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

                                   FORM 10-KSB

|X|      Annual report pursuant to section 13 or 15(d) of the Securities
         Exchange Act of 1934 for the fiscal year ended December 31, 2004.

         Transition report pursuant to section 13 or 15(d) of the Securities
         Exchange Act of 1934 for the transition period from
         _____________________ to _____________________.

                         Commission file number 0-29245
                         Ashlin Development Corporation
                 (Name of small business issuer in its charter)

                      FLORIDA                          65-0452156
            (State or other jurisdiction              (IRS Employer
         of incorporation or organization)         Identification No.)

       4400 NORTH FEDERAL HIGHWAY, SUITE 210
                BOCA RATON, FLORIDA                       33431
      (Address of principal executive offices)         (Zip Code)

      Issuer's telephone number, including area code: (561) 391-6196

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

                   Name of each exchange on which registered:
                               OTC BULLETIN BOARD

         Securities registered under Section 12(g) of the Exchange Act:
                     COMMON STOCK, PAR VALUE $.001 PER SHARE
                                (Title of Class)

         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 registrant's knowledge, in definitive proxy or
information statements incorporated by reference to Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. |X|

         State issuer's revenues for its most recent fiscal year.  $6,342,587.61

         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 price 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 on March 22, 2005 was
$207,493.72 (computed at the closing price of the common stock of the issuer
outstanding which was $.07 on March 22, 2005).

Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes |X| No [ ]

         As of March 22, 2005, 4,552,813 shares of the registrant's Common Stock
were outstanding.

         Transitional Small Business Disclosure Format:    Yes [ ]    No |X|

                       DOCUMENTS INCORPORATED BY REFERENCE

         Portions of the registrant's proxy statement for its 2005 annual
shareholders' meeting are incorporated by reference in Part III of this report.
The registrant's proxy statement will be filed within 120 days after December
31, 2004 or the portions incorporated by reference will be filed by amendment to
this Form 10-KSB prior to the end of such 120 day period.

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                                TABLE OF CONTENTS
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PART I............................................................................................................1

ITEM 1.     DESCRIPTION OF BUSINESS...............................................................................1

ITEM 2.     DESCRIPTION OF PROPERTY..............................................................................10

ITEM 3.     LEGAL PROCEEDINGS....................................................................................10

ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..................................................10

PART II..........................................................................................................10

ITEM 5.     MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER
            PURCHASES OF EQUITY SECURITIES...................................................................... 10

ITEM 6.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION............................................12

ITEM 7.     FINANCIAL STATEMENTS.................................................................................21

ITEM 8.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.................22

ITEM 8A.    CONTROLS AND PROCEDURES..............................................................................22

PART III.........................................................................................................22

ITEM 9.     DIRECTORS AND EXECUTIVE OFFICERS.....................................................................22

ITEM 10.    EXECUTIVE COMPENSATION...............................................................................23

ITEM 11.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.......23

ITEM 12.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.......................................................23

ITEM 13.    EXHIBITS AND REPORTS ON FORM 8-K.....................................................................23

ITEM 14.    PRINCIPAL ACCOUNTANT FEES AND SERVICES...............................................................26
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                FORWARD-LOOKING INFORMATION MAY PROVE INACCURATE

         This annual report on Form 10-KSB contains forward-looking statements.
These forward looking statements concern our operations, economic performance,
and financial condition, including but not limited to, the information under the
caption "Management's Discussion and Analysis or Plan of Operation." These
statements are based on management's beliefs as well as assumptions made by and
information currently available to management, including statements regarding
future economic performance and financial condition, liquidity and capital
resources, and management's plans and objectives. Any statements that are not
statements of historical fact should be regarded as forward-looking statements.
For example, the words "intends," "believes," "anticipates," "plans," and
"expects" are intended to identify forward-looking statements. There are a
number of important factors that could cause our actual results to differ
materially from those indicated by such forward-looking statements. These
factors include, without limitation, those factors described under "Certain
Factors Which May Affect Future Results" in this annual report. These factors,
among others, could cause our actual results to differ materially from those
indicated by such forward-looking statements.


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                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

GENERAL

         Ashlin Development Corporation (the "Company," "Ashlin," "we" or "us"),
formerly known as Health and Nutrition Systems International, Inc., was
organized as a Florida corporation on October 25, 1993. Our fiscal year end is
December 31.

         Our corporate offices are located at 4400 North Federal Highway, Suite
210, Boca Raton, Florida 33431. Our phone number is (561) 391-6196. Until
January 25, 2005, our offices were located at 3750 Investment Lane, Suite 5,
West Palm Beach, Florida 33401.

         On October 15, 2004, the Company filed in the southern district of
Florida a plan of reorganization under Chapter 11 of the United States
bankruptcy code. The Court confirmed the Company's plan of reorganization on
January 10, 2005 and the plan was declared effective on January 28, 2005.

         As part of the plan:

         (1) TeeZee, Inc., a company formed by our former Chief Executive
Officer, Christopher Tisi, purchased substantially all of the assets of the
Company, including the rights to the name "Health & Nutrition Systems
International, Inc." in exchange for $350,000 in cash and assumption of
approximately $1,841,000 in liabilities. Although allowed for under the plan no
other bids were submitted.

         (2) The Company entered into an employment agreement with Mr. Brown,
which provides for:

         o    Salary of $9,200 per month until the 30th calendar day
              following the Company's discharge from bankruptcy, and
              thereafter at a rate of $7,000 per month; and

         o    The issuance by the Company to Mr. Brown of 300,000 shares of
              its Common Stock, which are shares subject to repurchase by
              the Company in the event Mr. Brown terminates his employment
              with the Company for any reason at any time prior to the first
              anniversary of the agreement, or his employment with the
              Company is terminated by the Company for cause;

         (3) TeeZee, Inc. assumed the secured claim of Garden State Nutritionals
(GSN), a division of Vitaquest International, Inc.; GSN retained its
pre-existing lien on substantially all of the transferred assets;

         (4) TeeZee, Inc. assumed the secured claim of SunTrust Bank on the
Company's 2004 Honda Element on the effective date; SunTrust retained its
pre-existing lien on the vehicle;

         (5) TeeZee, Inc. assumed most unsecured claims, including those of
trade and employee creditors, together with any unsecured deficiency claims of
GSN and SunTrust. The unassumed unsecured claims of the Company were paid, pro
rata, from a fund which did not exceed $50,000;

         (6) A permanent injunction was issued barring the Company and the
purchaser from violating Window Rock Enterprises, Inc.'s trademarks for
"CortiSlim" and the Company agreed not to challenge Window Rock's trademark for
this product; and

         (7) All holders of the Company's common stock retained their shares.

         Since the effective date, the Company has continued to exist as a
separate incorporated entity. The present directors of the Company have
continued as directors of the Company, and Mr. Brown has continued to serve as
CEO and Chairman of the Board of Directors. He is the sole officer of the
Company.

         The current business plan of the Company is to merge with an
unidentified company or companies.

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<PAGE>

         From inception through the effective date of our Plan of
Reorganization, we developed, marketed and sold weight management, energy and
sport nutrition products to national and regional, food, drug, health, pharmacy,
mass-market accounts, and independent health and pharmacy accounts. Our product
formulations were not proprietary.

         The filing for protection under the bankruptcy code culminated a
lengthy effort by management and the Board of Directors to identify
opportunities by which shareholder value would be increased. These efforts
formally commenced in July of 2003, when the Board of Directors resolved to
consider strategic alternatives to either enhance or replace our nutraceutical
business. Alternatives included the possibility of acquiring additional
businesses for stock, or the sale of the Company (or substantially all of its
assets), including the possibility of a sale to Mr. Tisi or an entity controlled
by him.

         In connection with its determination to enhance shareholder value, we
entered into an agreement in November 2003 with TeeZee, Inc. to sell
substantially all of our assets, subject to approval by our shareholders, for
$425,000 in cash and notes and the assumption of substantially all of our
liabilities. As previously indicated, TeeZee, Inc. is controlled by Christopher
Tisi, who at that time served as our Chief Executive Officer. Prior to entering
into the definitive agreement, the Board of Directors reviewed strategic
alternatives, weighed them against the offer from TeeZee, Inc. and determined
that, at that time, the proposed sale was in the best interests of our
shareholders. The Board also hired an investment advisory firm, Capitalink, to
render an opinion as to the fairness of the transaction, from a financial point
of view. In February 2004, we restated our earnings for the third quarter of
2003, which lowered our reported earnings for the period. Capitalink thereafter
rescinded its fairness opinion, which was based in part on the third quarter
results. As a result, we terminated the agreement with TeeZee, Inc.

         The Board determined that Mr. Tisi's ongoing contributions were
essential to the future viability of the Company. On April 9, 2004, Mr. Tisi,
the Company's Chief Executive Officer and President, entered into a new two-year
employment contract effective as of January 1, 2004. The contract increased his
salary to $164,000 annually and provided for a bonus for improvements in both
net revenues and net income. With respect to the unpaid portion of Mr. Tisi's
unpaid 2003 bonus, the contract provided for the payment of the unpaid portion
of his 2003 bonus ($162,271) and the incremental increase in his annual salary
in 12 equal monthly installments beginning April 1, 2004.

         Additionally, our Chairman, Mr. James Brown, assumed greater
operational responsibility in the first quarter of 2004, and continued the focus
on exploring strategic options for the Company. As a result, Mr. Brown's entered
into a six-month agreement with the Company for compensation of $8,000 per
month.

         In 2004, the Company sought to capitalize on two factors, its
relationship with retailers and the apparent strength of consumer demand for low
carbohydrate products. The fourth quarter of 2003 was the Company's strongest
ever, and we sought to expand awareness for our products. The sales trend began
to deteriorate during the second quarter of 2004, a decline that continued
through the sale of the business in January of 2005. As a result, we believe
that retailers who previously sought to expand their low carbohydrate and diet
offerings decided to retrench, and this trend gained momentum in late 2004.

         Particularly as a result of the following three factors, the financial
condition of the Company deteriorated as 2004 progressed, and the Board
determined during the third quarter that cash flow from operations could not
support the business as the projections for future sales activity weakened:

         o   Several retailers notified us, beginning in the first quarter
             2004, that they would discontinue one of our core brands, Eat
             Less(R), and would return unsold inventory. In the ensuing 90
             days, we were forced to reserve $554,000. This negativelY
             impacted our receivables.

         o   Contrary to prognostications by many industry experts, the low
             carbohydrate phenomenon begin to wane in early 2004, and by
             late second quarter, the pace of the shift in consumer tastes
             was quickening. Demand for the entire category of low
             carbohydrate supplements dropped materially. Sales of our
             products fell 3.2% in 2004.

         o   Our cost structure further deteriorated for two reasons;
             first, we increased personnel and our marketing budget in an
             attempt to perpetuate the sales growth that we enjoyed in the
             fourth quarter of 2003, and; second, other G&A costs,
             predominately professional fees, increased significantly.

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         The Company had, in the past, sought enhanced credit terms from our
sole manufacturer, GSN, when other financing was unavailable. In the third
quarter projected lower sales and the weakness in our balance sheet precluded
GSN from relaxing our terms or broadening our credit line.

         The Board of Directors determined that the most attractive option for
the Company was to file for Chapter 11 bankruptcy protection, and then
approached Mr. Tisi to determine if he would be interested in serving as our
Stalking Horse Bidder, who, in Chapter 11 filings, serves the function of
placing a bid that others may use as a benchmark in bidding for assets of the
debtor.

         On September 26, 2004, in conjunction with his decision to weigh a
possible offer, Mr. Tisi stepped down as CEO and resigned all executive
capacities with the Company. Mr. James Brown, our Chairman, assumed the role of
Chief Executive Officer.

PRODUCTS

         We no longer offer any products for sale. The products that we formerly
marketed are now owned by TeeZee, Inc., who acquired substantially all of our
assets. Prior to the sale of our business in January 2005, we marketed and sold
the following products:

         o        Thin Tab(R) Mahuang Free -- Thin Tab(R) Mahuang Free helps
                  stimulate the metabolism without ephedra and helps break
                  through weight loss "plateaus." Introduced in the fourth
                  quarter of 1999.

         o        Original Carb Cutter(R) -- The Original Carb Cutter(R), is a
                  supplement formulated to support the controlled carbohydrate
                  lifestyle. It contains natural substances that can help to
                  accelerate the body's natural ability to metabolize excess
                  glucose from refined carbohydrates and sugars so they are
                  burned as energy - not stored as fat. Introduced in the fourth
                  quarter of 1999.

         o        Eat Less(R) -- Low carbohydrate diets are one of the most
                  effective ways to lose weight. However, they often lack fiber,
                  which can slow weight loss. Eat Less(R) is helpful for low
                  carbohydrate diets by reducing caloric intake, and
                  supplemental fiber, while still successfully maintaining a low
                  carbohydrate diet. Introduced in the fourth quarter of 2002.

         o        Carb Cutter(R) Phase 2 -- Carb Cutter(R) "Phase 2" may be used
                  as an adjunct to the Original Carb Cutter(R). It contains a
                  natural substance - "Phaseolamin 2250" that can help to
                  neutralize excess starch from complex carbohydrates by binding
                  with a key enzyme - alpha-amylase - without affecting
                  nutrients and fiber in foods. Introduced in the third quarter
                  of 2002.

         o        Fat Cutter(TM) Ephedra Free - Excess fats are a concern for
                  low carbohydrate dieters. Fat Cutter targets the absorption of
                  excess fats, allowing some of the fats to pass through
                  undigested. Fat Cutter also provides quality minerals such as
                  calcium which are often lacking in low carbohydrate dieters
                  because of increased protein intake. Introduced in the first
                  quarter of 2003.

         o        Zoom(R) -- Zoom(R) is a carbohydrate free, calorie free, sugar
                  free alternative to popular energy drinks and contains a blend
                  of natural herbs. It is enhanced with nutrients found
                  naturally in the body and everyday foods. It contains Taurine,
                  which is an important metabolic transmitter. Taurine increases
                  the heart function, improves energy boost. Zoom(R) also
                  includes natural caffeine and a triple ginseng blend all of
                  which play an important role. These ingredients go into the
                  blood and nervous system within ten minutes resulting in an
                  energy boost. Introduced in the fourth quarter of 2003.

         o        Diet A Day(TM) "Phase 2" -- Diet A Day "Phase 2" contains
                  "Phaseolamin 2250" which helps neutralize excess starch from
                  complex carbohydrates by binding with a key enzyme -
                  alpha-amylase -without affecting nutrients and fiber in foods.
                  It also contains natural ingredients to support healthy blood
                  sugar levels following high starch meals. Introduced in the
                  fourth quarter of 2003.

         On March 15, 2003, we stopped selling products that contain ephedra
because of negative publicity surrounding the ingredient, including, the Food
and Drug Administration's announcement that it was considering a ban on the

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ingredient. In December 2003 the FDA announced that it was banning the use of
ephedra. Prior to March 15, 2003, we sold ThinTab(R), Fat Cutter Plus(R), and
Carbolizer(TM), all of which contained ephedra. In 2003, sales of ThinTab(R) and
Fat Cutter Plus(R) totaled $61,843.

         Our third ephedra-containing product, Carbolizer(TM), was transferred
to KMS-Thin Tab 100, Inc. in September 2002 as part of a larger general
settlement of pending litigation with KMS and J.C. Herbert Bryant, III.

CERTIFICATES OF ANALYSIS

         Garden State Nutritional, a division of Vitaquest International Inc.,
was the exclusive manufacturer of our products. See "Manufacturing and
Shipping." GSN provided a certificate of analysis for each of our products which
gave laboratory test results performed by GSN that verified product quality and
ingredients. We delivered these certificates to our customers, and to consumers,
upon request.

CLINICAL TESTING

         No regulatory agency specifically requires that a marketer of dietary
supplements perform clinical testing. However, the claims that are made with
respect to our products' performance are subject to review by various state and
local authorities, including, the Federal Trade Commission. As a result, in
2001, we initiated a practice of performing independent clinical trials on our
principal products. These trials were intended to substantiate that our products
work as described in our advertising, labeling, or other consumer-directed
communications. These double blind placebo trials were conducted by
Marshall-Blum LLC, an independent research company with twenty years of
experience in product testing. Marshall-Blum followed strict clinical guidelines
to assist with product compliance with applicable regulations and scientific
standards. The FDA recently began to require that products like ours receive an
Investigational New Drug number before clinical testing can be conducted.

         Clinical testing is costly, over $120,000 per study, and we believe
that it was going to become even more important and expensive over time. The
Company, at the time of our filing, could not afford to continue to test new
products. This would have limited our ability to expand our product line.

MARKETING

         In 2004 and 2003, we spent $2,121,575 and $1,428,838, respectively,
advertising our products in consumer magazines such as Cosmopolitan,
Mademoiselle, Glamour, Fitness, Redbook, Allure, Muscle and Fitness, and others.
Historically, we felt that this was the preferred method, given our resources,
to reach potential consumers for our products.

         We report our net revenue after subtracting

         o   co-op advertising and promotions given to the customers to
             promote the product and improve sales;

         o   cash discounts;

         o   slotting fees and new store discounts; and

         o   returns and allowances.

         In 2004 those expenses rose to $1,915,370, a 1.8% increase over
$1,882,460 in 2003.

         We had ongoing "co-op" programs with most of the major retailers who
sell our products. These programs required us to spend a certain percentage of
projected revenue generated by our customers' sales of our products on targeted
advertising for that retailer through marketing vehicles such as Sunday
newspaper inserts and promotional "10-30" day price specials. We were obligated
to spend these co-op dollars irrespective of the actual revenue generated by the
sales of our products with that retailer. These co-op programs targeted several
million consumers and are intended to drive sales to the specific retailer.

         In connection with our marketing efforts, we sometimes offered, or were
required to grant, cash discounts, new store discounts and pay slotting fees for
inclusion of our products in the customer's "Plan-O-Gram." We also sometimes
gave allowances based on factors such as volume.

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         All of our products were included in the "plan-o-gram" marketing
programs of the major retailers who sold our products. These programs gave our
products identical shelf and aisle positions in all locations in a particular
chain of stores using a pre-planned, in-store display format. The plan-o-gram
program serves to guarantee consistent distribution and location of products in
all stores. The major retailers periodically review the products that
participate in their plan-o-gram programs, sometimes as often as quarterly. We
received negative feedback from several retailers in the third and fourth
quarter of 2004 that, due to the negative trend of low carbohydrate and diet
supplements, they were evaluating retrenchment of product offerings, and we may
be affected. If one or more of our products were to be removed from a retailer's
plan-o-gram program, sales volume would decline precipitously. This occurred in
second quarter 2004 when one of our products was discontinued at several chains.

MANUFACTURING AND SHIPPING

         Garden State Nutritional, a division of Vitaquest International Inc.,
manufactured all of our products. GSN is a state-of-the-art supplement, liquid,
and powder manufacturer, which owns a 200,000 square foot manufacturing facility
in West Caldwell, New Jersey. GSN has been known as an industry leader for more
than 25 years. GSN had the capacity to support the production of all of our
product needs, and could have continued if we had chosen to stay in the
business. During 2001, we did not have a term contract with GSN, but acquired
our needed inventory on a purchase order basis. In early April 2002, we entered
into a two year exclusive manufacturing contract with GSN under which we agreed
to purchase all of our requirements from GSN. Although back-up suppliers were
available, the loss of this supplier would have represented a material adverse
affect on us. GSN's research and development personnel, in conjunction with our
in-house team, developed our product formulations. Pursuant to the terms of our
exclusive manufacturing agreement with GSN, we had a $450,000 line of credit
with GSN that had 60 day terms, and GSN informally allowed the Company to exceed
that limit by as much as $700,000 during 2004. At December 31, 2004, the balance
owed to GSN under this line of credit was $1,133,443.

         Our production/assembly personnel were responsible for packaging
products once they were received from GSN. Our production/assembly personnel
completed shipping documents and supervised quality control and inventory flow.
Orders from large retailers were shipped on pallets using the preferred freight
company of the retailer's choice.

INTELLECTUAL PROPERTY

         The Company pursued registration of all of the trademarks associated
with our key products. Prior to their sale, we owned trademarks registered with
the United States Patent and Trademark Office for Carb Cutter(R) products, the
"On the Move(R)" advertising slogan, and for several of our advertising phrases
such as "I cheat(R)," and "we cheat(R)." Federally registered trademarks have a
perpetual life, provided that they are renewed on a timely basis and are used
properly as trademarks, subject to certain rights of third parties to seek
cancellation of the marks.

         We also relied on common law trademark rights to protect our
unregistered trademarks. Common law trademark rights did not provide us with the
same level of protection as afforded by a United States federal registration of
a trademark. In addition, common law trademark rights are limited to the
geographic area in which the trademark is actually used.

         All of the intellectual property belonging to the Company was included
in the sale of substantially all of our assets effective January 28, 2005.

EMPLOYEES

         As of March 22, 2005, the Company has one employee, Mr. Brown, our
Chairman, Chief Executive Officer and Secretary.

         As of December 31, 2004, the Company had 19 full-time employees, five
of whom had managerial roles.

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PRODUCT DISTRIBUTION

GENERAL

         Our customers were predominantly drug, health food, and mass retailers
who then sold our products to the retail consumer. Approximately 98% of our
customers do not have contracts and purchase our products on a purchase order
basis. The remainder purchase without credit terms on a direct basis.

DRUG, HEALTH FOOD AND MASS RETAILERS

         During 2004, we continued to diversify our customer base by
establishing one or more of our products in more than eighteen different drug,
health food, and mass retailers. Each of our products achieved "full
distribution" in each of the chains that sell it, which means that if one of our
products is sold by a retailer, it is sold in every location operated by that
retailer. Because our customers purchase our products on a purchase order basis,
we had no assurance that our products would have continued to have "full
distribution" (or any distribution) had we stayed in the business. A weakening
of consumer demand for diet and energy supplements will cause retailers to
condense shelf space dedicated to these products.

         In 2004, we derived approximately 92% of our net revenues from these
customers: Wal-Mart (2,048 locations), Walgreens (3,520 locations), Rite Aid
(3,631 locations), CVS (4,123 locations), Brooks (Maxi Drug) (330 locations),
Vitamin World (600 locations), H. E. Butt Grocery Co. (280 locations), Wakefern
(200 locations), Sav-On (1,300 locations), Giant Landover (180 locations), Giant
Eagle (188 locations), Eckerd's (2,650 locations), GNC (4,000 locations),
Albertsons (2,128 locations), Duane Reade (193 locations), Long's (430
locations), K-Mart (1,100 locations) and Vitamin Shoppe (78 locations).

INDEPENDENT RETAIL HEALTH AND PHARMACY STORES

         Our in-house staff of telemarketers (HNS Direct) has solicited
independent retail health and pharmacy stores since we began this program in
January 1999. These stores are not owned by a chain but are independently owned
and operated. We participated in trade shows attended by buyers for these
independent retail health and pharmacy stores. In 2004, $198,278 (or 3.1%) of
net revenues came from independent health and pharmacy accounts. In 2003,
$156,567 (or 2.4%) of net revenues came from independent health and pharmacy
accounts.

SIGNIFICANT CUSTOMERS

         The Company was highly dependent on several significant customers for a
large percentage of our sales. Our six largest customers were GNC, Wal-Mart,
Walgreens, Rite Aid, CVS and Eckerd Drugs. We did not have written agreements
with any of these customers. Those six customers, combined, accounted for over
80% of our net revenues in 2004. In 2003, these same six customers accounted for
84% of our net revenues.

GOVERNMENT REGULATIONS

         The processing, formulation, packaging, labeling, and advertising of
our products were subject to regulation by one or more federal agencies,
including the Food and Drug Administration ("FDA"), the Federal Trade Commission
("FTC"), the Consumer Product Safety Commission, the United States Department of
Agriculture and the United States Environmental Protection Agency. These
activities were also regulated by various agencies of the states, localities,
and countries in which its products are sold. In addition, we manufactured and
marketed certain of our products in substantial compliance with the guidelines
promulgated by the United States Pharmacopoeia Convention, Inc. ("USP") and
other voluntary standard organizations.

         The Dietary Supplemental Health and Education Act ("DSHEA") recognizes
the importance of good nutrition and the availability of safe dietary
supplements in preventive health care. DSHEA amends the Federal Food, Drug and
Cosmetic Act ("FFD&CA") by defining dietary supplements, which include vitamins,
minerals, nutritional supplements and herbs, as a new category of food, separate
from conventional food. Under DSHEA, the FDA is generally prohibited from
regulating such dietary supplements as food additives or drugs. It requires the
FDA to regulate dietary supplements so as to guarantee consumer access to
beneficial dietary supplements, allowing truthful and proven claims. Generally,
dietary ingredients that were on the market before October 15, 1994 may be sold
without FDA pre-approval and without notifying the FDA. However, new dietary
ingredients (those not used in dietary supplements marketed before October 15,
1994) require pre-market submission to the FDA of evidence of a history of their
safe use, or other evidence establishing that they are reasonably expected to be
safe. There can be no assurance that the FDA will accept the evidence of safety
for any new dietary ingredient that we may decide to use, and the FDA's refusal
to accept such evidence could result in regulation of such dietary ingredients
as food additives, requiring the FDA pre-approval based on newly conducted and
costly safety testing. Also, while DSHEA authorizes the use of statements of
nutritional support in the labeling of dietary supplements, the FDA is required

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to be notified of such statements, and there can be no assurance that the FDA
will not consider particular labeling statements we use to be drug claims rather
than acceptable statements of nutritional support, necessitating approval of a
costly new drug application, or re-labeling to delete such statements. It is
also possible that FDA could allege false statements were submitted to it if
structure/function claim notifications was either non-existent or so lacking in
scientific support as to be plainly false.

         FFD&CA also authorizes the FDA to promulgate good manufacturing
practice regulations ("GMP") for dietary supplements, which would require
special quality controls for the manufacture, packaging, storage, and
distribution of supplements. Although the final version of the GMP rules has not
yet been issued, we anticipate we will be in substantial compliance with the
proposed regulations once they are enacted. FFD&CA further authorizes the FDA to
promulgate regulations governing the labeling of dietary supplements. Such
rules, which were issued on September 23, 1997, entail specific requirements
relative to the labeling of our dietary supplements. The rules, which took
effect in March 1999, also require additional record keeping and claim
substantiation, reformulation, or discontinuance of certain products. We believe
we are in substantial compliance with these new requirements.

         All of our products that we offered are classified as dietary
supplements under the FFD&CA. In September 1997, the FDA issued regulations
governing the labeling and marketing of dietary supplement products. These
regulations cover:

         o   the identification of dietary supplements and their nutrition
             and ingredient labeling;

         o   the wording used for claims about nutrients, health claims and
             statements of nutritional support;

         o   labeling requirements for dietary supplements for which "high
             potency" and "anti-oxidant" claims are made;

         o   notification procedures for statements on dietary supplements;
             and

         o   pre-market notification procedures for new dietary ingredients
             in dietary supplements.

         The notification procedures became effective in October 1997. The
labeling requirements became effective on March 23, 1999. Where required, we
revised our product labels as necessary to reflect the requirements. We believe
we substantially comply with these requirements. In addition, we are required to
continue our ongoing program of providing evidence for our product performance
claims, and notify the FDA of certain types of performance claims made for our
products. Our substantiation program involves ongoing compilation and review of
scientific literature pertinent to the ingredients contained in our products and
the claims we make about them.

         In certain markets, including the United States, claims made with
respect to dietary supplements, personal care or any of our other products may
change the regulatory status of our products. For example, in the United States,
the FDA could possibly take the position that claims made for some of our
products make those products new drugs requiring preliminary approval. The FDA
could also place those products within the scope of its a Food and Drug
Administration over-the-counter (OTC) drug regulations and require it to comply
with a published FDA OTC monograph. OTC monographs dictate permissible
ingredients, appropriate labeling language, and require the marketer or supplier
of the products to register and file annual drug listing information with the
Food and Drug Administration. We do not at present sell OTC drug products. If
the FDA were to assert that our product claims cause them to be considered new
drugs or fall within the scope of over-the-counter regulations, we would be
required to either file a new drug application, comply with the applicable
monographs, or change the claims made in connection with our products.

         The FDA has recently required that products like ours secure an
Investigational New Drug number prior to being eligible for human clinical
trials. This will make such trials significantly more expensive and may subject
the Company to additional regulation.

         Additionally, dietary supplements are subject to the Nutrition,
Labeling and Education Act (NLEA), which regulates health claims, ingredient
labeling and nutrient content claims characterizing the level of a nutrient in a

                                       7
<PAGE>

product. NLEA prohibits the use of any health claim for dietary supplements
unless the health claim is supported by significant scientific agreement and is
pre-approved by the FDA.

         The FTC regulates the marketing practices and advertising of the
products that we sold. In the past several years, the FTC instituted enforcement
actions against several dietary supplement companies for false and misleading
marketing practices and advertising of certain products. These enforcement
actions have resulted in consent decrees and monetary payments by the companies
involved. Under FTC standards, the dissemination of any false advertising
constitutes an unfair or deceptive act or practice actionable under Section 45
of the Fair Trade Commission Act and a false advertisement actionable under
Section 52 of that act. A false advertisement is one that is "misleading in a
material respect." In determining whether an advertisement or labeling
information is misleading in a material respect, FTC determines not only whether
overt representations and implied representations are false, but also whether
the advertisement fails to reveal material facts. Under FTC's standard, any
health benefit representation made in advertising must be backed by "competent
and reliable scientific evidence" by which FTC means:

         tests, analyses, research studies, or other evidence based upon the
         expertise of professionals in the relevant area, that have been
         conducted and evaluated in an objective manner by persons qualified to
         do so, using procedures generally accepted by the profession to yield
         accurate and reliable results.

         The FTC increased its review of the use of the type of testimonials we
used in our business. The Federal Trade Commission requires competent and
reliable evidence substantiating claims and testimonials at the time that such
claims of health benefit are first made. The failure to have this evidence when
product claims are first made violates the Federal Trade Commission Act.
Although the FTC never threatened us with an enforcement action for the
advertising of our products, heightened scrutiny of low carbohydrate claims
raised our concern with respect to regulatory intervention, which we feared
would be costly.

         We could not predict what new legislation or regulations governing our
activities would be enacted by legislative bodies or promulgated by agencies
regulating our activities - but we viewed it as potential damaging to our
business. We do know that the nutraceutical industry has come under increased
scrutiny, principally because of the FDA's investigation of the use of ephedra.
In February, 2004, FDA published a final rule, effective in April 2004,
prohibiting the sale of dietary supplements that contain ephedrine alkaloids
(ephedra). The FDA took that action based on its determination that such
supplements present an "unreasonable risk of illness or injury." We stopped
selling products containing ephedra in March 2003.

         Moreover, the FDA is expected to increase its enforcement activity
against dietary supplements that the agency considers violative of FFD&CA. In
particular, the FDA is increasing its enforcement of DSHEA provisions. Those
enforcement activities were enhanced by the passage, in January, 2004, of the
Agriculture Appropriations, FY 2004 (Public Law: 108-199), which appropriated to
the FDA an additional $11,400,000 for enforcement of dietary supplement
regulations. That appropriation was over and above the increased enforcement
budget FDA received for fiscal year 2004.

         We were concerned that we would become subject to additional laws or
regulations administered by the FDA or other federal, state, or foreign
regulatory authorities. We also believed that the laws or regulations which we
consider favorable may be repealed, or more stringent interpretations of current
laws or regulations could be implemented in the future. The FDA may restrict or
prohibit the sale and marketing of additional dietary supplement ingredients.
Any or all of such requirements could have been a costly burden. Had we stayed
in the nutraceutical business, future regulations could:

         o   have required us to change the way we conduct business;

         o   have required us to change the contents of our products;

         o   have made us keep additional records;

         o   have made us increase the available documentation of the
             properties of our products; or

                                       8
<PAGE>

         o   have made us increase or use different labeling and scientific
             proof of product ingredients, safety or usefulness.

COMPETITION

         The diet industry is highly competitive. In 2004, we competed directly
with many companies, including Atkins Nutritional, Twinlabs, Metabolife
International, Inc, Dexatrim, Natures Bounty (NBTY) Slim Fast, and many others,
virtually all of whom had far greater resources than we did. We also competed
indirectly with companies that use direct marketing to distribute diet products
directly to the retail consumer without the use of an intermediary such as a
mass retailer. These companies use television and radio advertising which can
range from thirty second commercials to full length thirty minute infomercials.
Many of these companies also attempt to bring their best selling brands to the
retail market. When they do, the products compete directly with our products.

         Our product formulae were not proprietary. Similar formulations are
currently being developed and marketed by our competitors. Substantially all of
our competitors have greater resources and name recognition than we do. Many of
our competitors sell, in addition to diet products, a broad range of health and
nutrition products. In addition, many of our competitors sell to the same
customers as we do. In addition, GSN, our sole manufacturer, sold, and continues
to sell, similar products to our competitors, often with similar formulations.
We strive to differentiate our products through the mixture of ingredients in
our products and the amounts of such ingredients contained in our products. We
trademarked our proprietary brand names such as, the "Carb Free Blend(TM)" in
Carb Cutter(R) See "Intellectual Property." We believed that this allows us to
maintain consumer loyalty to our brand rather than to a specific ingredient or
combination of ingredients. We also endeavored to differentiate our products by
providing distinctive packaging.

         The most significant barrier to entry within our industry is the
difficulty of establishing a new product. This involves a significant capital
commitment to advertise the product, participate in trade shows, build
inventory, and pay the cost of entry with slotting fees and or free merchandise.
Test marketing also requires a significant commitment of time and capital. These
barriers effect us as well as our competition. Many of our competitors are
significantly better capitalized and have significantly more human resources
than us.

FINANCING

GSN FINANCING

         In early April 2002, we entered into an agreement with GSN, our sole
manufacturer, pursuant to which we agreed to repay to GSN amounts owed to them
as of the date of the agreement. The amount was approximately $700,000. Our
repayment schedule requires equal monthly payments over the next twenty four
months, without interest. In connection with this agreement, we granted a
blanket second priority lien on our assets to GSN.

         This agreement was superseded by a new arrangement entered into in July
2003 when the Company issued an amended promissory note to Garden State
Nutrition in the principal amount of $1,300,000.

         The note provided for $300,000 to be paid before December 31, 2003, an
obligation we met by using the proceeds from the sale of the Acutrim(R) brand in
August 2003. We agreed to pay the balance in quarterly installments of $131,410,
commencing November 1, 2003, at 4.5% per annum. At December 31, 2004, the
balance owed to GSN under the note was $263,985.

         In early April 2002, we entered into an exclusive manufacturing
agreement with GSN that provided us with a $450,000 line of credit on current
invoices, with 60 day terms. In 2004, GSN allowed us to exceed our terms by as
much as $700,000. Under our line of credit, the balance owed on December 31,
2004 was $1,133,443. At December 31, 2003, the balance owed was $502,424.

         While GSN periodically allowed us to exceed our line of credit terms in
the past, they had, in 2004, expressed a heightened concern with respect to the
rise in the outstanding balance coupled with our decelerating sales performance.
The Board of Directors became increasingly concerned that GSN would no longer
continue to allow our outstanding balance to grow. If that happened, the Board
believed that we would not have adequate working capital to respond to demand by
our customers, or new opportunities that were presented to us. We believe that

                                       9
<PAGE>

the terms of the GSN financing were significantly better than those which any
other source of financing would have provided, and, given our deteriorating
fiscal picture, believed we had no acceptable alternatives as it related to
accessing additional working capital.

PRODUCTS LIABILITY INSURANCE

         We are currently insured for products liability claims up to an
aggregate of $5,000,000.

         We are also an additional named insured on GSN's products liability
policy, which has an aggregate coverage of up to $2,000,000.

         Through March 2004, our product liability insurance was written on an
occurrence basis; i.e., our coverage related to the period when an incident
giving rise to a claim occurred, irrespective of whether that particular policy
was in force when the claim was made. As of March 2004, our product liability
insurance is on a "claims made" basis that means our coverage only becomes
effective if the policy itself is in effect when an action, or notice of an
action, is lodged with the carrier.

ITEM 2.  DESCRIPTION OF PROPERTY

         Our corporate office are now located at 4400 North Federal Highway,
Suite 210, Boca Raton, Florida 33431. Our lease for this facility expires on
March 31, 2006, and provides for a monthly rent of approximately $950.

         Prior to our reorganization, our corporate offices and finished product
warehouse were located in a 17,033 square foot facility at 3750 Investment Lane,
Building 5, West Palm Beach, Florida, 33404. Those leases, which were assigned
to TeeZee, Inc. expire on October 31, 2006 and provide for lease payments of
approximately $4,400 per month.

ITEM 3.  LEGAL PROCEEDINGS

         All of the litigation pending against the Company at the time of the
reorganization was discharged on the effective date of our plan of
reorganization, and we are not aware of any present claims against the company.

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

         During the fourth quarter of 2004, we did not submit any matters to the
vote of our security holders.

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL
         BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES


         The common stock of the Company trades on the OTC Bulletin Board under
the trading symbol "ASHD." Prior to our reorganization, our symbol was HNNS. The
prices set forth below reflect the quarterly high and low bid information for
shares of our common stock during the last two fiscal years as reported by CSI,
Inc. These quotations reflect inter-dealer prices, without retail markup,
markdown or commission, and may not represent actual transactions.

         There were no trades of our securities on the OTCBB prior to October 4,
2000.

                                       10
<PAGE>


                         2004 Quarter Ended          High           Low
                         ------------------          ----           ---
              December 31, 2004                     $0.07         $0.01
              September 30, 2004                     0.25          0.06
              June 30, 2004                          0.75          0.18
              March 31, 2004                         0.68          0.13

                         2003 Quarter Ended          High           Low
                         ------------------          ----           ---
              December 31, 2003                     $0.53         $0.11
              September 30, 2003                     0.60          0.07
              June 30, 2003                          0.10          0.04
              March 31, 2003                         0.05          0.04

         On December 31, 2004, there were approximately 76 holders of record of
our common stock.

         Our common stock is covered by an SEC rule that imposes additional
sales practice requirements on broker-dealers who sell such securities to
persons other than established customers and accredited investors, which are
generally institutions with assets in excess of $5,000,000, or individuals with
net worth in excess of $1,000,000 or annual income exceeding $200,000 or
$300,000 jointly with their spouse. For transactions covered by the rule, the
broker-dealer must make a special suitable determination for the purchaser and
transaction prior to the sale. Consequently, the rule may affect the ability of
broker-dealers to sell our securities, and also may affect the ability of
purchasers of our stock to sell their shares in the secondary market. It may
also cause fewer broker-dealers to be willing to make a market in our common
stock, and it may affect the level of news coverage we receive.

         Prior to June 29, 2000, we were not a reporting company and were not
required to file quarterly, annual, and other reports with the SEC.

         We have not declared or paid any cash dividends on our common stock
since our inception, and our Board of Directors currently intends to retain all
earnings for use in the business for the foreseeable future. Any future payment
of dividends will depend upon our results of operations, financial condition,
cash requirements, and other factors deemed relevant by our Board of Directors.

         The following table provides information as of December 31, 2004 about
our common stock that would have been issued upon the exercise of options under
our 1998 Stock Option Plan for employees, officers, directors, and independent
contractors. These obligations expired, unexercised, when the holders failed to
exercise their options.
<TABLE>
<CAPTION>

                                           EQUITY COMPENSATION PLAN INFORMATION
---------------------------------- ------------------------- ---------------------------- ----------------------------



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

Equity compensation plans
approved by security holders(1)            606,500                      $.43                        643,500
---------------------------------- ------------------------- ---------------------------- ----------------------------
Equity compensation plans not
approved by security holders(2)                                           --                         --                           --
---------------------------------- ------------------------- ---------------------------- ----------------------------
         Total(1)                          606,500                      $.43                        643,500
================================== ========================= ============================ ============================
</TABLE>

(1) All of the foregoing options, other than options exercisable for a total of
55,000 shares of our common stock which are vested in favor of Messrs. Alflen
and Pomerantz, terminated on January 28, 2005, the effective date of our
reorganization.

                                       11
<PAGE>

(2) We do not maintain equity compensation plans that have not been approved by
our stockholders.

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

FORWARD LOOKING STATEMENTS

         The following discussion of our results of operations and financial
condition refer, almost in their entirety, to the business that we sold in
January 2005. They should be read along with our Consolidated Financial
Statements listed in Item 8 and the Notes to them appearing elsewhere in this
Form 10-KSB.

CRITICAL ACCOUNTING POLICIES

         Financial Reporting Release No. 60, which was recently released by the
U.S. Securities and Exchange Commission, encourages all companies to include a
discussion of critical accounting policies or methods used in the preparation of
financial statements. Our financial statements include a summary of the
significant accounting policies and methods used in the preparation of our
financial statements.

         Management believes the following critical accounting policies affect
the significant judgments and estimates used in the preparation of the financial
statements.

REVENUE RECOGNITION

We recognize revenue when

         o   Persuasive evidence of an arrangement exists

         o   Shipment has occurred

         o   Price is fixed or determinable, and

         o   Collectability is reasonably assured

Subject to these criteria, except with respect to customers that buy our
products on "pay on scan terms," we recognize revenue at the time of shipment of
the relevant merchandise. "Pay on scan" sales are treated as consignment sales
by us. In the case of these consignment sales, we record revenues, and remove
the items from inventory when the customer reports the sales to us. Normally we
are notified of the customer's sales through periodic sales reports, payments or
when the customer reorders the relevant product.

         The Company inventory on consignment related to its "pay on scan" sales
at December 31 2004 and 2003 was $103,800 and $282,468.

         Included in the net sales in the accompanying financial statements for
the twelve months ended December 31, 2004 and 2003 are reductions for returns
and allowances, sales discounts, new store opening discounts and co-op
advertising and promotions in the amounts of $1,915,370 and $1,882,460 ,
respectively.

USE OF ESTIMATES

         Management's discussion and analysis of financial condition and results
of operations is based upon our financial statements, which have been prepared
in accordance with accounting principles generally accepted in the United States
of America. The preparation of these financial statements requires management to
make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues, and expenses, and related disclosure of contingent assets
and liabilities. On an ongoing basis, management evaluates these estimates,
including those related to valuation allowance for the deferred tax asset,
estimated useful life of fixed assets and the carrying value of long-lived
assets, intangible assets and allowances for sales returns, doubtful accounts,
and obsolete and slow moving inventory and reserve for customer liabilities.
Management bases these estimates on historical experience and on various other
assumptions that are believed to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying value of
assets and liabilities that are not readily apparent from other sources. Actual
results may differ from these estimates under different assumptions or
conditions.

                                       12
<PAGE>

CUSTOMER LIABILITY ESTIMATES

         The Company estimates and accrues expenses and liabilities for co-op
advertising and promotions and expenses for outdated products as a reduction of
sales. The liability is maintained until the customer takes the deduction
against payments due. This liability is netted against the accounts receivable
account on the balance sheet. The amount at December 31, 2004 was $1,067,127 and
December 31, 2003 was $863,301.

         We may incur a liability to a customer in three ways:

         o   We and the customer may agree that if the customer includes an
             advertisement for our products in the customer's advertising
             circulars, we will discount our products to the customer
             during the period of time surrounding the use of the
             circulars;

         o   Some of our customers have a policy that requires us to fund
             cooperative advertising and promotions in an amount equal to
             10% to 15% of the gross revenue generated within the year; and

         o   In some cases, if the dating of our product in inventory at
             the customer's location expires, the customer may seek a
             credit from us.

         We record the liability when we determine that the customer is taking
an action that will result in an expense to the Company in the future. For
example, when we agree to fund an advertising promotion in a given month, we
create a liability for that promotion. We also establish reserves for returns we
believe likely. Typically, these liabilities remain outstanding for three to six
months.

OVERVIEW

RECENT DEVELOPMENTS

         On October 15, 2004, the Company filed in the southern district of
Florida a plan of reorganization under Chapter 11 of the United States
bankruptcy code. This culminated a rather lengthy effort by management and the
Board of Directors to find alternatives to enhance shareholder value in the face
of deteriorating operating performance. The Court confirmed the Company's plan
of reorganization on January 10, 2005 and the plan was declared effective on
January 28, 2005.

         As part of the plan:

         (1) TeeZee, Inc., a company formed by our former Chief Executive
Officer, Christopher Tisi, purchased substantially all of the assets of the
Company, including the rights to the name "Health & Nutrition Systems
International, Inc." in exchange for $350,000 in cash and assumption of
approximately $1,841,000 in liabilities. Although allowed for under the plan no
other bids were submitted.

         (2) The Company entered into an employment agreement with Mr. Brown,
which provides for:

o            Salary of $9,200 per month until the 30th calendar day following
             the Company's discharge from bankruptcy, and thereafter at a rate
             of $7,000 per month; and

o            The issuance by the Company to Mr. Brown of 300,000 shares of its
             Common Stock, which are shares subject to repurchase by the
             Company in the event Mr. Brown terminates his employment with the
             Company for any reason at any time prior to the first anniversary
             of the agreement, or his employment with the Company is terminated
             by the Company for cause;

         (3) TeeZee, Inc. assumed the secured claim of Garden State Nutritionals
(GSN), a division of Vitaquest International, Inc.; GSN retained its
pre-existing lien on substantially all of the transferred assets;

         (4) TeeZee, Inc. assumed the secured claim of SunTrust Bank on the
Company's 2004 Honda Element on the effective date; SunTrust retained its
pre-existing lien on the vehicle;

                                       13
<PAGE>

         (5) TeeZee, Inc. assumed most unsecured claims, including those of
trade and employee creditors, together with any unsecured deficiency claims of
GSN and SunTrust. The unassumed unsecured claims of the Company were paid, pro
rata, from a fund which did not exceed $50,000;

         (6) A permanent injunction was issued barring the Company and the
purchaser from violating Window Rock Enterprises, Inc.'s trademarks for
"CortiSlim" and the Company agreed not to challenge Window Rock's trademark for
this product; and

         (7) All holders of the Company's common stock retained their shares.

         Since the effective date, the Company has continued to exist as a
separate incorporated entity. The present directors of the Company have
continued as directors of the Company, and Mr. Brown has continued to serve as
CEO and Chairman of the Board of Directors. He is the sole officer of the
Company.

         The current business plan of the Company is to merge with an
unidentified company or companies.

         From inception through the effective date of our Plan of
Reorganization, we developed, marketed and sold weight management, energy and
sport nutrition products to national and regional, food, drug, health, pharmacy,
mass-market accounts, and independent health and pharmacy accounts. Our product
formulations were not proprietary.

         TRENDS IN THE NUTRACEUTICAL INDUSTRY

         According to the Nutrition Business Journal, industry revenues reported
in year 2004 were down approximately 11.5% percent from those reported in year
2003. We believe that this trend will continue in the first half of 2005. This
is attributable, in part, to the downturn in demand for low carbohydrate diets.
In addition, our product formulae are not proprietary. Similar formulations are
currently being developed and marketed by our competitors. Substantially all of
our competitors had greater resources and name recognition than we do. Many of
our competitors sell, in addition to diet products, a broad range of health and
nutrition products. Many of them sell to the same customers as we do. In
addition to our existing competitors, we believed some of these potential
competitors would begin to market carbohydrate diet assisting products. In this
respect, the popularity of the low carbohydrate diets, although waning, may
encourage additional stronger competitors to compete with us. In addition, GSN,
our sole manufacturer, sells similar products to our competitors, often with
similar formulations.

         We endeavored to differentiate our products through the mixture of
ingredients in our products and the amounts of such ingredients contained in our
products. We also trademarked our proprietary brand names, such as, the "Carb
Free Blend" in Carb Cutter(R). We believed that this would help us to maintain
consumer loyalty to our brand rather than to a specific ingredient or
combination of ingredients. We also tried to differentiate our products by
providing distinctive packaging. None of our efforts in differentiating
ourselves, however, insured that existing or potential competitors could not
erode our market share.

         The most significant barrier to entry within our industry was the
difficulty of establishing a new product. This involves significant commitment
to advertise the product, participate in trade shows, build inventory, and pay
the cost of entry with slotting fees and or free merchandise. Test marketing
also requires a significant commitment of time and capital. Those factors effect
us as well as our competition. Many of our competitors were significantly better
capitalized and have significantly more human resources than we.

         REVENUE AND INCOME

         Net revenues for the twelve months-ended December 31, 2004, decreased
by $209,618 to $6,342,588, compared to net revenues of $6,552,206 in 2003. Net
Revenues for our two largest customers increased, however, by $1,098,000. The
reductions to gross revenue were $1,915,370 in 2004, an increase of $32,910 over
the $1,882,460 experienced in 2003.

         During the twelve months ended December 31, 2004, six companies
accounted for 80% of our net revenues compared to 84% in 2003. Two of our
largest customers accounted for 79% of the net revenue in 2004 compared to 60%

                                       14
<PAGE>

for our two largest customers in 2003. While we believed that our results were
better than many of our competitors with a decline in net revenues of 3%, the
fact that demand overall industry demand fell in 2004 was significant.
Additionally, the increased concentration of our business in fewer customers
made us more vulnerable to changes in their purchasing practices or, in some
cases, the customers' reluctance to do business with suppliers if those
suppliers represent too large a part of the supplier's total sales.

         For net income of the 12 months ended December 31, 2004, we had a net
loss of $1,214,519 compared to net income of $696,359, in 2003, a decrease of
$1,910,878. In 2003, approximately $275,000 of net income was a gain from the
sale of our Acutrim(R) product line.

         In 2004, our operating loss was $1,189,166 after expensing $21,881 of
incentive compensation for our CEO. In 2003, our operating income was $472,932,
after expensing $244,421 of incentive compensation for our CEO. This bonus is
based on a formula contained in his employment agreement dated January 1, 2002,
as follows:

         o   5% of the increase in net revenues for the period as measured
             against the corresponding period the year before, plus

         o   10% of Net Income for the period.

         In 2004, we were unable to increase our net revenues without increasing
administrative costs. The general and administrative expenses for year ended
December 31, 2004 were $2,620,491 or 41% of net revenues versus $2,113,918 or
32% of net revenues for the same period in 2003. As reported in 2003, we
projected that our administrative costs would increase in 2004.

         INSURANCE

         Insurance for the products that we sold has become significantly more
expensive. The policy that became effective in March 2004 carried a premium over
twenty times higher than for our prior policy, and because it is written on a
"claims made" rather than an "occurrence" basis; i.e., it did not provide us
with as much continuity of coverage as we historically have enjoyed. We
purchased $5,000,000 of coverage for 2004, as opposed to the $6,000,000 we had
in 2003. While we believed that the level of coverage was adequate to meet the
needs of our customers and provide us with appropriate risk protection, there
was no assurance that we would have been able to obtain coverage in the future
had we remained in the nutraceutical business. Further, we do not believe that
"occurrence" coverage will once again become available.

         INCREASED COSTS

         The increasing oversight costs resulting from Sarbanes-Oxley coupled
with changes we have made in response to the occurrences giving rise to the
earnings restatement for the third quarter of 2003 have led to the following.

         o   In 2004, our auditor, Daszkal Bolton, spent more time
             assisting us in connection with their quarterly reviews of our
             financial results. This included the examination of a wider
             area of accounts and obtaining greater exposure to operational
             activities and extraordinary events.

         o   The audit committee expanded their review and interaction with
             management.

         o   Our costs for legal and other professional services, including
             the retention of professionals to consult on areas related to
             Sarbanes-Oxley, rose significantly.

         ADEQUATE WORKING CAPITAL

         Our working capital situation decreased in 2004, and cash constraints
continued to limit our ability to grow. The loss or reduction in sales to any of
our key customers would have negatively impacted our working capital. Management
and the Board of Directors explored alternative sources of capital to fund
operations and support potential growth, but no financing sources superior to or
as good as that provided to us by our sole manufacturer, were identified. Lack

                                       15
<PAGE>

of adequate working capital was a prime contributor to the Company's filing for
Chapter 11 bankruptcy reorganization on October 15, 2004.

         STRATEGIC ALTERNATIVES

         In July of 2003, the Board of Directions determined to consider
strategic alternatives to either enhance or replace our nutraceutical business.
The Board endeavored to assess what steps could be taken to realize greater
value for our shareholders. These alternatives included the possibility of
acquiring additional businesses for stock and/or the sale of the Company or
substantially all of its assets, including the ongoing possibility of such a
sale to Mr. Tisi or an entity controlled by him.

         In connection with its determination to enhance shareholder value, we
entered into an agreement with TeeZee, Inc. in November 2003 to sell
substantially all of our assets, subject to approval by our shareholders, for
$425,000 in cash and notes and the assumption of substantially all of our
liabilities. TeeZee, Inc. is controlled by Christopher Tisi, our Chief Executive
Officer. Prior to entering into the definitive agreement, the Board of Directors
reviewed strategic alternatives, weighed them against the offer from TeeZee,
Inc. and determined that, at that time, the proposed sale was in the best
interests of our shareholders. The Board also hired an investment advisory firm,
Capitalink, to render an opinion as to the fairness of the transaction, from a
financial point of view. In February, we restated our earning for the third
quarter of 2003, which lowered our reported earnings for the period. Capitalink
thereafter rescinded its fairness opinion which was based in part on the third
quarter results. As a result, we terminated the agreement with TeeZee, Inc.
TeeZee, Inc., and Mr. Tisi agreed to serve as our CEO through December 31, 2005.

         On April 9, 2004, and effective as of December 31, 2003, Mr. Tisi, our
CEO, entered into a new two-year employment agreement with us. The terms of Mr.
Tisi's contract increased his base salary from $140,000 to $164,000, and allowed
him to earn a bonus based on increases in revenue, and net income. Provisions
dealing with Mr. Tisi's ability to compete with the Company, have been modified
in our favor. Mr. Tisi's agreement to continue with us through December 31,
2005, significantly increased our flexibility to explore ways to enhance
shareholder value.

         Mr. Tisi developed important relationships with our customers, vendors
and other industry participants that enabled us to grow; the loss of his
services would have severely impaired our ability to function. In addition to
serving as CEO, Mr. Tisi was also responsible for our product development,
marketing, operations and finance.

         The Board expanded the role of our Chairman, James Brown. Mr. Brown,
who, since becoming Chairman in May 2003, focused primarily on opportunities to
enhance shareholder value. In 2004, Mr. Brown had more day-to-day interaction in
areas such as financial management and strategic direction, and ultimately
leading the Company's reorganization process. For these services, Mr. Brown's
compensation was increased in February 2004 from $3,000 per month to $8,000 per
month. In September 2004, in conjunction with Mr. Brown assuming the role of
CEO, his compensation was raised to $9,200.

         As 2004 progressed, our business performance worsened.  Based on:

         o   Deteriorating financial performance, powered by two concerning
             trends; i.e., a slowing sales trend coupled with an increased
             cost structure necessary to support our participation in the
             nutraceutical industry

         o   Increased regulatory involvement; i.e., while the Company has
             always used its best efforts to comply with applicable
             regulations, the cost has posed an increasing burden

         o   Inadequate working capital coupled with an inability to find
             acceptable supplemental financing. Concurrently, GSN, our sole
             supplier, was becoming increasingly alarmed at our slowing
             sales trend coupled with our rising indebtedness to them.

         o   The market for low carbohydrate supplements contracted
             suddenly in 2004 as the low carbohydrate phenomenon fell out
             of favor. This served to jeopardize our position with our key
             retailers, who began to shift allocations of floor space away
             from diet, which further jeopardized our ongoing relationship
             with them.

                                       16
<PAGE>

         The Company's Board of Directors filed a Chapter 11 petition on October
15, 2004.

RESULTS OF OPERATIONS

         Beginning with they year ended December 31, 2002, we stopped reporting
our financial results based on gross revenues and began reporting based on net
revenues. We report our net revenue after subtracting:

         o   co-op advertising and promotions given to the customers to
             promote the product and improve sales;

         o   cash discounts;

         o   slotting fees and new store discounts; and

         o   returns and allowances;

          In 2004, the amount of the subtraction was $1,915,370 compared to
$1,882,460 in 2003, an increase of 2% compared to a decrease in net revenue of
3%. The increase in the amount of the subtraction and the decrease in the net
revenue, accounted for the amount of decrease in net revenue of $209,618. Some
of our new major customers did not ask us to participate in coop-advertising and
other promotions, which allowed us to select advertising that we believe
benefited the company as a whole.

NET REVENUES

Year ended December 31, 2004 compared with Year ended December 31, 2003

         Net revenues for the twelve months-ended December 31, 2004 decreased by
$209,618 to $6,342,588 versus the comparable period in 2003 of $6,552,206. Net
revenue from two of our major customers increased by $1,098,000 and accounted
for 79% of our net revenue in 2004 compared to 60% of our net revenue account
for by our two largest customers in 2003. The coop-advertising and promotions,
and in-house advertising, in the amounts of $3,015,062 and $2,524,928
respectively, significantly contributed to the maintaining of our revenues in a
decreasing market. During the twelve months ended December 31, 2004, six
customers accounted for 80% of our net revenues, compared to 84% in 2003.

COST OF SALES

Year ended December 31, 2004 compared with Year ended December 31, 2003

         Cost of sales for the twelve months ended December 31, 2004 was
$2,758,395, or 43.5% of net revenues, compared to $2,514,758, or 38.4% of net
revenues for the twelve months ended December 31, 2003. The increase in cost of
sales as a percentage of net revenues is primarily attributed to the higher cost
of goods for several new product which accounted for 24% of the net revenue. The
new products being sold had a cost of goods of 47% compared to our major brand
which has a cost of goods of 24.5%.

GROSS PROFIT

Year ended December 31, 2004 compared with Year ended December 31, 2003

         Gross profit for the twelve months ended December 31, 2004 was
$3,584,192 a decrease of $453,256, or 11% compared to gross profit of $4,037,448
for the twelve months ended December 31, 2003. As a percent of net sales, gross
profit was 56.5% for the twelve months ending December 31, 2004, as compared to
61.6% for the twelve months ended December 31, 2003. The decrease in gross
profit dollars is primarily attributable to the increase in Cost of Goods Sold
of $243,647 or 10% and the decrease of net revenue of $209,618.

                                       17
<PAGE>

OPERATING EXPENSES

Year ended December 31, 2004 compared with Year ended December 31, 2003

         Operating expenses were $4,773,359 for the twelve months ended December
31, 2004, compared to $3,564,516 for the twelve months ended December 31, 2003,
representing an increase of $1,208,843. As a percent of net sales, operating
expenses were 75% for the twelve months ended December 31, 2004, compared to 54%
for the twelve months ended December 31, 2003. Advertising and promotion
expenses were $2,121,575 for the twelve months ended December 31, 2003, compared
to $1,428,838 for the twelve months ended December 31, 2003, representing an
increase of $692,737. As a percent of net sales, advertising and promotion
expenses were 33.5% for the twelve months ended December 31, 2004, compared to
21.8% for the twelve months ended December 31, 2003. General and administration
expenses were $2,620,491 for the twelve months ended December 31, 2004, compared
to $2,113,918 for twelve months ended December 31, 2003, representing an
increase of $506,573. This increase was primarily due to the increases in:

         o   corporate liability insurance of $132,200 due to the increase
             in our policy cost increases;

         o   directors fees and expenses of $29,367 due to the increase in
             chairman of the Boards increase in fees and expenses;

         o   consulting fees of $34,866 due to the use of outside in
             marketing and graphic arts;

         o   legal & professional fees of $180,543 due to the costs
             associated with the KMS case and of the proposed transaction
             with TeeZee, Inc.; and

         o   research and development expenses of $31,078, for product
             studies.

NET INCOME FROM OPERATIONS

Year ended December 31, 2004 compared with Year ended December 31, 2003

         Net (loss) income for the twelve months ended December 31, 2004 was
$(1,214,519) or ($.32) per share, compared to $696,359 or $.19 per share for the
twelve months ended December 31, 2003. The decrease in net income of $1,910,878
was a result of the company's commitment to growth through new products and
increasing of sales for established products. The new products attributed
approximately $3,000,000 or 47% of net revenues. The down turn in the market
place for low carbohydrate diet products in the second half the year curtailed
the sales in our established product lines.

CARRY FORWARD LOSS

         We have a net operating loss carry-forward, as of December 31, 2004 of
approximately $1,500,000 for tax purposes to affect future taxable income. Our
net operating loss carry-forward will expire in 2022.

LIQUIDITY & CAPITAL RESOURCES

         During the twelve months ended December 31, 2004, the Company was
unable to maintain the profitability levels achieved in 2003, and we incurred a
net loss from operations of $1,189,166.

         At December 31, 2004, the Company had a deficit working capital of
$1,352,194, compared to the prior year end, at December 31, 2003, of a working
capital positive of $167,140, a decrease of $1,519,334 and is primarily the
result of the decrease net income.

         At December 31, 2004, the Company had inventory of $691,737, compared
to $1,159,470 at December 31, 2003. The decrease in inventory, of $467,733, was
primarily the result of a planned effort to decrease the inventory.

         Net cash provided by operating activities for the twelve months ended
December 31, 2004 was $671,036 compared to $441,777 provided by operating
activities for the twelve months ended December 31, 2003. The resulting increase
in cash provided was primarily due to the decreases in accounts receivable and
inventory and the increase in accounts payable.

                                       18
<PAGE>

         Cash used in investing activities was $55,932. The funds were invested
in equipment and new accounting software.

         Net cash used in financing activities for the twelve months ended
December 31, 2004 was $495,212 compared to net cash used by financing activities
of $719,135 for the twelve months ended December 31, 2003 This is primarily
attributable to the note due to Garden State Nutritionals

         In early April 2002, we entered into an agreement with GSN, our sole
manufacturer, pursuant to which we agreed to repay to GSN amounts owed to them
as of the date of the agreement. The amount was represented by a promissory note
of approximately $700,000. Our repayment schedule required equal monthly
payments over the next twenty four months, without interest. In connection with
this agreement, we granted a blanket lien on our assets to GSN.

         The occurrence of any of the following events would have constituted a
default under this promissory note:

         o   the failure of the Company to pay when due any payment of
             principal and such failure continues for fifteen (15) days
             after Lender notifies the Company in writing;

         o   the Company files for or is granted certain relief pursuant to
             or within the meaning of the United States Bankruptcy Code, or
             any other federal or state law relating to insolvency or
             relief of debtors, and

         o   Christopher Tisi ceases to be the President and Chief
             Executive Officer of the Company (unless a replacement
             reasonably acceptable to Lender is obtained within 30 days).

         In July 2003 the Company issued an amended promissory note to Garden
State Nutrition in the principal amount of $1,300,000.

         The new note provided for $300,000 to be paid before December 31, 2003,
an obligation we met by using the proceeds from the sale of Acutrim(R) in August
2003. The balance was due in quarterly installments of $131,410 commencing
November 1, 2003 at 4.5% per annum. At December 31, 2004, the balance owed to
GSN for the note was $263,985.

         In early April 2002, we entered into an exclusive manufacturing
agreement with GSN that provided us with a $450,000 line of credit on current
invoices, with 60 day terms. GSN has allowed us to exceed those terms,
periodically, by as much as $700,000. The balance owed on December 31, 2004 was
$1,133,443. On December 31, 2003, the balance owed to GSN under this line of
credit was $502,424.

         GSN agreed to provide certain financing during our Chapter 11
bankruptcy petition. Through a cash collateral agreement, they allowed us to
suspend payment on our credit line, and lowered our weekly note payment to
$9,000 per week.

GOVERNMENT REGULATIONS

         The processing, formulation, packaging, labeling and advertising of our
products are subject to regulation by one or more federal agencies, including
the FDA, the FTC, the Consumer Product Safety Commission, the United States
Department of Agriculture and the United States Environmental Protection Agency.
These activities are also regulated by various agencies of the states,
localities, and countries in which its products are sold.

         As the company no longer maintains any current operations other than to
seek a suitable merger, the company is not currently subject to any industry
specific regulations, but may become subject to additional regulation in the
future in the event a merger candidate is identified and a merger is
consummated.

COMMITMENTS AND CONTINGENCIES

         As we currently have limited capital and our current business plan is
to merge with an unspecified company or companies, unless we are able to
identify and consummate a suitable merger in the near future we may not be able
to continue as a going concern.

                                       19
<PAGE>

PRODUCT LIABILITY

         The availability of product liability coverage has decreased and its
cost increased materially. The Company, like other marketers of products that
are intended to be ingested, face the inherent risk of exposure to product
liability claims in the event that the use of our products results in injury. We
currently maintain product liability insurance coverage of $5,000,000.

         The Company's cost to procure this $5,000,000 beginning in March 2004
of coverage was over twenty times greater than the cost to procure the
$6,000,000 worth of coverage in 2003, the prior year. In addition, the current
coverage is on a "claims made" rather than an "occurrence" basis. Our ability to
maintain appropriate products liability coverage in the future can not be
guaranteed. The loss of coverage would have significantly impaired our ability
to continue business.

         We believe that our insurance coverage will be adequate to cover any
claims relating to our products. We further believe that by ceasing to sell
products containing ephedra and agreeing to accepting returns of our customers
existing inventory, we reduced potential liability relating to ephedra. We are
not aware of any claims similar to those relating to ephedra having been made
with respect to any of the other ingredients contained in our products.

CERTAIN FACTORS WHICH MAY AFFECT FUTURE RESULTS

         THE COMPANY'S ACCOUNTANTS ISSUED A GOING CONCERN OPINION WHEN WE WERE
IN THE NUTRACEUTICAL BUSINESS DUE TO THE LACK OF CAPITAL. THAT, AND THE RISK
FACTORS RECITED BELOW, ENTERED INTO THE DECISION TO SELL OUR OPERATING BUSINESS.
BECAUSE OF THE UNCERTAINTIES IN OUR ABILITY TO SATISFY OUR FUTURE CAPITAL NEEDS,
OUR INDEPENDENT AUDITORS' REPORT ON ITS FINANCIAL STATEMENTS FOR THE YEAR ENDED
DECEMBER 31, 2004 CONTAINS AN EXPLANATORY PARAGRAPH ABOUT OUR ABILITY TO
CONTINUE AS A GOING CONCERN.

         OUR FUTURE OPERATIONAL EXISTENCE IS DEPENDENT UPON OUR ABILITY TO
IDENTIFY A SUITABLE MERGER CANDIDATE AND TO SUCCESSFULLY MERGE WITH SUCH
COMPANY. As a result of the reorganization, we sold substantially all of our
operating assets. As a result, our future viability is dependent on our ability
to locate a suitable merger or acquisition candidate and to successfully
consummate a business combination with such entity. However, even if we are able
to consummate such a transaction, we can not assure you that the combined entity
will be profitable or able to otherwise successfully continue its operations.

         WE DEPEND SUBSTANTIALLY ON THE CONTINUED SERVICES AND PERFORMANCE OF
JAMES BROWN. Our limited prospects for success will be further impaired in the
event, Mr. Brown, our Chairman and Chief Executive Officer, leaves us. Although
we have an employment agreement with Mr. Brown, this does not guarantee that he
will remain with us. If we lose his services, we may not be able to attract and
retain additional qualified personnel to fill his position in the future and may
be further limited in our ability to continue as a going concern.

         OUR STOCK PRICE IS LIKELY TO REMAIN VOLATILE. The stock market has,
from time to time, experienced significant price and volume fluctuations that
may be unrelated to the operating performance of particular companies. In
addition, the market price of our common stock, has been, and will likely
continue to be, volatile. Prices of our common stock may be influenced by many
factors, including:

         o   limited operating capital to continue as a going concern;

         o   investor perception of us;

         o   analyst recommendations;

         o   fluctuations in financial results of us;

         o   future sales of substantial amounts of common stock by
             shareholders; and

         o   economic and other external factors

         WE ARE NOT LIKELY TO PAY DIVIDENDS. We have not paid any cash dividends
on our common stock and we do not plan to pay any cash dividends in the
foreseeable future. We plan to retain any earnings for the operation of our
business.

                                       20
<PAGE>

ITEM 7.  FINANCIAL STATEMENTS




<PAGE>

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
-------------------------------------------------------

To the Board of Directors and Shareholders
Health & Nutrition Systems International, inc.
3750 Investment Lane, Suite 5
West Palm Beach, Florida 33404

We have audited the accompanying balance sheets of Health & Nutrition Systems
International, Inc. as of December 31, 2004 and 2003, and the related statements
of operations, changes in shareholders' deficit and cash flows for the years
then ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our 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 audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company has determined that it
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audit included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company's internal control
over financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion. In our opinion, the financial statements
referred to above present fairly, in all material respects, the financial
position of Health & Nutrition Systems International, Inc., and the results of
their operations and their cash flows for the years then ended in conformity
with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has recorded losses of
$1,214,519 for the year ended December 31, 2004 and has filed for relief under
bankruptcy. Subsequent to year end substantially all the assets were sold and
the liabilities transferred. These conditions raise substantial doubt about the
Company's ability to continue as a going concern. The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.

/s/ Daszkal Bolton LLP
Boca Raton, Florida
February 16, 2005

                                       F-1

PAGE>


ASHLIN DEVELOPMENT CORPORATION F/K/A
HEALTH & NUTRITION SYSTEMS INTERNATIONAL, INC.
BALANCE SHEETS
YEARS ENDED DECEMBER 31, 2004 AND 2003

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>



                                     ASSETS
                                                                        2004           2003
                                                                    -----------    -----------
<S>                                                                 <C>            <C>
Current assets:
      Cash                                                          $   127,296    $     7,405
      Accounts receivable, net                                         (167,337)       520,402
      Inventory, net                                                    691,737      1,159,470
      Prepaids and other current assets                                  73,124         10,228
                                                                    -----------    -----------
             Total current assets                                       724,820      1,697,506
                                                                    -----------    -----------

Property and equipment, net                                              75,475         49,683
                                                                    -----------    -----------

Other assets:
      Trademarks, net                                                       120          1,274
      Security deposits                                                   8,019          6,424
                                                                    -----------    -----------
             Total other assets                                           8,139          7,698
                                                                    -----------    -----------

             Total assets                                           $   808,433    $ 1,754,887
                                                                    ===========    ===========
                      LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities not subject to compromise:
      Accounts payable                                              $   112,084    $   682,297
      Accrued expenses                                                   63,092        348,069
      Notes payable, current portion                                    283,367        500,000
                                                                    -----------    -----------
             Total current liabilities not subject to compromise        458,543      1,530,366

Current liabilities subject to compromise:
         Accounts payable                                           $ 1,418,238    $        --
         Accrued expenses                                               200,231             --
                                                                    -----------    -----------
                  Total current liabilities subject to compromise     1,618,469             --
                                                                    -----------    -----------
                  Total current liabilities                           2,077,012      1,530,366
                                                                    -----------    -----------
Notes payable, less current portion                                          --        278,580
                                                                    -----------    -----------

         Total liabilities                                            2,077,012      1,808,946
                                                                    -----------    -----------

Stockholders' deficit:
      Common stock, $ 0.001 par value, authorized 30,000,000
        shares; 3,829,813 and 3,629,813 shares issued and
        Outstanding at December 31, 2004 and 2003, respectively           3,830          3,830
      Additional paid-in capital                                        858,612        858,612
      Accumulated deficit                                            (2,131,020)      (916,501)
                                                                    -----------    -----------
             Total stockholders' deficit                             (1,268,578)       (54,059)
                                                                    -----------    -----------
             Total liabilities and stockholders' deficit            $   808,434    $ 1,754,887
                                                                    ===========    ===========
</TABLE>

                 See accompanying notes to financial statements

                                       F-2

<PAGE>


ASHLIN DEVELOPMENT CORPORATION F/K/A
HEALTH & NUTRITION SYSTEMS INTERNATIONAL, INC.
STATEMENTS OF OPERATION
YEARS ENDED DECEMBER 31, 2004 AND 2003

--------------------------------------------------------------------------------






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

Net revenue                                         $ 6,342,588     $ 6,552,206

Cost of sales                                         2,758,395       2,514,758
                                                    -----------     -----------

Gross Profit                                          3,584,193       4,037,448
                                                    -----------     -----------

Operating expense:
     General and administrative expense               2,620,491       2,113,918
     Advertising and promotion                        2,121,575       1,428,838
     Depreciation and amortization                       31,293          21,760
                                                    -----------     -----------
         Total operating expense                      4,773,359       3,564,516
                                                    -----------     -----------

Income (loss) from operations                        (1,189,166)        472,932
                                                    -----------     -----------

Other income (expense):
     Gain on sale of trademark                               --         274,945
     Interest expense                                   (25,353)        (46,518)
     Other income (expense)                                  --          (5,000)
                                                    -----------     -----------
         Total other income (expense)                   (25,353)        223,427

Income (loss) before income taxes                    (1,214,519)        696,359
                                                    -----------     -----------

Benefit (provision) for income taxes                         --              --
                                                    -----------     -----------

Net income (loss)                                   $(1,214,519)    $   696,359
                                                    ===========     ===========

Net income (loss) per share- basic                  $     (0.32)    $      0.19
                                                    ===========     ===========
Net income (loss) per share - basic                 $     (0.32)    $      0.19
                                                    ===========     ===========
Weighted average number of shares - basic             3,829,813       3,714,745
                                                    ===========     ===========
Weighted average number of shares - diluted           3,829,813       3,722,745
                                                    ===========     ===========
                 See accompanying notes to financial statements

                                       F-3
<PAGE>


ASHLIN DEVELOPMENT CORPORATION F/K/A
HEALTH & NUTRITION SYSTEMS INTERNATIONAL, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
YEARS ENDED DECEMBER 31, 2004 AND 2003

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>


                                          COMMON STOCK          ADDITIONAL
                                   -------------------------     PAID-IN     ACCUMULATED
                                      SHARES        AMOUNT       CAPITAL       DEFICIT        TOTAL
                                   -----------   -----------   -----------   -----------    -----------

<S>                                  <C>         <C>           <C>           <C>            <C>
Balance, December 31, 2002           3,629,813   $     3,630   $   834,812   $(1,612,860)   $  (774,418)

Common stock issued for services       200,000           200        23,800            --         24,000

Net income                                  --            --            --       696,359        696,359
                                   -----------   -----------   -----------   -----------    -----------


Balance, December 31, 2003           3,829,813         3,830       858,612      (916,501)       (54,059)
                                   -----------   -----------   -----------   -----------    -----------

Net income                                  --            --            --    (1,214,519)    (1,214,519)
                                   -----------   -----------   -----------   -----------    -----------

Balance, December 31, 2004           3,829,813   $     3,830   $   858,612   $(2,131.020)   $(1,268,578
                                   ===========   ===========   ===========   ===========    ===========

</TABLE>

                 See accompanying notes to financial statements

                                       F-5
<PAGE>


ASHLIN DEVELOPMENT CORPORATION F/K/A
HEALTH & NUTRITION SYSTEMS INTERNATIONAL, INC.
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2004 AND 2003

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                                2004           2003
                                                            -----------    -----------
<S>                                                         <C>            <C>
Cash flows from operating activities:
     Net income (loss)                                      $(1,214,519)   $   696,359
     Adjustments to reconcile net income to net cash
       provided by operating activities:
         Allowance for doubtful accounts                             --         (1,054)
         Allowance for obsolete and slow moving inventory       105,055        (74,770)
         Depreciation and amortization                           31,293         21,760
         Gain on sale of intangible asset                            --       (274,945)
         Imputed interest expense on note payable                    --         30,979
         Common stock issued for services                            --         24,000
         (Increase) decrease in:
              Accounts receivable                               688,713       (174,651)
              Inventory                                         361,706       (646,325)
              Prepaids and other current assets                 (64,491)        (7,855)
         Increase (decrease) in:
              Accounts payable subject to compromise          1,418,238             --
              Accounts payable not subject to compromise       (570,213)       564,890
              Accrued expenses subject to compromise            200,231             --
              Accrued expenses not subject to compromise       (284,977)       283,389
                                                            -----------    -----------
Net cash provided by operating activities                       671,036        441,777
                                                            -----------    -----------

Cash flows from investing activities:
     Proceeds from sale of trademark                                 --        300,000
     Purchases of property and equipment                        (55,934)       (30,014)
                                                            -----------    -----------
Net cash provided by (used in) investing activities             (55,934)       269,986
                                                            -----------    -----------

Cash flows from financing activities:
     Repayments on notes payable                               (495,212)      (718,421)
     Repayments on capital leases                                    --           (714)
                                                            -----------    -----------
Net cash used in financing activities                          (495,212)      (719,135)
                                                            -----------    -----------

Net increase (decrease) in cash                                 119,890         (7,372)
Cash, beginning of year                                           7,406         14,778
                                                            -----------    -----------
Cash, end of year                                           $   127,296    $     7,406
                                                            ===========    ===========
</TABLE>
                                      F-5

<PAGE>


ASHLIN DEVELOPMENT CORPORATION F/K/A
HEALTH & NUTRITION SYSTEMS INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------


NOTE 1 - DESCRIPTION OF BUSINESS
--------------------------------

Ashlin Development Corporation (F/K/A Health & Nutrition Systems International,
Inc.) ("the Company") markets and distributes weight management, energy and
sports nutrition products to numerous national and regional health, food, drug
and mass-market accounts as well as independent health and pharmacy accounts.
The Company was incorporated in Florida on October 25, 1993. Our product sales
consisted of seven primary dietary supplements: Carb Cutter(R), Carb Cutter(R)
Phase 2, Thin Tab Mahuang Free(TM), Zoom(R), Eat Less(R), Diet-a-Day(TM) Phase 2
and Fat Cutter(R) Ephedra Free. The Company's markets are concentrated in North
America and Puerto Rico.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
---------------------------------------------------

Cash and Cash Equivalents
-------------------------

The Company considers all highly liquid debt instruments with original
maturities of three months or less to be cash equivalents. There are no cash
equivalents at December 31, 2004 and 2003.

Use of Estimates
----------------

The preparation of financial statements in conformity with general accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.

Inventories
-----------

Inventories are stated at the lower of cost or market with cost being determined
on a standard cost basis, net of allowances for slow-moving or obsolete
inventory. Inventory allowances at December 31, 2004 and 2003 were $119,633 and
$13,606 respectively.

Depreciation and Amortization
-----------------------------

Property and equipment are carried at cost. Depreciation is provided using the
straight-line or accelerated methods, over the estimated economic lives of the
assets, which range from three to seven years. Leasehold improvements are
amortized over the expected lease term. The Company reviews the valuation of
fixed and other assets and their remaining economic lives annually and adjusts
depreciation and amortization accordingly.

Revenue Recognition
-------------------

The Company recognizes revenue when

         o   Persuasive evidence of an arrangement exists

         o   Shipment has occurred

         o   Price is fixed or determinable, and

         o   Collectability is reasonably assured


Subject to these criteria, except with respect to customers that buy our
products on "pay on scan terms," we recognize revenue at the time of shipment of
the relevant merchandise. "Pay on Scan" sales are treated as consignment sales
by the Company. In the case of these consignment sales, the Company records
revenues, and removes the items from inventory when the customer reports the
sales to the Company. Normally the Company is notified of the customer's sales
through periodic sales reports, payments, or when the customer reorders the
relevant product.

The Company's inventory on consignment related to its "pay on scan" sales at
December 31, 2004 and 2003 was $103,800 and $282,468, respectively.

                                      F-6
<PAGE>
ASHLIN DEVELOPMENT CORPORATION F/K/A
HEALTH & NUTRITION SYSTEMS INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

Included in the net sales in the accompanying financial statements are
reductions for returns and allowances, sales discounts, new store opening
discounts and co-op advertising and promotions.

Advertising Costs
-----------------

The Company expenses advertising production costs as they are incurred and
advertising communication costs the first time the advertising event takes
place. Advertising and promotion expenses for the years ending December 31, 2004
and 2003 were $2,121,575 and $1,428,838, respectively.

Basic Earnings Per Share
------------------------

Basic income per common share is computed by dividing the net income by the
weighted average number of shares of common stock outstanding during the year.

Diluted Earnings Per Share
--------------------------

Diluted earnings per share reflect the potential dilution that could occur if
dilutive securities (stock options and stock warrants) to issue common stock
were exercised or converted into common stock that then shared in the earnings
of the Company.

Stock Compensation
------------------

The Company has adopted Statement of Financial Accounting Standards No. 123
("SFAS 123"), "Accounting for Stock-Based Compensation." SFAS 123 encourages the
use of a fair-value-based method of accounting for stock-based awards, under
which the fair value of stock options is determined on the date of grant and
expensed over the vesting period. Under SFAS 123, companies may, however,
measure compensation costs for those plans using the method prescribed by
Accounting Principles Board Opinion No. 25 ("APB No. 25"), "Accounting for Stock
Issued to Employees." Companies that apply APB No. 25 are required to include
pro forma disclosures of net earnings and earnings per share as if the
fair-value-based method of accounting had been applied. The Company elected to
account for such plans under the provisions of APB No. 25. The Company accounts
for stock options granted to consultants under SFAS 123.

Had the compensation expense for the stock option plan been determined based on
the fair value of the options at the grant date consistent with the methodology
prescribed under Statement of Financial Standards No. 123, "Accounting for Stock
Based Compensation," at December 31, the Company's net income and earnings per
share would have been reduced to the pro forma amounts indicated below:

                                             2004             2003
                                     ------------------      -----------
        Net income
           As reported               $       (1,214,519)  $      696,359
                                     ==================   ==============
           Pro forma                 $       (1,224,985)  $      685,284
                                     ==================   ==============
        Earnings per share
           As reported               $            (0.32)  $         0.19
                                     ==================   ==============
           Pro forma                 $            (0.32)  $         0.18
                                     ==================   ==============

                                      F-7
<PAGE>
ASHLIN DEVELOPMENT CORPORATION F/K/A
HEALTH & NUTRITION SYSTEMS INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

Intangible Assets
-----------------

Intangible assets are stated at cost less amortization. Intangible assets are
the trademarks that the Company acquired in 2000 and 2001 and are being
amortized on a straight line based over their estimated useful lives.

Accounting for Long-Lived Assets
--------------------------------

The Company is required to periodically assess the impairment of long-lived
assets. An impairment review is performed whenever events or changes in
circumstances indicate that the carrying value may not be recoverable.

Factors considered important which could trigger an impairment review include,
but are not limited to, significant underperformance relative to expected
historical or projected future operating results, significant changes in the
manner of the acquired assets or the strategy for the overall business,
significant negative industry or economic trends, a significant decline in the
stock price for a sustained period and the Company's market capitalization
relative to net book value.

When management determines that the carrying value may not be recoverable based
upon the existence of one or more of the above indicators of impairment, any
impairment measured is based on a projected discounted cash flow method using a
discount rate commensurate with the risk inherent in the Company's current
business model.

New Accounting Pronouncements
-----------------------------

In January 2003, the Financial Accounting Standards Board ("FASB") issued
Interpretation ("FIN") No. 46, "Consolidation of Variable Interest Entities
(VIE)," (revised December 2003 by FIN No. 46R), which addresses how a business
enterprise should evaluate whether it has a controlling financial interest in an
entity through means other than voting rights and accordingly should consolidate
the entity. For variable interests in VIEs created before January 1, 2004, the
Interpretation will be applied beginning on January 1, 2005. For any VIEs that
must be consolidated under FIN No. 46R that were created before January 1, 2004,
the assets, liabilities and non-controlling interests of the VIE initially would
be measured at their carrying amounts with any difference between the net amount
added to the balance sheet and any previously recognized interest being
recognized as the cumulative effect of an accounting change. If determining the
carrying amounts is not practicable, fair value at the date FIN No. 46R first
applies may be used to measure the assets, liabilities and non-controlling
interest of the VIE. The adoption of FIN No. 46R did not have a material impact
on the Company's financial position, results of operations or cash flows as the
Company does not have any VIEs. In March 2004, the Emerging Issues Task Force
("EITF") reached a consensus on Issue No. 03-01, "The Meaning of
Other-Than-Temporary Impairment and Its Application to Certain Investments."
EITF 03-01 provides guidance on other-than-temporary impairment models for
marketable debt and equity securities accounted for under SFAS No. 115,
"Accounting for Certain Investments in Debt and Equity Securities," and SFAS No.
124, "Accounting for Certain Investments Held by Not-for-Profit Organizations,"
and non-marketable equity securities accounted for under the cost method. The
EITF developed a basic three-step model to evaluate whether an investment is
other-than-temporarily impaired.

In September 2004, the FASB issued FASB Staff Position EITF 03-01-1, which
delays the effective date until additional guidance is issued for the
application of the recognition and measurement provisions of EITF 03-01 to
investments in securities that are impaired; however, the disclosure
requirements are effective for annual periods ending after June 15, 2004. The
adoption of the disclosure provisions of EITF 03-01 did not have a material
effect on the Company's results of operations or financial condition.

In November 2004, the FASB issued SFAS 151, Inventory Costs --an amendment of
ARB No. 43, Chapter 4. The Statement amends the guidance of ARB No. 43, Chapter
4, Inventory Pricing , by clarifying that abnormal amounts of idle facility
expense, freight, handling costs, and wasted materials (spoilage) should be
recognized as current-period charges and by requiring the allocation of fixed
production overheads to inventory based on the normal capacity of the production

                                      F-8
<PAGE>
ASHLIN DEVELOPMENT CORPORATION F/K/A
HEALTH & NUTRITION SYSTEMS INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

facilities. It does not appear that this Statement will have a material effect
on the financial position, operations or cash flows of the Company when it
becomes effective in 2006.

In December 2004, the FASB issued SFAS No. 123R "Share-Based Payment" ("SFAS
123R"), a revision to SFAS No. 123 "Accounting for Stock-Based Compensation"
("SFAS 123"), and superseding APB Opinion No. 25 "Accounting for Stock Issued to
Employees" and its related implementation guidance. SFAS 123R establishes
standards for the accounting for transactions in which an entity exchanges its
equity instruments for goods or services, including obtaining employee services
in share-based payment transactions. SFAS 123R applies to all awards granted
after the required effective date and to awards modified, repurchased, or
cancelled after that date. Adoption of the provisions of SFAS 123R is effective
as of the beginning of the first interim or annual reporting period that begins
after June 15, 2005. The Company is currently in the process of evaluating the
potential impact that the adoption of SFAS 123R will have on its consolidated
financial position and results of operations.

Shipping and Handling Fees
--------------------------

The Company follows the provisions of Emerging Issues Task Force Issue No. 00
-10, "Accounting for Shipping and Handling Fees and Costs." Any amounts billed
to third-party customers for shipping and handling are included in the statement
of operations as a component of revenue. Shipping and handling costs incurred
are included as a component of cost of sales.

NOTE 3 - MANAGEMENT'S PLANS AND ISSUES AFFECTING LIQUIDITY
----------------------------------------------------------

The Company's financial statements have been prepared assuming that the Company
will continue as a going concern. During 2004, the Company has a net loss of
$1,214,519 and cash flow from operations of $671,037 At December 31, 2004, the
Company has a negative working capital of $1,352,194.

The Company has recently completed its Chapter 11 bankruptcy and has sold
substantially all of the assets and liabilities. (See Note 19).

NOTE 4 - TRADEMARKS
-------------------

In June 2001, the Financial Accounting Standards Board approved the issuance of
SFAS 142, "Goodwill and Other Intangible Assets," which establishes new
accounting and reporting requirements for goodwill and other intangible assets.
The new standards required that all intangible assets acquired that are obtained
through contractual or legal right, or are capable of being separately sold,
transferred, licensed, rented or exchanged, must be recognized as an asset apart
from goodwill. Goodwill and intangibles with indefinite lives are no longer
amortized, but are subject to an annual assessment for impairment by applying a
fair value based test. The Company applied the provisions of SFAS 142 beginning
on January 1, 2002 and performed a transitional fair value based impairment
test. In connection with adopting SFAS 142, the Company also reassessed the
useful lives and the classifications of its identifiable intangible assets and
determined that they continue to be appropriate.

                                      F-9
<PAGE>
ASHLIN DEVELOPMENT CORPORATION F/K/A
HEALTH & NUTRITION SYSTEMS INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

The components of the Company's intangible assets subject to amortization are as
follows:

Amortization expense for the years ended December 31, 2004 and 2003 was
approximately $1,153 and $1,098, respectively.

Estimated amortization of intangible assets is as follows:
<TABLE>
<CAPTION>

                                         DECEMBER 31, 2004               DECEMBER 31, 2003
                                      -------------------------       -------------------------
                                      GROSS                           GROSS
                                     CARRYING      ACCUMULATED       CARRYING      ACCUMULATED
                                      AMOUNT       AMORTIZATION       AMOUNT       AMORTIZATION
                                      ------       ------------       ------       ------------
<S>                                   <C>             <C>             <C>             <C>
Amortized intangible assets:
     Trademarks                       $7,229          $7,108          $7,228          $5,954
                                      ======          ======          ======          ======
</TABLE>

The following table adjusts earnings for the adoption of SFAS 142 for the years
ended December 31, 2004 and 2003:

                                         2004           2003
                                     -----------    -----------
        Net earnings:
             Reported net earnings   $(1,214,519)   $   696,359
             Goodwill amortization            --             --
                                     -----------    -----------
        Adjusted net earnings        $(1,214,519)   $   696,359
                                     ===========    ===========

NOTE 5 - ACCOUNTS RECEIVABLE
----------------------------

As of December 31, 2004, the Company had a negative accounts receivable balance
of $167,337. Gross receivables are $965,542. The negative accounts receivable
balance is the result of establishing

         o   A reserve of $388,100 for the anticipated return of the
             Company's products based on notice from customers indicating
             that they intended to discontinue selling it

         o   A reserve of $77,000 for the anticipated return of product due
             to merger of two of our major customers.

After the application of these two reserves, our accounts receivable balance was
further reduced by $602,028 of other customer liabilities. The total amount of
the reduction was $1,067,127 as of December 31, 2004. The result of the
allowances (totaling $65,751) and the reductions for customer liabilities is the
negative accounts receivable balance of $167,337.

At December 31, 2003, the Company had net receivables of $520,402, including
allowances of $66,723.

NOTE 6 - SUPPLEMENTAL CASH FLOW INFORMATION
-------------------------------------------
                                                            2004         2003
                                                          --------   ----------

        Cash paid for interest                            $ 25,353   $   15,538
                                                          ========   ==========
        Cash paid for income taxes                        $     --   $       --
                                                          ========   ==========

        Non-cash investing and financing activities:

        Common stock issued for services                  $     --   $   24,000
                                                          ========   ==========
        Conversion of accounts payable to notes payable   $     --   $1,000,000
                                                          ========   ==========


                                      F-10
<PAGE>
ASHLIN DEVELOPMENT CORPORATION F/K/A
HEALTH & NUTRITION SYSTEMS INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

NOTE 7 - FAIR VALUE OF FINANCIAL INSTRUMENTS
--------------------------------------------

The carrying value of cash, accounts receivables, loans receivable, accounts
payable and other payables approximates fair value because of their short
maturities.

NOTE 8 - PROPERTY AND EQUIPMENT
-------------------------------

Property and equipment consisted of the following at December 31, 2004 and 2003:

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

        Furniture and equipment           $  38,713    $  38,713
        Office equipment                     31,536       31,536
        Warehouse equipment                  24,349       24,349
        Computer equipment                   76,654       65,880
        Software                             56,076       56,076
        Website development                   2,155        2,155
        Leasehold improvements                1,860        1,860
        Trade Booth                          21,801
        Automobile                           23,356           --
                                          ---------    ---------
                                            276,501      220,569
        Less:  accumulated depreciation    (201,026)    (170,886)
                                          ---------    ---------
            Property and equipment, net   $  75,475    $  49,683
                                          =========    =========

Depreciation expense for the years ended December 31, 2004 and 2003 was $30,140
and $19,635, respectively.

NOTE 9 - NOTES PAYABLE
-----------------------

In July 2003, the Company issued an amended promissory note to Garden State
Nutritionals ("GSN") that increased the principal from the then outstanding
balance to $1,300,000. The note provided for $300,000 to be paid before December
31, 2003, with the balance due in quarterly installments of $131,410 commencing
November 1, 2003 at 4.5% per annum. The note is secured by all intangible and
tangible assets of the Company. The $300,000 portion of the note was paid in
August 2003. At December 31, 2004, the balance owed to GSN is $263,985.

This amount is reflected on our balance sheet as not being subject to compromise
as a result of our Chapter 11 bankruptcy filing. This is because, as it relates
to the Note, GSN was fully secured by the assets of the Company.

On April 11, 2002, the Company entered into the agreement with GSN to repay
$700,000 owed to GSN as of the date of the agreement. The repayment schedule
required eight equal quarterly payments, without interest, starting June 1,
2002. The note was secured by a blanket second priority lien on the Company's
assets.

Also, on April 11, 2002 (as amended July 21, 2003), the Company entered into an
exclusive manufacturing agreement with GSN pursuant to which GSN has provided a
$450,000 line of credit with 60-day terms to the Company. GSN informally allowed
the Company to purchase up to $1,000,000 on the line of credit. At December 31,
2004 and 2003, the balance owed to GSN under this line of credit was $1,133,443
and $502,424, respectively.

NOTE 10 - LEASE COMMITMENTS
---------------------------

At present, the Company leases office space for its corporate headquarters at
4400 North Federal Highway, Suite 210, Boca Raton Florida. The Company pays
$11,436 in rent annually and the lease runs through March 31, 2006.

Through January 25, 2005, the Company leased office and warehouse space in
Riviera Beach, Florida. Rent expense for the years ended December 31, 2004 and
2003 was $52,778 and $53,035, respectively. The Company also leased certain

                                      F-11
<PAGE>
ASHLIN DEVELOPMENT CORPORATION F/K/A
HEALTH & NUTRITION SYSTEMS INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

equipment. Lease expense for the years ended December 31, 2004 and 2003 was
$32,653 and $32,394, respectively. Leases for the real estate as well as the
office equipment were assumed by TeeZee, Inc. on January 25, 2005.

In April 2002, the Company began sub-leasing part of its warehouse space for
$1,800 per month and on December 1, 2004 the sub-lease was $3,671 per month.

Certain non-cancelable leases are classified as capital leases, and the leased
assets are included as part of property and equipment. Other leases are
classified as operating leases and are not capitalized.

Property under capital leases at December 31, 2004 and 2003 consisted of the
following:

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

        Machinery and equipment           $ 59,902    $ 59,902
        Less:  accumulated amortization    (59,902)    (54,578)
                                          --------    --------
                 Total                    $     --    $  5,324
                                          ========    ========



Future minimum rentals for property under operating leases at December 31 are as
follows:

            Year Ending December 31            Operating Leases
         --------------------------------     -------------------


                      2005                           $  10,651
                                                     ---------
         Total minimum lease obligation              $  10,651
                                                     =========


Capital leases obligations were repaid during 2003.

NOTE 11 - STOCKHOLDERS' EQUITY
------------------------------

On July 30, 2003, 200,000 shares of Health & Nutrition Systems were issued to
two board members of the Company, for services performed. The fair value of the
common stock at the time of issue was $0.12 per share, and the Company recorded
compensation expense of $24,000.

During the year ended December 31, 2004, the Company did not issued any common
stock.

On November 19, 2004, the Company agreed to issue 300,000 shares of common stock
to James A. Brown, our Chairman, to be awarded when the Company emerged from
bankruptcy. The fair value of the common stock at the time of issue was $0.04
per share, and the Company recorded compensation expense of $12,000 in January
2005. Subsequently, in March 2005, the Board voted to award Mr. Brown 320,000
shares. The fair value of the common stock at the time of issue was $0.08 per
share, and the Company recorded compensation expense of $25,600 in March 2005.

Also in March 2005, the Board of Directors entered into a contract with Global
Business Resources, Inc., a Ft. Lauderdale based consulting firm who were
granted 100,000 shares of common stock as partial compensation for their
services.

NOTE 12 - LEGAL MATTERS
-----------------------

All of the litigation pending against the Company at the time of the
reorganization was discharged on the effective date of our plan of
reorganization, and we are not aware of any present claims against the company.

                                      F-12
<PAGE>
ASHLIN DEVELOPMENT CORPORATION F/K/A
HEALTH & NUTRITION SYSTEMS INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

NOTE 13 - CONCENTRATIONS
-----------------------

Credit Risk
-----------

Financial instruments, which potentially expose the Company to concentrations of
credit risk, as defined by Statement of Financial Accounting Standards No. 105,
consist primarily of trade receivables. The Company's officers have attempted to
minimize this risk by monitoring the companies for which it provided credit.

The Company maintains bank accounts at various financial institutions. At times
during the year, balances in these accounts exceeded the amount insured by the
FDIC. At December 31, 2004 and 2003, $74,887 and $0, respectively, exceeded the
insured limit.

Product Liability
-----------------

As of December 31, 2004, the Company maintained $5 million of coverage for
product liability claims. The Company uses vendors who are also insured. There
was a risk that certain vendors may not have had sufficient product liability
insurance or may have lost their insurance. Further, the Company may not be able
to obtain insurance at a reasonable cost in the future. Had any of these events
arose, there would have been a material adverse effect on the financial
condition, results of operations or cash flows of the Company.

Significant Customers
---------------------

Prior to the sale of our nutraceutical business on January 25, 2005, we had
approximately 17 drug, health food, and mass retailer customers which
collectively comprised 92% of our revenues in 2004. We depended on several
significant customers for a large percentage of our sales. Our largest customers
were GNC, Wal-Mart, Walgreens, Rite Aid, and CVS Drugs. The Company did not have
written agreements with any of these customers or any of our other customers.
The loss of one or more of these customers would have had a material adverse
effect on the Company.

The Company's net revenue attributable to customers accounting for more than 10%
of the Company's net revenue for the years ended December 31, 2004 and 2003, are
as follows:

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

                   A               $3,052,000          2,084,000

                   B                1,959,000          1,829,000

Significant Supplier
--------------------

As of January 25, 2005, when we sold substantially all of our assets, our
reliance on one significant supplier was eliminated.

During the years ended December 31, 2004 and 2003, the Company received 100% of
its products from one manufacturer of herbal and dietary supplements, located in
Caldwell, New Jersey. The Company was dependent on the ability of its supplier
to provide products on a timely basis and on favorable pricing terms. The loss
of the supplier or a significant reduction in product availability from the
supplier would have had a material adverse effect on the Company.

                                      F-13
<PAGE>
ASHLIN DEVELOPMENT CORPORATION F/K/A
HEALTH & NUTRITION SYSTEMS INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

NOTE 14 - INCOME TAXES
----------------------

The Company's evaluation of the tax benefit of its net operating loss carry
forward is presented in the following table. At December 31, 2004 and 2003, the
tax amounts have been calculated using the 34% federal and 5.5% state income tax
rates.

Reconciliation of the Federal statutory income tax rate to the Company's
effective tax rate is as follows:

<TABLE>
<CAPTION>
                                                                                     2004         2003
                                                                                   ---------    ---------
<S>                                                                               <C>           <C>
                   Income tax (benefit) consists of:
                        Current                                                    $      --    $      --
                        Deferred                                                   $      --    $      --
                                                                                   ---------    ---------

                   Provision (benefit) for income taxes                            $      --    $      --
                                                                                   =========    =========

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


            Taxes computed at combined federal and state tax rate                  $(412,937)   $ 236,762
            Non-deductible expenses                                                   12,203        3,555
            State income taxes, net of federal income tax benefit                    (42,784)      25,657
            Increase (Decrease) in deferred tax asset valuation allowance            443,518     (265,974)
                                                                                   ---------    ---------
            Provision (benefit) for income taxes                                   $      --    $      --
                                                                                   =========    =========



        The components of the deferred tax asset were as follows at December 31:

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

                       Deferred tax assets:
                            Net operating loss carryforward                        $ 566,933    $ 133,530
                            Allowance for receivables                                 24,743       25,109
                            Allowance for inventory                                   45,019        5,120
                            Accrued compensation                                      39,108       68,526
                                                                                   ---------    ---------
                       Total deferred tax assets                                     675,803      232,285
                                                                                   ---------    ---------

                            Deferred tax liabilities                                      --           --
                                                                                   ---------    ---------
                       Net deferred tax asst                                         675,803      232,285
                                                                                   ---------    ---------

                       Valuation allowance:
                            Beginning of year                                       (232,285)    (498,259)
                            (Increase) Decrease during year                         (443,518)     265,974
                                                                                   ---------    ---------
                            Ending balance                                          (675,803)    (232,285)
                                                                                   ---------    ---------
                       Net deferred taxes                                          $      --    $      --
                                                                                   =========    =========
</TABLE>


As of December 31, 2004, the Company had an unused net operating loss
carryforward of approximately $1,510,361 available for use on its future
corporate income tax returns. This net operating loss carryforward begins to
expire in December 2022. Pursuant to Sections 382 and 383 of the Internal
Revenue Code, annual use of any of the Company's net operation loss and credit
carry forwards may be limited if cumulative changes in ownership of more than
50% occur during any three year period.

                                      F-14
<PAGE>
ASHLIN DEVELOPMENT CORPORATION F/K/A
HEALTH & NUTRITION SYSTEMS INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

NOTE 15 - STOCK OPTIONS
-----------------------

In May 1998 the Company adopted a stock option plan. The purpose of the stock
option plan was to increase the employees and non-employee director's
proprietary interest in our Company and to align more closely their interests
with the interests of our shareholders, as well as to enable us to attract and
retain the services of experienced and highly qualified employees and
non-employees directors.

Options granted under this plan may either be options qualifying as incentive
stock options under Section 422 of the Internal revenue Code of 1986, as
amended, or options that do not so qualify. Any incentive option must provide
for an exercise price of not less than 100% of the fair market value of the
underlying shares on the date of such grant, but the exercise price of any
incentive option granted to an eligible employee owning more than 10% of the our
common stock must be at least 110% of such fair market value as determined on
the date of the grant.

The term of each option and the manner in which it may be exercised is
determined by the board of directors, provided that no option may be exercisable
more that 10 years after the date of its grant and, in the case of an incentive
option granted to an eligible employee owning more that 10% of the our common
stock, no more than five years after the date of the grant. The board of
directors shall determine the exercise price of non-qualified options. We
reserved an aggregate of 1,250,000 shares of common stock for issuance of
options under the stock option plan. As of December 31, 2004, the Company had
granted 606,500 options under the plan. However, on January 28, 2005, the
effective date of our plan of reorganization, all of our outstanding options
terminated other than options held by Messrs. Alflen and Pomerantz which are
exercisable for a total of 55,000 shares of our comon stock.

Therefore, options to purchase 1,195,000 shares of common stock remain available
to be issued. The board of directors or a committee of the board of directors
will administer the plan including, without limitation, the selection of the
persons who will be granted plan options under the plan, the type of plan
options to be granted, the number of shares subject to each plan options and the
plan option price.

The per share exercise price of shares granted under the plan may be adjusted in
the event of certain changes in the total purchase price payable upon the
exercise in full of options granted under the plan. Officers, directors and key
employees of and consultants to us will be eligible to receive non-qualified
options under the plan. Only our officers, directors and employees who are
employed by us or by any subsidiary thereof are eligible to receive incentive
options.

The Company has elected to account for the stock options under the Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and
related interpretations. Accordingly, no compensation expense has been
recognized on the employee stock options. The Company accounts for stock options
granted to consultants under Financial Accounting Standards Board Statement No.
123, "Accounting for Stock-Based Compensation." The Company recognized $-0- and
$-0- in compensation expense at December 31, 2004 and 2003, respectively.

During the years ended December 31, 2004 and 2003, 50,000 options were granted
to the chief executive officer of the Company.

A summary of options during the years ended December 31, 2004 and 2003 is shown
below:
<TABLE>
<CAPTION>

                                             DECEMBER 31, 2004          DECEMBER 31, 2003
                                         -------------------------- ---------------------------
                                         NUMBER OF WEIGHTED-AVERAGE NUMBER OF  WEIGHTED-AVERAGE
                                          SHARES    EXERCISE PRICE    SHARES    EXERCISE PRICE
                                         -------    --------------    -------   --------------

<S>                                      <C>            <C>          <C>            <C>
Outstanding at beginning of year         556,500        $0.43        506,500        $0.43
Granted                                   50,000         0.30         50,000         0.04
Exercised                                     --           --             --           --
Forfeited                                     --           --             --           --
                                         -------        -----        -------        -----
Outstanding at December 31               606,500        $0.42        556,500        $0.43
                                         =======        =====        =======        =====
Exercisable at December 31               499,900                     449,900
                                         =======                     =======
Available for issuance at December 31    643,500                     693,500
                                         =======                     =======
</TABLE>

                                      F-15
<PAGE>
ASHLIN DEVELOPMENT CORPORATION F/K/A
HEALTH & NUTRITION SYSTEMS INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

The fair value of each option is estimated on the date of grant using the fair
market value option-pricing model with the assumptions:

                   Risk-free interest rate                 4.5%-6.5%
                   Expected life (years)                    Various
                   Expected volatility                       1.23
                   Expected dividends                        None

NOTE 16 - EMPLOYMENT AGREEMENT(S)
---------------------------------

In April 2004, the Company entered into an employment agreement with Christopher
Tisi, the Company's Chief Executive Officer and President. The agreement
provided for a base salary of $164,000, as well as bonuses that were contingent
upon increases in revenue and net profits over prior years. The agreement
provides that bonuses would be determined quarterly with 33% of such bonuses to
be paid quarterly. The agreement also provided for an annual grant of 50,000
stock options under its 1998 Stock Option Plan. The options have a four-year
term and will be vested 100% on the date of grant. The agreement also provides
for the payment of an amount equal to the lesser of (i) $275,000 or (ii) the
maximum "golden parachute" payment permitted to be deducted by us under the
federal tax law in the event Mr. Tisi is terminated after a change of control.

On April 9, 2004, Mr. Tisi entered into a new two-year employment contract,
which was effective as of January 1, 2004. The contract

         o   Increased his base salary from $147,000 to $164,000;

         o   Provided for a quarterly bonus of the sum of 5% of the
             increase in net revenues compared to the comparable quarter
             for the prior year and 10% of the increase in net income over
             the prior year's comparable quarter. One third of the bonus is
             payable at the conclusion of the applicable quarter; one third
             is payable on the conclusion of the following quarter based on
             cumulative results for the year through the end of such
             quarter compared to the prior year's year to date results, and
             one third is payable at year end based on a comparison to the
             prior years results;

         o   Provided for the payment of the unpaid portion of his 2003
             bonus ($162,271) and the incremental increase in his annual
             salary in 12 equal monthly installments beginning April 1,
             2004. At December 31, 2004 the unpaid portion of bonuses was
             $118,748.

         o   Provided for an annual grant of options to purchase 50,000
             shares of the Company's common stock under the 1998 Stock
             Option Plan;

         o   Provided for the payment of $275,000 in severance upon a
             change in control of the Company if the Company terminates the
             agreement other than for cause, unless the Company enters into
             an agreement regarding his continued employment;

         o   Provided that he will not compete with the Company for a one
             year period after the termination of the contract (other than
             termination without cause) in the wholesale distribution of
             sale in the United States to retailers or intermediaries of
             products which directly or otherwise significantly compete
             with products sold or distributed by the Company.

On September 28, 2004, Mr. Tisi stepped down as CEO and resigned all executive
capacities, and his salary was lowered by 10%, where it remained until the
Company was sold on January 25, 2005. This bonus plan also continued until the
sale.

                                      F-16
<PAGE>
ASHLIN DEVELOPMENT CORPORATION F/K/A
HEALTH & NUTRITION SYSTEMS INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

NOTE 17 - SUBSEQUENT EVENTS
---------------------------

         On October 15, 2004, the Company filed in the southern district of
Florida a plan of reorganization under Chapter 11 of the United States
bankruptcy code. This culminated a rather lengthy effort by management and the
Board of Directors to find alternatives to enhance shareholder value in the face
of deteriorating operating performance. The Court confirmed the Company's plan
of reorganization on January 10, 2005 and the plan was declared effective on
January 28, 2005.

         As part of the plan:

         (1) TeeZee, Inc., a company formed by our former Chief Executive
Officer, Christopher Tisi, as a result of no superior bids being submitted,
purchased substantially all of the assets of the Company, including the rights
to the name "Health & Nutrition Systems International, Inc." in exchange for
$350,000 in cash and assumption of approximately $1,841,000 in liabilities.

         (2) The Company entered into an employment agreement with Mr. Brown,
the highlights of which are as follows:

         o   Monetary compensation of $9,200 per month until the 30th
             calendar day following the Company's discharge from
             bankruptcy, and thereafter at a rate of $7,000 per month; and

         o   The issuance by the Company to Mr. Brown of 300,000 shares of
             its Common Stock, which are subject to repurchase by the
             Company in the event Mr. Brown terminates his employment with
             the Company for any reason at any time prior to the first
             anniversary of the agreement, or his employment with the
             Company is terminated by the Company for cause. The Company
             recorded compensation expense of $12,000 or $0.04 per share of
             common stock.

         (3) The secured claim of Garden State Nutritionals (GSN), a division of
Vitaquest International, Inc. was assumed by the Purchaser, and GSN retained its
pre-existing lien on substantially all of the transferred assets;

         (4) The secured claim of SunTrust Bank on the Company's 2004 Honda
Element was assumed by the purchaser on the effective date and SunTrust will
retain its pre-existing lien on the vehicle;

         (5) Most unsecured claims, including those of trade and employee
creditors, together with any unsecured deficiency claims of GSN and SunTrust
were assumed by the Purchaser. The assumed unsecured claims of the Company were
paid, pro rata, from a fund which did not exceed $50,000;

                                      F-17
<PAGE>
ASHLIN DEVELOPMENT CORPORATION F/K/A
HEALTH & NUTRITION SYSTEMS INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

         (6) The plan also provided for the entry of a permanent injunction
barring the Company and the purchaser from violating Window Rock Enterprises,
Inc.'s trademarks for "Cortislim" and for the agreement of the Company and the
purchaser not to challenge Window Rock's trademark for this product; and

         (7) All holders of the Company's common stock retained their shares.

         From and after the effective date, the Company has continued to exist
as a separate corporate entity, with all the powers of a corporation under the
laws of Florida, and has been engaged in the business of seeking suitable
commercial activities or a strategic alliance with an operating entity. The
present directors of the Company have continued as directors of the Company, and
Mr. Brown has continued to serve as CEO and Chairman of the Board of Directors
and is the sole officer of the Company.

         During the year ended December 31, 2004, the Company did not issue any
common stock.

         On March 1, 2005 the Company entered into a consulting agreement with
Global Business Resources Inc. ("GBRI"), pursuant to which GBRI was engaged as a
non-exclusive consultant to the Company to assist the Company with the
development of its strategic plan and the identification, negotiation and
consummation of strategic relationships. The agreement continues on a
month-to-month basis and may be terminated by either party upon 30 days written
notice. The agreement provides that, commencing on the March 1, 2005, the
Company will pay to GBRI a monthly fee of $2,000 for ongoing advisory consulting
services. On March 1, 2005 the Company issued 100,000 shares of its common stock
to CBRI as additional consideration for GBRI's services. The Company has the
right to repurchase 80,000 of the shares if the agreement is terminated during
prior to April 1, 2005; the repurchase right decreases by 20,000 shares during
each of the four calendar months thereafter. The Company's right to repurchase
shall terminate in the event of a change of control of the Company.

         On March 3, 2005 (the "Effective Date"), we entered into a letter
agreement with Mr. James A. Brown, the Company's Chief Executive Officer and the
Chairman of the Board of its Board of Directors, pursuant to which the Company
issued to Mr. Brown an additional 320,000 shares of common stock of the Company
in consideration of Mr. Brown's continued services to the Company and in
recognition of the Company's successful emergence from reorganization. In
accordance with the terms of the Letter Agreement, the Company has the right to
repurchase the shares at the closing price of the common stock on the Effective
Date if Mr. Brown leaves the Company or if he is terminated for cause, in each
case prior to the expiration of the initial term of his employment agreement.
The Company's right to repurchase terminates in the event of a change of control
of the Company. The fair value of the common stock at the time of issue was
$0.08 per share, and the Company recorded compensation expense of $25,600 in
March 2005.

                                      F-18
<PAGE>


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

         None.

ITEM 8A. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

         Our principal executive officer, currently the only officer and
employee of our company, has participated in and supervised the evaluation of
our disclosure controls and procedures that are designed to ensure that
information required to be disclosed by us in the reports that we file is
recorded, processed, summarized and reported within the time periods 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 the information required to be disclosed by us in the reports that
we file or submit under the Act is accumulated and communicated to our
management, including our principal executive officer or officers and principal
financial officer, to allow timely decisions regarding required disclosure.
Based on his evaluation of those controls and procedures as of a date within 90
days of the date of this filing, our CEO has determined that the controls and
procedures are adequate and effective.

INTERNAL CONTROL OVER FINANCIAL REPORTING

         Our principal executive officer is responsible for establishing and
maintaining adequate internal controls over our financial reporting. The
framework used by our principal executive officer to evaluate the effectiveness
of our internal control over financial reporting includes, without limitation,
internal controls designed to provide reasonable assurance :

         o   that financial information required to be disclosed by us in
             the reports that we file is recorded, processed, summarized
             and reported within the time periods specified in the
             Securities and Exchange Commission's rules and forms;

         o   that the information required to be disclosed by us in the
             reports that we file or submit under the Act is accumulated
             and communicated to our management, including our principal
             executive officer, and to our independent auditors, to allow
             timely decisions regarding required disclosure; and

         o   regarding the reliability of financial reporting and the
             preparation of financial statements for external purposes in
             accordance with generally accepted accounting principles.

         There was no change in our internal control over the financial
reporting that occurred during the last fiscal quarter covered by this Annual
Report on Form 10KSB that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.

CHANGES IN INTERNAL CONTROLS

         There were no significant changes, including any corrective actions
with regard to significant deficiencies and material weaknesses, in our internal
controls or in other factors that could significantly affect internal controls
since the date of the most recent evaluation of these controls by our chief
executive officer.

                                    PART III

ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS

         We have adopted a written code of ethics that applies to our senior
financial officers and persons performing similar functions. Upon written
request to our corporate secretary by U.S. mail, we will provide, at no charge,
a copy of such Code to any person requesting a copy.

                                       22
<PAGE>

         The other information required by this item is incorporated by
reference to our proxy statement to be filed within 120 days of December 31,
2004 in connection with solicitation of proxies for our 2005 annual meeting of
shareholders.

ITEM 10. EXECUTIVE COMPENSATION

         The information required by this item is incorporated by reference to
our definitive proxy statement to be filed within 120 days of December 31, 2004
in connection with solicitation of proxies for our 2005 annual meeting of
shareholders.

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

         The other information required by this item is incorporated by
reference to our proxy statement to be filed within 120 days of December 31,
2004 in connection with solicitation of proxies for our 2005 annual meeting of
shareholders.


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The information required by this item is incorporated by reference to
our definitive proxy statement to be filed within 120 days of December 31, 2004
in connection with solicitation of proxies for our 2005 annual meeting of
shareholders.

ITEM 13. EXHIBITS

                  The following documents are filed as part of this report:
                  FINANCIAL STATEMENTS:
<TABLE>
<CAPTION>
                                                                                               PAGE
<S>                                                                                            <C>
Independent Auditors' Report                                                                   F-1
Balance Sheets as of December 31, 2004 and 2003                                                F-2
Statements of Operations for the years ended December 31, 2004 and 2003                        F-3
 Statements of Changes in Stockholders' Deficit for the years ended                            F-4
   December 31, 2004 and 2003
 Statements of Cash Flows for the years ended December 31, 2004 and 2003                       F-5
 Notes to Financial Statements                                                                 F-6 - F19
</TABLE>

The exhibits to this Form 10-KSB appear following the Signature Page included in
this report.


2.1          Debtor's Amended Plan of Reorganization (incorporated by reference
             to Exhibit 2.1 of Registrant's Form 8-K, filed January 14, 2005;
             Commission File Number 000-29245).

3.1(a)       Articles of Incorporation of the Registrant (incorporated by
             reference to Exhibit 3.1(A) of Registrant's registration statement
             on Form 10-SB, filed on January 31, 2000; Commission File Number
             000-29245).

3.1(b)       Articles of Amendment to the Articles of Incorporation
             (incorporated by reference to Exhibit 3.1(B) of Registrant's
             registration statement on Form 10-SB, filed on January 31, 2000;
             Commission File Number 0000-29245).

3.1(c)       Articles of Amendment to Articles of Incorporation (incorporated by
             reference to Exhibit 3.1(C) of Registrant's registration statement
             on Form 10-SB, filed on January 31, 2000; Commission File Number
             000-29245).

3.1(d)       Articles of Amendment to Articles of Incorporation (incorporated by
             reference to Exhibit 3.1(D) of Registrant's Annual Report on Form
             10-KSB, filed on April 16, 2001; Commission File Number 000-29245).

                                       23
<PAGE>

3.2          By-Laws of the Registrant (incorporated by reference to Exhibit 3.2
             of Registrant's registration statement on Form 10-SB, filed on
             January 31, 2000; Commission File Number 000-29245).

3.3          Amendment to the Restated Bylaws of the Company dated September 25,
             2000 (incorporated by reference to Exhibit 3.3 of Registrant's
             Annual Report on Form 10-KSB, filed on April 16, 2000; Commission
             File Number 000-29245).

3.4          Amendment to the Restated Bylaws of the Company dated November 10,
             2000 (incorporated by reference to Exhibit 3.4 of Registrant's
             Annual Report on form 10-KSB, filed on April 16, 2000; Commission
             File Number 000-29245).

10.1         Employment Agreement between the Company and Christopher Tisi
             effective as of January 1, 2002 (incorporated by reference to
             Exhibit 10.1 of Registrant's Current Report on Form 8-K filed on
             February 13, 2002; Commission File Number 000-29245).

10.2         Severance Agreement between the Company and Steven Pomerantz
             effective as of January 1, 2002 (incorporated by reference to
             Exhibit 10.3 of Registrant's Current Report on Form 8-K filed on
             February 13, 2002; Commission File Number 000-29245).

10.3         Factoring and Security Agreement between LSQ Funding Group L.C. and
             Health and Nutrition Systems International, Inc. effective as of
             March 15, 2002 (incorporated by reference to Exhibit 10.3 of
             Registrant's Annual Report on Form 10-KSB, filed on April 12, 2002;
             Commission File Number 000-29245).

10.4         Indemnification Agreement dated March 15, 2002 between LSQ Funding
             Group L.C. and Christopher Tisi (incorporated by reference to
             Exhibit 10.4 of Registrant's Annual Report on Form 10-KSB, filed on
             April 12, 2002; Commission File Number 000-29245).

10.5         Indemnification Agreement between the Company and Christopher Tisi
             dated January 1, 2002 (incorporated by reference to Exhibit 10.2 of
             Registrant's Current Report on Form 8-K filed on February 13, 2002;
             Commission File Number 000-29245).

10.6         Indemnification Agreement between the Company and Steven Pomerantz
             dated January 1, 2002 (incorporated by reference to Exhibit 10.4 of
             Registrant's Current Report on Form 8-K filed on February 13, 2002;
             Commission File Number 000-29245).

10.7         Lease Agreement between the Company and Fred Keller, Trustee dated
             November 1, 2000 (incorporated by reference to Exhibit 10.5 of
             Registrant's Annual Report on Form 10-KSB, filed on April 16, 2001;
             Commission File Number 000-29245).

10.8         Lease Agreement between the Company and Fred Keller, Trustee dated
             January 1, 2001 (incorporated by reference to Exhibit 10.6 of
             Registrant's Annual Report on Form 10-KSB, filed on April 16, 2001;
             Commission File Number 000-29245).

10.9         Secured Party's Bill of Sale between Fleet National Bank and the
             Company dated January 12, 2001 (incorporated by reference to
             Exhibit 10.1 of Registrant's Current Report on Form 8-K filed on
             January 26, 2001; Commission File Number 000-29245).

10.10        Trademark Assignment from Heritage Consumer Products, LLC to the
             Company dated January 12, 2001 (incorporated by reference to
             Exhibit 10.2 of Registrant's Current Report on Form 8-K filed on
             January 26, 2001; Commission File Number 000-29245).

10.11        Agreement between the Company and Steven Pomerantz dated January
             12, 2001 (incorporated by reference to Exhibit 10.3 of Registrant's
             Current Report on Form 8-K filed on January 26, 2001; Commission
             File Number 000-29245).

10.12        Shareholders' Agreement among Tony D'Amato, Christopher Tisi, and
             the Company dated July 13, 2000 (incorporated by reference to
             Exhibit 1 of Christopher Tisi, Steven Pomerantz, Tony Musso, and
             Tony D'Amato's Schedule 13D, filed on January February 14, 2001;
             Commission File Number 0-29245).

                                       24
<PAGE>

10.13        Irrevocable Proxy dated July 13, 2000 (incorporated by reference to
             Exhibit 2 of Christopher Tisi, Steven Pomerantz, Tony Musso, and
             Tony D'Amato's Schedule 13D, filed on January February 14, 2001;
             Commission File Number 0-29245).

10.14        Waiver dated January 31, 2001 (incorporated by reference to Exhibit
             3 of Christopher Tisi, Steven Pomerantz, Tony Musso, and Tony
             D'Amato's Schedule 13D, filed on January February 14, 2001;
             Commission File Number 0-29245).

10.15        Joint Filing Agreement dated February 13, 2001 (incorporated by
             reference to Exhibit 4 of Christopher Tisi, Steven Pomerantz, Tony
             Musso, and Tony D'Amato's Schedule 13D, filed on January February
             14, 2001; Commission File Number 0-29245).

10.16        Exclusive Manufacturing Agreement dated April 11, 2002 between the
             Company and Garden State Nutritionals, a division of VitaQuest
             International, Inc. (incorporated by reference to Exhibit 10.16
             of Registrant's Annual Report on Form 10-KSB, filed on April 12,
             2002; Commission File Number 000-29245).

10.17        Security Agreement dated April 11, 2002 between the Company and
             Garden State Nutritionals, a division of VitaQuest International,
             Inc. (incorporated by reference to Exhibit 10.16 of Registrant's
             Annual Report on Form 10-KSB, filed on April 12, 2002; Commission
             File Number 000-29245).

10.18        Health & Nutrition Systems International, Inc. 1998 Stock Option
             Plan (incorporated by reference to Exhibit 10.18 of Registrant's
             Annual Report on Form 10-KSB, filed on April 12, 2002; Commission
             File Number 000-29245).

10.19        Promissory Note dated April 11, 2002 between the Company as
             borrower and Garden State Nutritionals as lender (incorporated by
             reference to Exhibit 10.19 of Registrant's Annual Report on Form
             10-KSB, filed on April 12, 2002; Commission File Number 000-29245).

10.20        Subordination Agreement dated April 11, 2002 among the Company, LSQ
             Funding Group, L.C. and Garden State Nutritionals (incorporated by
             reference to Exhibit 10.20 of Registrant's Annual Report on Form
             10-KSB, filed on April 12, 2002; Commission File Number 000-29245).

10.21        Amendment No. 1 dated April 29, 2002 to the Employment Agreement
             between the Company and Christopher Tisi effective as of January 1,
             2002 (incorporated by reference to Exhibit 10.21 of Registrant's
             Annual Report on Form 10-KSB/A-1, filed on April 30, 2002;
             Commission File Number 000-29245).

10.22        Amendment No. 1 dated April 29, 2002 to the Severance Agreement
             between the Company and Steven Pomerantz effective as of January 1,
             2002 (incorporated by reference to Exhibit 10.2 of Registrant's
             Annual Report on Form 10-KSB/A-1, filed on April 30, 2002;
             Commission File Number 000-29245).

10.23        First Amendment to Shareholders' Agreement among Tony D'Amato,
             Christopher Tisi and the Company dated April 24, 2002 (incorporated
             by reference to Exhibit 4 of Christopher Tisi, Steven Pomerantz and
             Tony D'Amato's Schedule 13D, filed on April 29, 2002; Commission
             File Number 0-29245).

10.24        Irrevocable Proxy dated April 24, 2002 (incorporated by reference
             to Exhibit 5 of Christopher Tisi, Steven Pomerantz and Tony
             D'Amato's Schedule 13D, filed on April 29, 2002; Commission File
             Number 0-29245).

10.25        Option Agreement effective as of February 12, 2002 between the
             Company and Christopher Tisi (incorporated by reference to Exhibit
             10.25 of Registrant's Annual Report on Form 10-KSB/A-1, filed on
             April 30, 2002; Commission File Number 000-29245).

10.26        Indemnification Agreement between Ted Alflen and the Company dated
             as of January 1, 2002 (incorporated by reference to Exhibit 10.1 of
             Registrant's Quarterly Report on Form 10-QSB, filed on November 14,
             2002; Commission File Number 000-29245).

                                       25
<PAGE>

10.27        Indemnification Agreement between Darryl Green and the Company
             dated as of January 1, 2002 (incorporated by reference to Exhibit
             10.2 of Registrant's Quarterly Report on Form 10-QSB, filed on
             November 14, 2002; Commission File Number 000-29245).

10.28        Employment Agreement between the Company and Christopher Tisi dated
             as of January 1, 2004 (incorporated by reference to Exhibit 10.1 of
             Registrant's Report on Form 8-K, filed on April 12, 2004;
             Commission File Number 000-29245).

10.29        Second Amendment to Employment Agreement dated effective as of
             September 24, 2004 between the Company and Christopher Tisi
             (incorporated by reference to Exhibit 99.2 of Registrant's Report
             on Form 8-K, filed on September 24, 2004; Commission File Number
             000-29245).

10.30        Asset Purchase Agreement between the Company and TeeZee, Inc. dated
             October 15, 2004 (incorporated by reference to Exhibit 2 to Exhibit
             2.1 of Registrant's Report on Form 8-K, filed on January 14, 2005;
             Commission File Number 000-29245).

10.31        Employment Agreement between the Company and James A. Brown dated
             as of November 19, 2004 (incorporated by reference to Exhibit 3 to
             Exhibit 2.1 of Registrant's Report on Form 8-K, filed on January
             14, 2005; Commission File Number 000-29245).

10.32        Letter Agreement between the Company and James A. Brown dated March
             3, 2005 (incorporated by reference to Exhibit 10.1 of Registrant's
             Form 8-K, filed March 7, 2005; Commission File Number 000-29245).

14.1         Code of Ethics (incorporated by reference to Exhibit 14.1 of
             Registrant's Report on Form 10-KSB, filed on April 14, 2004;
             Commission File Number 000-29245).

16.1         Letter from Butner & Kahle, CPA dated September 6, 2000
             (incorporated by reference to Exhibit 16.4 of Registrant's Current
             Report on Form 8-K filed on September 7, 2000; Commission File
             Number 000-29245).

24           Power of attorney (included on signature page).*

31.1         Certification Pursuant to Item 601(b)(31) of Regulation S-K, as
             adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

32.1         Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
             Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

*Included with this filing

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

         The information required by this item is incorporated by reference to
our definitive proxy statement to be filed within 120 days of December 31, 2004
in connection with solicitation of proxies for our 2005 annual meeting of
shareholders.

                           [INTENTIONALLY LEFT BLANK]


                                       26
<PAGE>

                                   SIGNATURES

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

Date: March 31, 2005              Health & Nutrition Systems International, Inc.



                                  By: /s/James A. Brown
                                      --------------------------------------
                                      James A. Brown
                                      Chief Executive Officer and Secretary
                                      (Principal Executive Officer)

         Each person whose signature appears below hereby constitutes and
appoints James Brown his true and lawful attorney-in-fact and agent, with full
power of substitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments to this report on Form 10-KSB, and to
file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and his agents, and each of them full power and authority to do
and perform each and every act and all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that such attorney-in-fact and
agents or any of them or his or their substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.

         In accordance with the requirements of the Exchange Act, this report
has been signed by the following persons in the capacities and on the dates
indicated.
<TABLE>
<CAPTION>

         SIGNATURE                           TITLE                                 DATE

<S>                        <C>                                                 <C>

/s/James A. Brown          Chairman of the Board, Chief Executive Officer       March 31, 2005
----------------------
James A. Brown             and Secretary

/s/Steven A. Pomerantz     Director                                             March 31, 2005
----------------------
Steven A. Pomerantz

/s/Ted Alflen              Director                                             March 31, 2005
----------------------
Ted Alflen
</TABLE>


                                       27
<PAGE>


Index to Exhibits

Exhibit
Number                Description of Exhibits
------   -----------------------------------------------------------------------

24       Power of attorney (included on signature page).

31.1     Certification Pursuant to Item 601(b)(31) of Regulation S-K, as adopted
         pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1     Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
         to Section 906 of the Sarbanes-Oxley Act of 2002.