U.S. Securities and Exchange Commission

                             Washington, D.C. 20549

                                   Form 10-KSB
(Mark One)

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


                   For the fiscal year ended October 31, 2003


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


                For the transition period from _______ to _______


                        Commission file number 000-30451


                         Eline Entertainment Group, Inc.
                 ----------------------------------------------
                 (Name of small business issuer in its charter)


               Nevada                                  88-0429856
   ---------------------------------        ---------------------------------
     (State or other jurisdiction           (IRS Employer Identification No.)
   of incorporation or organization)


         8905 Kingston Pike
         Suite 313
         Knoxville, Tennessee                                   37923
         ----------------------------------------             ----------
         (Address of principal executive offices)             (Zip Code)


                     Issuer's telephone number 215-895-9859
                                               ------------


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

    Title of each class             Name of each exchange on which registered

           None                                    not applicable
   ---------------------            -----------------------------------------
   (Title of each class)


Securities registered under Section 12(g) of the Exchange Act:

                                  common stock
                                ----------------
                                (Title of class)
<PAGE>

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act 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 there is no 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 the 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. [ ]

State issuer's revenues for its most recent fiscal year. $ 1,404,089 for the 12
months ended October 31, 2003.

State the aggregate market value of the voting and non-voting common equity held
by non- affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked prices of such common equity, as of a
specified date within the past 60 days. The aggregate market value of the voting
stock held by non-affiliates computed at the closing price of Eline's common
stock on February 9, 2004 is approximately $2,443,885.

State the number of shares outstanding of each of the issuer's class of common
equity, as of the latest practicable date. As of January 31, 2004, 3,850,265
shares of common stock are issued and outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference, briefly describe them
and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into
which the document is incorporated: (1) any annual report to security holders;
(2) any proxy or information statement; and (3) any prospectus filed pursuant to
Rule 424(b) of the Securities Act of 1933 ("Securities Act"). Not Applicable.

Transitional Small Business Disclosure Form (check one):  Yes       No   X
                                                              ----     -----

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         When used in this annual report, the terms "Eline," "we," and "us"
refers to Eline Entertainment Group, Inc., a Nevada corporation, and its
subsidiaries, Industrial Holding Group, Inc., a Florida corporation ("Industrial
Holding") and 24/7 MRI, Inc., a Florida corporation ("24/7 MRI"). The term "IFR"
refers to Industrial Fabrication and Repair, Inc., a Tennessee corporation,
which is a wholly-owned subsidiary of Industrial Holding, and the term
"Okeechobee Imaging" refers to Okeechobee Imaging, Inc., a Florida corporation,
which is a wholly-owned subsidiary of 24/7 MRI.

         All per share information contained in this annual report gives
proforma effect to the one for 250 reverse stock split of our common stock
effected on November 28, 2002 and a three for two forward stock split of our
common stock effected on November 7, 2003.

           CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION

         CERTAIN STATEMENTS IN THIS ANNUAL REPORT ON FORM 10-KSB CONTAIN OR MAY
CONTAIN FORWARD-LOOKING STATEMENTS THAT ARE SUBJECT TO KNOWN AND UNKNOWN RISKS,
UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR
ACHIEVEMENTS TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR
ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THESE
FORWARD-LOOKING STATEMENTS WERE BASED ON VARIOUS FACTORS AND WERE DERIVED
UTILIZING NUMEROUS ASSUMPTIONS AND OTHER FACTORS THAT COULD CAUSE OUR ACTUAL
RESULTS TO DIFFER MATERIALLY FROM THOSE IN THE FORWARD-LOOKING STATEMENTS. THESE
FACTORS INCLUDE, BUT ARE NOT LIMITED TO, OUR ABILITY TO CONSUMMATE A MERGER OR
BUSINESS COMBINATION, ECONOMIC, POLITICAL AND MARKET CONDITIONS AND
FLUCTUATIONS, GOVERNMENT AND INDUSTRY REGULATION, INTEREST RATE RISK, U.S. AND
GLOBAL COMPETITION, AND OTHER FACTORS. MOST OF THESE FACTORS ARE DIFFICULT TO
PREDICT ACCURATELY AND ARE GENERALLY BEYOND OUR CONTROL. YOU SHOULD CONSIDER THE
AREAS OF RISK DESCRIBED IN CONNECTION WITH ANY FORWARD-LOOKING STATEMENTS THAT
MAY BE MADE HEREIN. READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE
FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE OF THIS REPORT.
READERS SHOULD CAREFULLY REVIEW THIS ANNUAL REPORT IN ITS ENTIRETY, INCLUDING
BUT NOT LIMITED TO OUR FINANCIAL STATEMENTS AND THE NOTES THERETO AND THE RISKS
DESCRIBED IN "ITEM 1. DESCRIPTION OF BUSINESS--RISK FACTORS." EXCEPT FOR OUR
ONGOING OBLIGATIONS TO DISCLOSE MATERIAL INFORMATION UNDER THE FEDERAL
SECURITIES LAWS, WE UNDERTAKE NO OBLIGATION TO RELEASE PUBLICLY ANY REVISIONS TO
ANY FORWARD-LOOKING STATEMENTS, TO REPORT EVENTS OR TO REPORT THE OCCURRENCE OF
UNANTICIPATED EVENTS. FOR ANY FORWARD-LOOKING STATEMENTS CONTAINED IN ANY
DOCUMENT, WE CLAIM THE PROTECTION OF THE SAFE HARBOR FOR FORWARD-LOOKING
STATEMENTS CONTAINED IN THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.

                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS.

         Eline is a holding company which currently has two divisions,
Industrial Holding and 24/7 MRI. Industrial Holding owns a seasoned company with
approximately 25 years of operating history and 24/7 MRI is a development stage
business. Eline is seeking to expand it business and operations through the
acquisition of companies or expansion of business focused on undervalued
opportunities in traditional industries.

INDUSTRIAL HOLDING AND IFR

         In May 2003 Eline, through its Industrial Holding subsidiary, acquired
IFR, a Knoxville, Tennessee based company. Founded in 1979, IFR is engaged in
component sales, machining, specialty design and fabrication for conveyer
systems used in the movement of raw materials, finished goods and

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supplies in its customers' manufacturing processes. IFR's customers are engaged
in various industries, including paper, steel mills, rock quarry operations,
coal mining applications and bottling facilities located in the South Eastern
United States. Its customers include Coca-Cola, Pepsico, Kimberly-Clarke Corp.,
American Limestone, Gerdau-AmeriSteel, Vulcan Materials Co., Harrison
Construction, Blue Diamond Coal, Carlex Glass, HBD Industries and Hartco
Flooring. For the year ended October 31, 2003, the Industrial Holding division
represented approximately 96% of our consolidated revenues. For the year ended
October 31, 2003, our consolidated revenues include revenues from IFR for five
months following its acquisition in May 2003 as described later in this report.
Revenue from one customer of IFR represented approximately 14% and 0% of our
consolidated revenues for the fiscal years ended October 31, 2003 and 2002,
respectively.

         IFR conducts its business from a 35,000 square foot facility which is
equipped with a five ton bridge crane over most equipment to allow handling of
heavy components for machining. IFR has invested in computer numerical control
(CNC ) technology to assure the highest degree of accuracy for its client's
precision machining requirements. IFR's equipment includes two Fadal VMC 2040
machining centers, a Tree Journeyman 310 knee-type milling machine and a
Cincinnati Milicron Falcon 300 lathe. IFR's CNC technicians have 15 years
experience programming a wide variety of parts and materials. In addition to a
standard complement of normal machine shop accessories, IFR's manual machines
include:

         *  lathes up to 34" diameter by 16 feet
         *  Boring Mill
         *  Heavy-Duty Knee-Type milling machines
         *  Column drills
         *  Keyseating (internal up to 3" by 18")
         *  Amada auto bar feed saw (10" by 10" capacity)

         IFR also specializes in prototype machining proprietary designs and
short production runs. IFR has engineering capabilities with autocad computer
enhanced design layout. It can create proprietary drawings, specialized
machinery or modify existing equipment for its clients specific needs. IFR is
also capable of reconstruction components to original OEM specs from its clients
damaged or sample parts and preparing engineering drawings for your future
requirements. IFR has an 8,000 sq. ft welding bay, equipped with two five ton
overhead cranes with 20' lift working height, which provides it with the
capacity to quickly and competitively meet its clients fabrication needs. IFR
has welders certified to the ASMF Code Section 8 and its welding services
include, MIG, TIG, WIRE, and STICK welding on a variety of materials. IFR can
furnish shape cutting on carbon steel up to 2" thick and plasma burn stainless
steel up to 1/2" thick. It stocks a wide variety of structural shapes and can
secure from its suppliers most items not in stock within two to three working
days. IFR also provides maintenance and repair services on power transmissions
and is the exclusive manufacturer for the provider of an ongoing project
involving customized target and shooting bays for use in the Federal prison
system.

         IFR maintains a website at www.ifr-tn.com which describes the services
available from IFR, lists the product lines for which IFR serves as a
distributor and enables its customers to check the current inventory of a
variety of equipment components, including

         *  bearings
         *  rubber and metal belting
         *  chains
         *  conveyors
         *  screw conveyors

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         *  couplings
         *  electric motors
         *  elevator buckets
         *  idlers
         *  motor controls
         *  pneumatics
         *  power transmissions
         *  drum and wing pulleys
         *  speciality parts
         *  sprockets
         *  water pumps

The inventory information which appears on IFR's web site is updated on a
regular basis.

COMPETITION

         While IFR competes with numerous fabricators in the East Tennessee
area, management of IFR believes it has limited direct competition as a result
of the comprehensive nature of its services. Within the 150 mile radius of its
client base, IFR is one of a select few fabricators which offers a full bevy of
services from concept and design to engineering and prototype to custom systems.
There can be no assurances, however, that IFR in fact maintains a competitive
advantage or that if such competitive advantage exists, IFR will be able to
retain same in the future.

GOVERNMENT REGULATION

         The operations of IFR are not subject to any state or government
regulations at the present time, other than normal and customary rules and
regulations, including environmental regulations, to which most companies are
subject. There can be no assurances, however, that future regulations at the
state or federal level, if adopted, will not have a material adverse effect on
the operations of IFR.

EMPLOYEES

         As of January 31, 2004 IFR has approximately 30 employees, all of which
are full time. IFR is not covered by any collective bargaining agreements and
considers its employee relationships to be good.

24/7 MRI

         Eline formed 24/7 MRI in June 2003 to explore opportunities in the
diagnostic imaging field. Following the acquisition of IFR, we continued to
explore additional avenues of expanding our business and operations. One
business opportunity which was reviewed was a chain of diagnostic imaging
centers. While we did not progress beyond the due diligence phase, we believed
that opportunities exist within this space, and in August 2003 24/7 MRI opened
Okeechobee Imaging, a store-front MRI center in West Palm Beach, Florida to test
its operating concepts. In conjunction with the opening of this site, we
acquired a 2000 GE Profile III Mobile open MRI system from GE Medical Systems
under an operating lease on an equipment reposition. 24/7 MRI completed the beta
test of this initial retail center in December 2003.

         For the year ended October 31, 2003, 24/7 MRI represented approximately
4% of our consolidated revenues, which reflected revenues from the beta test
site for three months.

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THE 24/7 MRI BUSINESS MODEL

         The business plan for the further development of 24/7 MRI's business
and operations has three base components -- wholesale, physician joint ventures,
and retail sites. The wholesale arm is the segment on which 24/7 MRI is
presently focusing, due primarily to the current availability of good used
short- bore and open MRI systems at significant price reductions from just a few
years ago. We define "wholesale" to mean the leasing, either pursuant to
short-term or long-term contracts, of MRI systems to non-affiliated diagnostic
imaging centers, hospitals, other healthcare providers as well as equipment
companies. Under this structure, the lessee will be required to pay 24/7 MRI a
flat monthly fee which will include maintenance on the system. The actual
operation of the system, and all other costs attendant thereto, will be borne by
the lessee. 24/7 MRI's market niche will be high quality, gently used equipment,
with all the upgrades to make it current state of the art, which, by virtue of
the reduced cost of the equipment, it can lease at very competitive rates.

         In December 2003 24/7 MRI entered into a two-month lease for its
Profile III mobile MRI which was acquired in connection with the beta site. In
connection with the completion of the beta test, 24/7 MRI determined to lease
out its Profile III under a short term agreement to provide cash flow during the
interim. 24/7 MRI placed an advertisement on Dotmed.com and as a result of the
advantageous purchase price and the quality of the MRI system, 24/7 MRI was able
to quickly enter into a short-term rental agreement. The quickness with which it
was able to enter into a lease under terms which are favorable to 24/7 MRI lead
it to conduct further due diligence into this segment of the industry. The first
leasing program for the Profile III has been completed and it is seeking
additional lessee for this unit.

         24/7 MRI may seek to expand this area of business by purchasing
desirable, gently used mobile MRI systems, focusing primarily on high field,
short-bore systems. Most operators in the leasing business purchase new mobile
systems. A typical price is $1.2 million to $1.6 million for a new, short- bore
mobile MRI. The debt service on these systems is between $24,000 and $32,000
monthly. OEM service is an additional expense of $5,000 to $ 11,000 per month.
Accordingly, the cost to operate this system is between $29,000 and $43,000 per
month, depending on the MRI. Based on these numbers, it is understandable why
these machines lease for between $50,000 and $65,000 per month. 24/7 MRI
believes it can purchase used mobile MRI's at a fraction of the cost of the new,
equivalently equipped, systems, and lease these systems at a discounted rate to
the third party end users. 24/7 MRI's has determined that desirable units are
available in the $250,000 to $500,000 range, which in turn can be leased out
under short-term or long-term leases at rates ranging from $15,000 to $40,000
per month, including maintenance.

         24/7 MRI would utilize a number of sources in the acquisition of
additional equipment, including manufacturers, OEM specialists, industry
contacts, and advertisements on Dotmed.com and other trade media. 24/7 MRI may
also enter into strategic relationships with OEM specialists to assist it in
both the acquisition of additional equipment as well as a base of customers for
this equipment.

         24/7 MRI may also expand its operations in the future by opening retail
centers or entering into joint ventures with physician groups. We define
"retail" to mean diagnostic imaging centers which will be owned and operated by
24/7 MRI which combine digital technology, with high-speed Internet, and leading
edge mobile MRI. The current business model provides that 24/7 MRI may seek to
develop multiple locations and would service those future locations with the one
or more mobile MRI systems. The development of these locations may also include
other imaging modalities, including PET scanning, which is primarily used in
cancer detection and cardiology, and CT. We define "physician joint ventures" to
be outsourced diagnostic imaging services to be provided primarily to
institutional and other

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healthcare providers on a mobile, shared-service basis. These services will
normally include the use of 24/7 MRI's imaging systems, technicians to operate
the systems, equipment maintenance and upgrades and management of day-to-day
operations pursuant to exclusive, long-term contracts with institutional and
other healthcare providers which generally require them to pay 24/7 MRI monthly.
These contracts will be non-cancellable by 24/7 MRI's clients and will often
contain automatic renewal provisions. This business model is inspired in part by
Alliance Imaging, Inc. (NYSE: AIQ).

COMPETITION

         The market for diagnostic imaging services is highly fragmented and has
few national imaging service providers. We believe that the key competitive
factors which will affecting 24/7 MRI's business will include:

         *  the quality and reliability of service;
         *  the quality and type of equipment available;
         *  the availability of types of imaging and ancillary services;
         *  the availability of imaging center locations and flexibility of
            scheduling;
         *  pricing;
         *  the knowledge and service quality of technologists;
         *  the ability to obtain regulatory approvals; and
         *  the ability to establish and maintain relationships with healthcare
            providers and referring physicians.

         24/7 MRI will compete with other mobile providers, independent imaging
centers, physicians, hospitals, and other healthcare providers that have their
own diagnostic imaging systems, and equipment manufacturers that sell or lease
imaging systems to healthcare providers for mobile or full-time use. 24/7 MRI
expects significant competition in its targeted markets and segments from
businesses offering diagnostic imaging services, including existing and
developing technologies. There are many companies engaged in this market,
including one national competitor and many smaller regional competitors, and
most of these competitors have access to greater resources than 24/7 MRI does.
There can be no assurances 24/7 MRI will ever be able to effectively compete in
its market segment.

REGULATION

         24/7 MRI's business will be subject to extensive federal and state
government regulation.

         FRAUD AND ABUSE LAWS; PHYSICIAN REFERRAL PROHIBITIONS

         The healthcare industry is subject to extensive federal and state
regulation relating to licensure, conduct of operations, ownership of
facilities, addition of facilities and services and payment for services.

         In particular, the federal anti-kickback law prohibits persons from
knowingly and willfully soliciting, receiving, offering or providing
remuneration, directly or indirectly, to induce either the referral of an
individual, or the furnishing, recommending, or arranging for a good or service,
for which payment may be made under a federal healthcare program such as the
Medicare and Medicaid Programs. The definition of "remuneration" has been
broadly interpreted to include anything of value, including for example gifts,
discounts, the furnishing of supplies or equipment, credit arrangements,
payments of cash, waivers of payments, ownership interests, and providing
anything at less than its fair market value. In addition, there is no one
generally accepted definition of intent for purposes of finding a violation of

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the anti-kickback law. For instance, one court has stated that an arrangement
will violate the anti-kickback law where any party has the intent to unlawfully
induce referrals. In contrast, another court has opined that a party must engage
in the proscribed conduct with the specific intent to disobey the law in order
to be found in violation of the anti-kickback law. The lack of uniform
interpretation of the anti-kickback law makes compliance with the law difficult.
The penalties for violating the anti-kickback law can be severe. These sanctions
include criminal penalties and civil sanctions, including fines, imprisonment
and possible exclusion from the Medicare and Medicaid programs.

         The anti-kickback law is broad, and it prohibits many arrangements and
practices that are lawful in businesses outside of the healthcare industry.
Recognizing that the anti-kickback law is broad and may technically prohibit
many innocuous or beneficial arrangements within the healthcare industry, the
U.S. Department of Health and Human Services issued regulations in July of 1991,
which the Department has referred to as "safe harbors." These safe harbor
regulations set forth certain provisions which, if met, will assure healthcare
providers and other parties that they will not be prosecuted under the federal
anti-kickback law. Additional safe harbor provisions providing similar
protections have been published intermittently since 1991. Although full
compliance with these provisions ensures against prosecution under the federal
anti-kickback law, the failure of a transaction or arrangement to fit within a
specific safe harbor does not necessarily mean that the transaction or
arrangement is illegal or that prosecution under the federal anti-kickback law
will be pursued. Although 24/7 MRI will seek to make certain that any
arrangements that it enters into in the future fall within a safe harbor,
liability under the anti-kickback law may still arise because of the intentions
of the parties with whom 24/7 MRI may do business. In addition, 24/7 MRI may
have anti-kickback law liability based on arrangements established by the
entities which it may acquire if any of those arrangements involved an intention
to exchange remuneration for referrals covered by the anti-kickback law. Conduct
and business arrangements that do not fully satisfy one of these safe harbor
provisions may result in increased scrutiny by government enforcement
authorities such as the Office of the Inspector General of the U.S. Department
of Health and Human Services, or OIG.

         Many states have adopted laws similar to the federal anti-kickback law.
Some of these state prohibitions apply to referral of patients for healthcare
services reimbursed by any source, not only the Medicare and Medicaid Programs.
Although 24/7 MRI will strive to comply with both federal and state
anti-kickback laws, any finding of a violation of these laws could subject 24/7
MRI to criminal and civil penalties or possible exclusion from federal or state
healthcare programs. Such penalties would adversely affect our financial
performance and 24/7 MRI's ability to operate our business.

         In addition, the Ethics in Patient Referral Act of 1989, commonly
referred to as the federal physician self-referral prohibition or Stark Law,
prohibits physician referrals of Medicare and Medicaid patients to an entity
providing certain designated health services (including MRI and other diagnostic
imaging services) if the physician or an immediate family member has any
financial arrangement with the entity and no statutory or regulatory exception
applies. The Stark Law also prohibits the entity from billing for any such
prohibited referral. Initially, the Stark Law applied only to clinical
laboratory services and regulations applicable to clinical laboratory services
were issued in 1995. Earlier that same year, the Stark Law's self-referral
prohibition expanded to additional goods and services, including MRI and other
imaging services. In 1998, the Centers for Medicare and Medicaid Services, or
CMS (formerly known as the Health Care Financing Administration), published
proposed rules for the remaining designated health services, including MRI and
other imaging services, and in January of 2001, CMS published a final rule which
it characterized as the first phase of what will be a two-phase final rule.
Phase one of the final rule became effective on January 4, 2002, except for a
provision relating to physician payment arrangements, which become effective on
January 6, 2003.

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         A person who engages in a scheme to circumvent the Stark Law's referral
prohibition may be fined up to $100,000 for each such arrangement or scheme. In
addition, any person who presents or causes to be presented a claim to the
Medicare or Medicaid Program in violation of the Stark Law is subject to civil
monetary penalties of up to $15,000 per bill submission, an assessment of up to
three times the amount claimed, and possible exclusion from participation in
federal healthcare programs. Bills submitted in violation of the Stark Law may
not be paid by Medicare or Medicaid, and any person collecting any amounts with
respect to any such prohibited bill is obligated to refund such amounts.

         Several states have enacted (including Florida) or are considering
legislation that prohibits physician self-referral arrangements or requires
physicians to disclose any financial interest they may have with a healthcare
provider to their patients when referring patients to that provider. Possible
sanctions for violating these state law physician self-referral and disclosure
requirements include loss of license and civil and criminal sanctions. State
laws vary from jurisdiction to jurisdiction and have been interpreted by the
courts or regulatory agencies infrequently.

         24/7 MRI will seek to establish its operations to comply with these
federal and state physician self-referral prohibition laws. Because 24/7 MRI may
have financial arrangements with physicians and possibly their immediate family
members, and because 24/7 MRI may not be aware of all those financial
arrangements, it will rely on physicians and their immediate family members to
avoid making referrals to it in violation of the Stark law and similar state
laws. If 24/7 MRI should receive such a prohibited referral which is not covered
by exceptions under the Stark Law and applicable state law, its submission of a
bill for the referral could subject it to sanctions under the Stark Law and
applicable state law. Any sanctions imposed on 24/7 MRI under the Stark Law or
any similar state laws could adversely affect our financial results and its
ability to operate its business.

         The Health Insurance Portability and Accountability Act of 1996 (HIPPA)
created two new federal crimes: healthcare fraud and false statements relating
to healthcare matters. The healthcare fraud statute prohibits knowingly and
willfully executing a scheme to defraud any healthcare benefit program,
including private payors. A violation of this statute is a felony and may result
in fines, imprisonment or exclusion from government sponsored programs such as
the Medicare and Medicaid Programs. The false statements statute prohibits
knowingly and willfully falsifying, concealing or covering up a material fact or
making any materially false, fictitious or fraudulent statement in connection
with the delivery of or payment for healthcare benefits, items or services. A
violation of this statute is a felony and may result in fines or imprisonment.
HIPPA will also require 24/7 MRI to follow federal privacy standards for
individually identifiable health information and computer security standards for
all health information. 24/7 MRI will seek to fully comply with the provisions
of HIPPA. However, a violation of the act's health fraud, privacy or security
provisions may result in criminal and civil penalties, which may adversely
affect our financial performance and 24/7 MRI's ability to operate its business.

         Both federal and state government agencies are continuing heightened
and coordinated civil and criminal enforcement efforts. As part of announced
enforcement agency work plans, the federal government will continue to
scrutinize, among other things, the billing practices of hospitals and other
providers of healthcare services. The federal government also has increased
funding to fight healthcare fraud, and it is coordinating its enforcement
efforts among various agencies, such as the U.S. Department of Justice, the U.S.
Department of Health and Human Services Office of Inspector General, and state
Medicaid fraud control units. We believe that the healthcare industry will
continue to be subject to increased government scrutiny and investigations.

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         FEDERAL FALSE CLAIMS ACT

         Another trend affecting the healthcare industry is the increased use of
the federal False Claims Act and, in particular, actions under the False Claims
Act's "whistleblower" provisions. Those provisions allow a private individual to
bring actions on behalf of the government alleging that the defendant has
defrauded the federal government. After the individual has initiated the
lawsuit, the government must decide whether to intervene in the lawsuit and to
become the primary prosecutor. If the government declines to join the lawsuit,
then the individual may choose to pursue the case alone, in which case the
individual's counsel will have primary control over the prosecution, although
the government must be kept apprised of the progress of the lawsuit. Whether or
not the federal government intervenes in the case, it will receive the majority
of any recovery. If the litigation is successful, the individual is entitled to
no less than 15%, but no more than 30%, of whatever amount the government
recovers. The percentage of the individual's recovery varies, depending on
whether the government intervened in the case and other factors. Recently, the
number of suits brought against healthcare providers by private individuals has
increased dramatically. In addition, various states are considering or have
enacted laws modeled after the federal False Claims Act. Even in instances when
a whistleblower action is dismissed with no judgment or settlement, 24/7 MRI may
incur substantial legal fees and other costs relating to an investigation.
Future actions under the False Claims Act may result in significant fines and
legal fees, which would adversely affect our financial performance and 24/7
MRI's ability to operate its business.

         When an entity is determined to have violated the federal False Claims
Act, it must pay three times the actual damages sustained by the government,
plus mandatory civil penalties of between $5,000 to $10,000 for each separate
false claim. Liability arises, primarily, when an entity knowingly submits a
false claim for reimbursement to the federal government. Simple negligence
should not give rise to liability, but submitting a claim with reckless
disregard of its truth or falsity could result in substantial civil liability.
24/7 MRI will strive to ensure that it meets applicable billing requirements.
However, the costs of defending claims under the False Claims Act, as well as
sanctions imposed under the Act, could significantly affect our financial
performance.

         UNLAWFUL PRACTICE OF MEDICINE AND FEE SPLITTING

         The marketing and operation of 24/7 MRI's retail diagnostic imaging
centers, when established, will be subject to state laws prohibiting the
practice of medicine by non-physicians. 24/7 MRI will strive to ensure that its
operations will not involve the practice of medicine because all professional
medical services relating to its operations, including the interpretation of
scans and related diagnoses, will be separately provided by licensed physicians
not employed by 24/7 MRI. Some states have laws that prohibit any fee-splitting
arrangement between a physician and a referring person or entity that would
provide for remuneration paid to the referral source on the basis of revenues
generated from referrals by the referral source. 24/7 MRI will strive to
establish operating policies which do not violate these state laws with respect
to fee splitting.

         REIMBURSEMENT

         It is likely that when 24/7 MRI opens retail diagnostic imaging centers
that it will derive most of the revenues attributable to those centers directly
from healthcare providers rather than third-party payors, including government
programs such as the Medicare Program. It is further likely that 24/7 MRI will
derive only a small percentage of its revenues from direct billings to patients
or their third-party payors. Services for which 24/7 MRI may submit direct
billings for Medicare and Medicaid patients typically will be reimbursed by
contractors on a fee schedule basis. As a result of federal cost-containment
legislation currently in effect, Medicare generally pays for inpatient services
under a

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prospective payment system based upon a fixed amount for each Medicare patient
discharge. Each discharge is classified into one of many diagnosis related
groups, or DRGs. A pre-determined amount covers all inpatient operating costs,
regardless of the services actually provided or the length of the patient's
stay. Because Medicare reimburses a hospital for all services rendered to a
Medicare patient on the basis of a pre-determined amount based on the DRG, a
hospital or free-standing facility cannot be separately reimbursed for an MRI
scan or other procedure performed on the hospital inpatient. Many state Medicaid
Programs have adopted comparable payment policies.

         On August 1, 2000, the Centers for Medicare and Medicaid Services, or
CMS, (formerly the Health Care Financing Administration) implemented a Medicare
outpatient prospective payment system under which services and items furnished
in hospital outpatient departments are reimbursed using a pre-determined amount
for each ambulatory payment classification, or APC. Each APC is based on the
specific procedures performed and items furnished during a patient visit.
Certain items and services are paid on a fee schedule, and for certain drugs,
biologics and new technologies, hospitals are reimbursed additional amounts. It
is possible that third-party reimbursement policies will affect the need or
price for 24/7 MRI's services in the future, which could significantly affect
our financial performance and 24/7 MRI's ability to conduct its business.

EMPLOYEES

         As of January 31, 2004 24/7 MRI has one employee, its president, who
devotes his full time and attention to the company's business and operations.
24/7 MRI is not covered by any collective bargaining agreements and considers
its employee relationships to be good. As 24/7 MRI's business and operations
expand, it will be necessary for it to hire additional employees, including
administrative and marketing staff and technicians. Based upon its review of the
current job market in South Florida it does not believe it will have any
difficulties in hiring qualified personnel at competitive salaries.

HISTORY OF ELINE

         We were incorporated in June 1997 under the laws of the State of Nevada
originally under the name Rapid Retrieval Systems, Inc. We were initially
engaged in the development of comprehensive processing, document retrieval,
editing, integration and network support services for small businesses and the
general public. Our ability to implement our business plan was tied to our
ability to raise sufficient working capital. We were not successful in obtaining
this needed capital, and in mid-2000 we remained a development stage company
that did not have customers nor had we ever generated any revenues from
operations.

         In June 2000 we signed a plan and agreement of merger with Eline
Music.com, Inc., a Tennessee corporation (" Tennessee Eline"). Tennessee Eline
was a development stage company created to provide exposure for independent
music artists and labels and to fill a perceived void that existed in the
entertainment and music business.

         Under the terms of the plan and agreement of merger, Tennessee Eline
was to be merged into our company and we were to be the surviving legal entity.
The plan and agreement of merger contained certain conditions precedent to its
closing. These conditions were satisfied and in December 2000 the transaction
was consummated and Tennessee Eline was merged into our company. As a result of
the transaction, the Tennessee Eline management became our management and the
Tennessee Eline stockholders became our controlling stockholders. The
transaction, which was structured as a reverse

                                        9
<PAGE>

merger, was treated as a purchase for accounting purposes. In January 2001 we
changed our name to Eline Music.com, Inc., which was subsequently changed to our
current name on April 25, 2001.

         Following the aforedescribed transaction, our then current management
attempted to build our company into a full service entertainment company. Its
activities were to include producing music and developing film and video
productions for retail, theatrical, radio, Internet, television and cable
broadcasting distribution. We entered into a number of ventures in these areas
including an Internet radio talk show, the development of an interactive music
video web site, a wedding video production company, film and video production of
commercials, corporate videos, music videos and electronic press kits, an
independent record label, and a web site focused on independent music artists
and independent labels. We also attempted to enter into a number of other
ventures which were never consummated for a variety of reasons, including lack
of sufficient capital to fund the ventures.

         In March 2002 at a meeting of our then board of directors, Mr. Sonny
Paradise, our then current CEO and chairman, who was also our then principal
stockholder, tendered his resignation as an officer and director. His
resignation was accepted and the remaining board members adopted resolutions
that approved the relocation of our corporate headquarters from Tennessee to
Pennsylvania and the retirement of certain debt owed to our former CEO and
chairman who had just resigned. Under the resolution, we were to contract with
our former CEO and chairman to produce three albums at $100,000 per album, for
aggregate consideration of $300,000. Our then board of directors approved the
plan whereby we were to transfer all of our studio equipment to our former CEO
and chairman, he would retire debt we owned him and the price we were to pay for
the three albums, for which he was given two years to deliver, was reduced to
$150,000 in the aggregate. Finally, as we were moving our corporate offices to
Pennsylvania, our former CEO and chairman was to assume the lease and occupy our
facilities in Tennessee, assuming all obligations therefor. Subsequent to Mr.
Paradise's resignation in March 2002 as our CEO and member of our board of
directors, in April 2002 Mr. Thomas J. Gaffney was elected our president and a
member of our board of directors.

         On September 24, 2002 under the terms of a stock purchase and
redemption agreement, between our company, Thomas J. Gaffney and Yucatan Holding
Company, a privately-held investment company, acquired approximately 69,480
shares of our common stock in exchange for $16,000 in a private transaction
exempt from registration under the Securities Act of 1933. The funds Yucatan
Holding Company used for the transaction were funds it had on hand. The funds
were tendered by Yucatan Holding Company to Mr. Gaffney, our then current
president and member of our board of directors. As of the closing date,
certificates and medallion guaranteed stock powers representing approximately
57,000 shares of common stock were delivered to Yucatan Holding Company. The
certificates representing the remaining approximate 12,480 shares were delivered
by Mr. Gaffney and he advised Yucatan Holding Company that the medallion
guaranteed stock powers and corporate resolutions, as needed, were forthcoming.
In November 2002 when it became clear that Mr. Gaffney would not deliver the
medallion guaranteed stock powers and corporate resolutions, as necessary, for
these approximate 12,480 shares of our common stock, Yucatan Holding Company
returned the original certificates to the holders.

         In connection with the execution of the agreement, an unaffiliated
third party who was the holder of approximately 39,222 shares of our common
stock granted Jayme Dorrough, Yucatan Holding Company's sole officer and
director, a one-year irrevocable voting proxy covering such shares. This proxy
has expired by its terms. On the closing date of the stock purchase and
redemption agreement, our

                                       10
<PAGE>

then current officers and directors resigned and Mrs. Dorrough was elected sole
director. Following the closing of the stock purchase and redemption agreement,
our board of directors appointed Barry A. Rothman to serve as our interim
president.

         Subsequent to the closing of this transaction, Yucatan Holding Company
exchanged the approximately 57,000 shares of common stock delivered to it at
closing for 200,000 shares of our newly created Series B Convertible Preferred
Stock. The designations, rights and preferences of the Series B Convertible
Preferred Stock provide, among other provisions, that it is convertible at our
sole option into shares of our common stock on a to-be-negotiated conversion
ratio and each share entitles the holder to 500 votes at any meeting of our
stockholders. Concurrent with such exchange, the approximately 57,000 shares of
our common stock owned by Yucatan Holding Company were returned to our treasury
and cancelled.

         In addition, under the terms of the stock purchase and redemption
agreement, we agreed to redeem 4,000,000 shares of our Series A Preferred Stock,
which represented all of the shares, in exchange for cash payments to Mr.
Gaffney of an aggregate of $6,000 and an unsecured, non-interest bearing
promissory note (the "Gaffney Note") to him in the principal amount of $120,000
(collectively, the "Gaffney Redemption Consideration"). As of the closing date,
certificates and medallion guaranteed stock powers representing 2,000,000 shares
of the Series A Preferred Stock were delivered. Mr. Gaffney delivered the
certificate representing the remaining 2,000,000 shares of Series A Preferred
Stock and advised us the medallion guaranteed stock power was forthcoming. Upon
the redemption of these shares, it was our intent that the shares would be
returned to our treasury with the status of unissued, undesignated shares of
preferred stock.

         Subsequent to the closing of the stock purchase and redemption
agreement, we determined that prior management had failed to file a certificate
of designation covering the Series A Preferred Stock purportedly issued to Mr.
Sonny Paradise, our former Chairman and CEO, in November 2001 at a time when he
was an officer and director of the company and ultimately responsible for such
filing. Specifically, Section 78.1955 of the Nevada Revised Statutes permits a
Nevada corporation which has previously designated a series of blank check
preferred stock (such as Eline) to, by resolution of board of directors, create
a class of that preferred stock and set forth the voting powers, designations,
preferences, limitations, restrictions and relative rights thereof. The creation
of the class and its designations, rights and preferences must be included in a
certificate of designation which must be signed by an officer of the corporation
and filed with the Secretary of State. Section 78.1955 specifically provides
that such certificate of designation must be filed pursuant to that section and
become effective before the issuance of any shares of the class so designated.

         As a result of prior management's failure to file a certificate of
designation covering the 4,000,000 shares of Class A Preferred Stock, such class
was never duly authorized. Accordingly, the 4,000,000 shares of Class A
Preferred Stock reflected on the transfer records on the date of the stock
purchase and redemption agreement were not, in fact, issued and outstanding. The
fact that such shares were not duly authorized and did not exist as of the date
of such agreement resulted in an event of default under the stock purchase and
redemption agreement. The redemption of these shares was the basis of the
agreement by which we were to pay the Gaffney Redemption Consideration described
above.

         On October 31, 2002 we notified Mr. Gaffney that the Gaffney Note was
void on its face. Pursuant to the provisions of Section 5.2 of the stock
purchase and redemption agreement and the terms of the Gaffney Note, we offset
and voided the entire amount of such note, and offset the remaining $6,000

                                       11
<PAGE>

cash to be paid to Mr. Gaffney which represented the balance of the Gaffney
Redemption Consideration. As a result of the foregoing, we have no obligation to
pay the Gaffney Redemption Consideration.

         As a condition of the stock purchase and redemption agreement,
individuals or entities which represented approximately $740,000 of liabilities
on our balance sheet at July 31, 2002, including approximately $640,000
purportedly due to our former officers, directors and affiliates, were to
deliver to Yucatan Holding Company forgiveness of debt and general releases.
These amounts, however, gave no effect to the transactions approved by our then
board of directors in March 2002 as described earlier in this section. Prior to
the closing of the stock purchase and redemption agreement, both Mr. Gaffney and
certain other third parties advised Yucatan Holding Company that the delivery of
the forgiveness of debt and general releases were forthcoming and would be
provided on or immediately after closing. As of the date hereof, Yucatan Holding
Company has received a forgiveness of debt and general release for $8,500 from
an unaffiliated third party. While in the first few weeks after the closing Mr.
Gaffney continued to advise Yucatan Holding Company that the remaining
forgiveness of debt and general releases were forthcoming, same were never
delivered and the failure to so deliver has constituted additional events of
default against Mr. Gaffney under the terms of the stock purchase and redemption
agreement.

         Upon assuming control of our company and undertaking certain due
diligence, our current management has determined that the transactions approved
in March 2002 by our then board of directors as described above were consummated
some time before September 24, 2002. It also appears that prior management
exceeded the scope of the March 2002 board resolutions in that subsequent to
September 24, 2002 we have also discovered that all of our other tangible and
intangible assets, in addition to the studio equipment, are no longer in our
company's possession or control.

         In the course of its due diligence, our current management has also
determined that several consulting agreements which we had entered into in May
2001 with affiliates contained termination provisions which benefit us. These
agreements included a five year consulting agreement with our then CEO and
chairman under which we issued him approximately 11,700 shares of our common
stock, valued at $5,362,500 at the time of issuance, and for which we have
recognized an expense. The agreement with our former CEO and chairman was
cancellable without cause at our discretion, with a provision that required him
to return all unearned compensation to us upon such cancellation. Through our
due diligence we determined that our former CEO no longer holds in record name
any of the shares we issued to him under this agreement, and it appears that all
such shares were transferred to third parties and deposited into street name
prior to September 2002. Yucatan Holding Company did not acquire any of the
shares issued to our former CEO under the terms of the stock purchase and
redemption agreement. While current management cannot say with any certainty if
any services were ever rendered to our company by our former CEO and these other
consultants under the terms of these various agreements, no such services have
been rendered since September 2002.

         At October 31, 2002 our financial statements, which are contained
elsewhere in this annual report, reflect the implementation in the fourth
quarter of fiscal 2002 of the March 2002 resolutions of our then board of
directors related to the transfer of our studio equipment and the retirement of
debt owned him. In conjunction with this, we have written off the remainder of
our assets which are no longer in our control or possession and certain
liabilities related to these assets as an offset against the unearned consulting
fees paid to our former CEO which were expensed in fourth quarter of fiscal
2002. We have also fully expensed the costs of all other consulting agreements
we entered into prior to September 24, 2002 as services under these agreements
were not being rendered to our company at October 31, 2002.

                                       12
<PAGE>

         Subsequent to the resignation on March 27, 2002 of Mr. Sonny Paradise
as our CEO and chairman and the resignation on September 24, 2002 of Mr. Thomas
J. Gaffney as our president and a member of our board of directors, and given
the lack of historical revenues associated with our entertainment initiatives,
current management intends to transition our company into other lines of
business that will serve to increase revenues and stockholder value. As a result
of the transactions approved in March 2002 by our then board of directors and
the conversion of our remaining assets by prior management , at the time Yucatan
Holding Company acquired control of our company we had no business or operations
other than the future delivery of the three albums by our former CEO and
chairman which are due no later than March 2005. However, because of historical
events involving prior management and the uncertainty surrounding the delivery
of these albums, following the change of control Yucatan Holding Company began
exploring additional lines of business which led to the acquisition of IFR and
the organization of 24/7 MRI.

ACQUISITION OF IFR

         In May 2003, under the terms of a share exchange agreement date, our
Industrial Holding subsidiary acquired 100% of the issued and outstanding
capital stock of IFR from its sole stockholder in exchange for 1 million shares
of Industrial Holding's common stock in a private transaction exempt from
registration under the Securities Act of 1933. The shares of Industrial Holding
common stock issued to Mr. Gann are convertible into shares of our common stock
at such time and upon such terms and conditions as the parties may agree to in
the future.

         Prior to closing the transaction with IFR, we had formed Industrial
Holding as a first tier subsidiary. The authorized capital of Industrial Holding
consists of 100 million shares of common stock and 10 million shares of blank
check preferred stock, of which one share has been designated as Series A
Preferred Stock. In conjunction with its organization Industrial Holding issued
the one share of authorized Series A Preferred Stock to us. The designations,
rights and preferences of the Series A Preferred Stock provide that:

         *  it does not pay dividends,
         *  it is not convertible or transferrable,
         *  it is redeemable only upon our consent,
         *  it carries a liquidation preference of $1.00 per share, and
         *  it votes together with the common stock and any other class of
            voting securities as may then be authorized and entitles us to one
            vote more than one-half of all votes entitled to be cast by all
            holders of voting capital stock of Industrial Holding so as to
            ensure that the votes entitled to be cast by us are equal to at
            least 51% of the total of all votes entitled to be cast.

         The transaction was recorded in accordance with the provisions of
Statement of Financial Accounting Standards No. 141 as issued by the Financial
Accounting Standards Board. Among the provisions of SFAS No. 141 is the
requirement to adjust the carry value of non-current assets for any negative
goodwill which might arise as a result of a transaction. At the time of the
acquisition of IFR, it had property and equipment net of depreciation of
approximately $337,000, which represented its only non-current assets. In
accordance with the statement, during fiscal 2003 we reduced the carry value of
the property and equipment by $313,202.

         Under the terms of the share exchange agreement, IRF will pay us a
monthly management fee equal to 50% of its free cash flow as that term is
defined in the share exchange agreement. During fiscal

                                       13
<PAGE>

2003 we waived any management fees which may have otherwise been due the parent
company in order to provide additional funds to IFR for use in the expansion of
its business during fiscal 2004. No additional shares of either Industrial
Holding common or any series of preferred stock can be issued without the
consent of both our company and Mr. Gann.

         Prior to the transaction, Mr. Gann had advanced IFR approximately $1.1
million which is collateralized by a security interest in all of its assets (the
"Gann Obligations"). The note bears interest at (7%) per annum, with interest
only payments due quarterly. The principal and any accrued but unpaid interest
is due on January 1, 2008. The Gann Obligations continue to be serviced by IFR
after the closing of the transaction under the same payment terms as were
utilized prior to the transaction, and the security interest remained in place
pending repayment in full of the Gann Obligations. The share exchange agreement
also provided mechanisms for retirement of the Gann Obligations under certain
circumstances, including upon Mr. Gann's death or disability, or the sale of
IFR, which include a repayment of the Gann Obligations and the return to us of
any capital we have loaned IFR. Mr. Gann, or his estate, will be entitled to a
portion of the proceeds we receive upon the sale of IFR or its assets after
repayment of these amounts.

PENDING NAME CHANGE AND FORWARD STOCK SPLIT

         On January 28, 2004 we announced that our board of directors approved
changing the corporate name to 24/7 Holdings Inc. which the board believes
better represents the company's current business model. The proposal will be
presented to a vote of the company's shareholders at the 2004 annual meeting and
is expected to be approved by mid-April 2004. The company will provide
supplemental information regarding the name change closer to the effective date
of the name change, including the new ticker symbol and CUSIP number. Until the
name change is effective, our common stock will continue to trade under the
current symbol.

RISK FACTORS

         On February 12, 2004 we announced that our board of directors declared
a three for one forward stock split of our issued and outstanding common stock.
The record date for the forward split is February 23, 2004 and the anticipated
effective date will February 24, 2004.

         An investment in our common stock involves a significant degree of
risk. You should not invest in our common stock unless you can afford to lose
your entire investment. You should consider carefully the following risk factors
and other information in this annual report before deciding to invest in our
common stock.

WE HAVE A HISTORY OF LOSSES AND AN ACCUMULATED DEFICIT.

         We reported a net loss of $483,370 for the fiscal year ended October
31, 2003, and a net loss of $8,166,056 for the fiscal year ended October 31,
2002. At October 31, 2003 we had an accumulated deficit of $14,153,258. While a
significant portion of our historical losses and accumulated deficit are
non-cash, until the acquisition of IFR in May 2003 we have never generated
sufficient revenues to even partially offset our operating costs. As we continue
to grow and develop both the Industrial Holding division and the 24/7 MRI
division, it is likely we will continue to report losses.

WE WILL NEED TO RAISE ADDITIONAL CAPITAL TO EXPAND OUT 24/7 MRI DIVISION.

         To date, the development of our 24/7 MRI division has been funded
through a combination of our internal working capital, an operating lease and
loans from Yucatan Holding Company, our principal stockholder. Based upon
information known to us at this time, 24/7 MRI will be able to continue to

                                       14
<PAGE>

develop its wholesale segment through a continuation of the utilization of these
same sources of capital. We will, however, need to additional capital if we
decide to fully implement 24/7 MRI's retail segment. Other than our internal
working capital, operating leases and loans from Yucatan Holding Company, we do
not presently have any source of additional capital. While the capital markets
have become more liquid to large companies in the past year, it has been very
difficult for small companies to raise working capital in the past few years,
and we cannot anticipate if the funding environment in the U.S. or aboard will
improve during 2004 and beyond. Accordingly, we cannot offer any assurances that
if we should need additional capital that it will be available to us on terms
and conditions which are reasonably acceptable, if at all. We cannot assure you
that we will be successful in securing sufficient additional working capital
resources which will allow 24/7 MRI to expand operations to include retail
locations, should the decision be made, at the levels necessary to fully
penetrate the target market areas and reach any significant economies of scale.

24/7 MRI'S BUSINESS AND OPERATION WILL BE SUBJECT TO SIGNIFICANT REGULATION.

         The operation of diagnostic imaging centers are subject to a number of
federal and state laws including the anti-kickback laws, compliance with HIPPA,
prohibitions against physician fee-splitting and the unlawful practice of
medicine and federal reimbursement practices, among others. While 24/7 MRI will
seek to conduct its operations in a manner which complies with all applicable
federal and state laws, rules and regulations, we cannot assure you that it will
also do so. Any finding that it has violated any federal or state law, rule or
regulation to which 24/7 MRI and its business and operations may be subject
could materially and adversely affect our future business and operations and
subject us to fines, penalties or sanctions.

OUR COMMON STOCK IS CURRENTLY QUOTED ON THE OTCBB, BUT TRADING IN OUR STOCK IS
LIMITED.

         The market for our common stock is extremely limited and there are no
assurances an active market for our common stock will ever develop. Accordingly,
purchasers of our common stock cannot be assured any liquidity in their
investment.

BECAUSE OUR STOCK CURRENTLY TRADES BELOW $5.00 PER SHARE, AND IS QUOTED ON THE
OTC BULLETIN BOARD, OUR STOCK IS CONSIDERED A "PENNY STOCK" WHICH CAN ADVERSELY
EFFECT ITS LIQUIDITY.

         If the trading price of our common stock is less than $5.00 per share,
our common stock is considered a "penny stock," and trading in our common stock
is subject to the requirements of Rule 15g-9 under the Securities Exchange Act
of 1934. Under this rule, broker/dealers who recommend low- priced securities to
persons other than established customers and accredited investors must satisfy
special sales practice requirements. The broker/dealer must make an
individualized written suitability determination for the purchaser and receive
the purchaser's written consent prior to the transaction.

         SEC regulations also require additional disclosure in connection with
any trades involving a "penny stock," including the delivery, prior to any penny
stock transaction, of a disclosure schedule explaining the penny stock market
and its associated risks. These requirements severely limit the liquidity of
securities in the secondary market because few broker or dealers are likely to
undertake these compliance activities. In addition to the applicability of the
penny stock rules, other risks associated with trading in penny stocks could
also be price fluctuations and the lack of a liquid market.

                                       15
<PAGE>

ITEM 2.  DESCRIPTION OF PROPERTY.

         Our principal stockholder, Yucatan Holding Company, provides us office
space at no cost to us. We believe that this arrangement is suitable for our
present needs. IFR's business and operations are conducted from a 35,000 square
foot facility in Knoxville, Tennessee which is leased from Mr. Gann for $78,000
per annum under a lease expiring on January 1, 2008.

ITEM 3.  LEGAL PROCEEDINGS.

         We are not a party to any pending legal proceedings.

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

         None.

                                     PART II

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

         Our common stock is quoted on the OTCBB under the symbol EEGR. The
reported high and low bid prices for the common stock as reported on the OTCBB
are shown below for the periods indicated. The quotations reflect inter-dealer
prices, without retail mark-up, markdown or commission, and may not represent
actual transactions. The following prices give effect to the one for 250 reverse
stock split effective on November 29, 2002 and the three for two forward stock
split effective on November 7, 2003.

                                                          High          Low
FISCAL 2002

First Quarter ended January 31, 2002 ...............  $   592.50    $    28.125
Second Quarter ended April 30, 2002 ................  $    67.50    $    13.125
Third Quarter ended July 31, 2002 ..................  $    90.00    $    16.875
Fourth Quarter ended October 31, 2002 ..............  $    60.00    $     0.375

FISCAL 2003

First Quarter ended January 31, 2003 ...............  $     2.70    $     0.06
Second Quarter ended April 30, 2003 ................  $     3.75    $     1.575
Third Quarter ended July 31, 2003 ..................  $     9.90    $     3.375
Fourth Quarter ended October 31, 2003 ..............  $    10.65    $     5.25

         On February 9, 2004 the last sale price of our common stock as reported
on the OTCBB was $4.15. As of January 15, 2004 there were approximately 150
record owners of our common stock.

                                       16
<PAGE>

DIVIDEND POLICY

         We have never paid cash dividends on our common stock. We intend to
keep future earnings, if any, to finance the expansion of our business. We do
not anticipate that any cash dividends will be paid in the foreseeable future.

RECENT SALES OF UNREGISTERED SECURITIES

         In November 2001 we issued approximately 600 shares of our common stock
to an individual as compensation for consulting services. We valued these shares
at $124,000 and we have recognized an expense for this issuance in fiscal 2002.

         In May 2002 we issued an aggregate of approximately 36,000 shares of
our common stock to two individuals and two entities in exchange for services to
be rendered to us. We valued these shares at $840,000, and we have recognized an
expense for these issuances in fiscal 2002. Included in these issuances were
approximately 15,000 shares of common stock valued at $350,000 issued to Thomas
J. Gaffney, then our president and a member of our board of directors.

         In July 2002 we issued an aggregate of approximately 40,260 shares of
our common stock to six individuals and three entities in exchange for services
to be rendered to us. We valued these shares at $595,800, and we have recognized
an expense for these issuances in fiscal 2002.

         In August 2002 we issued an aggregate approximately 6,000 shares of our
common stock to an individual in exchange for services to be rendered to us. We
valued these shares at $25,000, and we have recognized an expense for this
issuance in fiscal 2002.

         In October 2002 we issued 200,000 shares of our Series B Convertible
Preferred Stock to Yucatan Holding Company in exchange for approximately 57,000
shares of our common stock held by that company. The approximately 57,000 shares
of our common stock were cancelled and returned to our treasury with the status
of authorized but unissued shares of common stock.

         In November 2002 we issued Yucatan Holding Company approximately
360,000 shares of our common stock, valued at $150,000, the value of the
services performed, as compensation for services and reimbursement for expenses.

         In October 2003 we issued Mr. Dirk Sichel, President of 24/7 MRI,
20,000 shares of our common stock, valued at $80,000, as compensation for
services pursuant to his employment agreement, which has been treated as
deferred compensation over the term of the two year agreement.

         All of these issuances were made in reliance on an exemption from
registration under the Securities Act of 1933 in reliance on Section 4(2)
thereof. There were no underwriters involved in any of these issuances and we
did not pay any commissions. The recipients were either accredited investors or
non-accredited investors who had such knowledge and experience in financial,
investment and business matters that they were capable of evaluating the merits
and risks of the prospective investment in our securities. No general
solicitation or advertising was used in connection with this transaction, and
the certificates evidencing the shares that were issued contained a legend
restricting their transferability absent registration under the Securities Act
of 1933 or the availability of an applicable exemption therefrom.

                                       17
<PAGE>

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

         The following table sets forth securities authorized for issuance under
equity compensation plans, including individual compensation arrangements, by us
under our 2003 Stock Option and Equity Compensation Plan and any compensation
plans not previously approved by our stockholders as of October 31, 2003.

                            Number of        Weighted      Number of
                            securities to    average       securities remaining
                            be issued upon   exercise      available for future
                            exercise of      price of      issuance under equity
                            outstanding      outstanding   compensation plans
                            options,         options,      (excluding securities
                            warrants         warrants      reflected in
                            and rights       and rights    column (a))
                            --------------   -----------   ---------------------
Plan category                     (a)             (b)

2003 Stock Option and
Equity Compensation Plan          (1)             (1)              22,010

Equity compensation plans
not approved by stockholders     none            none               none

(1) There are no outstanding options under the 2003 Stock Option and Equity
Compensation Plan. Additional information on our 2003 Stock Option and Equity
Compensation Plan appears later in this annual report under Item 10.

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

RESULTS OF OPERATIONS

         We reported revenues of $1,404,089 for fiscal 2003 as compared to
revenues of $94,527 for fiscal 2002, representing an increase of $1,309,562.
Included in revenues for fiscal 2003 are revenues of $1,350,744, or
approximately 96% of our consolidated revenues, from our Industrial Holding
division for the five month period following the acquisition of IFR and $53,345
of revenues, or approximately 4% of our consolidated revenues for fiscal 2003,
from our 24/7 MRI division for the three month period following the opening of
the beta test site in August 2003. We did not have comparable revenues from
either the Industrial Holding division or the 24/7 MRI division in fiscal 2002.

         Since our acquisition of IFR in May 2003 IFR has reported an increase
in order activity from its existing customer base. This upswing in both core and
special order business for IFR follows the positive trend for manufacturing
businesses in the U.S. Since the end of fiscal 2003 IFR has begun receiving
purchase orders on jobs quoted six to 12 months ago as pending projects are
being released by the purchasing managers at some of IFR's regular customers. In
addition, during the first quarter of fiscal 2004 IFR has received purchase
orders totaling approximately $400,000 from its customer base in several
industries, including steel mills, rock quarries and public utilities, for
special projects outside the normal course of their operations, which IFR
expects to be completed during the second quarter of fiscal 2004.

                                       18
<PAGE>

Based upon the information available to us at this time, we believe that IFR's
revenues will continue at amounts which are at least at the historic levels
during fiscal 2004.

         We formed 24/7 MRI in June 2003 to explore opportunities in the
diagnostic imaging field. In August 2003 24/7 MRI opened Okeechobee Imaging, a
store-front MRI center in West Palm Beach, Florida to test its operating
concepts. In December 2003 24/7 MRI completed the beta test of this initial
retail center. During the balance of fiscal 2004 24/7 MRI will continue to
develop its business plan as described elsewhere in this annual report.

         We reported a gross profit of $419,065 for fiscal 2003 as compared to a
gross profit of $94,527 in fiscal 2002. Of the consolidated amount, Industrial
Holding represented $410,999 of the gross profit and Other represented the
remaining $8,066. Revenues for fiscal 2002 represented a non-refundable advance
from a distributor under a contract which was terminated in fiscal 2002 which
had no cost basis.

         Operating expenses for fiscal 2003 were $945,019 as compared to
$8,250,583 for fiscal 2002, a reduction of approximately 87%. Included in
operating expenses in fiscal 2003 were $587,959 of general and administrative
expenses, which included $529,838 attributable to Industrial Holding and $58,121
attributable to 24/7 MRI and Eline as the corporate parent, and $357,059 of
non-cash stock compensation expense which represented the value of common stock
issued as compensation for consulting services. Included in operating expenses
for fiscal 2002 were $90,557 of general and administrative expenses and
$8,160,026 of non-cash stock compensation expense which represented the value of
common stock issued as compensation for consulting services. Of the stock
compensation expense for fiscal 2002, $3,489,814 of such expense represented net
consulting fees paid to our former president and $4,670,212 represented
consulting fees paid to third parties.

         Other expense, which represented interest expense, was $30,681 for
fiscal 2003, an increase of $20,681 from fiscal 2002. Interest expense in fiscal
2003 was interest which was primarily paid to Lester Gann under the terms of the
Gann Obligations. Please see Item 1. Business - History of Eline - Acquisition
of IFR which appears earlier in this annual report.

         We reported a loss from operations before minority interest in fiscal
2003 of $556,635 as compared to a loss from operations before minority interest
in fiscal 2002 of $8,166,056, an approximate 94% reduction.

         For fiscal 2003 we reported a loss in subsidiary (Industrial Holding)
attributed to the minority interest held by Mr. Gann of $73,265. We did not have
a comparable loss in subsidiary in fiscal 2002. This loss in subsidiary, which
represents 49% of the loss attributable to Industrial Holding which is allocated
to Mr. Gann as its minority stockholder, had the effect of reducing our net loss
from continuing operations.

LIQUIDITY AND CAPITAL RESOURCES

         At October 31, 2003 we had working capital of $941,390 as compared to a
working capital deficit of $44,096 at October 31, 2002. The change in working
capital is attributable to our acquisition of IFR in May 2003 as described
elsewhere herein.

         Net cash used in operating activities for fiscal 2003 was $2,916 as
compared to net cash provided by operating activities of $95,217 for fiscal
2002. The change is primarily attributable:

         *  the significant reduction in the net loss from fiscal 2002 to fiscal
            2003,

                                       19
<PAGE>

         *  a reduction in depreciation expense from fiscal 2002 to fiscal 2003
            of $88,310,
         *  amortization of unearned consulting fees and compensation and
            termination of consulting agreements in fiscal 2002 of $6,996,425
            for which there were no comparable expenses in fiscal 2003, and
         *  a reduction in the value of stock issued for compensation from
            fiscal 2002 to fiscal 2003 of $1,648,941.

         Included in the net cash generated by operating activities in fiscal
2003 is $357,060 of non-cash stock compensation expense and $73,265 attributable
to the net minority interest in losses at Industrial Holding and equity in loss
of affiliates. We did not a minority interest in Industrial Holding in fiscal
2002.

         Net cash provided by investing activities was $92,774 for fiscal 2003
as compared to $0 for fiscal 2002. The increase represents the cash acquired in
the acquisition of IFR. Net cash provided by financing activities for fiscal
2003 was $58,930 as compared to net cash used by financing activities of $95,905
for fiscal 2002.

         As a result of the application of SFAS No. 141 to the acquisition of
IFR, in fiscal 2003 we were required to adjust the carry value of non-current
assets for any negative goodwill which might arise as a result of the
transaction. At the time of the acquisition, IFR had property and equipment net
of depreciation of approximately $347,000, which represented non-current assets.
In accordance with the statement, during fiscal 2003 we reduced the carry value
of the property and equipment by $313,202 to $33,082 which is reflected on our
balance sheet at October 31, 2003. Immediately prior to the acquisition of IFR,
IFR had obtained an independent appraisal of its property and equipment which
placed the value at approximately $650,000. Notwithstanding the application of
SFAS No. 141 which resulted in the reduction of the carry value of the property
and equipment, we believe that the value of IFR's assets as they appear on our
balance sheet at October 31, 2003 exceed the carry value.

         At October 31, 2003 we had working capital of $941,390. While
approximately 74% of our loss for fiscal 2003 relates to non-cash expenses, we
reported a net loss of $483,370 for fiscal 2003 and at October 31, 2003 we have
an accumulated deficit of $14,153,258. The report from of our independent
auditor on our audited financial statements at October 31, 2003 contains a going
concern modification. To date, the development of our 24/7 MRI division has been
funded through a combination of our internal working capital, an operating lease
and loans from Yucatan Holding Company, our principal stockholder. Based upon
information known to us at this time, 24/7 MRI will be able to continue to
develop its wholesale segment through a continuation of the utilization of these
same sources of capital. We will, however, need to additional capital if we
decide to fully implement 24/7 MRI's retail segment or for further expansion of
our Industrial Holding division. In addition, based upon results to date we
believe that Industrial Holding division's revenues will increase during fiscal
2004 in an amount to sustain its operations without additional losses, the
manufacturing segment of the U.S. is subject to volatility and any decline of
orders from existing customers, or if anticipated additional orders from these
customers do not materialize, we may need to raise additional working capital
for the Industrial Holding division. Other than our internal working capital,
operating leases and loans from Yucatan Holding Company, we do not presently
have any source of additional capital. In addition, while we believe Yucatan
Holding Company will continue to provide us with interim capital, it is under no
firm obligation to do so. While the capital markets have become more liquid to
large companies in the past year, it has been very difficult for small companies
to raise working capital in the past few years, and we cannot anticipate if the
funding environment in the U.S. or aboard will improve during 2004 and beyond.
Accordingly, we cannot offer any assurances that if we should need additional
capital that it will be available to us on terms and

                                       20
<PAGE>

conditions which are reasonably acceptable, if at all. If we are unable to
increase revenues in our Industrial Holding division or raise working capital
when needed to fund its expansion and that of 24/7 MRI, our results of operation
and liquidity may adversely impacted in future periods.

ITEM 7. FINANCIAL STATEMENTS

         The financial statements required by this report are included,
commencing on page F-1.

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

         On November 24, 2003 we notified Dempsey Vantrease & Follis PLLC, our
principal independent accountant, that we were terminating their services. Our
decision to terminate their services was based upon their notification to us
subsequent to October 31, 2003 that such firm had decided not to register with
the Public Company Accounting Oversight Board. The report of Dempsey Vantrease &
Follis PLLC on our financial statements for the fiscal year ended October 31,
2002 contained an explanatory paragraph as to our ability to continue as a going
concern. Other than such going concern modification, such report did not contain
an adverse opinion or disclaimer of opinion, nor was it modified as to
uncertainty, audit scope, or accounting principles. There were no disagreements
between our company and Dempsey Vantrease & Follis PLLC on any matter of
accounting principles or practices, financial statement disclosure or auditing
scope or procedure which, if not resolved to Dempsey Vantrease & Follis PLLC's
satisfaction, would have caused it to make reference to the subject matter of
the disagreement(s) in connection with its report.

         In accordance with the requirements of Item 304 of Regulation S-B of
the Securities Act of 1933, we provided Dempsey Vantrease & Follis PLLC with a
copy of Item 4 of our Report on Form 8-K as filed on November 25, 2003 and they
furnished us a letter addressed to the SEC stating that such firm agreed with
the statements made by us in that Report. A copy of such letter was filed as an
exhibit to our Report on Form 8-K filed on November 25, 2003.

         On January 21, 2004 we engaged Webb & Company, P.A. to act as our
principal independent accountant. Prior to such engagement, during the two most
recent fiscal years and any subsequent interim period prior to engaging Webb &
Company, P.A. we did not consult with such firm regarding the application of
accounting principles to a specific completed or contemplated transaction, or
the type of audit opinion that might be rendered on our financial statements.
The change in our principal independent accountants was approved by our board of
directors.

         On September 30, 2002 we notified Rodefer Moss & Co PLLC, our principal
independent accountant, that we were terminating their services. The report of
Rodefer Moss & Co PLLC on our financial statements for the fiscal year ended
October 31, 2001 contained an explanatory paragraph as to our ability to
continue as a going concern. Other than such going concern modification, such
report did not contain an adverse opinion or disclaimer of opinion, nor was it
modified as to uncertainty, audit scope, or accounting principles. There were no
disagreements between our company and Rodefer Moss & Co PLLC on any matter of
accounting principles or practices, financial statement disclosure or auditing
scope or procedure which, if not resolved to Rodefer Moss & Co PLLC's
satisfaction, would have caused it to make reference to the subject matter of
the disagreement(s) in connection with its report.

         On September 30, 2002 we engaged Dempsey Vantrease & Follis PLLC to act
as our principal independent accountant. Prior to such engagement, during the
two most recent fiscal years and any

                                       21
<PAGE>

subsequent interim period prior to engaging Dempsey Vantrease & Follis PLLC we
did not consult with such firm regarding the application of accounting
principles to a specific completed or contemplated transaction, or the type of
audit opinion that might be rendered on our financial statements.

         The change in our principal independent accountants was approved by our
board of directors.

         In accordance with the requirements of Item 304 of Regulation S-B of
the Securities Act of 1933, we provided Rodefer Moss & Co PLLC with a copy of
Item 4 of our Report on Form 8-K as filed on October 3, 2002 and they furnished
us a letter addressed to the SEC stating that such firm agreed with the
statements made by us in that Report. A copy of such letter was filed as an
exhibit to our Report on Form 8-K/A filed on October 7, 2002. We have also filed
as an exhibit to our Report on Form 8-K/A as filed on October 22, 2002 a letter
from Rodefer Moss & Co, PLLC addressed to the SEC confirming that they agree
with the statements contained in this Report as they relate to that firm.

         Accordingly, during the two most recent fiscal years and any subsequent
interim period prior to each of their respective resignation or termination,
there were no disagreements between our company and either of Dempsey Vantrease
& Follis LLP or Rodefer Moss & Co. PLLC on any matter of accounting principles
or practices, financial statement disclosure or auditing scope or procedure
which, if not resolved to such firm's satisfaction, would have caused it to make
reference to the subject matter of the disagreement(s) in connection with its
report.

ITEM 8A. CONTROLS AND PROCEDURES

         As required by Rule 13a-15 under the Securities Exchange Act of 1934,
as of the end of the period covered by the annual report, being October 31,
2003, we have carried out an evaluation of the effectiveness of the design and
operation of our company's disclosure controls and procedures. This evaluation
was carried out under the supervision and with the participation of our
company's management, including our company's President. Based upon that
evaluation, our company's President concluded that our company's disclosure
controls and procedures are effective. There has been no significant changes in
our company's internal controls or in other factors, which could significantly
affect internal control subsequent to the date we carried out our evaluation.

         Disclosure controls and procedures and other procedures that are
designed to ensure that information required to be disclosed in our reports
filed or submitted under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported, within the time period specified in the
Securities and Exchange Commission's rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed in our reports filed under the
Securities Exchange Act of 1934 is accumulated and communicated to management
including our President as appropriate, to allow timely decisions regarding
required disclosure.

                                    PART III

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

         The following individuals are our executive officers and directors:

                                       22
<PAGE>

              Name                 Age                 Position
              ----                 ---                 --------

         Barry A. Rothman           48          President and secretary
         Jayme Dorrough             35          Director

         BARRY A. ROTHMAN. Mr. Rothman has been our president and secretary
since September 25, 2002. Mr. Rothman has been president of B. Alan Associates,
Inc., a consulting firm assisting public companies with corporate
communications, marketing and investor relations, since founding that company in
May 1996. Since January 2001, Mr. Rothman has also served as vice president of
Visual Data Corporation (Nasdaq: VDAT), a full service broadband media company
that specializes in webcasting, marketing solutions for the travel industry and
networking solutions for the entertainment industry. From February 1992 to May
1996 he was vice president of Greenstone Roberts Advertising. Mr. Rothman
received a B.A. from Union College.

         JAYME DORROUGH. Mrs. Dorrough has been a member of our board of
directors since September 24, 2002. Since 1994 Mrs. Dorrough has been president
and the principal of Yucatan Holding Company, a privately-held investment
company with interests in various companies. Mrs. Dorrough has been a member of
the board of directors of Techlabs, Inc. (OTCBB: TELA), a reseller of opt-in
email addresses generated from web sites its owns, since December 2000, and has
served as its president and secretary since February 2001. Yucatan Holding
Company is our principal stockholder.

         There are no family relationship between any of the executive officers
and directors. Each director is elected at our annual meeting of stockholders
and holds office until the next annual meeting of stockholders, or until his
successor is elected and qualified. There are no committees of our board of
directors.

Key Employees

INDUSTRIAL HOLDING

         Lester Gann. Mr. Gann, 59, has been President of Industrial Holding
since May 2003. Mr. Gann founded IFR in 1979 and has served as its President and
a director continuously since the date of formation. Mr. Gann has approximately
35 years experience in tool and machinery design and power transmission
equipment and has received extensive training from various manufacturers and
distributors of the foregoing equipment. Mr. Gann is responsible for all day to
day operations of the Industrial Holding division.

24/7 MRI

         Dirk Sichel. Mr. Sichel, 47, has been President of 24/7 MRI since
October 2003. Prior to joining 24/7 MRI, since March 1998 Mr. Sichel had served
as president of High Watt Medical, Inc., a radiology consulting firm
specializing in practice startup and management. Key projects undertaken during
his tenure with his prior firm included his serving as General Manager and
Director of Marketing of Hialeah Open MRI and Project Developer for Mizner Place
MRI. Mr. Sichel has approximately 16 years experience in the diagnostic imaging
industry. He has worked with two publicly owned national imaging companies,
Medical Resources, Inc. and U.S. Diagnostic Labs, that each created market
valuation in excess of $400 million. Mr. Sichel was primarily responsible for
starting new imaging centers as well as more traditional mergers and
acquisitions of existing facilities. Mr. Sichel was involved with over 100
acquisitions, mergers or start-up opportunities with these previous companies.

                                       23
<PAGE>

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

         Based solely upon a review of Forms 3 and 4 and amendments thereto
furnished to us under Rule 16a-3(d) of the Securities Exchange Act of 1934
("Exchange Act") during the fiscal year ended October 31, 2003, we are not aware
of any person that failed to file on a timely basis, as disclosed in the
aforementioned Forms, reports required by Section 16(a) of the Exchange Act
during the fiscal year ended October 31, 2003.

Code of Ethics

         Effective December 31, 2003, our board of directors adopted a Code of
Business Conduct and Ethics that applies to, among other persons, our company's
President, as well as persons performing similar functions. As adopted, our Code
of Business Conduct and Ethics sets forth written standards that are designed to
deter wrongdoing and to promote:

         *  honest and ethical conduct, including the ethical handling of actual
            or apparent conflicts of interest between personal and professional
            relationships;

         *  full, fair, accurate, timely, and understandable disclosure in
            reports and documents that we file with, or submit to, the
            Securities and Exchange Commission and in other public
            communications made by us;

         *  compliance with applicable governmental laws, rules and regulations;

         *  the prompt internal reporting of violations of the Code of Business
            Conduct and Ethics to an appropriate person or persons identified in
            the Code of Business Conduct and Ethics; and

         *  accountability for adherence to the Code of Business Conduct and
            Ethics.

         Our Code of Business Conduct and Ethics requires, among other things,
that all of our company's personnel shall be accorded full access to our
President with respect to any matter that may arise relating to the Code of
Business Conduct and Ethics. Further, all of our company's personnel are to be
accorded full access to our company's board of directors if any such matter
involves an alleged breach of the Code of Business Conduct and Ethics by our
President.

         In addition, our Code of Business Conduct and Ethics emphasizes that
all employees, and particularly managers and/or supervisors, have a
responsibility for maintaining financial integrity within our company,
consistent with generally accepted accounting principles, and federal,
provincial and state securities laws. Any employee who becomes aware of any
incidents involving financial or accounting manipulation or other
irregularities, whether by witnessing the incident or being told of it, must
report it to his or her immediate supervisor or to our company's President. If
the incident involves an alleged breach of the Code of Business Conduct and
Ethics by the President, the incident must be reported to any member of our
board of directors. Any failure to report such inappropriate or irregular
conduct of others is to be treated as a severe disciplinary matter. It is
against our company policy to retaliate against any individual who reports in
good faith the violation or potential violation of our company's Code of
Business Conduct and Ethics by another.

                                       24
<PAGE>

         Our Code of Business Conduct and Ethics is filed herewith with the
Securities and Exchange Commission as Exhibit 14 to this report. We will provide
a copy of the Code of Business Conduct and Ethics to any person without charge,
upon request. Requests can be sent to: Eline Entertainment Group, Inc., 8905
Kingston Pike, Suite 313, Knoxville, Tennessee 37923.

ITEM 10. EXECUTIVE COMPENSATION

                           SUMMARY COMPENSATION TABLE

         The table below sets forth information relating to the compensation
paid by us during the past three fiscal years to: (i) the president and Chief
Executive Officer; and (ii) each other executive officer who earned more than
$100,000 during last three completed fiscal years (the "Named Executive
Officers").
<TABLE>
<CAPTION>
                                      Annual                                  Long-Term
                                   Compensation                              Compensation
                       _______________________________________   ______________________________________

                                                                 Restricted   Securities
                                                  Other Annual     Stock      Underlying       All
Name and Principal     Fiscal   Salary    Bonus   Compensation     Awards      Options        Other
Position                Year      ($)      ($)        ($)            ($)        SAR (#)    Compensation
_______________________________________________________________________________________________________
<S>                     <C>     <C>        <C>         <C>           <C>          <C>       <C>
Barry A. Rothman        2003    $   (1)    $0          $0            $0           0         $        0
                        2002    $   (1)    $0          $0            $0           0         $        0

Thomas J. Gaffney       2002    $   (2)    $0          $0            $0           0         $  350,000

Sonny Paradise (3)      2002    $     0    $0          $0            $0           0         $4,294,510
                        2001    $ 3,000    $0          $0            $0           0         $  491,562

John P. Brancaccio (4)  2001    $89,000    $0          $0            $0           0         $        0
</TABLE>

(1) Mr. Rothman has served as our president since September 25, 2002. While we
do not pay Mr. Rothman a salary, we have recognized an expense of $12,000 for
fiscal 2003 and $1,742 for the period of September 25, 2002 though October 31,
2002 which we believe equals the fair value of his services during this period.

(2) Mr. Gaffney served as our president April 17, 2002 until September 25, 2002.
The compensation in the amount of $350,000 paid to Mr. Gaffney represents the
fair value of 15,000 shares of our common stock issued to him May 14, 2002 as
compensation.

(3) Mr. Paradise served as our president from June 2000 until January 2001, and
served as our chairman from June 2000 until April 2002. In May 2001 we entered
into a five year consulting with him and issued him 2,925,000 shares of our
common stock which were valued at $5,362,500, with $491,562 expensed through
October 31, 2001 and $4,988,987 reflected as prepaid at the end of fiscal 2001.
The compensation paid in fiscal 2002 is the gross compensation expense of
$4,988,987 in consulting fees reflected as prepaid at October 31, 2001, reduced
by approximately $696,000 which was the amount of assets taken by him and
corresponding liabilities related to those assets in the transactions described
elsewhere herein. See Item 1. Description of Business.

(4) Mr. Brancaccio served as President from January through July 2001.

                     OPTION / SAR GRANTS IN LAST FISCAL YEAR

         The following table sets forth information concerning individual grants
of options made during fiscal 2003 to the Named Executive Officers.

                                       25
<PAGE>

                                      % of Total
                 Number of Shares     Options Granted   Exercise or
                 Underlying Options   to Employees in   Base Price    Expiration
                 Granted (#) (1)      Fiscal Year       ($/Sh)        Date
________________________________________________________________________________

Barry A. Rothman        0                  n/a             n/a            n/a

2003 STOCK OPTION AND EQUITY COMPENSATION PLAN

         On April 28, 2003, the board of directors and a majority of our
stockholders adopted our 2003 Stock Option and Equity Compensation Plan (the
"Plan"). We initially reserved an aggregate of 250,000 shares of common stock
for issuance pursuant to options granted under the Plan ("Plan Options") or for
restricted stock grants ("Stock Grants") made under the Plan. The number of
shares available for issuance under the Plan is automatically increased so that
it equal 10% of our outstanding common stock. As a result of this Plan
provision, the aggregate number of shares available for issuance under the Plan
increased to 354,010 as a result of our three for two forward stock split
effective November 7, 2003. To date, we have granted Plan Options and Stock
Grants representing an aggregate of 332,000 shares (which such number is not
adjusted to reflect the three for two forward stock split) and an aggregate of
22,010 shares remain available for issuance under the Plan.

         The stated purpose of the Plan is to increase our employees',
advisors', consultants' and non-employee directors' proprietary interest in the
company, and to align more closely their interests with the interests of our
company, as well as to enable us to attract and retain the services of
experienced and highly qualified employees and non-employee directors. The Plan
is administered by our board of directors. The board of directors determines,
from time to time, those of our officers, directors, employees and consultants
to whom Stock Grants and Plan Options will be granted, the terms and provisions
of the respective Grants and Plan Options, the dates such Plan Options will
become exercisable, the number of shares subject to each Plan Option, the
purchase price of such shares and the form of payment of such purchase price.
All other questions relating to the administration of the Plan, and the
interpretation of the provisions thereof are to be resolved at the sole
discretion of the board of directors.

         Plan Options granted under the Plan may either be options qualifying as
incentive stock options ("Incentive Options") under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), or options that do not so qualify
("Non-Qualified Options"). In addition, the Plan also allows for the inclusion
of a reload option provision ("Reload Option"), which permits an eligible person
to pay the exercise price of the Plan Option with shares of common stock owned
by the eligible person and to receive a new Plan Option to purchase shares of
common stock equal in number to the tendered shares. Any Incentive Option
granted under the Plan must provide for an exercise price of not less than 100%
of the fair market value of the underlying shares on the date of such grant, but
the exercise price of any Incentive Option granted to an eligible employee
owning more than 10% of our common stock must be at least 110% of such fair
market value as determined on the date of the grant.

         The term of each Plan Option and the manner in which it may be
exercised is determined by the board of directors or the Committee, provided
that no Plan Option may be exercisable more than 10 years after the date of its
grant and, in the case of an Incentive Option granted to an eligible employee
owning more than 10% of our common stock, no more than five years after the date
of the grant. In any case, the exercise price of any stock option granted

                                       26
<PAGE>

under the Plan will not be less than 85% of the fair market value of the common
stock on the date of grant. The exercise price of Non-Qualified Options shall be
determined by the board of directors.

         The per share purchase price of shares subject to Plan Options granted
under the Plan may be adjusted in the event of certain changes in our
capitalization, but any such adjustment shall not change the total purchase
price payable upon the exercise in full of Plan Options granted under the Plan.
Officers, directors and key employees of and consultants to us and our
subsidiaries will be eligible to receive Non-Qualified Options under the Plan.
Only our officers, directors and employees who are employed by us or by any of
our subsidiaries thereof are eligible to receive Incentive Options.

         All Plan Options are nonassignable and nontransferable, except by will
or by the laws of descent and distribution and, during the lifetime of the
optionee, may be exercised only by such optionee. If an optionee's employment is
terminated for any reason, other than his death or disability or termination for
cause, or if an optionee is not our employee but is a member of our board of
directors and his service as a Director is terminated for any reason, other than
death or disability, the Plan Option granted may be exercised on the earlier of
the expiration date or 90 days following the date of termination. If the
optionee dies during the term of his employment, the Plan Option granted to him
shall lapse to the extent unexercised on the earlier of the expiration date of
the Plan Option or the date one year following the date of the optionee's death.
If the optionee is permanently and totally disabled within the meaning of
Section 22(c)(3) of the Code, the Plan Option granted to him lapses to the
extent unexercised on the earlier of the expiration date of the option or one
year following the date of such disability.

         The board of directors may amend, suspend or terminate the Plan at any
time, except that no amendment shall be made which (i) increases the total
number of shares subject to the Plan or changes the minimum purchase price
therefore (except in either case in the event of adjustments due to changes in
our capitalization), (ii) affects outstanding Plan Options or any exercise right
thereunder, (iii) extends the term of any Plan Option beyond ten years, or (iv)
extends the termination date of the Plan.

         Unless the Plan shall be earlier suspended or terminated by the board
of directors, the Plan shall terminate on approximately 10 years from the date
of the Plan's adoption. Any such termination of the Plan shall not affect the
validity of any Plan Options previously granted thereunder.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         RELATED STOCKHOLDER MATTERS

         As of January 15, 2004 there were 3,850,265 shares of our common stock
and 180,000 shares of our Class B Convertible Preferred Stock issued and
outstanding. These two classes of securities represent all of our voting
securities. Each share of common stock is entitled to one vote, and each share
of Class B Convertible Preferred Stock is entitled to 500 votes, on all matters
submitted to our stockholders for a vote, and both classes of these securities
vote together as one class. The following table contains information regarding
record ownership of our voting securities as of January 15, 2003 held by:

                                       27
<PAGE>

         *  persons who own beneficially more than 5% of our outstanding voting
            securities,
         *  our directors,
         *  named executive officers, and
         *  all of our directors and officers as a group.

         A person is deemed to be the beneficial owner of securities that can be
acquired by such a person within 60 days from January 15, 2004, upon exercise of
options, warrants or convertible securities. Each beneficial owner's percentage
ownership is determined by assuming that options, warrants and convertible
securities that are held by such a person (but not those held by any other
person) and are exercisable within 60 days from that date have been exercised.
Unless otherwise indicated, the address of each of the listed beneficial owners
identified is 8905 Kingston Pike, Suite 313, Knoxville, TN 37923.
<TABLE>
<CAPTION>
Title of        Name of                    Amount and Nature of     Percentage        Percent of
Class           Beneficial Owner           Beneficial Ownership      of Class      Voting Control (1)
________        ________________           ____________________     __________     __________________
<S>             <C>                              <C>                   <C>                 <C>
Common Stock

                Jayme Dorrough (2) ........      3,261,377             84.7%               99%
                Barry A. Rothman ..........              0               -                  -
                All executive officers
                  and directors as a
                  group (two persons)(2)...      3,261,377             84.7%               99%

Class B Convertible Preferred Stock

                Jayme Dorrough (2) ........        180,000              100%               99%
                Barry A. Rothman ..........              0               -                  -
                All executive officers
                  and directors as a
                  group (two persons)(2) ..        180,000              100%               99%
                Yucatan Holding
                  Company(2) ..............        180,000              100%               99%
</TABLE>
*   represents less than 1%

(1) Percentage of Voting Control is based upon the number of issued and
    outstanding shares of our common stock and shares of our Class B Convertible
    Preferred Stock at January 15, 2004. At January 15, 2004 the holders of our
    outstanding shares of common stock and Class B Convertible Preferred Stock
    were entitled to an aggregate of 93,850,265 votes at any meeting of our
    stockholders, which includes 3,850,265 votes attributable to the outstanding
    shares of common stock and 900,000,000 votes attributable to the outstanding
    shares of Class B Convertible Preferred Stock.

(2) Mrs. Dorrough, our sole director, is the sole officer and director of
    Yucatan Holding Company. All shares of Series B Convertible Preferred Stock
    owned by Mrs. Dorrough are owned of record by Yucatan Holding Company.

                                       28
<PAGE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         As described in Item 1. Description of Business, in March 2002 the
members of our then board of directors approved the plan whereby we were to
transfer all of our studio equipment to Mr. Sonny Paradise, our former CEO and
chairman, in exchange for a retirement of debt owned him and for a reduced price
on three albums he is to produce for us.

         As described in Item.1 Description of Business, in November 2002 we
issued Yucatan Holding Company 360,000 shares of our restricted common stock,
valued at $150,000, as compensation for services and reimbursement for
out-of-pocket expenses expended on our behalf.

         From time to time Yucatan Holding Company has advanced funds to us for
working capital. At October 31, 2003, we owed Yucatan Holding Company $1,093,
net of repayments on advances made during the year . This loan is unsecured and
will be repaid by us as our working capital permits.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

3(i)     Articles of Incorporation (1) 3(ii) Certificate of Designation (2)

3(iii)   Articles of Amendment to the Articles of Incorporation (3) 3(iv)
         Articles of Amendment to the Articles of Incorporation (8)

3(v)     Certificate of Change in Number of Authorized and Issued and
         Outstanding Shares of Common Stock (8)

3(vi)    Certificate of Change in the Number of Authorized and Issued and
         Outstanding Shares of Common Stock

3(vii)   By-Laws (1)

4(i)     Plan and Agreement of Merger (6) 10(i) Stock Purchase and Redemption
         Agreement (2) 10(ii) 2003 Stock Option and Equity Compensation Plan (9)

10(iii)  Share Exchange Agreement dated as of May 27, 2003 by and between the
         registrant, Industrial Holding Group, Inc., Industrial Fabrication &
         Repair, Inc. and Lester E. Gann (10)

10(iv)   Security Agreement and Secured Promissory Note

14       Code of Ethics

16(i)    Letter from Rodefer Moss & Co PLLC regarding change in certifying
         accountants (2)

16(ii)   Letter from Rodefer Moss & Co PLLC regarding change in certifying
         accountants (4)

16(iii)  Letter from Rodefer Moss & Co PLLC regarding change in certifying
         accountants (5)

16(iv)   Letter from Dempsey Vantrease & Follis PLLC regarding change in
         certifying accountants (7)

23.1     Consent of Independent Certified Public Accountants

31(i)    Section 302 Certificate of President

32(i)    Section 906 Certificate of President
_________
                                       29
<PAGE>

(1) Incorporated by reference to the registrant's registration statement on Form
    10-SB, file number 000-30451, as filed with the SEC on April 25, 2002.

(2) Incorporated by reference to the registrant's Report on Form 8-K as filed
    with the SEC on October 3, 2002.

(3) Incorporated by reference to the registrant's preliminary Information
    Statement on Schedule 14C as filed with the SEC on October 8, 2002.

(4) Incorporated by reference to the registrant's Report on Form 8-K/A as filed
    with the SEC on October 7, 2002.

(5) Incorporated by reference to the registrant's Report on Form 8-K/A as filed
    with the SEC on October 22, 2002.

(6) Incorporated by reference to the registrant's Report on Form 8-K as filed
    with the SEC on August 21, 2000.

(7) Incorporated by reference to the registrant's Report on Form 8-K as filed
    with the SEC on November 25, 2003.

(8) Incorporated by reference to the registrant's Annual Report on Form 10-KSB
    for the fiscal year ended October 31, 2002 as filed with the SEC on February
    13, 2003.

(9) Incorporated by reference to the registration's registration statement on
    Form S-8, SEC file number 333-104931, as filed with the SEC on May 2, 2003.

(b) Reports on 8-K

         We did not file any reports on Form 8-K during the last quarter covered
by this annual report.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Audit Fees

         The aggregate audit fees billed by Webb & Company, P.A. for
professional services rendered for the audit of our annual financial statements
included in our annual report on Form 10-KSB during the fiscal year ended
October 31, 2003 were $0.

         The aggregate audit fees billed to us by Dempsey Vantrease & Follis
PLLC during the fiscal year ended October 31, 2002 were approximately $ 13,447.
The aggregate audit fees billed to us by Dempsey Vantrease & Follis PLLC for the
review of quarterly financial statements included in our quarterly reports on
Form 10-QSB for the quarters ending January 31, April 30 and July 31, 2003 were
approximately $3,000.

Audit Related Fees

         For the fiscal year ended October 31, 2003 the aggregate fees billed
for assurance and related services by Webb & Company, P.A. relating to the
performance of the audit of our financial statements which are not reported
under the caption "Audit Fees" above was $0.

         For the fiscal year ended October 31, 2002 the aggregate fees billed
for assurance and related services by Dempsey Vantrease & Follis PLLC relating
to the performance of the audit of our financial statements which are not
reported under the caption "Audit Fees" above was $0.

                                       30
<PAGE>

Tax Fees

         We do not use our principal accountant for tax compliance, tax advice
or tax planning and did not pay such firms any fees for these related matters
during either fiscal 2003 or fiscal 2002.

All Other Fees

         Other than fees relating to the services described above under "Audit
Fees," "Audit- Related Fees" and "Tax Fees," there were no additional fees
billed by our principal accountant for services rendered to us for the fiscal
years ended October 31, 2003 or 2002.

We do not have an audit committee of our board of directors.



                                       31
<PAGE>
                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Securities Exchange Act
of 1934, as amended, the registrant caused this report to be signed on its
behalf by the undersigned and duly authorized.

Dated: February 13, 2004                Eline Entertainment Group, Inc.
                                        By: /s/ Barry A. Rothman
                                            --------------------
                                        Barry A. Rothman
                                        President, principal executive and
                                        principal accounting officer

         In accordance with the Exchange Act, this report has been signed by the
following persons in the capacities and on the dates indicated.

      SIGNATURE                      TITLE                          DATE

 /s/ Barry A. Rothma                President                 February 13, 2004
 --------------------
 Barry A. Rothman

 /s/ Jayme Dorrough                 Director                  February 13, 2004
 ------------------
 Jayme Dorrough



                                       32
<PAGE>
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
               OF ELINE ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES

                                                                            Page

Report of Independent Auditors...............................................F-2

Report of Independent Auditors...............................................F-3

Consolidated Balance Sheet at October 31, 2003...............................F-4

Consolidated Statement of Operations for the years ended
  October 31, 2003 and 2002..................................................F-5

Consolidated Statement of Cash Flows for the years ended
  October 31, 2003 and 2002..................................................F-6

Statement of Changes in Stockholders' Deficit for the years ending
  October 31 ,2003 and 2002..................................................F-7

Notes to Consolidated Financial Statements...................................F-8



                                      F-1
<PAGE>
                          INDEPENDENT AUDITORS' REPORT


To the Audit Committee of:
Eline Entertainment Group, Inc.

We have audited the accompanying consolidated balance sheet of Eline
Entertainment Group, Inc. and subsidiaries as of October 31, 2003, and the
related consolidated statements of operations, changes in stockholders' equity
and cash flows for the year then ended. These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audit. The financial statements of Eline Entertainment Group, Inc. as of October
31, 2002 were audited by other auditors whose report dated February 5, 2003
included an explanatory paragraph describing conditions that raised substantial
doubt about the Company's ability to continue as a going concern.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about 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 provide a reasonable
basis for our opinion.

In our opinion, the financial statements referred to above present fairly in all
material respects, the financial position of Eline Entertainment Group, Inc. and
subsidiaries as of October 31, 2003 and the results of its operations and its
cash flows for the year then ended in conformity with accounting principles
generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, the Company had a net loss of $483,370, has
had recurring losses since inception and has a accumulated deficit of
$14,153,258. This raises substantial doubt about its ability to continue as a
going concern. Management's plans concerning this matter are also described in
Note 2. The accompanying consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

WEBB & COMPANY, P.A.

Boynton Beach, Florida
February 9, 2004

                                       F-2
<PAGE>
                         DEMPSEY VANTREASE & FOLLIS PLLC

                          Independent Auditors' Report


To the Board of Directors and Stockholders
Eline Entertainment Group, Inc.

We have audited the accompanying balance sheet of Eline Entertainment Group,
Inc. as of October 31, 2002, and the related statement of operations, and
changes in stockholders' deficit 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. The Company's financials statements as of October 31, 2001 and for
the period from November 2, 1999 (date of inception) through October 31, 2001
were audited by other auditors whose report dated February 22, 2002 included an
explanatory paragraph describing conditions that raised substantial doubt about
the Company's ability to continue as a going concern.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about 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, the 2002 financial statements referred to above present fairly,
in all material respects, the financial position of Eline Entertainment Group,
Inc. as of October 31, 2002, and the results of its operations and its cash
flows for the year then ended in conformity with accounting principles generally
accepted in the United States of America.

As discussed in Note 3 to the financial statements, the Company is a development
stage company with insufficient revenues to fund operating expenses. This
condition raises substantial doubt about its ability to continue as a going
concern. Management's plans in regard to these matters are also described in
Note 3. These financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

Dempsey Vantrease & Follis PLLC
Murfreesboro, Tennessee

February 5, 2003

                   Certified Public Accountants & Consultants
               Information Technology & Network Systems Consulting
        630 South Church Street, Suite 300, Murfreesboro, Tennessee 37130
            (615 893-6666o Fax: (615) 893-8047o Web: www.dvf-pllc.com

                                       F-3
<PAGE>
                Eline Entertainment Group, Inc. and Subsidiaries
                           Consolidated Balance Sheet
                                October 31, 2003

ASSETS

Current assets
   Cash and cash equivalents .................................     $    148,788
   Accounts receivable, net off
    allowance for  doubtful accounts of $144,090 .............          328,906
   Inventories, net ..........................................        1,226,553
                                                                   ------------
    Total current assets .....................................        1,704,247

Property and Equipment, net ..................................           33,082

Other assets
   Deposits ..................................................           14,614
                                                                   ------------

                                                                   $  1,751,943
                                                                   ============

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current liabilities
   Trade accounts payable ....................................     $    407,027
   Accrued expenses ..........................................           32,924
   Due to related party ......................................          299,923
   Due to affiliate ..........................................            1,093
   Current maturities of long-term debt ......................           21,890
                                                                   ------------

    Total current liabilities ................................          762,857

Long-term debt, less current portion
   Long-term debt ............................................            8,127
   Shareholder note ..........................................          894,211
                                                                   ------------

   Total liabilities .........................................        1,665,195

Minority Interest in Subsidiary ..............................          227,654


STOCKHOLDERS' DEFICIENCY
Preferred stock, $.001 par value; 5,000,000 shares
   authorized, 180,000 shares Series B
   Convertible Preferred issued and outstanding ..............              180
Common stock, $.001 par value; 30,000,000 shares
   authorized, 3,561,054  issued and outstanding .............            3,561
Additional paid in capital ...................................       14,088,611
Deferred compensation ........................................          (80,000)
Accumulated deficit ..........................................      (14,153,258)
                                                                   ------------

    Total stockholders' deficiency ...........................         (140,906)
                                                                   ------------

                                                                   $  1,751,943
                                                                   ============

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

                                       F-4
<PAGE>
                Eline Entertainment Group, Inc. and Subsidiaries
                      Consolidated Statements of Operations
                  For the Years Ended October 31, 2003 and 2002

                                                            October 31,
                                                    ----------------------------
                                                        2003            2002
                                                    -----------     -----------
Revenues .......................................    $ 1,404,089     $    94,527

Cost of goods sold .............................        985,024               -
                                                    -----------     -----------

Gross profit ...................................        419,065          94,527

Operating expenses
      General and administrative ...............        587,959          90,557
      Stock compensation expense ...............        357,060       8,160,026
                                                    -----------     -----------
Total operating expenses .......................        945,019       8,250,583
                                                    -----------     -----------


Loss from continuing operations ................       (525,954)     (8,156,056)

Other expense
      Interest expense .........................        (30,681)        (10,000)
                                                    -----------     -----------

Loss from  operations
      before minority interest .................    $  (556,635)    $(8,166,056)

Less loss in subsidiary attributed to
  minority interest ............................         73,265               -
                                                    -----------     -----------

Net loss .......................................    $  (483,370)    $(8,166,056)
                                                    ===========     ===========


Net loss per share basic and fully diluted .....    $     (0.24)    $   (149.19)
                                                    ===========     ===========

Weighted average number of
      shares outstanding .......................      1,977,705          54,737
                                                    ===========     ===========

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

                                       F-5
<PAGE>
<TABLE>
                                   ELINE ENTERTAINMENT GROUP, INC.
                                 Consolidated Statement of Cash Flows
                            For the Years Ended October 31, 2003 and 2002
<CAPTION>

                                                                      For the Year Ending October 31,
                                                                      ------------------------------
                                                                         2003               2002
                                                                      ---------          -----------
<S>                                                                   <C>                <C>
Operating activities:
 Net loss ...................................................         $(483,370)         $(8,166,056)
 Adjustments to reconcile net loss to net cash provided by
  (used in) operating activities:
   Depreciation .............................................            12,873              101,183
   Amortization of unearned consulting fees and compensation                  -            2,215,500
   Termination of consulting agreements .....................                 -            4,780,925
   Other non-cash transaction ...............................                 -             (694,798)
   Minority interest in loss of subsidiaries and equity in
    loss of affiliate, net ..................................           (73,265)                   -
   Common stock issued and to be issued for consulting fees
    and options .............................................           357,060            1,858,400
   Imputed salary ...........................................            12,000                    -
   Changes in operating assets and liabilities:
          Decrease in accounts receivable ...................           112,409                    -
          Decrease in other assets ..........................            12,366                    -
          Increase in deposits ..............................            (7,414)                   -
          Increase in inventory .............................           (42,593)                   -
          Increase in accounts payable ......................            32,918                   63
          Increase in accrued expenses ......................            10,350                    -
          Increase in due to related party ..................            53,750                    -
                                                                      ---------          -----------

          Net Cash Provided by (Used in) Operating Activities            (2,916)              95,217
                                                                      ---------          -----------

Investing activities:
Cash acquire in acquisition .................................            92,774                    -
                                                                      ---------          -----------
 Net cash provided by investing activities ..................            92,774                    -

Financing activities:
 Advances from distributors .................................                 -              (94,527)
 Exercise of stock options ..................................            17,500                    -
 Cash overdraft .............................................                 -               (1,378)
 Payment on notes payable ...................................            (5,842)                   -
 Loans from related party ...................................            98,880                    -
 Payment of loans to related party ..........................           (52,701)                   -
 Due to affiliate ...........................................             1,093                    -
                                                                      ---------          -----------

 Net cash (used) provided by financing activities ...........            58,930              (95,905)
                                                                      ---------          -----------

Increase (Decrease) in cash .................................           148,788                 (688)

Cash, beginning of period ...................................                 -                  688
                                                                      =========          ===========

Cash, end of period .........................................         $ 148,788          $         -
                                                                      =========          ===========

Supplemental disclosure for non-cash financing activities

Exchange of common stock for preferred stock ................         $      20          $         -
                                                                      =========          ===========

Property and equipment acquired for notes payable ...........         $  17,425          $         -
                                                                      =========          ===========


              The accompanying notes are an integral part of these financial statements

                                                 F-6
</TABLE>
<PAGE>
<TABLE>
                                    Eline Entertainment Group, Inc. and Subsidiaries
                                     Statements of Changes in Stockholders' Deficit
                                   For the Two Years Ending October 31, 2003 and 2002

<CAPTION>
               Preferred Stock     Common Stock                     Unearned
               ---------------   -----------------   Additional    consulting
                   Class B                            paid in       fees and       Deferred     Accumulated
               Shares   Amount    Shares    Amount    capital     compensation   Compensation     deficit       Total
               -------  ------   ---------  ------   ----------   ------------   ------------   -----------   ---------
<S>            <C>         <C>   <C>         <C>     <C>          <C>              <C>         <C>           <C>
Balance
October 31,
2001 ........        -       -      24,923     467   11,766,925    (6,996,425)           -      (5,503,832)    (732,865)

Correction
in par value
in prior
common stock
issuances ...        -       -           -    (443)         443             -            -               -            -

Amortization
of unearned
consulting
fees &
compensation         -       -           -       -            -     2,215,500            -               -    2,215,500

Termination
of
consulting
agreements ..        -       -           -       -            -     4,780,925            -               -    4,780,925

Common stock
issued to
consultants:
November
2001 through
August 2002 .        -       -      93,132      93    1,858,306             -            -               -    1,858,400

Return of
Common
shares to
treasury in
exchange for
preferred
stock .......  200,000     200     (57,000)    (57)        (123)            -            -               -           20

Net Loss for
year ended
October 31,
2002 ........        -       -           -       -            -             -            -      (8,166,056)  (8,166,056)
               -------  ------   ---------  ------   ----------    ----------      -------     -----------   ----------
                                                                                                             (continued)

                       The accompanying notes are an integral part of these financial statements

                                                          F-7A
</TABLE>
<PAGE>
<TABLE>
                                    Eline Entertainment Group, Inc. and Subsidiaries
                                     Statements of Changes in Stockholders' Deficit
                                   For the Two Years Ending October 31, 2003 and 2002
                                                      (continued)
<CAPTION>
               Preferred Stock     Common Stock                     Unearned
               ---------------   -----------------   Additional    consulting
                   Class B                            paid in       fees and       Deferred     Accumulated
               Shares   Amount    Shares    Amount    capital     compensation   Compensation     deficit       Total
               -------  ------   ---------  ------   ----------   ------------   ------------   -----------   ---------
<S>            <C>         <C>   <C>         <C>     <C>          <C>              <C>         <C>           <C>
Balance
October 31,
2002 ........  200,000     200      61,054      61   13,625,551             -            -     (13,669,888)     (44,076)

Shares
issued to
principal
stockholder
for services         -       -     360,000     360      149,640             -            -               -      150,000

Shares
issued to
consultants .        -       -     105,000     105      206,395             -            -               -      206,500

Issuance of
stock options        -       -           -       -          540             -            -               -          540

Exercise of
stock options        -       -      15,000      15       17,485             -            -               -       17,500

Imputed
Salary ......        -       -           -       -       12,000             -            -               -       12,000

Conversion
of preferred
stock .......  (20,000)    (20)  3,000,000   3,000       (2,980)            -            -               -            -

Deferred
compensation         -       -      20,000      20       79,870             -      (80,000)              -            -

Net loss for
year ended
October 31,
2003 ........        -       -           -       -            -             -            -        (483,370)    (483,370)
               -------  ------   ---------  ------   ----------    ----------      -------     -----------   ----------

               180,000     180   3,561,054   3,561   14,088,601             -      (80,000)    (14,153,258)    (140,906)
               =======  ======   =========  ======   ==========    ==========      =======     ===========   ==========


                       The accompanying notes are an integral part of these financial statements

                                                          F-7B
</TABLE>
<PAGE>
                ELINE ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF OCTOBER 31, 2003

NOTE 1   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(A) Nature of Operations

         Eline Entertainment Group, Inc. ("Eline") was incorporated in June 1997
under the laws of the State of Nevada originally under the name Rapid Retrieval
Systems, Inc. Eline was initially engaged in the development of comprehensive
processing, document retrieval, editing, integration and network support
services for small businesses and the general public.

         In June 2000 Eline signed a Plan and Agreement of Merger with Eline
Music.com, Inc., a Tennessee corporation ("Tennessee Eline"). Tennessee Eline
was a development stage company created to provide exposure for independent
music artists and labels and to fill a perceived void that existed in the
entertainment and music business. Under the terms of the Plan and Agreement of
Merger, Tennessee Eline was merged into Eline and Eline was the surviving legal
entity. As a result of the transaction, the Tennessee Eline management became
Eline's management and the Tennessee Eline stockholders became Eline's
controlling stockholders. Accordingly, the combination has been accounted for as
a reverse acquisition whereby, for accounting purposes, Tennessee Eline is the
acquirer and Eline is the acquiree.

         Following the transaction with Tennessee Eline, the then current
management attempted to build Eline into a full service entertainment company.
Its activities were to include producing music and developing film and video
productions for retail, theatrical, radio, Internet, television and cable
broadcasting distribution. Eline entered into a number of ventures in these
areas including an Internet radio talk show, the development of an interactive
music video web site, a wedding video production company, film and video
production of commercials, corporate videos, music videos and electronic press
kits, an independent record label, and a web site focused on independent music
artists and independent labels. Eline also attempted to enter into a number of
other ventures which were never consummated for a variety of reasons, including
lack of sufficient capital to fund the ventures.

         In March 2002 at a meeting of Eline's then board of directors, its then
current CEO and chairman, who was also its principal shareholder, tendered his
resignation as an officer and director. His resignation was accepted and the
remaining board members adopted resolutions that approved the relocation of
Eline's corporate headquarters from Tennessee to Pennsylvania and the retirement
of certain debt owed to Eline's former CEO and chairman who had just resigned.
Under the resolution, Eline was to contract with its former CEO and chairman to
produce three albums at $100,000 per album, for aggregate consideration of
$300,000. Eline's then board of directors approved the plan whereby Eline was to
transfer all of its studio equipment to its former CEO and chairman and the
price Eline was to pay for the three albums, for which he was given two years to
deliver, was reduced to $150,000 in the aggregate. Finally, as Eline was moving
its corporate offices to Pennsylvania, its former CEO and chairman was to assume
the lease and occupy its facilities in Tennessee, assuming all obligations
therefor.

         On September 24, 2002 under the terms of a Stock Purchase and
Redemption Agreement, between Eline, its then current president and Yucatan
Holding Company ("Yucatan"), Yucatan acquired control of Eline. All of the
officers and directors resigned and Eline's current sole director was appointed.
Upon assuming control of Eline and undertaking certain due diligence, Eline's
current management determined that the transactions approved in March 2002 by
Eline's then board of directors were consummated some time before September 24,
2002. It also appears that prior management exceeded the scope of the March 2002
board resolutions in that subsequent to September 24, 2002 Eline's current
management has also discovered that all of Eline's other tangible and intangible
assets, in addition to the studio equipment, were no longer in Eline's
possession or control. At October 31, 2002 Eline's financial

                                       F-8
<PAGE>

NOTE 1   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

statements reflect the implementation in the fourth quarter of fiscal 2002 of
the March 2002 resolutions of its then board of directors, as well as a write
down of certain liabilities related to its tangible and intangible assets which
were no longer in Eline's control or possession. Eline offset all liabilities
related to the studio equipment and other assets no longer in its possession, as
well as certain other liabilities incurred by prior management related to
Eline's then current operations, against unearned consulting fees previously
paid to Eline's former CEO. Eline also fully expensed the costs of all other
consulting agreements it entered into prior to September 24, 2002 as services
under these agreements were not being rendered to Eline at October 31, 2002.

         On May 27, 2003 Eline executed a Share Exchange Agreement with Lester
E. Gann, the sole shareholder of Industrial Fabrication & Repair, Inc., a
Tennessee corporation ("IFR") and Eline's then newly formed subsidiary,
Industrial Holding Group, Inc., a Florida corporation ("Industrial Holding").
Under the terms of the agreement on that date, Eline acquired 100% of the issued
and outstanding capital stock of IFR from Mr. Gann in exchange for 1 million
shares of Industrial Holding's common stock in a private transaction exempt from
registration under the Securities Act of 1933. The shares of Industrial Holding
common stock issued to Mr. Gann are convertible into shares of Eline's common
stock at such time and upon such terms and conditions as the parties may agree
to in the future. Founded in 1979, IFR provides machining, welding, specialty
design and fabrications for custom applications to customers from various
industries including paper, steel mills, rock quarry operations, coal mining
applications and bottling facilities.

         Prior to closing the transaction with IFR, Eline formed Industrial
Holding as a first tier subsidiary. The authorized capital of Industrial Holding
consists of 100 million shares of common stock and 10 million shares of blank
check preferred stock, of which one share has been designated as Series A
Preferred Stock. In conjunction with its organization Industrial Holding issued
the one share of authorized Series A Preferred Stock to Eline. The designations,
rights and preferences of the Series A Preferred Stock provides that (i) it does
not pay dividends, (ii) it is not convertible or transferable, (iii) it is
redeemable only upon our consent, (iv) it carries a liquidation preference of
$1.00, and (v) it votes together with the common stock and any other class of
voting securities as may then be authorized and entitles Eline to one vote more
than one-half of all votes entitled to be cast by all holders of voting capital
stock of Industrial Holding so as to ensure that the votes entitled to be cast
by Eline are equal to at least 51% of the total of all votes entitled to be
cast. Following the share exchange, IFR is a wholly-owned subsidiary of
Industrial Holding which is in turn owned 51% by Eline and 49% by the minority
stockholder. (See Note 10.)

         Prior to the acquisition of IFR, Mr. Gann had advanced IFR
approximately $1.1 million which is covered by a secured promissory note in the
principal amount of $2 million and collateralized by a security interest in all
of its assets (the "Gann Obligations"). The note bears interest at (7%) per
annum, with interest only payments due quarterly. The principal and any accrued
but unpaid interest is due on January 1, 2008. The Gann Obligations continue to
be serviced by IFR after the closing of the transaction under the same payment
terms as were utilized prior to the transaction, and the security interest
remained in place pending repayment in full of the Gann Obligations. The share
exchange agreement also provided mechanisms for retirement of the Gann
Obligations under certain circumstances, including upon Mr. Gann's death or
disability, or the sale of IFR, which include a repayment of the Gann
Obligations and the return to us of any capital we have loaned IFR. Mr. Gann, or
his estate, will be entitled to a portion of the proceeds we receive upon the
sale of IFR or its assets after repayment of these amounts.

         In June 2003 Eline formed 24/7 MRI, Inc. ("24/7 MRI"), a Florida
corporation which was formerly know as Imaging Holding Group, Inc. In June 2003
Eline also formed Okeechobee Imaging, Inc.("Okeechobee Imaging"), a Florida
corporation originally known as Florida Health Care Imaging, Inc. 24/7 MRI is a

                                       F-9
<PAGE>

NOTE 1   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

wholly-owned subsidiary of Eline and Okeechobee Imaging is a wholly-owned
subsidiary of 24/7 MRI. Eline formed 24/7 MRI to explore opportunities in the
diagnostic imaging field. Following the acquisition of IFR, Eline continued to
explore additional avenues of expanding its business and operations.

One business opportunity which was reviewed was a chain of diagnostic imaging
centers. While Eline did not progress beyond the due diligence phase, it
believed that opportunities exist within this space. In August 2003 24/7 MRI
opened Okeechobee Imaging, a store-front MRI center in West Palm Beach, Florida
to test its operating concepts. In conjunction with the opening of this site,
Okeechobee Imaging acquired a 2000 GE Profile III Mobile open MRI system from GE
Medical Systems under an operating lease on an equipment reposition. 24/7 MRI
completed the beta test of this initial retail center in December 2003. In
conjunction with the completion of the beta test, 24/7 MRI leased its mobile MRI
system to an unaffiliated third party under a two month lease which expired in
February 2003. 24/7 MRI is currently seeking to lease the mobile MRI system to
additional third parties as it further implements is business plan. (See Note
16.)

         When used herein, the term the "Company" refers to Eline and its
subsidiaries including Industrial Holding Group, IFR, 24/7 MRI and Okeechobee
Imaging. The Company has two operating segments, the Industrial Holding segment
which includes Industrial Holding and IFR and Other, which includes 24/7 MRI,
Okeechobee Imaging and Eline.

(B) Basis of Consolidation

         The accompanying consolidated financial statements for fiscal 2003
include the accounts of Eline and its wholly-owned subsidiaries 24/7 MRI and
Okeechobee Imaging, and its 51% majority owned subsidiary Industrial Holding.
The accompanying financial statements for fiscal 2002 included the accounts of
Eline. All significant intercompany accounts and transactions have been
eliminated in consolidation.

(C) Use of Estimates

         The financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America and, as
such, include amounts based on informed estimates and assumptions by management,
with consideration given to materiality. Actual results could vary from those
estimates.

(D) Cash Equivalents

         Cash and cash equivalents consists of all highly liquid investments
with original maturities of three months or less. At October 31, 2003 the
Company had $148,788 in cash.

(E) Concentration of Credit Risk

         The Company at times has cash in banks in excess of FDIC insurance
limits and places its temporary cash investments with high credit quality
financial institutions. At October 31, 2003, the Company had approximately
$49,000 in cash balances at financial institutions which were in excess of the
FDIC insured limits. The Company performs ongoing credit evaluations of its
customers' financial condition and does not require collateral from them.
Reserves for credit losses are maintained at levels considered adequate by
management. Revenue from one customer represented approximately 14% and 0% of
the Company's consolidated revenue for the years ended October, 2003 and 2002,
respectively. At October 31, 2003 approximately 20% of the Company's net
accounts receivable was due from that customer. The allowance for doubtful
accounts at October 31, 2003 is $144,900. The provision for uncollectible
accounts is $0.

                                      F-10
<PAGE>

NOTE 1   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(F) Revenue Recognition

         The Industrial Holding division generate revenues from component sales,
machining, specialty design and fabrication for conveyer systems used in the
movement of raw materials, finished goods and supplies in its customers'
manufacturing processes. The Industrial Holding division's customers are engaged
in various industries, including paper, steel mills, rock quarry operations,
coal mining applications and bottling facilities located in the South Eastern
United States when products are shipped. The Industrial Holding division
recognizes revenues when the products are shipped. The 24/7 MRI division
generates revenues from the provision of MRI services to patients referred to it
by non-affiliated physicians. These services are billed to third-party payors.
Revenue is recognized when the services are performed and deemed collectable.

(G) Inventories

         Inventories are valued at the lower of cost or market. Cost is
determined using the first-in, first- out (FIFO) method. Provision for
potentially obsolete or slow moving inventory is made based on management's
analysis of inventory levels and future sales forecasts.

(H) Property and Equipment

         Property and equipment are recorded at cost less accumulated
depreciation and amortization. Deprecation is computed using accelerated methods
over the estimated useful lives of the assets, which are five to 15 years for
machinery and equipment and up to 10 years for other assets. Repairs and
maintenance on property and equipment are expensed as incurred.

(I) Long-Lived Assets

         Long-lived assets and certain identifiable intangible assets (other
than goodwill and intangible assets with indefinitie lives) held and used by the
Company are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. For
purposes of evaluating the recoverability of long-lived assets (other than
goodwill and intangible assets with indefinitie lives), the recoverability test
is performed using undiscounted net cash flows related to the long-lived assets.
The Company reviews such long-lived assets to determine that carrying values are
not impaired. Under Statement of Financial Accounting Standards ("SFAS") No.
142, goodwill and intangible assets with indefinite lives are no longer
amortized but are reviewed for impairment. Intangible assets that are not deemed
to have indefinite lives will continue to be amortized over their useful lives;
however, no maximum life applied. The Company adopted the provisions of SFAS No.
142 effective October 1, 2002.

(J) Reclassification

         Certain amounts from prior periods have been reclassified to conform to
the current year presentation.

(K) Fair Value of Financial Instruments

         SFAS No. 107, "Disclosure About Fair Value of Financial Instruments,"
requires certain disclosures regarding the fair value of financial instruments.
Trade accounts receivable, accounts payable, and accrued liabilities are
reflected in the financial statements at fair value because of the short- term
maturity of the instruments.

                                      F-11
<PAGE>

NOTE 1   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(L) Income Taxes

         The Company accounts for income taxes under SFAS No. 109, "Accounting
for Income Taxes". Under SFAS No. 109, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and liabilities and
their respective tax bases and operating loss and tax credit carry-forwards.
Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. Under SFAS No. 109, the
effect on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment date.

(M) Loss Per Share

         Basic and diluted loss per share is calculated by dividing net loss for
the period by the weighted average number of shares of common stock outstanding
during the period. The assumed exercise of stock options is only included in the
calculation of diluted earnings per share, if dilutive. As of October 31, 2003
and 2002, the Company did not have any outstanding common stock equivalents.

(N) Stock-Based Compensation

         In accordance with SFAS No. 123, the Company has elected to account for
stock options issued to employees under Accounting Principles Board Opinion No.
25 ("APB Opinion No. 25") and related interpretations. The Company accounts for
stock options issued to consultants and for other services in accordance with
SFAS No. 123.

(O) New Accounting Pronouncements

         In May 2003, SFAS No. 150 "Accounting for Certain Financial Instruments
with characteristics of both liabilities and equity" was issued. This Statement
establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and equity. It
requires that an issuer classify a financial instrument that is within its scope
as a liability (or an asset in some circumstances). Many of those instruments
were previously classified as equity. Some of the provisions of this Statement
are consistent with the current definition of liabilities in FASB Concepts
Statement No. 6, Elements of Financial Statements. The remaining provisions of
this Statement are consistent with the Board's proposal to revise that
definition to encompass certain obligations that a reporting entity can or must
settle by issuing its own equity shares, depending on the nature of the
relationship established between the holder and the issuer. While the Board
still plans to revise that definition through an amendment to Concepts Statement
6, the Board decided to defer issuing that amendment until it has concluded its
deliberations on the next phase of this project. That next phase will deal with
certain compound financial instruments including puttable shares, convertible
bonds, and dual-indexed financial instruments.

         This statement is effective for financial instruments entered into on
or modified after May 31, 2003 and otherwise shall be effective at the beginning
of the first fiscal interim period beginning after June 15, 2003. The adoption
of this pronouncements did not have a material effect on the Company's financial
position or results of operations.

NOTE 2   GOING CONCERN

         The consolidated financial statements have been presented on the basis
that the Company is a going concern, which contemplates the realization of
assets and the satisfaction of liabilities in the normal course of business. The
Company has incurred losses since its inception, and has an accumulated deficit

                                      F-12
<PAGE>

of $14,153,258 at October 31, 2003. For the year ended October 31, 2003, the
Company had a net loss of $483,370. There is substantial doubt about the
Company's ability to continue as a going concern. These financial statements do
not include any adjustments to reflect future effects on the recoverability and
classification of assets or amounts and classification of liabilities that may
result from the outcome of this uncertainty.

NOTE 3   INVENTORIES

         Inventories consisted of the following:
                                                              2003

         Raw materials ..............................     $ 1,394,390
         Work-in-process ............................          32,163
         Reserve for impaired inventory..............        (200,000)
                                                          -----------
                                                          $ 1,226,553
                                                          ===========

NOTE 4   PROPERTY AND EQUIPMENT

         The transaction with IFR was recorded in accordance with the provisions
of SFAS No. 141. Among the provisions of SFAS No. 141 is the requirement to
adjust the carry value of non-current assets for any negative as a result of the
transaction. The Company reduced the carry value of the property and equipment
by $313,202 as a result of the acquisition of IFR.

         Property and equipment at October 31, 2003, after reduction of the
carry value of the property and equipment, consisted of the following:

         Shop equipment .............................       $ 270,015
         Furniture and Fixtures .....................          17,680
         Automobiles ................................         117,538
         Leasehold Improvements .....................           9,380
                                                              414,613
                                                            ---------
         Less: accumulated depreciation .............        (381,531)
                                                            ---------
                                                            $  33,082
                                                            =========

         Depreciation and amortization expense for the years ended October 31,
2003 and 2002 totaled $12,873 and $0, respectively.

NOTE 5   ADVANCES FROM AFFILIATES

         During the fiscal year ended October 31, 2003 from time to time Yucatan
Holding Company, the Company's principal shareholder, has advanced funds for
working capital. At October 31, 2003, the Company owed Yucatan Holding Company
$1,093. This amount will be repaid by the Company as its working capital
permits.

NOTE 6   DUE TO RELATED PARTY

         At October 31, 2003 the Company owed Mr. Lester Gann, a related party,
an aggregate of $299,923, which included $184,000 of accrued payroll and
$115,923 of interest payable. These amounts are included in the Gann
Obligations. (See Note 1.)

                                      F-13
<PAGE>

NOTE 7   ACCRUED EXPENSES

         At October 31, 2003 accrued expenses consisted of:

                  Payroll Taxes ...........  $  4,750
                  Property Taxes ..........    19,862
                  Sales Tax ...............     1,594
                  Other ...................     6,718
                                             --------
                                             $ 32,924
                                             ========

NOTE 8   LONG-TERM DEBT

         Long term obligations consisted of the following:

                                                             2003
                                                             ----
Note payable to finance company, secured by
         automobile , interest at 1.9% per annum.
         Monthly payments of $600 due
         through April 2005.............................   $ 15,831

Note payable to finance company, secured by automobile
         Interest at 5.75% per annum, Monthly payments
         of $288 due through August 2005................      5,986

Note payable to related party, secured by a security
         interest in IFR's assets, interest at 7% per
         annum, interest only payment, principal and
         accrued interest due January 1, 2008...........    894,211

Capital lease payable, secured by related equipment,
         interest at 0% per annum, payable of $912
         per month, due monthly through August 2004.....      8,194
                                                           --------

                                                            924,228

         Less: current maturities.......................     21,890
                                                           --------
                                                           $902,338
                                                           ========

Current maturities are as follows:

           Year ending October 31,
                                2004 ...............  $ 21,890
                                2005 ...............     8,127
                                2006 ...............         -
                                2007 - thereafter ..   894,211
                                                      --------
                                                      $924,228
                                                      ========

NOTE 9   ACQUISITION

         On May 27, 2003 Eline executed a Share Exchange Agreement with Lester
E. Gann, the sole shareholder of IFR and Eline's then newly formed subsidiary,
Industrial Holding. Eline owns one share of Series A Preferred Stock which
entitles it at all times to such number of votes at any meeting of

                                      F-14
<PAGE>

shareholders which shall represent at least 51% of all votes entitled to be cast
at such meeting. Under the terms of the agreement on that date, Eline acquired
100% of the issued and outstanding capital stock of IFR from Mr. Gann in
exchange for 1 million shares of Industrial Holding's common stock in a private
transaction exempt from registration under the Securities Act of 1933. The
shares of Industrial Holding common stock issued to Mr. Gann are convertible
into shares of Eline's common stock at such time and upon such terms and
conditions as the parties may agree to in the future. Based upon the currently
outstanding capital stock of Industrial Holding, Eline owns 51% of Industrial
Holding and Mr. Gann owns 49%. (See Note 1.)

         The following table summarizes the estimated fair value of the assets
acquires and the liabilities assumed at the date of acquisition:

         Current assets ..................................   $1,718,134
         Property and equipment, net of depreciation .....       40,812
         Other ...........................................        7,200
                                                             ----------
                    Total assets acquired ................   $1,766,146
                                                             ==========

         Liabilities

         Current liabilities .............................   $  598,760
         Long-term debt ..................................       18,434
         Shareholder note and interest payable ...........      848,033
         Minority interest ...............................      300,919
                                                             ----------
                    Total liabilities assumed ............   $1,766,146

         Net assets acquired .............................   $        0
                                                             ==========

Proforma Information

         The following unaudited supplemental proforma acquisition is presented
as if the company had been combined as if the companies had been combined for
the period presented:

                                      F-15
<PAGE>

NOTE 9   ACQUISITION (CONTINUED)
                                                   12 months ended
                                                   October 31, 2003
                                                   ----------------
         Revenues .................................  $ 3,419,992
         Cost of revenues .........................    2,188,265
         Total operating expenses .................    1,776,391
         Total other income (expense) .............        7,743
         Net loss .................................  $  (536,921)
         Basic and diluted net
           loss per share .........................  $     (0.20)
                                                     ============

         In July 2001, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 141, "Business Combinations." SFAS No. 141 requires all business
combinations initiated after June 30, 2001 to be accounted for using the
purchase method. The Company adopted the provisions of SFAS No. 141 effective
October 1, 2002.

         The transaction was recorded in accordance with the provisions of SFAS
No. 141. Among the provisions of SFAS No. 141 is the requirement to adjust the
carry value of non-current assets for any negative as a result of the
transaction. The Company reduced the carry value of the property and equipment
by $313,202 as a result of the acquisition of IFR.

NOTE 10  SEGMENT INFORMATION

         The Company has two reportable segments. Each segment is a strategic
business that the Company manages separately because each business develops and
sells products and/or services to a specific market. The two reportable segments
are Industrial Holding which provides machining, welding, specialty design and
fabrications for custom applications to customers from various industries
including paper, steel mills, rock quarry operations, coal mining applications
and bottling facilities and Other. Other includes 24/7 MRI, which is developing
operations in the diagnostic imaging industry, and Eline, which is the corporate
parent and provides management and administration for the subsidiary operations.
Neither 24/7 MRI or Eline meet the quantitative thresholds for a reportable
segment and are therefore included in the "Other" category. The accounting
policies of the segments are the same as described in the summary of significant
accounting policies. The Company evaluates segment performance based on income
from prospective operations. All intercompany transactions between segments have
been eliminated. As a result, the components of operating loss for one segment
may not be comparable to another segment. Segment results for fiscal 2003 and
fiscal 2002 are as follows:

                                     Industrial
2003                                  Holding          Other           Total
                                    -----------      ---------      -----------

Revenues ......................     $ 1,350,744      $  53,345      $ 1,404,089
Loss from operations ..........         (78,256)      (411,114)        (483,370)
Depreciation ..................          12,873              -           12,873
Assets ........................       1,736,120         15,823        1,731,943
Capital expenditures ..........               -              -                -

                                      F-16
<PAGE>

NOTE 10  SEGMENT INFORMATION (CONTINUED)

2002

Revenues ......................               -      $  94,527      $    94,527
Loss from operations ..........               -      (8,166,056)     (8,166,056)
Deprecation ...................               -        101,183          101,183
Assets ........................               -              -                -
Capital expenditures ..........               -              -                -

NOTE 11 CAPITAL STOCK

         The Company's authorized capital consists of 30,000,000 shares of
common stock, par value $0.001 per share, and 5,000,000 shares of preferred
stock, par value $0.001 per share. The preferred stock is issuable in such
series and with such designations, rights and preferences as the Company's Board
of Directors may determine from time to time. In fiscal 2002 the Company
designated 200,000 shares of its blank check preferred stock as Series B
Convertible Preferred Stock. The designations, rights and preferences of the
Series B Convertible Preferred Stock provide:

         *  the stated value of the shares is equal to par value,
         *  in the case of a liquidation or winding up of the Company, the
            holders of shares of Series B Convertible Preferred Stock are
            entitled to a liquidation preference of $0.01 per share,
         *  the shares are not redeemable by the Company without the consent of
            a majority of the holders,
         *  the shares are convertible into shares of the Company's common stock
            at the Company's sole option based upon a conversion ratio to be
            determined by the Company and the holder(s) at the time of
            conversion,
         *  the shares vote together with the holders of the common stock on all
            matters submitted to a vote of the Company's shareholders, which
            each share of Series B Preferred Stock being entitled to 150 votes,
            and
         *  so long as the shares are outstanding the Company cannot take
            certain actions without the prior consent of the holders of the
            Series B Convertible Preferred Stock.

         At October 31, 2003 the Company had 3,561,054 shares of common stock
and 180,000 shares of Series B Convertible Preferred Stock issued and
outstanding.

(A) Series B Convertible Preferred Stock Issuances

         In October 2002 the Company issued 200,000 shares of Series B
Convertible Preferred Stock to Yucatan Holding Company, its principal
shareholder, in exchange for 57,000 shares of the Company's common stock then
owned by Yucatan Holding Company.

(B) Common Stock Issuances

         During the fiscal year ended October 31, 2002:

         *  the Company issued 93,132 shares of its common stock to various
            consultants in exchange for services provided to the Company. The
            Company valued these shares at $1,858,400 based upon the fair market
            value of the shares on the date of issuance, and

                                      F-17
<PAGE>

NOTE 11 CAPITAL STOCK (CONTINUED)


         *  as described in (A) above, during fiscal 2002 Yucatan Holding
            Company returned 57,000 shares of common stock owned by it to the
            treasury of the Company in exchange for 200,000 shares of Series B
            Convertible Preferred Stock. Upon such exchange, the shares of
            common were returned to the treasury of the Company with the status
            of authorized but unissued shares.

         During the fiscal year ended October 31, 2003:

         *  the Company issued Yucatan Holding Company, its principal
            shareholder, 360,000 shares of its common stock as compensation for
            its past and future efforts on the Company's behalf and
            reimbursement for out-of-pocket fees and costs they have expended on
            the Company's behalf. The Company valued these shares at $150,000
            which represented a value of $0.41667 per share which represented a
            reduction from the quoted price on the stock on the OTC Bulletin
            Board based upon the illiquid market at the time of issuance and the
            restricted nature of the shares,

         *  the Company issued an aggregate of 105,000 shares of its common
            stock to consultants as compensation for services rendered to the
            Company. The Company valued these shares at $206,140 based on the
            fair market value of the stock on the date of issuance,

         *  Yucatan Holding Company converted 20,000 shares of the Series B
            Convertible Preferred Stock owned by it into 3,000,000 shares of the
            Company's common stock,

         *  the Company issued an entity 15,000 shares of its common stock upon
            the exercise of an option with an exercise price of $1.75 per share
            based upon the fair market value of the underlying stock on the date
            of grant. The Company received $17,500 upon the exercise of this
            option and recognized an expense of $540 related to its issuance,
            and

         *  the Company issued an individual 20,000 shares of its common stock,
            valued at $80,000 based upon the fair market value of the stock on
            the date of grant, in connection with the execution of any
            employment agreement. Such amount has been record as deferred
            compensation and will be amortized over the term of the agreement
            which is one year.

(C)      Stock Splits

         On November 28, 2002 the Company undertook a reverse stock split of its
outstanding common stock on a ratio of 250 for one. On November 7, 2003 the
Company effective a three for two forward stock split of its outstanding common
stock. All references in the consolidated financial statements referring to
shares, share prices, per share amounts and stock plans have been adjusted
retroactively for these stock splits.

(D)      Imputed Salary

         The Company's current president has served in such capacity since
September 25, 2002. The Company does not compensate its president for his
services, but has recognized an expense of $12,000 for fiscal 2003 and $1,742
for the period of September 25, 2002 though October 31, 2002 which it believe
equals the fair value of his services during these periods. These amounts have
been expensed through a reduction in the Company's additional paid-in capital.

                                      F-18
<PAGE>

NOTE 12  STOCK OPTION AND EQUITY COMPENSATION PLAN

         On April 28, 2003, the Company's Board of Directors and a majority of
its stockholders adopted the Company's 2003 Stock Option and Equity Compensation
Plan (the "Plan"). The Company initially reserved an aggregate of 250,000 shares
of common stock for issuance pursuant to incentive or non- qualified options
granted under the Plan or for restricted stock grants made under the Plan. The
number of shares available for issuance under the Plan is automatically
increased so that it equal 10% of our outstanding common stock. As a result of
this Plan provision, the aggregate number of shares available for issuance under
the Plan increased to 354,010 as a result of the Company's three for two forward
stock split effective November 7, 2003.

         Under the Plan, the Board of Directors determines, from time to time,
those of the Company's officers, directors, employees and consultants to whom
stock grants and plan options will be granted, the terms and provisions of the
respective grants and plan options, the dates such plan options will become
exercisable, the number of shares subject to each plan option, the purchase
price of such shares and the form of payment of such purchase price. Plan
options granted under the Plan may either be options qualifying as incentive
stock options under Section 422 of the Internal Revenue Code of 1986, as
amended, or options that do not so qualify. In addition, the Plan also allows
for the inclusion of a reload option provision , which permits an eligible
person to pay the exercise price of the plan option with shares of common stock
owned by the eligible person and to receive a new plan option to purchase shares
of common stock equal in number to the tendered shares. Any incentive option
granted under the Plan must provide for an exercise price of not less than 100%
of the fair market value of the underlying shares on the date of such grant, but
the exercise price of any incentive option granted to an eligible employee
owning more than10% of the Company's common stock must be at least 110% of such
fair market value as determined on the date of the grant. Plan options may be
exercisable more than 10 years after the date of its grant and, in the case of
an incentive option granted to an eligible employee owning more than 10% of the
Company's common stock, no more than five years after the date of the grant. In
any case, the exercise price of any stock option granted under the Plan will not
be less than 85% of the fair market value of the common stock on the date of
grant. The exercise price of non-qualified options shall be determined by the
board of directors.

         The per share purchase price of shares subject to plan options granted
under the Plan may be adjusted in the event of certain changes in the Company's
capitalization, but any such adjustment shall not change the total purchase
price payable upon the exercise in full of plan options granted under the Plan.
Officers, directors and key employees of and consultants to the Company and its
subsidiaries will be eligible to receive non-qualified options under the Plan.
Only Company officers, directors and employees who are employed by it or by any
of its subsidiaries thereof are eligible to receive incentive options.

         During the year ended October 31, 2003, the Company granted
non-qualified plan options to purchase an aggregate of 15,000 shares of common
stock and stock grants representing an aggregate of 59,000 shares of common
stock. None of the option or stock grants were made to employees of the Company.
(See Note 15.)

NOTE 13  COMMITMENTS AND CONTINGENCIES

(A) Operating Lease

The Company leases a Profile III mobile MRI system from a financial institution
under an operating lease. Under the terms of a 63 month lease, the Company
received an abatement for lease payments for the first three months of the lease
and thereafter makes monthly payments of $6,042. At the termination of the lease
the Company has the option to purchase the equipment for the then fair market
value.

                                      F-19
<PAGE>

NOTE 13  COMMITMENTS AND CONTINGENCIES (CONTINUED)

         Future minimum lease payments under the operating lease at October 31,
2003, consist of the following:

                  Year                 Amount

                  2004 ............  $72,449.92
                  2005 ............   72,449.92
                  2006 ............   72,449.92
                  2007 ............   72,449.92
                  2008 ............   65,458.26

         Rent expense totaled $17,262 and $0 for the years ended October 31,
2003 and 2002, respectively.

(B) Real Property Lease

         In June 2003 the Company entered into a 12 month lease for
approximately 4,400 square feet of commercial office space. Under the terms of
the lease, the Company was obligated to make monthly rental payment of $6,890.
In January 2004 the Company and the lessor agreed to an early termination of the
lease and the Company issued the lessor 26,191 shares of its common stock,
valued at $55,000, in settlement of all obligations under the lease. (See Note
16.)

(C) Employment Agreement

         In October 2003 24/7 MRI entered into a two year employment agreement
with an individual who serves as its president. Under the terms of the
agreement, the employee is paid a base salary of $78,000 per annum. He is
entitled to a monthly car allowance of $400 and a medical insurance contribution
of $225 per month. He is entitled to participate in a stock bonus program if
EBIT from the 24/7 MRI division meets certain minimum amounts during the term of
the agreement. The agreement may be terminated by 24/7 MRI for cause or upon the
mutual consent of the parties, in which event the employee would not be entitled
to any severance benefits. The agreement may also be terminated by 24/7 MRI
without cause, in which event the employee is entitled to a severance equal to
six month's base salary and he is entitled to receive any stock bonuses as shall
be earned for the full six month measurement period that is underway at the date
of termination.

ITEM 14  INCOME TAXES

         On September 24, 2002 the Company underwent the change of ownership (as
defined by Internal Revenue Code 382). This change limits the Company's ability
to utilize its approximately $14,000,000 of net operating loss carryfowards
(NOLs) as of October 31, 2003, to approximately $1,579,000 per year. At October
31, 2003, the Company has net operating loss carryforwards of approximately
$14,000,000 that expire in 2023. A valuation allowance of approximately
$4,579,000 has been recognized to offset primarily all of the deferred tax
assets related to the carryforwards.

         The valuation allowance at October 31, 2002 was $4,672,762. The net
change in the valuation allowance during the year ended October 31, 2003 was an
increase of $111,238.

NOTE 15  RELATED PARTY TRANSACTIONS

         Please see Notes 5 and 11 included elsewhere herein.

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NOTE 16  SUBSEQUENT EVENTS

         During fiscal 2003 the Company's 24/7 MRI division opened Okeechobee
Imaging, a store-front MRI center in West Palm Beach, Florida to test its
operating concepts. 24/7 MRI completed the beta test of this initial retail
center in December 2003. In conjunction with the completion of the beta test,
24/7 MRI leased its mobile MRI system to an unaffiliated third party under a two
month lease which expired in February 2003. 24/7 MRI is currently seeking to
lease the mobile MRI system to additional third parties as it further implements
is business plan. (See Note 1.)

         During fiscal 2003 the Company had entered into a one year lease for
commercial office space. In January 2004 the Company and the lessor agreed to an
early termination of the lease and the Company issued the lessor 26,191 shares
of its common stock, valued at $55,000 based upon the fair market value of the
stock on the date of issuance, in settlement of all obligations under the lease.

         Subsequent to the end of fiscal 2003, the Company has granted stock
grants under the Plan representing an aggregate of 263,000 shares of common
stock and an aggregate of 20,010 shares remain available for issuance under the
Plan.

         On February 12, 2004 we announced that our board of directors declared
a three for one forward stock split of our issued and outstanding common stock.
The record date for the forward split is February 23, 2004 and the anticipated
effective date will February 24, 2004.

                                      F-21