of these financial statements.

                                      F-5
<PAGE>


                                MIAD SYSTEMS LTD.

                        STATEMENT OF SHAREHOLDERS' EQUITY
                 FOR THE YEARS ENDED SEPTEMBER 30, 2004 AND 2003
                   (ALL AMOUNTS EXPRESSED IN CANADIAN DOLLARS)
<TABLE>
<CAPTION>

                                                  Common Shares
                                              Shares         Amount       Deficit         Total
                                             ----------------------------------------------------

<S>                                          <C>           <C>           <C>            <C>
Balances September 30, 2002                  3,711,400     $ 590,299     $(554,511)     $  35,788
    Net income (loss) for the year ended
    September 30, 2003                              --            --        29,246         29,246
                                             ---------     ---------     ---------      ---------

Balances September 30, 2003                  3,711,400       590,299      (525,265)        65,034
    Net income (loss) for the year ended
    September 30, 2004                              --            --      (251,676)      (251,676)
                                             ---------     ---------     ---------      ---------

Balances September 30, 2004                  3,711,400     $ 590,299     $(776,941)     $(186,642)
                                             =========     =========     =========      =========
</TABLE>

The accompanying notes form an integral part of these financial statements.

                                      F-6
<PAGE>


                                MIAD SYSTEMS LTD.

                             STATEMENT OF CASH FLOWS
                 FOR THE YEARS ENDED SEPTEMBER 30, 2004 AND 2003
                   (ALL AMOUNTS EXPRESSED IN CANADIAN DOLLARS)

                                                           2004         2003
-------------------------------------------------------------------------------

CASH FLOWS FROM OPERATING ACTIVITIES
    Net income (loss) for the year                      $(251,676)    $  29,246
    Adjustments to reconcile net income to net cash
     used in operating activities
        Depreciation                                       44,764        43,580
        Cash effect of changes in:
           Accounts receivable                            810,103      (651,190)
           Inventory                                       57,837       114,969
           Prepaid expenses                                15,029       (18,811)
           Accounts payable and accrued charges          (863,412)      561,334
                                                        ---------     ---------

                                                         (187,355)       79,128
                                                        ---------     ---------


CASH FLOWS FROM FINANCING ACTIVITIES
    Advances from a director                              140,000       140,000
    Repayments to a director                                   --      (280,000)
    Loan payable - related party                           50,000            --
                                                                      ---------

                                                          190,000      (140,000)
                                                        ---------     ---------

CASH FLOWS FROM INVESTING ACTIVITIES
    Purchases of capital assets                           (24,524)      (37,333)
                                                        ---------     ---------

DECREASE IN CASH AND CASH EQUIVALENTS                     (21,879)      (98,205)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR               93,240       191,445
                                                        ---------     ---------

CASH AND CASH EQUIVALENTS, END OF YEAR                  $  71,361     $  93,240
                                                        =========     =========

SUPPLEMENTAL CASH FLOW INFORMATION:

    Interest paid in cash during the period             $  25,770     $  24,062




The accompanying notes form an integral part of these financial statements.

                                      F-7
<PAGE>



                                MIAD SYSTEMS LTD.

                        NOTES TO THE FINANCIAL STATEMENTS
                     YEARS ENDED SEPTEMBER 30, 2004 AND 2003
                   (ALL AMOUNTS EXPRESSED IN CANADIAN DOLLARS)




1. DESCRIPTION OF BUSINESS
--------------------------------------------------------------------------------

    MIAD Systems Ltd. (the "Company") was incorporated in 1993 under the laws of
    the Province of Ontario and is primarily engaged in computer assembly,
    distribution and integration, computer warranty and maintenance service and
    e-business consulting. The reporting currency is Canadian dollars unless
    otherwise noted.

2. GOING CONCERN
--------------------------------------------------------------------------------

    During the year ended September 30, 2004, the Company incurred a net loss of
    $251,676 and has a working capital deficiency of $387,297. The application
    of the going concern concept is dependent upon the Company's receiving
    sufficient and timely financing, expanding the business, generating positive
    cash flow and the continued support of its creditors. Management believes
    the going concern assumption to be appropriate. If the going concern
    assumption was not appropriate for these financial statements, adjustments
    would be necessary in the carrying values of its assets and liabilities,
    reported operation results and in balance sheet classifications used.

3. SIGNIFICANT ACCOUNTING POLICIES
--------------------------------------------------------------------------------

    Basis of Accounting

         These financial statements have been prepared in accordance with
         Canadian generally accepted accounting principles ("GAAP"), which do
         not materially differ from accounting principles generally accepted in
         the United States ("US GAAP") except as described in Note 16.

    Capital Assets and Depreciation

         Capital assets are recorded at cost less accumulated depreciation.
         Depreciation is provided at rates intended to write off the assets over
         their estimated productive lives as follows:

                  Office Equipment         - 10-20% diminishing balance
                  Computer equipment       - 20% diminishing balance
                  Computer software        - straight-line over 60 months

    Cash and Cash Equivalents

         Cash and cash equivalents include all highly liquid investments with an
         original maturity of three months or less. The Company periodically
         maintains cash balances in financial institutions in excess of insured
         limits.

    Foreign Currency Translation

         Revenue and expense items denominated in foreign currencies are
         translated into Canadian dollars at the rates of exchange prevailing
         during the period. Monetary assets and liabilities denominated in
         foreign currencies are translated at the period-end exchange rates.
         Non-monetary assets and liabilities are translated at rates of exchange
         in effect when the assets are acquired or obligations incurred. Foreign
         exchange gains and losses are reflected in net income for the period.



                                      F-8
<PAGE>



                                MIAD SYSTEMS LTD.

                        NOTES TO THE FINANCIAL STATEMENTS
                     YEARS ENDED SEPTEMBER 30, 2004 AND 2003
                   (ALL AMOUNTS EXPRESSED IN CANADIAN DOLLARS)



3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
--------------------------------------------------------------------------------

    Fair Value of Financial Instruments

         Cash and cash equivalents, accounts receivables, and accounts payable
         and accrued charges are reflected in the financial statements at fair
         value due to the short term maturity of those instruments. The fair
         values of the Company's loans payable are the same as the recorded
         amounts because rates and terms approximate current market conditions.

    Inventories

         Inventories are valued at the lower of cost or net realizable value,
         with cost being determined on an average cost basis.

    Net Earnings (Loss) per Common Share

         Basic net earnings (loss) per share is computed by dividing net
         earnings (loss) available to the common shareholders by the weighted
         average number of common shares outstanding for the period. Diluted net
         earnings (loss) per share is computed by giving effect to all dilutive
         securities convertible into common shares.

    Revenue Recognition

         Revenues from the sales of products are recognized upon shipment and
         when all significant contractual obligation have been satisfied and
         collection is reasonably assured. The Company ships products FOB its
         warehouse and uses common carriers to deliver the goods. Provision is
         made for an estimate of product returns and doubtful accounts and is
         based on historical experience.

         Revenue from the sales of software is recognized at the date of
         shipment to customers. The Company ships software products FOB our
         warehouse and uses common carriers to deliver the goods.

         Revenue from network installations, warranty and repair service and
         e-business consulting are recognized after the completion of the
         service.



                                      F-9
<PAGE>



                                MIAD SYSTEMS LTD.

                        NOTES TO THE FINANCIAL STATEMENTS
                     YEARS ENDED SEPTEMBER 30, 2004 AND 2003
                   (ALL AMOUNTS EXPRESSED IN CANADIAN DOLLARS)



3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
--------------------------------------------------------------------------------

    Stock-based compensation

         Effective October 1, 2003, the Company adopted the revised
         recommendations of CICA Handbook Section 3870, "Stock-Based
         Compensation and other Stock-Based Payments", which requires that the
         fair value method of accounting be applied to all stock-based
         compensation payments to both employees and non-employees. In
         accordance with the transitional provisions of Section 3870, the
         Company has prospectively applied the fair value method of accounting
         for stock option awards granted and shares issued after October 1,
         2003. Prior to October 1, 2003, no compensation expense was recognized
         for the issuance of stock or stock options, however, pro-forma
         disclosure of net income and net income per share was provided as if
         these awards were accounted for using the fair value method. The
         estimated fair value of the options is measured at the grant date using
         the Black-Scholes valuation model and is amortized to earnings over the
         vesting period on a straight-line basis.

         Consideration received on the exercise of the stock options, together
         with any amount previously recognized in contributed surplus, is
         recorded as an increase to share capital.

    Income taxes

         The asset and liability method is used for determining income taxes.
         Under this method, future tax assets and liabilities are recognized at
         the estimated tax recoverable or payable which would arise if assets
         and liabilities were recovered and settled at the financial statement
         carrying amounts. Future tax assets and liabilities are measured using
         enacted tax rates expected to apply to taxable income in the years in
         which the temporary differences are expected to be recovered or
         settled. Changes to these balances are recognized in income in the
         period in which they occur. A valuation allowance is provided to offset
         deferred tax assets if, based upon the available evidence, it is more
         likely than not that some or all of the deferred tax assets will not be
         realized.

    Use of Estimates

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

4. ALLOWANCE FOR DOUBTFUL ACCOUNTS RECEIVABLE
--------------------------------------------------------------------------------

    The allowance for doubtful accounts receivable reflects the best estimate of
    probable losses inherent in the Company's receivable portfolio determined on
    the basis of historical experience, specific allowances for known troubled
    accounts and other currently available evidence. At September 20, 2004 and
    2003, the allowance for doubtful accounts receivable was $10,000 and $5,000
    respectively.



                                      F-10
<PAGE>



                                MIAD SYSTEMS LTD.

                        NOTES TO THE FINANCIAL STATEMENTS
                     YEARS ENDED SEPTEMBER 30, 2004 AND 2003
                   (ALL AMOUNTS EXPRESSED IN CANADIAN DOLLARS)



5. CONCENTRATIONS OF CREDIT RISK
--------------------------------------------------------------------------------

    The Company has no significant off-balance sheet concentration of credit
    risk such as foreign exchange contracts, options contracts or other foreign
    currency hedging arrangements. Financial instruments that potentially
    subject the Company to a concentration of credit risk consist primarily of
    accounts receivable. Concentration of credit risk with respect to accounts
    receivable is limited to certain customers to whom the Company makes
    substantial sales. During the fiscal year ended September 30, 2004, three
    customers accounted for 37% of the Company's receivables and no single
    customers accounted for greater than 10% of the Company's sales. During the
    fiscal year ended September 30, 2003, no single customer accounted for 10%
    of the Company's accounts receivable and one single customer accounted for
    16% of the Company's revenues. The Company regularly monitors the
    creditworthiness of its customers and believes that it has adequately
    provided for exposure to potential credit losses.

6. INVENTORY
--------------------------------------------------------------------------------

    As at September 30, 2004 and 2003, inventory by major classification was as
follows:

                                                    2004               2003
                                                  -------            -------
    Finished goods                                $10,500            $28,000
    Component parts                                28,600             68,937
                                                  -------            -------

                                                  $39,100            $96,937
                                                  =======            =======


7. CAPITAL ASSETS
--------------------------------------------------------------------------------

                                         Accumulated      NET          Net
                               Cost     Depreciation     2004         2003
                             -----------------------------------------------
    Office equipment         $192,580     $ 86,828     $105,752     $107,157
    Computer equipment         98,208       49,505       48,703       50,738
    Computer software          84,000       37,800       46,200       63,000
                             --------     --------     --------     --------

                             $374,788     $174,133     $200,655     $220,895
                             ========     ========     ========     ========


8. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
--------------------------------------------------------------------------------

    In 2000, the Company signed General Security Agreements with two of its
    suppliers, Synnex Canada Inc. and Ingram Micro Canada, Inc., granting
    security over all of the assets of the Company ranking after Metcan
    Information Technologies Inc.'s General Security Agreement and after any
    banking security. At September 30, 2004, the two suppliers are owed $907,614
    and $129,116 respectively (2003 - $1,531,851 and $275,471). The Company
    purchases the majority of its products from these two suppliers and pays
    interest of 14% and 18% per annum, respectively, on the outstanding
    balances. The President of the Company has personally guaranteed all debts
    owing to these suppliers.



                                      F-11
<PAGE>



                                MIAD SYSTEMS LTD.

                        NOTES TO THE FINANCIAL STATEMENTS
                     YEARS ENDED SEPTEMBER 30, 2004 AND 2003
                   (ALL AMOUNTS EXPRESSED IN CANADIAN DOLLARS)




9. LOAN PAYABLE - RELATED PARTY
--------------------------------------------------------------------------------

    The loan payable is due to a relative of Michael Green (President, CEO and a
    director), non-interest bearing, unsecured and has no fixed terms of
    repayment.

10. CAPITAL STOCK
--------------------------------------------------------------------------------

    The Company is authorized to issue an unlimited number of shares of common
    stock without par value (which is the common form of incorporation in
    Canada), of which 3,711,400 shares are issued and outstanding as of
    September 30, 2004 and 2003. The holders of common stock are entitled to one
    vote per share held and have the sole right and power to vote on all matters
    on which a vote of shareholders is taken. The holders of the common stock do
    not have any preemptive rights to subscribe for or purchase any shares of
    any class of stock.

    The Company is authorized to issue an unlimited number of first preference
    shares without par value of which none are issued and outstanding. The
    shares may be issued in one or more series with the designation, rights,
    privileges, restrictions and conditions to be fixed by the board by articles
    of amendment to the certificate of incorporation which must be approved by
    special resolution of the shareholders.

11. STOCK BASED COMPENSATION
--------------------------------------------------------------------------------

    The Company stock option plan authorizes the granting of stock options to
    employees. Under the plan, the exercise price of the option equals the
    market price of the Company's stock on the grant date.

    The following table summarizes information about the stock options
outstanding as at September 30, 2004 and 2003:
    ----------------------------------------------------------------------------
       Exercise price  Number of options outstanding &          Expiry Date
            (USD)              exercisable at
                         September 30, 2004 and 2003
    ----------------------------------------------------------------------------
            $0.20                  160,000                       June 2006
            $1.75                  40,000                      September 2006
            $0.69                  25,000                      September 2007
    ----------------------------------------------------------------------------
            $0.53                  225,000
    ----------------------------------------------------------------------------

    No options were granted, exercised or cancelled in 2004 or 2003.

12. RELATED PARTY TRANSACTIONS
--------------------------------------------------------------------------------

    A director is employed by the Company under a service contract and was paid
    $100,000 (2003 - $100,00).

13. LEASE OBLIGATIONS
--------------------------------------------------------------------------------

    The Company has entered into a lease agreement for its premises expiring
    November 2005 at rate of approximately $7,000 per month and for an
    automobile expiring June 2007 at a rate of approximately $1,400 per month.



                                      F-12
<PAGE>



                                MIAD SYSTEMS LTD.

                        NOTES TO THE FINANCIAL STATEMENTS
                     YEARS ENDED SEPTEMBER 30, 2004 AND 2003
                   (ALL AMOUNTS EXPRESSED IN CANADIAN DOLLARS)



14. INCOME TAXES
--------------------------------------------------------------------------------

    The Company has losses for income tax purposes of $ 613,000 which are
    available to reduce taxable income in future periods. The potential future
    benefit of these amounts has not been recorded as it cannot be considered
    more likely than not that they will be utilized to reduce future taxable
    income. The benefit will be recorded when realized.

    Losses for tax purposes expire as follows:
                                                     2006           $    79,000
                                                     2007               123,000
                                                     2008               174,000
                                                     2014               237,000
                                                                    -----------
                                                                    $   613,000
                                                                    ===========

    A summary of the provision for income taxes for the year ended
    September 30, 2004 is as follows:

           Currently Payable                                       $       -
           Deferred benefit                                             85,000
           Valuation allowance                                         (85,000)
                                                                   -----------
           Provision for income taxes                              $       -
                                                                   ===========

    Deferred tax assets (liabilities) at September 30, 2004 are as follows:

           Available Non-capital losses                            $   221,000
           Less: Valuation allowance                                  (221,000)
                                                                   -----------
           Net deferred tax assets                                 $       -
                                                                   ===========

    The Company has used an estimated federal and provincial tax rate of 36%
(2003 - 38%) for all deferred tax computations.

15. CONTINGENT LIABILITIES
--------------------------------------------------------------------------------

    A former employee has commenced a lawsuit for wrongful dismissal and breach
    of contract. The Company has filed a statement of defence and a
    counter-suit. The final outcome of this matter is uncertain but management
    believes that any effect would not be material to the Company's financial
    position. Accordingly, no provision has been recorded in the accounts of the
    Company.

16. SIGNIFICANT DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GAAP
--------------------------------------------------------------------------------

    The Company's financial statements were prepared using Canadian GAAP, which
    differs in some respects from US GAAP. There are no material differences
    between Canadian GAAP and US GAAP in the balance sheets of the Company as at
    September 30, 2004 and 2003, and the statements of income, shareholders'
    equity and cash flows for the years then ended. The following additional
    disclosures are made for US GAAP disclosure requirements.

  (I)  STOCK BASED COMPENSATION

    As more fully described in note 2, the Company has prospectively adopted the
    new Canadian GAAP recommendations, which require that a fair value method of
    accounting be applied to all stock-based compensation awards to both
    employees and non-employees granted on or after October 1, 2003. The
    Canadian GAAP recommendations are substantially harmonized with US GAAP
    rules. Therefore, there is no GAAP difference for stock-based compensation
    and awards in fiscal 2004 or 2003.



                                      F-13
<PAGE>



                                MIAD SYSTEMS LTD.

                        NOTES TO THE FINANCIAL STATEMENTS
                     YEARS ENDED SEPTEMBER 30, 2004 AND 2003
                   (ALL AMOUNTS EXPRESSED IN CANADIAN DOLLARS)




16. SIGNIFICANT DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GAAP (CONTINUED)
--------------------------------------------------------------------------------

  (II) FREIGHT COSTS

    Freight costs incurred for delivering goods to customers are included in
    cost of goods sold and amounted to $50,600 and $46,700 in 2004 and 2003,
    respectively. The Company generated $25,800 and $22,500 of freight revenues
    recharged to customers in 2004 and 2003, respectively, and these amounts are
    included in sales.

  (III) STATEMENT OF COMPREHENSIVE INCOME

    In Accordance with SFAS No. 130, "Reporting Comprehensive Income", the
    Company is required to report its comprehensive income. Other comprehensive
    income refers to revenue, expenses, and gains and losses that under US GAAP
    are included in comprehensive income but are excluded from net income, as
    these amounts are recorded directly as an adjustment to shareholders'
    equity. A statement of comprehensive income has not been prepared as the
    Company has no items of the comprehensive income. Comprehensive income is
    the same as net income for the years presented herein.

  (IV) LITIGATION

    From time to time the Company is exposed to claims and legal actions in the
    normal course of business, some of which are initiated by the Company.
    Management believes that the settlement or resolution of such actions, if
    any, will not have a material effect on the financial position or results of
    operations of the Company.

  (V) RECENT ACCOUNTING PRONOUNCEMENTS

    In November 2004, the Financial Accounting Standards Board (FASB) released
    revised FASB Statement No. 151 (FAS 151), "Inventory Costs - an amendment of
    ARB No. 43". The new standard requires amounts of idle facility expense,
    freight, handling costs, and wasted material (spoilage) to be recognized as
    current-period charges. It also requires that allocation of fixed production
    overheads to the costs of conversion be based on the normal capacity of the
    production facilities. The requirements of the standard will be effective
    for inventory costs incurred during fiscal years beginning after June 15,
    2005. Company does not expect that adoption of FAS 151 will have a material
    impact on its results from operations or financial position.


                                      F-14