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, 2004


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


                For the transition period from _______ to _______


                        Commission file number 000-30451


                         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. $4,027,732 for the 12
months ended October 31, 2004.

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 7, 2005 is approximately $1,625,000.

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, 2005, 11,574,295
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
                                                              ----     -----

                                       ii
<PAGE>

         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 51% owned subsidiary of Industrial Holding, the term Storm Depot
refers to Storm Depot International Corp., 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 report gives proforma
effect to the one for 250 reverse stock split of our common stock effected on
November 28, 2002, a three for two forward stock split of our common stock
effected on November 7, 2003 and a three for one forward stock split of our
common stock effected on February 24, 2004.

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.

                                       iii
<PAGE>
                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS.

         Eline is a holding company that 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 whose operations were discontinued in fiscal 2004. 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 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. The Industrial
Holding division represented approximately 100% and 96% of our consolidated
revenues in the years ended October 31, 2004 and October 31, 2003, respectively.
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. In the fiscal year ended October 31, 2004, two customers
of IFR represented 14% and 9%of our consolidated revenues. In the fiscal year
ended October 31, 2003, revenue from one customer of IFR represented
approximately 14% of our consolidated revenues.

         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)

                                        1
<PAGE>

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
reconstructing 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
         *  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 array 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.

                                        2
<PAGE>

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, 2005 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.

STORM DEPOT INTERNATIONAL CORP.

         In October 2004, Eline, through its Industrial Holding subsidiary,
established a new subsidiary, Storm Depot International Corp., through which it
intends to market hurricane protection products in South Florida. In 2004 the
South Florida area suffered the effects of both Hurricane Frances and Jeanne.
The eye of both storms passed directly over this area during September 2004
causing damage, by some estimates, of over $20 billion.

         IFR had received several inquiries during the hurricane season with
regards to machinery and production equipment for the hurricane shutter
industry. Possessing extensive engineering and precision machining capabilities,
IFR is equipped to produce a wide range of proprietary designs and specialized
machinery on a highly efficient basis. As a result, Eline's management has
evaluated the industry and believes that opportunities may exist in what it sees
as a fragmented market.

         As of the date hereof, Eline has not yet established any operations or
determined what, if any, operations it will establish in the future in this line
of business.

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 existed 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. In April 2004 we determined
that the diagnostic imaging field was not an area in which we would devote any
additional time or resources and we ceased operations in the 24/7 MRI subsidiary
and classified $244,776 as a loss on discontinued operations in fiscal 2004.

                                        3
<PAGE>

EMPLOYEES

         As of January 31, 2005, 24/7 MRI has no employees.

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 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

                                        4
<PAGE>

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 therefore.
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 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.

                                        5
<PAGE>

         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 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.

                                        6
<PAGE>

         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
cancelable 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.

                                        7
<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 51% 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 transferable,
         *  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.

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<PAGE>

         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 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

         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, originally
to be presented to a vote of the company's shareholders at the 2004 annual
meeting, is now expected to be presented to a vote of the company's shareholders
at the 2005 annual meeting and is expected to be approved by mid-April 2005. 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.

                                        9
<PAGE>

RISK FACTORS

         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 $1,147,611 for the fiscal year ended October
31, 2004, and a net loss of $483,370 for the fiscal year ended October 31, 2003.
At October 31, 2004 we had an accumulated deficit of $15,300,869. 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 the Industrial Holding division it is likely we will
continue to report losses.

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.

                                       10
<PAGE>

         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.

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.

         On March 11, 2004 we announced that we had signed an agreement in
principal to form MRI Management & Leasing, a joint venture that will be focused
on leasing mobile MRI systems. Under the terms of the arrangement we were to own
a majority ownership of MRI Management & Leasing, which will be managed by A.M
Services, LLC and Dirk Sichel, the then president of 24/7 MRI, who together
would also be its minority owners. We then proceeded with the preparation of an
operating agreement and circulated same to all parties, including counsel for
A.M. Services, LLC. In connection with this anticipated joint venture, under
separate agreement Okeechobee Imaging, Inc., a subsidiary of 24/7 MRI, which
held the lease for the mobile MRI system which was to be used in the joint
venture, was to enter into a lease for that equipment with the joint venture. On
April 13, 2004 we notified both Mr. Sichel and Mr. Anwar Mithavayani, the
principal of A.M. Services, that as a result of the lapse of time and the
changes requested by counsel to the A.M. Services operating agreement that we
had made a determination not to pursue the joint venture. Contemporaneously we
notified GE Healthcare Financial that we were seeking their assistance in
repositioning the MRI unit and terminating the lease forewith.

         On April 15, 2004, after an inspection visit to the location of the
mobile MRI unit the Company discovered that the unit was not at the location
specified by Mr. Sichel and Mr. Mithavayani; the Company reported the unit
stolen.

                                       11
<PAGE>

         On April 16, 2004 the 24/7 Open MRI subsidiary was served with a
lawsuit by Medserv, Inc., another company controlled by Mr. Mithavayani, styled
Medserv, Inc. v 24/7 Open MRI of Port St. Lucie, Inc., Eline Entertainment
Group, Inc. and GE Healthcare Financial Services, Inc., Case No. 04006295 in the
Circuit Court of the 17th Judicial Circuit in and for Broward County, Florida.
In its complaint, as amended, the plaintiff alleges a lien on the MRI system
pursuant to terms of a maintenance agreement purportedly entered into by 24/7
Open MRI, and is seeking approximately $30,000. The Compnay has filed an Answer,
Affirmative Defenses and Counterclaim alleging conversion and tortious
interference with contractual rights.

         In August 2004 GE Healthcare Financial Services, Inc. filed an answer
and cross claim in which it has asserted breach of contract by Okeechobee
Imaging alleging that it defaulted under its lease agreement with GE Healthcare
Financial Services for the MRI unit, as well as a claim of tortious interference
with a contract relationship between GE and Okeechobee Imaging by 24/7 Open MRI.
GE Healthcare Financial is asserting that Okeechobee Imaging is in default under
the lease for the equipment in the amount of approximately $50,000.00 and other
as yet unspecified damages.

         In July 2004 the Company received an Order for Default Judgment in the
matter of Guardian Technology, Inc., a British Columbia corporation, versus
Eline Entertainment Group, Inc. formerly known as Eline Music.com, Inc., Case
No. 04-2-10345-2SEA in the Superior Court of the State of Washington in and for
the County of King. The plaintiff is alleging that Eline defaulted on a
promissory note purportedly issued on August 9, 2000 for services in the
principal amount of $100,000. This date of this purported note predates the
transaction in September 2002 in which Yucatan Holding Company acquired control
of Eline. The state court has granted a summary judgment in the amount of
$290,967.21 which represents a principal amount of $177,000, prejudgment
interest of $107,822.21, and attorney's fees and costs of $6,145. The Company is
unable to ascertain the difference in the principal amount of the purported note
and the principal amount as set forth in the judgment. The Company has
subsequently obtained from plaintiff's counsel a copy of the purported
promissory note, which such note reflects that ElineMusic.com, Inc., a Tennessee
corporation, not Eline, is the maker and the note is signed by Larry Paradise,
as president of the maker. ElineMusic.com, Inc. was an unaffiliated entity until
its merger into Eline in December 2000. Mr. Larry Paradise, the father of Mr.
Sonny Paradise who served as the Company's president from June 2000 until
January 2001, has never been an officer or director of Eline. A review of the
records of our company prior to the change of control in September 2002 does not
reflect that Guardian Technology Inc. ever made any loans to Eline. The Company
has advised plaintiff's counsel of the dispute of both the ability of Mr. Larry
Paradise to bind the company as well as the validity of the obligation. As a
result of the foregoing, as well as the purported involvement of Mr. Larry
Paradise in the matter, The Company does not believe that the note is a valid
obligation of Eline.

                                       12
<PAGE>

         As of October 31, 2004 the Company reserved $499,057 for legal fees and
expenses related to the above aforementioned litigation and in addition on
October 29, 2004 filed a complaint in The United States District Court For The
Eastern District of Tennessee at Knoxville naming Larry Paradise, Guardian
Technology, Inc and Elio Guglielmi as defendants in a civil action claiming
fraud, conspiracy, and making false statements thereby damaging the Company's
financial interests. The Company seeks judgement against the defendants in an
amount not to exceed One Million Dollars.

         As of October 31, 2004, the Company reserved a total of $499,057 for
legal fees and expenses related to pending litigation.

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

         There were no submissions of matters to security holders in the quarter
ended October 31, 2004.

                                       13
<PAGE>
                                     PART II

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

         Our common stock is quoted on the OTCBB under the symbol EEGI. 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 the one for 250 reverse
stock split of our common stock effected on November 28, 2002, a three for two
forward stock split of our common stock effected on November 7, 2003 and a three
for one forward stock split of our common stock effected on February 24, 2004.


                                                          High          Low
FISCAL 2003

First Quarter ended January 31, 2003 ...............  $     1.80    $     0.04
Second Quarter ended April 30, 2003 ................  $     2.50    $     1.05
Third Quarter ended July 31, 2003 ..................  $     6.60    $     2.20
Fourth Quarter ended October 31, 2003 ..............  $     7.10    $     5.25


FISCAL 2004

First Quarter ended January 31, 2004 ...............  $     5.35    $     1.75
Second Quarter ended April 30, 2004 ................  $     9.40    $     1.25
Third Quarter ended July 31, 2004 ..................  $     1.85    $     0.25
Fourth Quarter ended October 31, 2004 ..............  $     0.79    $     0.36


         On February 7, 2005 the last sale price of our common stock as reported
on the OTCBB was $0.92. As of January 15, 2005 there were approximately 150
record owners of our common stock.

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.

                                       14
<PAGE>

RECENT SALES OF UNREGISTERED SECURITIES

         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 expense has been recognized
in fiscal 2004. (1)

         During the year ended October 31, 2004, the Company issued 26,191
shares of common stock to terminate a real property lease. The Company
recognized a non-cash expense of $55,000 during the year ended October 31, 2004
related to this issuance. (1)

         During the year ended October 31, 2004 the Company issued 789,000 of
stock to a consultant as compensation for services. The Company recognized a
non-cash expense of $460,250. (1)

         During the year ended October 31, 2004 the Company issued an aggregate
of 17,500 shares of common stock to two consulting firms as compensation for
services. During the year ended October 31, 2004, the Company recognized
non-cash expenses of $95,750, which represents the value of those shares. (1)

         In April 2004 we issued our president 6,000 shares of our common stock,
valued at $30,150, as compensation for his services from November 1, 2003 to
October 31, 2004, and we have recognized an expense for this issuance in fiscal
2004. (1)

_________
         (1) This issuance is an individual compensation arrangement under which
we issued our common stock for services. None of these issuances were approved
by our shareholders.

                                       15
<PAGE>

         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.

EQUITY COMPENSATION PLAN INFORMATION AS OF OCTOBER 31, 2004

         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, 2004.

                            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)                (c)

Equity compensation plans
approved by stockholders          0               0                22,010

Equity compensation plans
not approved by stockholders     none            none               none

                                       16
<PAGE>

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

RESULTS OF OPERATIONS

Fiscal Years Ended October 31, 2004 and 2003

         We reported revenues of $4,024,906 for fiscal 2004 as compared to
revenues of $1,350,744 for fiscal 2003. Revenues of approximately $31,000 from
our 24/7 MRI division have been reclassified at October 31, 2003 to loss from
discontinued operations.

         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.

         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 2005.

         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. 24/7 MRI completed the beta test of this initial retail center in
December 2003. In April 2004 we determined that the diagnostic imaging field was
not an area in which we would devote any additional time or resources and we
subsequently exited this line of business.

         We reported a gross profit of $1,419,617 for fiscal 2004 as compared to
a gross profit of $404,999 for fiscal 2003. Operating expenses for fiscal 2004
were $2,340,245 as compared to $922,006 for fiscal 2003, an increase of
approximately 154%. The increase is largely attributable to the effect of
operating expenses from IFR for the entire twelve months of fiscal 2004 as
compared to the five month period following the acquisition of IFR in May of
fiscal 2003. Included in operating expenses in fiscal 2004 were $1,416,045 of
general and administrative expenses, and $731,200 of non-cash stock non-cash
stock compensation expense which represented the value of common stock issued as
compensation for consulting services and the termination of a real property
lease, included in discontinued operations. In comparison, included in
operating expenses in fiscal 2003 were $564,946 of general and administrative
expenses, and $357,060 of non-cash stock compensation expense which represented
the value of common stock issued as compensation for consulting services.

         Other expense, which represented interest expense, was $13,095 for
fiscal 2004, a decrease of $17,586 from fiscal 2003. Interest expense in fiscal
2004 and fiscal 2003 was interest that 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.

                                       17
<PAGE>

         We reported a loss from operations before minority interest and
discontinued operations in fiscal 2004 of $933,643 as compared to a loss from
operations before minority interest in fiscal 2003 of $547,688, an approximate
71% increase.

         For fiscal 2004 we reported a loss in subsidiary (Industrial Holding)
attributed to the minority interest held by Mr. Gann of $30,808, as compared to
a loss in subsidiary (Industrial Holding) attributed to the minority interest
held by Mr. Gann of $73,265. 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.

         For fiscal 2004, we reported a loss from operations of $902,835 as
compared to a loss from operations of $474,423 for fiscal 2003.

DISCONTINUED OPERATIONS

         Pursuant to the guidance of Staff Accounting Bulletin No. 93,
"Accounting and Disclosures regarding Discontinued Operations"("SAB 93") and
SFAS No. 144, in connection with the disposal of the 24/7 MRI segment, the
Company recorded its proportionate share of net losses in the former subsidiary
for the period from November 1, 2003 through October 31, 2004 by crediting loss
form operations and debiting loss on disposal of subsidiary totaling $244,776.
The amount of the loss from discontinued operations for the year ended October
31, 2003 was $8,947.

LIQUIDITY AND CAPITAL RESOURCES

         At October 31, 2004, we had working capital of $356,577, as compared to
working capital of $941,390 at October 31, 2003. The change in working capital
is primarily attributable to an increase in reserves of $499,057 in the reserve
for commitments, contingencies and claims, coupled with an increase of $142,037
in the amount due to a related party.

         Net cash used in operating activities for fiscal 2004 was $3,720, as
compared to net cash used in operating activities for fiscal 2003 of $56,666.
The change reflects the $664,241 increase in the net loss, offset primarily by:

      *  a reserve for commitments, contingencies and claims in fiscal 2004 of
         $499,057, for which there were no comparable expenses in fiscal 2003,
         and

      *  an increase in the value of stock issued for consulting fees and
         compensation in fiscal 2004 of $374,140, and

      *  The loss from discontinued operations of $244,776 recorded in fiscal
         2004.

         Included in the net cash generated by operating activities in fiscal
2004 is $731,200 of non-cash expense and $30,808 attributable to the net
minority interest in losses at Industrial Holding and equity in loss of
affiliates. 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.

                                       18
<PAGE>

         Net cash used by investing activities was $25,203 for fiscal 2004 as
compared to net cash provided by investing activities of $92,774 for fiscal
2003. The increase in cash used represents the cash used for the purchase of
property and equipment in fiscal 2004 as compared to the cash acquired in the
acquisition of IFR in fiscal 2003. Net cash provided by financing activities for
fiscal 2004 was $9,272 as compared to net cash provided by financing activities
for fiscal 2003 of $112,689, which change primarily reflects the an increase in
the payment of loans to related parties amounting to $188,891 and proceeds from
an affiliate totaling $142,037in fiscal 2004, as compared to loans of $98,880
received from related parties, less payments made of $52,701, in fiscal 2003.

         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, 2004 and October 31, 2003 exceed the carry value.

         At October 31, 2004 we had working capital of $356,577. While
approximately 64% of our loss for fiscal 2004 relates to non-cash expenses, we
reported a net loss of $1,147,611 for fiscal 2004 and at October 31, 2004 we
have an accumulated deficit of $15,300,869. The report from of our independent
auditor on our audited financial statements at October 31, 2004 contains a going
concern modification. To date, the development of new business lines has been
funded through a combination of our internal working capital, an operating lease
and loans from Yucatan Holding Company, our principal stockholder. We will,
however, need to additional capital for further expansion of our Industrial
Holding division or to develop new lines of business. In addition, based upon
results to date we believe that Industrial Holding division's revenues will
increase during fiscal 2005 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 2005 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. If we are
unable to increase revenues in our Industrial Holding division or raise working
capital when needed to fund its expansion or the development of new lines of
business, our results of operation and liquidity may adversely impacted in
future periods.

                                       19
<PAGE>

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The SEC's Financial Reporting Release No. 60, "Cautionary Advice Regarding
Disclosure About Critical Accounting Policies" ("FRR 60"), suggests companies
provide additional disclosure and commentary on those accounting policies
considered most critical. A critical accounting policy is one that is both very
important to the portrayal of our financial condition and results, and requires
management's most difficult, subjective or complex judgments. Typically, the
circumstances that make these judgments difficult, subjective and/or complex
have to do with the need to make estimates about the effect of matters that are
inherently uncertain. We believe the accounting policies below represent our
critical accounting policies as contemplated by FRR 60.

Allowances for refunds and product returns. We may grant our customers the right
to return products which they do not find satisfactory. Upon sale, we evaluate
the need to record a provision for product returns based on our historical
experience, economic trends and changes in customer demand.

Allowances for doubtful accounts receivable. We maintain allowances for doubtful
accounts to cover uncollectible accounts receivable, and we evaluate our
accounts receivable to determine if they will ultimately be collected. This
evaluation includes significant judgments and estimates, including an analysis
of receivables aging and a customer-by-customer review for large accounts. If,
for example, the financial condition of our customers deteriorates resulting in
an impairment of their ability to pay, additional allowances may be required.

Provisions for inventory obsolescence. We may need to record a provision for
estimated obsolescence of inventory. Our estimates would consider the cost of
inventory, the estimated market value and our historical experience. If there
are changes to these estimates, provisions for inventory obsolescence may be
necessary.

Value of long lived assets. We capitalize and amortize the costs incurred in the
acquisition of capital equipment. We also carry other long lived assets on our
balance sheet. We evaluate the carrying values of such assets and may be
required to reduce the value in the event we determine if the value is impaired
from the current carrying among.

OBLIGATIONS AND COMMITMENTS

The following table reflects our obligation to make future payments under
contractual obligations and other commercial commitments as of October 31, 2004.
This table does not include trade payables and other operating expenses not
subject to written commitments such as salaries.

                                       20
<PAGE>

                  Payments Due By Period as of October 31, 2004
                  ---------------------------------------------

                                                 Less Than
                     Total          1 Year       1-3 Years       4-5 Years
________________________________________________________________________________

Facility lease      $312,000       $78,000        $234,000           $0


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 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 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.

         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.

                                       21
<PAGE>

         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.

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

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,
2004, 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.

                                       22
<PAGE>
                                    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:

              Name                 Age                 Position
              ----                 ---                 --------
         Barry A. Rothman           49          President and secretary
         Jayme Dorrough             36          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.

                                       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, 2004, 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, 2004.

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

                                       24
<PAGE>

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.

         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.

Audit Committee Financial Expert

         The Board has determined that Mrs. Dorrough is not an audit committee
financial expert as defined by Item 401(e)(2) of Regulation S-B of the
Securities exchange Act of 1934.

Director Independence

         The Board has determined that Mrs. Dorrough is not independent within
the NASDAQ Stock Market's director independence rules.

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        2004    $  (1)     $ 0      $ 30,150         $ 0          0         $        0
                        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

</TABLE>
                                       25
<PAGE>
_________
(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.
In April 2004 we issued Mr. Rothman 6,000 shares of our common stock, valued at
$30,150, as compensation for his services for fiscal 2004.

(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.

STOCK OPTIONS

         There were no stock options or stock appreciated rights granted to the
named executive officers in the fiscal year ended October 31, 2004.

         There were no stock options exercised by the named executive officers
during the fiscal year ended October 31, 2004. There were no stock options or
stock appreciation rights held or exercised by the named executive officers
during the fiscal year ended October 31, 2004.

DIRECTOR COMPENSATION

         We do not pay directors for attending meeting of the Board of
Directors.

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

         As of January 15, 2004 there were 11,574,295 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, 2005 held by:

                                       26
<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, 2005, 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) ........      9,784,131             84.7%               99%
                Barry A. Rothman ..........              0               -                  -
                All executive officers
                  and directors as a
                  group (two persons)(2)...      9,784,131             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 9,784,131
         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.

                                       27
<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, 2004, we owed Yucatan Holding Company $68,325,
net of repayments on advances made during the year. This loan is unsecured and
will be repaid by us as our working capital permits.



                                       28
<PAGE>

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 (11)

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 (11)

14       Code of Ethics (11)

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 (11)

31.1     Rule 13a-14a/5d-14(a) Certificate of Chief Executive and Financial
         Officer

32.1     Section 1350 Certificate of Chief Executive and Financial Officer

                                       29
<PAGE>

Incorporation by reference notes:

(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.

(10) Incorporated by reference to the registrant's Report on Form 8-K/A as filed
     with the SEC on May 27, 2003.

(11) Incorporated by reference to the registrant's Annual Report on Form 10-KSB
     for the fiscal year ended October 31, 2003 as filed with the SEC on
     February 13, 2004.


(b) Reports on 8-K

         On October 28, 2004 registrant filed a Form 8-K reporting its intention
to expand its business to construction-related activities under Items 2.02 and
9.01.


Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

         Webb & Company audited the Company's financial statements for the
fiscal years ended October 31, 2004 and October 31, 2003.

                                       30
<PAGE>

         Fees related to services performed by such firms in fiscal 2004 and
2003 were as follows

                                      2004       2003
                                      ----       ----

         Audit Fees (1)             $ 26,500     9,288
         Audit-Related Fees                0         0
         Tax Fees (2)                      0         0
         All Other Fees                    0         0
         _____________________________________________

         Total                      $ 26,500     9,288

         (1) Audit fees represent fees for professional services provided in
         connection with the audit of our financial statements and review of our
         quarterly financial statements.

         (2) Tax fees principally included tax advice, tax planning and tax
         return preparation.

         The Board of Directors has reviewed and discussed with the Company's
management and Webb & Company the audited financial statements of the Company
contained in the Company's Annual Report on Form 10-KSB for the Company's 2004
fiscal year. The Board has also discussed with Webb & Company the matters
required to be discussed pursuant to SAS No. 61 (Codification of Statements on
Auditing Standards, AU Section 380), which includes, among other items, matters
related to the conduct of the audit of the Company's financial statements.

         The Board has received and reviewed the written disclosures and the
letter from Webb and Company required by Independence Standards Board Standard
No. 1 (Independence Discussions with Audit Committees), and has discussed with
Webb and Company its independence from the Company.

         The Board has considered whether the provision of services other than
audit services is compatible with maintaining auditor independence.

         Based on the review and discussions referred to above, the Board
approved the inclusion of the audited financial statements be included in the
Company's Annual Report on Form 10-KSB for its 2004 fiscal year for filing with
the SEC.

 Audit Committee's Pre-Approval Policies

         The Board's policy is now to pre-approve all audit services and all
permitted non-audit services (including the fees and terms thereof) to be
provided by the Company's independent auditor; provided, however, pre-approval
requirements for non-audit services are not required if all such services (1) do
not aggregate to more than five percent of total revenues paid by the Company to
its accountant in the fiscal year when services are provided; (2) were not
recognized as non-audit services at the time of the engagement; and (3) are
promptly brought to the attention of the Board and approved prior to the
completion of the audit.

         The Board pre-approved all of Webb and Company's fees described above.

                                       31
<PAGE>

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
               OF ELINE ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES

                                                                            Page

Report of Independent Registered Public Accounting Firm......................F-2

Consolidated Balance Sheet at October 31, 2004...............................F-3

Consolidated Statement of Operations for the years ended
  October 31, 2004 and 2003..................................................F-4

Consolidated Statement of Cash Flows for the years ended
  October 31, 2004 and 2003..................................................F-5

Statement of Changes in Stockholders' Deficit for the years ending
  October 31, 2004 and 2003..................................................F-6

Notes to Consolidated Financial Statements...................................F-7



                                       F-1
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of:
  Eline Entertainment Group, Inc.

We have audited the accompanying consolidated balance sheet of Eline
Entertainment Group, Inc. and subsidiaries (a development stage company) as of
October 31, 2004, and the related consolidated statements of operations, changes
in stockholders' deficiency and cash flows for the years ended October 31, 2004
and 2003. 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 audits.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits 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
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly in all
material respects, the consolidated financial position of Eline Entertainment
Group, Inc. and subsidiaries as of October 31, 2004 and the consolidated results
of its operations and its cash flows for the years ended October 31, 2004 and
2003 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 1(B) to
the consolidated financial statements, the Company has a loss from operations of
$1,147,611 and a stockholders' deficiency of $ 15,300,869. These factors raise
substantial doubt about its ability to continue as a going concern. Management's
plans concerning this matter are also described in Note 1(B). The accompanying
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

/s/ WEBB & COMPANY, P.A.
WEBB & COMPANY, P.A.
Certified Public Accountants

February 7, 2005


                                       F-2
<PAGE>
                Eline Entertainment Group, Inc. and Subsidiaries
                           Consolidated Balance Sheet
                                October 31, 2004

ASSETS
Current Asset
  Cash and cash equivalents ..................................     $    129,137
  Accounts receivable, net of allowance for
      doubtful accounts of $140,202 ..........................          322,955
  Inventories, net ...........................................        1,316,964
  Prepaid expenses ...........................................           19,814
                                                                   ------------

      Total current assets ...................................        1,788,870

Property, equipment and leasehold improvements, net ..........           58,285

Other assets
  Deposits ...................................................            7,200
                                                                   ------------

                                                                   $  1,854,355
                                                                   ============

LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current Liabilities
  Trade accounts payable .....................................     $    447,064
  Accrued expenses ...........................................           31,189
  Due to related parties .....................................          443,053
  Reserve for commitments, contingencies and claims ..........          499,057
  Current maturities of long-term debt .......................           11,930
                                                                   ------------

      Total Current Liabilities ..............................        1,432,293

Note payable - related party .................................          775,320
Long-term debt, less current portion .........................            4,213
                                                                   ------------

      Total Liabilities ......................................        2,211,826

Minority Interest in Subsidiary ..............................          196,846

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; 90,000,000 shares
      authorized, 11,574,295 issued and outstanding ..........           11,574
  Additional paid-in capital .................................       14,734,798
  Accumulated deficit ........................................      (15,300,869)
                                                                   ------------

      Total Stockholders' Deficiency .........................         (554,317)
                                                                   ------------
                                                                   $  1,854,355
                                                                   ============

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

                                       F-3
<PAGE>
                Eline Entertainment Group, Inc. and Subsidiaries
                      Consolidated Statements of Operations
                  For the years ended October 31, 2004 and 2003

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

Revenues ..........................................  $  4,024,906   $ 1,350,744

Cost of goods sold ................................     2,605,209       945,745
                                                     ------------   -----------

Gross profit ......................................     1,419,697       404,999

Operating expenses
   General and administrative .....................     1,364,045       564,946
   Stock compensation expense .....................       676,200       357,060
   Reserve for commitments contingencies and claims       300,000             -
                                                     ------------   -----------

Total operating expenses ..........................     2,340,245       922,006
                                                     ------------   -----------

Loss from continuing operations ...................      (920,548)     (517,007)

Other expense
   Interest expense ...............................       (13,095)      (30,681)
                                                     ------------   -----------

Loss from operations before minority interest and
   discontinued operations ........................      (933,643)     (547,688)

Less Income in subsidiary attributed to minority
   interest .......................................        30,808        73,265
                                                     ------------   -----------

Loss from operations ..............................      (902,835)     (474,423)

Loss on discontinued operations ...................      (244,776)       (8,947)
                                                     ------------   -----------

Net loss ..........................................  $ (1,147,611)  $  (483,370)
                                                     ============   ===========


Net loss per share basic and fully diluted from
   continuing operations ..........................  $      (0.08)  $     (0.09)
Net loss per share basic and fully diluted from
   discontinued operations ........................         (0.02)            -
                                                     ------------   -----------

                                                     $      (0.10)  $     (0.09)
                                                     ============   ===========

Basic and fully diluted weighted average
   shares outstanding .............................    11,529,287     5,933,115
                                                     ============   ===========

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

                                       F-4
<PAGE>
<TABLE>
                                      Eline Entertainment Group, Inc. and Subsidiaries
                                     Statements of Changes in Stockholders' Deficiency
                                       For the Years Ending October 31, 2004 and 2003
<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      183,222  $   183  $13,625,429             -             -    $(13,669,888)  $   (44,076)

Shares issued
to principal
stockholder
for services                     1,080,000    1,080      148,920                                                   150,000

Shares issued
to consultant                       67,500       68       44,032                                                    44,100

Issuance of
stock options                                                540                                                       540

Stock issued
for services                        90,000       90       58,710                                                    58,800

Exercise of
stock options                       45,000       45       17,455                                                    17,500

Imputed
salary                                                    12,000                                                    12,000

Stock issued
for services                       157,500      158      103,442                                                   103,600

Conversion of
preferred
stock          (20,000)   (20)   9,000,000    9,000       (8,980)                                                        0

Deferred
compensation                        60,000       60       79,940                     (80,000)                            0

Net loss                                                                                            (483,370)     (483,370)
               -------  ------  ----------  -------  -----------   -----------     ---------    ------------   -----------

Balance,
October 31,
2003           180,000    180   10,683,222   10,684   14,081,488             -       (80,000)    (14,153,258)     (140,906)

Shares issued
to vendor for
rent
settlement                          78,573       78       54,922                                                    55,000

Shares issued
to
consultants                          2,500        2        8,748                                                     8,750

Shares issued
to
consultants                          6,000        6       40,194                                                    40,200

Shares issued
to
consultants                         15,000       15       86,985                                                    87,000

Shares issued
to
consultants                        789,000      789      459,461                                                   460,250

Imputed
salary                                                     3,000                                                     3,000

Amortization
of deferred
compensation                                                                          80,000                        80,000

Net loss                                                                                          (1,147,611)   (1,147,611)
               -------  -----   ----------  -------  -----------   -----------     ---------    ------------   -----------

Balance,
October 31,
2004           180,000  $ 180   11,574,295  $11,574  $14,734,798   $         0     $       0    $(15,300,869)  $  (554,317)
               =======  =====   ==========  =======  ===========   ===========     =========    ============   ===========

                         The accompanying notes are an integral part of these financial statements

                                                            F-5
</TABLE>
<PAGE>
                Eline Entertainment Group, Inc. and Subsidiaries
                      Consolidated Statements of Cash Flows
                  For the years ended October 31, 2004 and 2003

                                                            2004         2003
                                                        -----------   ---------
Operating Activities:
  Net loss ...........................................  $(1,147,611)  $(483,370)
  Adjustments to reconcile net loss to net cash
   provoded by (used in) operating activities:
    Depreciation .....................................            0      12,873
    Allowance for doubt ful accounts .................       (3,888)          -
    Loss from discontinued operations ................      244,776           -
    Stock issued for consulting fees and compensation       676,200     357,060
    Minority interest in loss of subsidiaries and
      equity in loss of affiliate, net ...............      (30,808)    (73,265)
      imputed salary .................................        3,000      12,000
    Changes in operating assets and liabilities:
      Increase in accounts receivable ................        9,839     112,409
      Increase in other assets .......................            -      12,366
      Decrease (Increase) in deposits ................        7,414      (7,414)
      Increase in inventory ..........................      (90,411)    (42,593)
      Increase in prepaid expenses ...................      (19,814)          -
      (Decrease) Increase in accounts payable ........       49,318      32,918
      (Decrease) Increase in accrued expenses ........       (1,735)     10,350
      Reserve for commitments contingencies and claims      300,000           -
                                                        -----------   ---------

        Net Cash Provided by (Used in)
          Operating Activities .......................       (3,720)    (56,666)
                                                        -----------   ---------

Investing Activities:
  Cash acquired in acquisition .......................            -      92,774
  Purchase of property and equipment .................      (25,203)          -
                                                        -----------   ---------

        Net Cash (Used in) Provided by
          Investing Activities .......................      (25,203)     92,774
                                                        -----------   ---------

Financing Activities:
  Excersise of stock options .........................            -      17,500
  Loans from related parties .........................            -      98,880
  Payment of loans to related parties ................     (118,891)    (52,701)
  Payments on long-term debt .........................      (22,874)     (5,842)
  Proceeds from long-term debt .......................        9,000           -
  Due to affiliate ...................................      142,037      54,843
                                                        -----------   ---------

        Net Cash (Used in) Provided by
          Financing Activities .......................        9,272     112,680
                                                        -----------   ---------

(Decrease) in Cash and Cash Equivalents ..............      (19,651)    148,788

Cash, beginning of period ............................      148,788           0
                                                        -----------   ---------

Cash, end of period ..................................  $   129,137   $ 148,788
                                                        ===========   =========

    The accompanying notes are an integral part of these financial statements

                                       F-6
<PAGE>
                ELINE ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                             As of October 31, 2004

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.

         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 51% 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.

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 the
Company any capital that it has loaned IFR. Mr. Gann, or his estate, will be
entitled to a portion of the proceeds the Company will receive upon the sale of
IFR or its assets after repayment of these amounts.

In June 2003 the Company formed 24/7 MRI, Inc. ("24/7 MRI"), a Florida
corporation which was formerly know as Imaging Holding Group, Inc. In June 2003
the Company also formed Okeechobee Imaging, Inc. ("Okeechobee Imaging"), a
Florida corporation originally known as Florida Health Care Imaging, Inc. 24/7
MRI is a 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. In April 2004 the Company
determined that the diagnostic imaging field was not an area in which the
Company would devote any additional time or resources and thus has exited this
line of business. The Company continues to explore additional avenues of
expanding its business and operations.

                                       F-7
<PAGE>
                ELINE ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                             As of October 31, 2004

NOTE 1  - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)

(B)      Going Concern

         The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. As shown in the
accompanying financial statements, the Company incurred a net loss of $1,147,611
during the year ended October 31, 2004 and has an accumulated deficit of
$15,300,869 at October 31, 2004. The Company believes that these matters raise
substantial doubt about our ability to continue as a going concern. The
accompanying financial statements do not include any adjustments related to the
recoverability and classification of assets or the amounts and classification of
liabilities that might be necessary should the Company be unable to continue as
a going concern.

         Although there are no assurances, the Company believes that with
increased sales, raising additional capital and borrowings from its principal
shareholder it will be able to continue as a going concern.

(C)      Basis of Consolidation

         The accompanying consolidated financial statements for the year ended
October 31, 2004 include the accounts of Eline and its wholly-owned subsidiaries
24/7 MRI and Storm Depot and its 51% majority owned subsidiary Industrial
Holding. The Statement of operations for the year ended October 31, 2003 include
IFR from the date of acquisition. All significant inter-company accounts and
transactions have been eliminated in consolidation.

(D)      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.

(E)      Cash Equivalents

         Cash and cash equivalents consists of all highly liquid investments
with original maturities of three months or less. At October 31, 2004 the
Company had $129,137 in cash.

(F)      Concentration of Credit Risk

Eline 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, 2004, the Company had $29,137 in cash in excess of FDIC insurance
limits. The Company performs ongoing credit evaluations of our 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% of the revenues for the
year ended October 31, 2004. Revenue from one customer represented approximately
20% of the revenue for the year ended October 31, 2003. The allowance for
uncollectible accounts was $140,202 and $144,900 at October 31, 2004 and 2003,
respectively.

                                       F-8
<PAGE>
                ELINE ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                             As of October 31, 2004

NOTE 1  - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)

(G)      Revenue Recognition

         The Industrial Holding division generates 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 were billed to third-party payors.
Revenue is recognized when the services are performed and deemed collectable.

(H)      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 inventory is made based on management's analysis of
inventory levels.

(I)      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.

(J)      Long-Lived Assets

         Long-lived assets and certain identifiable intangible assets (other
than goodwill and intangible assets with indefinite 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 indefinite 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 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.

(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-9
<PAGE>
                ELINE ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                             As of October 31, 2004

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.

(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)      Reclassifications

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

(P)      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

                                      F-10
<PAGE>
                ELINE ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                             As of October 31, 2004

NOTE 1  - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)

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 pronouncement did not have a material effect on our financial position
or results of operations.

NOTE 2 - INVENTORIES

         Inventories consisted of the following:

                  Finished products ............  $ 1,394,277
                  Work-in-process ..............      122,687
                  Reserve for impaired inventory     (200,000)
                                                  -----------
                                                  $ 1,316,964
                                                  ===========

Reserve for impaired inventory was $0 and $200,000 at October 31, 2004 and 2003,
respectively.

NOTE 3 - 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, 2004 consisted of the following:

                  Shop equipment .................  $ 283,336
                  Furniture and Fixtures .........     22,583
                  Automobiles ....................    207,538
                  Leasehold Improvements .........      9,380
                                                    ---------
                                                      522,837
                  Less: accumulated depreciation .   (464,552)
                                                    ---------
                                                       58,285
                                                    =========

                                      F-11
<PAGE>
                ELINE ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                             As of October 31, 2004

NOTE 3 - PROPERTY AND EQUIPMENT - (CONTINUED)

         Depreciation and amortization expense for the years ended October 31,
2004 and 2003 totaled $5,125 and $12,873, respectively.

NOTE 4 - DUE TO RELATED PARTY

         During the fiscal years ended October 31, 2004 and 2003, from time to
time Yucatan Holding Company, the Company's principal shareholder, has advanced
funds for working capital. At October 31, 2004, the Company owed Yucatan Holding
Company $68,325. The Company will repay this amount as its working capital
permits.

         At October 31, 2004 the Company owed Mr. Lester Gann, a related party,
an aggregate of $373,533, which included $244,000 of accrued payroll and
$129,533 of interest. These amounts are included in due to related parties in
current liabilities.

NOTE 5 - ACCRUED EXPENSES

         At October 31, 2004 accrued expenses consisted of:

                  Accrued Payroll ..............       $23,334
                  Payroll Taxes ................         3,271
                  Sales Tax ....................           905
                  Other ........................         3,679
                                                       -------
                                                       $31,189
                                                       =======

NOTE 6 - LONG-TERM DEBT

Long term obligations consisted of the following:

Note payable to finance company, secured by automobile, interest
     at 1.9% per annum. Monthly payments of $600 due through
     through April 2005 .............................................  $  4,344

Note payable to a bank, secured by automobile, interest at 6.75%
     per annum.Monthly payments of $402 due through September 2006 ..     9,000

Note payable to finance company, secured by automobile
     Interest at 5.75% per annum.Monthly payments of $288 due
     through August 2005 ............................................     2,799
                                                                       --------
                                                                         16,143
Less current maturities .............................................   (11,930)
                                                                       --------
                                                                       $  4,213
                                                                       ========

                                      F-12
<PAGE>
                ELINE ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                             As of October 31, 2004

NOTE 6 - LONG-TERM DEBT - (CONTINUED)

         Note payable to related party, secured by the assets of IFR
          Interest at 7% per annum.Principal and accrued interest due
           January 1, 2008 ..........................................  $775,320

         Current maturities are as follows:

          Year ending October 31,
                          2005 ......................................  $ 11,930
                          2006 ......................................     4,213
                          2007 and thereafter .......................   775,320
                                                                       --------
                                                                       $791,463
                                                                       ========

NOTE 7 - SEGMENT INFORMATION

         During fiscal 2003 the Company had two reportable segments; during 2004
the Company disposed of the 24/7 MRI segment and thus has one reportable
segment. The remaining segment is 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. During the year
ended October 31, 2003, Other includes 24/7 MRI and Eline, which is the
corporate parent and provides management and administration for the subsidiary
operations. Neither 24/7 MRI or Eline met 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 the
year ended October 31, 2003 follows:

                                     Industrial
                                       Holding         Other            Total
             2003
Revenues ......................     $ 1,350,744      $  53,345      $ 1,404,089
Loss from operations ..........         (78,256)      (447,698)        (525,954)
Net income (loss) .............        (232,560)      (250,810)        (483,370)
Depreciation ..................          12,873              -           12,873
Assets ........................       1,736,120         15,823        1,736,120
Capital expenditures ..........               -              -                -

                                      F-13
<PAGE>
                ELINE ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                             As of October 31, 2004

NOTE 8 - EQUITY ISSUANCES REPRESENTING NON-CASH EXPENSES

         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.

         During the year ended October 31, 2004 the Company issued an aggregate
of 263,000 shares of common stock to a related party as compensation for
services rendered. The Company recognized an expense of $460,250 during the year
ended October 31, 2004 related to these issuances.

         During the year ended October 31, 2004, the Company issued 26,191
shares of common stock valued at the fair value on the date of the grant to
terminate a real property lease. The Company recognized a non-cash expense of
$55,000 during the year ended October 31, 2004 related to this issuance. The
expense is recognized in the loss from discontinued operations.

         During the year ended October 31, 2004 the Company recognized a
non-cash expense of $80,000, respectively, which represents the amortization of
a portion of the value of shares of common stock issued to the president of our
24/7 MRI division as compensation.

         During the year ended October 31, 2004 the Company issued an aggregate
of 17,500 shares of common stock to two consulting firms as compensation for
services. During the year ended October 31, 2004, the Company recognized
non-cash expenses of $95,750, which represents the fair value of those shares on
the date of the grant.

         In April 2004 the Company issued the Company's president 6,000 shares
of common stock valued at fair value on the date of the grant at $40,200 as
compensation for his services.

                                      F-14
<PAGE>
                ELINE ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                             As of October 31, 2004

NOTE 8 - EQUITY ISSUANCES REPRESENTING NON-CASH EXPENSES - (CONTINUED)

Imputed Salary -

         The Company's current president has served in such capacity since
September 25, 2002. The Company compensated its president for his services
through the issuance of common stock valued at the fair value on the date of the
grant at $40,200 during the year ended October 31, 2004. The Company has
recognized an additional expense of $3,000 for fiscal 2004, which it believes
equals the fair value of his services. During the year ended October 31, 2003,
the Company did not compensated its president for his services and thus recorded
an expense of $12,000 which it believes equals the fair value of his services
during this period.

Stock split -

         On April 11, 2004, the Company declared a 3 to 1 forward split. All
amounts presented give effect for the split.

NOTE 9 - COMMITMENTS AND CONTINGENCIES

(A)      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.

(B)      Litigation

         On March 11, 2004 the Company announced that it had signed an agreement
in principal to form MRI Management & Leasing, a joint venture that will be
focused on leasing mobile MRI systems. Under the terms of the arrangement the
Company held a majority ownership of MRI Management & Leasing, which was to be
managed by A.M Services, LLC and Dirk Sichel, the then president of 24/7 MRI,
who together would also be its minority owners. The Company then proceeded with
the preparation of an operating agreement and circulated same to all parties,
including counsel for A.M. Services, LLC. In connection with this anticipated
joint venture, under separate agreement Okeechobee Imaging, Inc., the subsidiary
of 24/7 MRI which held the lease for the mobile MRI system which was to be used
in the joint venture, was to enter into a lease for that equipment with the
joint venture. On April 13, 2004 the Company notified both Mr. Sichel and Mr.
Anwar Mithavayani, the principal of A.M. Services, that as a result of the lapse
of time and the changes requested by counsel to A.M. Services to the operating
agreement that the Company had made a determination not to pursue the joint
venture. Contemporaneously the Company notified GE Healthcare Financial that
they were seeking their assistance in repositioning the MRI unit and terminating
the lease.

                                      F-15
<PAGE>
                ELINE ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                             As of October 31, 2004

NOTE 9 - COMMITMENTS AND CONTINGENCIES -(CONTINUED)

         On April 15, 2004, after an inspection visit to the location of the
mobile MRI unit the Company discovered that the unit was not at the location
specified by Mr. Sichel and Mr. Mithavayani; the Company reported the unit
stolen.

         On April 16, 2004 the 24/7 Open MRI subsidiary was served with a
lawsuit by Medserv, Inc., another company controlled by Mr. Mithavayani, styled
Medserv, Inc. v 24/7 Open MRI of Port St. Lucie, Inc., Eline Entertainment
Group, Inc. and GE Healthcare Financial Services, Inc., Case No. 04006295 in the
Circuit Court of the 17th Judicial Circuit in and for Broward County, Florida.
In its complaint, as amended, the plaintiff alleges a lien on the MRI system
pursuant to terms of a maintenance agreement purportedly entered into by 24/7
Open MRI, and is seeking approximately $30,000. The Company has filed an Answer,
Affirmative Defenses and Counterclaim alleging conversion and tortuous
interference with contractual rights.

         In August GE Healthcare Financial Services, Inc. filed an answer and
cross claim in which it has asserted breach of contract by Okeechobee Imaging
alleging that it defaulted under its lease agreement with GE Healthcare
Financial Services for the MRI unit, as well as a claim of tortuous interference
with a contract relationship between GE and Okeechobee Imaging by 24/7 Open MRI.
GE Healthcare Financial is asserting that Okeechobee Imaging is in default under
the lease for the equipment in the amount of approximately $200,000, and other
as yet unspecified damages.

         In July 2004 the Company received an Order for Default Judgment in the
matter of Guardian Technology, Inc., a British Columbia corporation, versus
Eline Entertainment Group, Inc. formerly known as Eline Music.com, Inc., Case
No. 04-2-10345-2SEA in the Superior Court of the State of Washington in and for
the County of King. The plaintiff is alleging that Eline defaulted on a
promissory note purportedly issued on August 9, 2000 for services in the
principal amount of $100,000. This date of this purported note predates the
transaction in September 2002 in which Yucatan Holding Company acquired control
of Eline. The state court has granted a summary judgment in the amount of
$290,967.21 which represents a principal amount of $177,000, prejudgment
interest of $107,822.21, and attorney's fees and costs of $6,145. The Company is
unable to ascertain the difference in the principal amount of the purported note
and the principal amount as set forth in the judgment. The Company has
subsequently obtained from plaintiff's counsel a copy of the purported
promissory note, which such note reflects that ElineMusic.com, Inc., a Tennessee
corporation, not Eline, is the maker and the note is signed by Larry Paradise,
as president of the maker. ElineMusic.com, Inc. was an unaffiliated entity until
its merger into Eline in December 2000. Mr. Larry Paradise, the father of Mr.
Sonny Paradise who served as the Company's president from June 2000 until
January 2001, has never been an officer or director of Eline. A review of the
records of our company prior to the change of control in September 2002 does not
reflect that Guardian Technology Inc. ever made any loans to Eline. The Company
has advised plaintiff's counsel of the dispute of both the ability of Mr. Larry
Paradise to bind the company as well as the validity of the obligation. As a
result of the foregoing, as well as the purported involvement of Mr. Larry
Paradise in the matter, The Company does not believe that the note is a valid
obligation of Eline.

                                      F-16
<PAGE>
                ELINE ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                             As of October 31, 2004

NOTE 9 - COMMITMENTS AND CONTINGENCIES -(CONTINUED)

         As of October 31, 2004 the Company reserved approximately $500,000 for
legal fees and expenses related to the above aforementioned litigation and in
addition on October 29, 2004 filed a complaint in The United States District
Court For The Eastern District of Tennessee at Knoxville naming Larry Paradise,
Guardian Technology, Inc and Elio Guglielmi as defendants in a civil action
claiming fraud, conspiracy, and making false statements thereby damaging the
Company's financial interests. The Company seeks judgment against the defendants
in an amount not to exceed One Million Dollars.

         The Company leases its manufacturing facility from a related party.
Minimum lease payments of $6,500 are due monthly through 2008.

         Approximate future minimum lease payments at October 31, 2004 are as
follows:

                  2005 ......................         $ 78,000
                  2006 ......................           78,000
                  2007 ......................           78,000
                                                      --------
                                                      $234,000
                                                      ========

NOTE 10 - 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. At October 31, 2004, the Company has net
operating loss carryforwards of approximately $15,100,000 that expire at various
times through 2024. A valuation allowance of approximately $4,751,142 has been
recognized to offset primarily all of the deferred tax assets related to the
carryforwards.

         The valuation allowance at October 31, 2004 was $4,751,142. The net
change in the valuation allowance during the year ended October 31, 2004 was an
increase of $172,422.

NOTE 11 - DISCONTINUED OPERATIONS

         Pursuant to the guidance of Staff Accounting Bulletin No. 93,
"Accounting and Disclosures regarding Discontinued Operations"("SAB 93") and
SFAS No. 144, in connection with the disposal of the 24/7 MRI segment, the
Company recorded its proportionate share of net losses in the former subsidiary
for the period from November 1, 2003 through October 31, 2004 by crediting loss
form operations and debiting loss on disposal of subsidiary totaling $244,776.
The amount of the loss from discontinued operations for the year ended October
31, 2003 was $8,947.

                                      F-17
<PAGE>
                ELINE ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                             As of October 31, 2004

NOTE 11 - DISCONTINUED OPERATIONS -(CONTINUED)

         The loss on discontinued operations consisted of the following:

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

Revenues .............................................   $  31,454    $  53,345
Cost of sales ........................................       9,492       39,279
                                                         ---------    ---------
Gross profit .........................................      21,962       14,066

General and administrative expenses ..................      12,681       23,013
Stock compensation ...................................      55,000            -
Reserve for commitments contingencies and claims .....     199,057            -
                                                         ---------    ---------

Loss from discontinued operations ....................    (244,776)      (8,947)
                                                         =========    =========

                                      F-18
<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 16, 2005                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. Rothman              President                  February 16, 2005
 --------------------              (principal executive
 Barry A. Rothman                  and accounting officer)


 /s/ Jayme Dorrough                Director                   February 16, 2005
 ------------------
 Jayme Dorrough