UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

(Mark One)
[ X ]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
       OF 1934
       For the quarterly period ended June 30, 2005

[   ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
       For the transition period from ________________ to _________________

                           Commission file number  0-50742

                            SIGN MEDIA SYSTEMS, INC.
  -----------------------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

             FLORIDA                                      02-0555904
   --------------------------                    ----------------------------
     (State or other jurisdiction of incorporation or organization) (IRS
Employer Identification No.)

                       2100 19th Street, Sarasota FL 34234
  -----------------------------------------------------------------------------
                    (Address of principal executive offices)

                                 (941) 330-0336
  -----------------------------------------------------------------------------
                           (Issuer's telephone number)



  -----------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)


                      APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 8,460,000 Common Shares no par value
as of June 30, 2005.

Transitional Small Business Disclosure Format (Check one): Yes [ ] No [ X ]


<PAGE>


                         PART I -- FINANCIAL INFORMATION

Item 1.  Financial Statements.

The information required by Item 310(b) of Regulation S-B is attached hereto as
Exhibit One and is incorporated herein by reference.

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

THE FOLLOWING DISCUSSION OF THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF
THE COMPANY SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND
NOTES THERETO INCLUDED ELSEWHERE IN THIS REPORT.

THIS DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES, AND THE COMPANY'S ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE
ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN FACTORS,
INCLUDING, BUT NOT LIMITED TO COMPETITION AND OVERALL MARKET AND ECONOMIC
CONDITIONS.

RESULTS OF OPERATIONS

                                                  Six Months Ended
                                                       June 30

                                                2005                  2004

        Revenue                              $ 511,385             $ 654,484
        Cost of goods sold                      13,396                94,260
                                             ------------        ------------

        Gross profit                           497,989               560,224
                                             ------------        ------------

        Operating and other
           Expenses                            403,511               328,963
                                             ------------        ------------

        Other income                               103                     -
                                             ------------        ------------

        Net income (loss)                     $ 94,581             $ 231,261
                                             ============        ============


        Gross profit margin                         97%                   86%

        Earnings per share
           of common stock                    $  0.011              $  0.028
                                             ============        =============


        Weighted average of
           common shares                     8,460,000             8,256,621
                                             ===========         ============

For the six months ended June 30, 2005, the Company generated $511,385 of
revenue, $497,989 of gross profit, $94,581 of net income, and $0.011 in earnings
per weighted average common share based upon a weighted average of 8,460,000
common shares outstanding. .

For the six months ended June 30, 2004, the Company generated $654,484 of
revenue, $560,224 of gross profit, $231,261) of net income, and $0.028 of net
income per weighted common share based upon a weighted average of 8,256,631
common shares outstanding.

Revenue for the six months ended June 30, 2005, decreased $143,099 from the same
period last year. Net income for the six months ended June 30, 2005, decreased
$136,680 from the same period last year. Earnings per share for the six months
ended June 30,2005, decreased $0.02 from the same period last year.

                                                      Three Months Ended
                                                            June 30

                                                       2005              2004

          Revenue                                   $ 489,114         $ 371,884
          Cost of goods sold                           10,889            39,116
                                                    ----------        ---------

          Gross profit                                478,225           332,768
                                                    ----------        ---------

          Operating and other
             Expenses                                 213,443           148,845
                                                    ----------        ---------

          Other income                                    101                 -
                                                    ----------        ---------

          Net income (loss)                         $ 264,883         $ 183,923
                                                    ==========        =========


          Gross profit margin                             98%                89%

          Earnings per share
            of common stock                         $  0.031           $  0.022
                                                    ==========         ========


          Weighted average of
            common shares                          8,460,000          8,460,000
                                                   ==========         =========

For the three months ended June 30, 2005, the Company generated $489,114 of
revenue, $478,225 of gross profit, $264,883 of net income, and $0.031 in
earnings per weighted average common share based upon a weighted average of
8,460,000 common shares outstanding. .

For the three months ended June 30, 2004, the Company generated $371,884 of
revenue, $332,768 of gross profit, $183,923 of net income, and $0.022 in
earnings per weighted average common share based upon a weighted average of
8,460,000 common shares outstanding.

Revenue for the three months ended June 30, 2005, increased $117,230 from the
same period last year. Net income for the three months ended June 30, 2005,
increased $80,960 from the same period last year. Earnings per share for the
three months ended June 30,2005, increased $0.03 from the same period last year.

MANAGEMENT'S DISCUSSION

The Company is in the business of developing, manufacturing and marketing mobile
billboard mounting systems which are mounted primarily on truck sides, rear
panels and breaking panel roll up doors. The Company also produces digitally
created outdoor, full color vinyl images ("Fleet Graphics") which are inserted
into the mounting systems and displayed primarily on trucks. The Company has
developed mounting systems which allow Fleet Graphics to easily slide into an
aluminum alloy extrusion with a cam-lever that snaps closed stretching the image
tight as a drum, and that also easily opens to free the image for fast removals
and change outs without damaging the truck body or the Fleet Graphics. The
mounting systems' proprietary cam-lever technology is the key to their
operation.

The Company's revenue comes from three primary sources; sales of the mobile
billboard mounting systems, sales of digital printing, and sales of third party
advertising utilizing the mobile billboard mounting systems. During the six
months ended June 30, 2005, $496,904. or 97% of the Company's revenue came from
the sale of its mobile billboard mounting systems, $0.00 or 00% of the Company's
revenue came from the sale of third party advertising and $15,281.00 or 3% of
the Company's revenue came from the sale of digital printing.

A material part of the Company's business is currently dependent upon one key
customer, Advanced Advertising Network, LLC of Lake Mary, Florida. During the
six months ended June 30, 2005, the Company's sales to this customer were
approximately $485,816 or 95% of all sales. During the three months ended June
30, 2005, the Company's sales to this customer were approximately $459,768 or
94% of all sales. The Company continues to rely on this customer for the
majority of its sales. However, the Company is moving forward to expand its
distribution base so that it will no longer depend on this one key customer.
There can be no guarantee that the Company will be able to diversify its
distribution base. Advanced Advertising Network, LLC is not a related party.

For the six months ended June 30, 2005, the Company attributes the decreases in
revenue, net income and earnings per share to seasonal decreases in sales and
increases in operating expenses due to the continued expansion of the Company's
sales and marketing division. The Company's primary emphases is to expand sales
nation wide and to also expand into Latin America by acquiring independent
dealers.

                          PART II -- OTHER INFORMATION

Item 1.  Legal Proceedings.

There are no pending or threatened legal proceedings against the Company or any
of its subsidiaries.

Item 2.  Changes in Securities.

NONE

Item 3.  Defaults Upon Senior Securities

NONE

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

NONE

Item 5.  Other Information.

NONE

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

INDEX TO EXHIBITS.

EXHIBIT
NUMBER   DESCRIPTION OF DOCUMENT
-------------------------------------------------------
     1   SIGN MEDIA SYSTEMS, INC. FINANCIAL STATEMENTS

The Company filed no Forms 8K for the quarter ended June 30, 2005.


<PAGE>


                                   SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                  SIGN MEDIA SYSTEMS, INC.
                                  (Registrant)

Date August 22, 2005              /S/Antonio F. Uccello, III
     ---------------              -----------------------------
                                 Antonio F. Uccello, III
                                 Chief Executive Officer
                                 Chairman of the Board
<PAGE>
EXHIBIT ONE













                          SIGN MEDIA SYSTEMS, INC.

                   CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                            FOR THE SIX MONTHS ENDED

                             JUNE 30, 2005 AND 2004








<PAGE>




                            SIGN MEDIA SYSTEMS, INC.


              INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS




CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Condensed Consolidated Balance Sheet (Unaudited) as of June 30, 2005

Condensed Consolidated Statements of Income for the
   Six and Three Months Ended June 30, 2005 and 2004 (Unaudited)

Condensed Consolidated Statements of Cash Flows for the Six Months Ended
   June 30, 2005 and 2004 (Unaudited)

Notes to Condensed Consolidated Financial Statements

<PAGE>


                            SIGN MEDIA SYSTEMS, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                  JUNE 30, 2005
                                   (UNAUDITED)

                                     ASSETS


CURRENT ASSETS
   Cash and cash equivalents                                  $        13,705
   Accounts receivable                                                  8,929
   Inventory                                                           78,036
                                                              ---------------

                               Total current assets                   100,670
                                                              ---------------

PROPERTY AND EQUIPMENT - Net                                          186,527
                                                              ---------------

OTHER ASSETS
   Due from related parties                                         1,200,000
                                                              ---------------

                              Total other assets                    1,200,000
                                                              ---------------

TOTAL ASSETS                                                    $   1,487,197
                                                              ===============


                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
   Deferred revenue                                             $     250,000
   Liability for stock to be issued                                   224,900
   Accounts payable and accrued expenses                              222,823
   Due to related parties                                              19,985
   Current portion of long-term debt                                    9,211
                                                                -------------

                              Total current liabilities               726,919

Long-term debt - net of current portion                                51,184
                                                                -------------

TOTAL LIABILITIES                                               $     778,103
                                                                -------------

STOCKHOLDERS' EQUITY
   Common stock, no par value, 100,000,000 shares
      authorized at June 30, 2005 and 8,460,000 shares
      issued and outstanding at June 30, 2005                   $       5,000
   Additional paid-in capital                                       1,171,700
   Accumulated deficit                                               (467,606)
                                                                -------------
                              Total stockholders' equity              709,094
                                                                -------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                      $   1,487,197
                                                                =============




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

  <PAGE>
                            SIGN MEDIA SYSTEMS, INC.
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
      FOR THE SIX AND THREE MONTHS ENDED JUNE 30, 2005 AND 2004 (UNAUDITED)


                                    SIX MONTHS ENDED        THREE MONTHS ENDED
                              June 30,        June 30,    June 30,     June 30,
                                2005           2004        2005          2004
                             -------------------------------------------------

REVENUE                      $   511,385  $   654,484   $  489,114   $ 371,884

COST OF GOODS SOLD                13,396       94,260       10,889      39,116
                             -------------------------------------------------

GROSS PROFIT                     497,989      560,224      478,225     332,768
                             -------------------------------------------------

OPERATING EXPENSES
    Professional fees             33,854       28,021       13,244       6,664
    General and administrative
       expenses                  343,798      249,095      186,534      94,926
    Depreciation                  24,941       16,715       13,050      12,215
                             -------------------------------------------------
     Total operating expenses    402,593      293,831      212,828     113,805
                             -------------------------------------------------

NET INCOME BEFORE OTHER
   INCOME (EXPENSE)               95,396      266,393      265,397     218,963

OTHER INCOME (EXPENSE)
    Other income                     103           -           101           -
    Interest expense                (918)    (35,132)         (615)    (35,040)
                             -------------------------------------------------
 Total Other Income (Expense)       (815)    (35,132)         (514)    (35,040)
                             -------------------------------------------------

NET INCOME BEFORE PROVISION
   FOR INCOME TAXES               94,581     231,261       264,883     183,923
   Provision for income taxes          -           -             -           -
                             -------------------------------------------------

NET INCOME APPLICABLE TO
   COMMON SHARES             $    94,581   $ 231,261    $  264,883  $  183,923
                             =================================================

NET INCOME PER BASIC AND
   DILUTED SHARES                  0.011       0.028         0.031       0.022
                             =================================================

WEIGHTED AVERAGE NUMBER OF
   COMMON SHARES OUTSTANDING   8,460,000   8,256,631     8,460,000   8,460,000
                             =================================================



  The accompanying notes are an integral part of these condensed consolidated
                             financial statements.
<PAGE>
                            SIGN MEDIA SYSTEMS, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
           FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004 (UNAUDITED)

                                                     2005           2004
                                             ---------------      ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                 $        94,581      $  231,261
                                             -------------------------------
  Adjustments to reconcile net income
     to net cash provided by operating
     activities

        Depreciation                                  24,941          16,715

Changes in assets and liabilities:
   (Increase) in accounts receivable                 541,649        (235,582)
   (Increase) decrease in allowance
       for doubtful accounts                         500,000               -
   (Increase) decrease in inventory                    7,536           2,850
   Decrease in prepaid expenses and
      other current assets                             4,000          39,666
   (Increase) in miscellaneous receivable                  -          (4,000)
   Increase in accounts payable and
      accrued expenses                                52,834          17,248
   Increase in deferred revenue                      250,000               -
                                             -------------------------------
          Total adjustments                        1,380,960        (163,103)
                                             -------------------------------

    Net cash provided by operating activities      1,475,541          68,158
                                             -------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Acquisition of property and equipment             (86,913)        (47,230)
                                             -------------------------------

    Net cash (used in) investing activities          (86,913)        (47,230)
                                             -------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Increase in liability for stock to be issued       24,900               -
   Payments on long-term debt                         (9,209)        (52,089)
   Payments on debt - related parties             (1,396,966)       (183,142)
   Contribution of additional paid-in capital              -         200,000
                                             -------------------------------

    Net cash (used in) financing activities       (1,381,275)        (35,231)
                                             -------------------------------

NET INCREASE (DECREASE) IN CASH AND
   CASH EQUIVALENTS                                    7,353         (14,303)

CASH AND CASH EQUIVALENTS - BEGINNING
   OF PERIOD                                           6,352          47,068
                                             -------------------------------

CASH AND CASH EQUIVALENTS - END OF PERIOD    $        13,705      $   32,765
                                             ===============================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Cash paid during the period for interest.  $             -      $   35,132
                                             ===============================

SUPPLEMENTAL NON-CASH INVESTING ACTIVITIES:

  Conversion of liability to common stock    $             -      $  324,000
                                             ===============================

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


<PAGE>
                            SIGN MEDIA SYSTEMS, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                             JUNE 30, 2005 AND 2004


NOTE 1-  ORGANIZATION AND BASIS OF PRESENTATION

                  The condensed unaudited interim financial statements included
                  herein have been prepared by Sign Media Systems, Inc. (the
                  "Company") without audit, pursuant to the rules and
                  regulations of the Securities and Exchange Commission (the
                  "SEC"). Certain information and footnote disclosures normally
                  included in the financial statements prepared in accordance
                  with accounting principles generally accepted in the United
                  States of America have been condensed or omitted as allowed by
                  such rules and regulations, and the Company believes that the
                  disclosures are adequate to make the information presented not
                  misleading. It is suggested that these condensed consolidated
                  financial statements be read in conjunction with the December
                  31, 2004 audited financial statements and the accompanying
                  notes thereto. While management believes the procedures
                  followed in preparing these condensed financial statements are
                  reasonable, the accuracy of the amounts are in some respects
                  dependent upon the facts that will exist, and procedures that
                  will be accomplished by the Company later that year.

                  The management of the Company believes that the accompanying
                  unaudited condensed consolidated financial statements contain
                  all adjustments (including normal recurring adjustments)
                  necessary to present fairly the operations and cash flows for
                  the periods presented.

                  The Company began business as Go! Agency LLC, a Florida
                  Limited Liability Company ("Go Agency"). Go Agency was formed
                  in April 2000, principally to pursue third party truck side
                  advertising. The principal of Go Agency invested approximately
                  $857,000 in Go Agency pursuing this business. It became
                  apparent that a more advanced truck side mounting system would
                  be required and that third party truck side advertising alone
                  would not sustain an ongoing profitable business. Go Agency
                  determined to develop a technologically advanced mounting
                  system and focused on a different business plan.



<PAGE>


                            SIGN MEDIA SYSTEMS, INC.
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                             JUNE 30, 2005 AND 2004


NOTE 1-  ORGANIZATION AND BASIS OF PRESENTATION (CONTINUED)

                  The Company was incorporated on January 28, 2002 as a Florida
                  corporation. Upon incorporation, an officer of the Company
                  contributed $5,000 and received 1,000 shares of common stock
                  of the Company. Effective January 1, 2003, the Company issued
                  7,959,000 shares of common stock in exchange of $55,702 of net
                  assets of GO! Agency, LLC, a Florida limited liability company
                  ("Go Agency"), a company formed on June 20, 2000, as E Signs
                  Plus.com, LLC, a Florida limited liability company. In this
                  exchange, the Company assumed some debt of GO! Agency and the
                  exchange qualified as a tax-free exchange under IRC Section
                  351. The net assets received were valued at historical cost.
                  The net assets of Go Agency that were exchanged for the shares
                  of stock were as follows:

                                Accounts receivable             $   30,668
                                Fixed assets, net of depreciation  112,214
                                Other assets                        85,264
                                Accounts payable                   (29,242)
                                Notes payable                      (27,338)
                                Other payables                    (115,864)
                                                                 ---------

                                Totals                            $ 55,702
                                                                  ========

                  Go Agency was formed to pursue third party truck advertising.
                  The principal of Go Agency invested approximately $857,000 in
                  Go Agency pursuing this business. It became apparent that a
                  more advanced truck side mounting system would be required and
                  that third party truck side advertising alone would not
                  sustain an ongoing profitable business. Go Agency determined
                  to develop a technologically advanced mounting system and
                  focused on a different business plan. Go Agency pre-exchange
                  transaction was a company under common control of the major
                  shareholder of SMS. Post-exchange transactions have not
                  differed. Go Agency still continues to operate and is still
                  under common control.

                  Go Agency and the Company developed a new and unique truck
                  side mounting system, which utilizes a proprietary cam lever
                  technology, which allows an advertising image to be stretched
                  tight as a drum. Following the exchange, the Company had
                  7,960,000 shares of common stock issued and outstanding. The
                  Company has developed and filed an application for a patent on
                  its mounting systems. The cam lever technology is considered
                  an intangible asset and has not been recorded as an asset on
                  the Company's consolidated balance sheet. This asset was not
                  recoded due to the fact that there was no historic recorded
                  value on the books of Go Agency for this asset.


<PAGE>
                            SIGN MEDIA SYSTEMS, INC.
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                             JUNE 30, 2005 AND 2004

NOTE 1-  ORGANIZATION AND BASIS OF PRESENTATION (CONTINUED)

                  On November 17, 2003, the Company entered into a merger
                  agreement by and among American Powerhouse, Inc., a Delaware
                  corporation and its wholly owned subsidiary, Sign Media
                  Systems Acquisition Company, Inc., a Florida corporation and
                  Signs Media Systems, Inc. Pursuant to the merger agreement,
                  Signs Media Systems merged with Sign Media Systems Acquisition
                  Company with Sign Media Systems being the surviving
                  corporation. The merger was completed on December 8, 2003 with
                  the filing of Articles of Merger with the State of Florida at
                  which time Sign Media Systems Acquisition ceased to exist and
                  Sign Media Systems became the surviving corporation. Some time
                  prior to the merger, American Powerhouse had acquired certain
                  technology for the manufacture of a water machine in the form
                  of a water cooler that manufactures water from ambient air.
                  However, American Powerhouse was not engaged in the business
                  of manufacturing and distributing the water machine but was
                  engaged in the licensing of that right to others. Prior to the
                  merger, American Powerhouse granted a license to Sign Media
                  Systems Acquisition to use that technology and to manufacture
                  and sell the water machines. The acquisition of this license
                  was the business purpose of this merger. As consideration for
                  the merger, Sign Media Systems issued 300,000 shares of its
                  common stock to American Powerhouse, 100,000 shares in the
                  year ending December 31, 2002, and 200,000 shares in the year
                  ending December 31, 2004. The 300,000 shares of stock were
                  valued at $1.50 per share based on recent private sales of
                  Sign Media Systems common stock. There were no other material
                  costs of the merger. There was and is no relationship between
                  American Powerhouse and either Sign Media Systems or GO!
                  AGENCY. The Company recorded this license as an intangible
                  asset for $400,000 and subsequently impaired the entire
                  amount.



NOTE 2-  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

                  Principles of Consolidation

                  The condensed consolidated financial statements include the
                  accounts of the Company and its wholly owned subsidiary. All
                  significant intercompany accounts and transactions have been
                  eliminated in consolidation.

<PAGE>


                            SIGN MEDIA SYSTEMS, INC.
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                             JUNE 30, 2005 AND 2004

NOTE 2-  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

                  Use of Estimates

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

                  Revenue and Cost Recognition

                  Currently, the Company has three primary sources of revenue:

                  (1) The sale and installation of their mounting system
                  (2) The printing of advertising images to be inserted on
                      trucks utilizing the Company's mounting systems.
                  (3) Third party advertising

                  The Company's revenue recognition policy for these sources of
                  revenue is as follows. The Company relies on Staff Accounting
                  Bulletin Topic 13, in determining when recognition of revenue
                  occurs. There are four criteria that the Company must meet
                  when determining when revenue is realized or realizable and
                  earned. The Company has persuasive evidence of an arrangement
                  existing; delivery has occurred or services rendered; the
                  price is fixed or determinable; and collectibility is
                  reasonably assured. Typically, the Company recognizes revenue
                  when orders are placed and they receive deposits on those
                  orders. In regard to the revenue recognition of third party
                  advertising, the Company recognizes the revenue once they have
                  completed the task for which the consumer paid.

                  In addition, the Company offers manufacturer's warranties.
                  These warranties are provided by the Company and not sold.
                  Therefore, no income is derived from the warranty itself.

                  Cost is recorded on the accrual basis as well, when the
                  services are incurred rather than when payment is made.

                  Costs of goods sold are separated by components consistent
                  with the revenue categories. Mounting systems, printing and
                  advertising costs include purchases made, and payroll costs
                  attributable to those components. Payroll costs is included
                  for sales, engineering and warehouse personnel in cost of
                  goods sold. Cost of overhead is diminimus. The Company's
                  inventory consists of finished goods, and unassembled parts
                  that comprise the framework for the mounting system placed on
                  trucks for their advertising. All of these costs are included
                  in costs of goods sold for the six months ended June 30, 2005
                  and 2004.

<PAGE>
                            SIGN MEDIA SYSTEMS, INC.
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                             JUNE 30, 2005 AND 2004


NOTE 2-  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

                  Cash and Cash Equivalents

                  The Company considers all highly liquid debt instruments and
                  other short-term investments with an initial maturity of three
                  months or less to be cash equivalents.

                  The Company maintains cash and cash equivalent balances at
                  several financial institutions that are insured by the Federal
                  Deposit Insurance Corporation up to $100,000.

                  Property and Equipment

                  Property and equipment are stated at cost. Depreciation is
                  computed primarily using the straight-line method over the
                  estimated useful life of the assets.

                  Furniture and fixtures                               5 years
                  Equipment                                            5 years
                  Trucks                                               5 years

                  Advertising

                  Costs of advertising and marketing are expensed as incurred.
                  Advertising and marketing costs were $1,800 and $3,020 for the
                  six months ended June 30, 2005 and 2004, respectively

                  Fair Value of Financial Instruments

                  The carrying amount reported in the balance sheets for cash
                  and cash equivalents, accounts receivable, accounts payable
                  and accrued expenses approximate fair value because of the
                  immediate or short-term maturity of these financial
                  instruments.

                  Earnings per Share of Common Stock

                  Historical net income per common share is computed using the
                  weighted-average number of common shares outstanding. Diluted
                  earnings per share (EPS) include additional dilution from
                  common stock equivalents, such as stock issuable pursuant to
                  the exercise of stock options and warrants.


<PAGE>


                            SIGN MEDIA SYSTEMS, INC.
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                             JUNE 30, 2005 AND 2004

NOTE 2-           SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

                  Earnings per Share of Common Stock (Continued)

                  The following is a reconciliation of the computation for basic
                  and diluted EPS:

                                                               2005      2004
                                                              ------    ------
                  Weighted-average common stock equivalents
                        Stock options                             -         -
                        Warrants                                  -         -
                                                             --------  -------
                  Weighted-average common shares outstanding
                        Diluted                             8,460,000 8,256,631
                                                            ========= =========

NOTE 3-           PROPERTY AND EQUIPMENT

                  Property and equipment consist of the following at June 30,
                  2005 and 2004:

                                                              2005      2004
                                                            --------   -------
                  Equipment                                 $ 104,234 $ 71,634
                  Furniture and Fixtures                      112,022   41,798
                  Transportation Equipment                     54,621   54,621
                                                            ---------  -------
                                                              270,877  167,053
                  Less: accumulated depreciation               84,350   34,484
                                                            ---------  -------

                  Net Book Value                            $ 186,527 $133,569
                                                            ========= ========

                  Depreciation expense for the six months ended June 30, 2005
                  and 2004 was $24,941 and $16,715, respectively.


<PAGE>

                            SIGN MEDIA SYSTEMS, INC.
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                             JUNE 30, 2005 AND 2004

NOTE 4-           COMMITMENTS AND CONTINGENCIES

                  The Company entered into a lease agreement on November 1, 2002
                  with Hawkeye Real Estate, LLC, a related entity, to lease
                  warehouse and office space. The lease expires on December 30,
                  2007, and provides that SMS pay all applicable sales and use
                  tax, insurance and maintenance. The total minimum rental
                  commitments at June 30, 2005 under this lease are as follows:

                                2005                            $  30,000
                                2006                               30,000
                                2007                               15,000
                                                                ---------
                                                                $  75,000
                                                                =========

                  Rent expense for the six months ended June 30, 2005 and 2004
                  was $16,050, and $19,086, respectively.

NOTE 5-           RELATED PARTY TRANSACTIONS

                  On January 28, 2002,  Sign Media Systems,  Inc. was formed as
                  a Florida  Corporation  but did not begin business  operations
                  until April 2002. Most of the revenue that Sign Media Systems,
                  Inc. earned was contract work with Go! Agency,  LLC., a
                  Florida limited liability  company,  a related party.  Sign
                  Media Systems,  Inc.  would  contract Go! Agency,  LLC. to
                  handle and complete jobs. There was no additional revenue or
                  expense added from one entity to the other.

                  On January 3, 2003, the Company entered into a loan agreement
                  with Olympus Leasing Company, a related party, and in
                  connection therewith executed a promissory note with a future
                  advance clause in favor of Olympus Leasing, whereby Olympus
                  Leasing agreed to loan the Company up to a maximum of
                  $1,000,000 for a period of three years, with interest accruing
                  on the unpaid balance at 18% per annum, payable interest only
                  monthly, with the entire unpaid balance due and payable in
                  full on January 3, 2006. As of June 30, 2005 there was $0 due
                  to Olympus. Other due to related party advances were $19,985.
                  Due from related parties totaled $19,985 at June 30, 2005.

                  On June 28, 2005, the Company loaned to Olympus Leasing
                  Company, a related party, $1,200,000. The loan is for a period
                  of five years with interest accruing on the unpaid balance at
                  5.3% per annum, interest only payable annually, with the
                  entire principal and unpaid interest due and payable in full
                  on June 28, 2010.


<PAGE>


                            SIGN MEDIA SYSTEMS, INC.
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                             JUNE 30, 2005 AND 2004


NOTE 6-  LONG-TERM DEBT

                  Long-term debt consists of two installment notes with GMAC
                  Finance. As discussed in Note 1, the Company assumed debt from
                  Go! Agency as of January 28, 2002. On June 18, 2003, the
                  Company acquired a truck in the amount of $45,761 financed by
                  GMAC over a period of 5 years. Monthly payments are $763. The
                  loan carries no interest charges.


NOTE 7-  PROVISION FOR INCOME TAXES

                  The net deferred tax assets in the accompanying condensed
                  consolidated balance sheets include the following components
                  at June 30, 2005:

                  Deferred tax assets                           $  140,000
                  Deferred tax valuation allowance                (140,000)
                                                                ----------

                                                                $        -
                                                                ==========

                  Due to the uncertainty of utilizing the entire $467,606 in net
                  operating losses, and recognizing the deferred tax assets, an
                  offsetting valuation allowance has been established. The
                  Company will utilize its net operating losses to offset any
                  Federal Income Tax due.

NOTE 8-           STOCKHOLDERS' EQUITY

                  As of June 30, 2005 and 2004, there were 100,000,000 shares of
                  common stock authorized.

                  As of June 30, 2005 and 2004, there were 8,460,000 shares of
                  common stock issued and outstanding.

                  During the six months ended June 30, 2005 the Company did not
                  have any stock transactions.



NOTE 9-           LIABILITY FOR STOCK TO BE ISSUED

                  At June 30, 2005, the Company has recorded $224,900 for common
                  stock to be issued at a later date. Upon the issuance of the
                  common stock the liability will be removed.