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

                              AMENDMENT NO.1 TO
                                FORM 10-KSB/A


[X]      ANNUAL REPORT UNDER OR OF THE SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended May 31, 2004
                   --------------------------------------

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

     For the transition period from _______________________ to _____________

                        Commission file number 000-50776
                        --------------------------------


                        American Capital Holdings, Inc.
                        --------------------------------
                 (Name of small business issuer in its charter)


       Florida                                          65-0895564
       ------                                           ----------
(State or other jurisdiction             (I.R.S. Employer Identification No.)
of incorporation or organization)


100 Village Square Crossing, Suite 202                   33410
Palm Beach Gardens, FL
-------------------------------------------------        -----
(Address of principal executive offices)               (Zip Code)


Issuer's telephone number, including area code: (561) 207-6395


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

Title of each class                 Name of each exchange on which registered


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

                    Common Stock, par value $.0001 per share
                     ---------------------------------------
                                (Title of class)

                                     1



Check whether the issuer (1) filed all reports required to be filed by Section
or 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 contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB/A or any
amendment to this Form 10-KSB/A. [X]

Registrant's revenues for its most recent fiscal year:          $0.

Aggregate market value of Registrant's voting and non-voting common equity held
by non-affiliates:          Currently no trading market

Shares of Registrant's common stock outstanding as of May 31, 2004:
15,723,903

Transitional Small Business Disclosure Format (Check one): Yes ____; No _X__




































                                     2

AMERICAN CAPITAL HOLDINGS, Inc.            Form 10-KSB/A     MAY 31, 2004

                                       INDEX

                                                                    PAGE NO.
PART I


ITEM 1    DESCRIPTION OF BUSINESS . . . . . . . . . . . . . . . . . . . . 4

ITEM 2    DESCRIPTION OF PROPERT . . . . . . . . . . . . . . . . . . . . 10

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

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

ITEM 5    MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS . . . 10

ITEM 6    MANAGEMENT'S PLAN OF OPERATION . . . . . . . . . . . . . . . . 11

PART II   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA . . . . . . . . . F-1

PART III

ITEM 7   DIRECTORS, EXECUTIVE OFFICERS AND CONTROL PERSONS. . . . . . . 33

ITEM 8   EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . 35

ITEM 9   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 36

ITEM 10  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS . . . . . . . . 37

ITEM 11  EXHIBITS AND REPORTS ON FORM 8-K . . . . . . . . . . . . . . . 37

ITEM 12  PRINCIPAL ACCOUNTANT FEES AND SERVICES . . . . . . . . . . . . 37

SIGNATURES AND CERTIFICATIONS . . . . . . . . . . . . . . . . . . . . . 38


















                                     3
PART I

ITEM 1. DESCRIPTION OF BUSINESS.

History


American Capital Holdings, Inc.("the Company") originated through a series of
transactions and restructurings from US Amateur Sports Company, one of ten
wholly-owned subsidiaries of eCom eCom.com ("eCom"), an internet-based e-
commerce company with businesses ranging from sports memorabilia and equipment
to data compression technology.  eCom eCom.com trades on the OTC/Bulletin Board
under the symbol 'ECEC.'

eCom incorporated in the State of Florida on June 14, 1994 as US Amateur
Sports, Inc., but on December 17, 1998, eCom's directors voted to change the
name from US Amateur Sports, Inc. to eCom eCom.com,Inc. in the belief that the
proposed name more accurately reflected the nature of the core business--
electronic commerce.  At a Special Meeting of Shareholders held on January 25,
1999, the shareholders approved an amendment to Articles of Incorporation of US
Amateur Sports Company in order to adopt the new name.  At that time, a current
report on Form 8-K was filed with the Securities and Exchange Commission, and
the name change became effective on January 27, 1999.


Throughout these transactions and restructurings, and as the market's
infatuation with dot-coms began to wane, eCom began to lose market
capitalization.  From the historical high share price of $21.50 in April 1999,
shares saw a rapid decline to a low of $.01 in February 2003.  eCom concluded
that it did not have the financial resources necessary to develop all ten of
its business units collectively, so in an effort to preserve and restore
shareholder value, eCom decided to spin off the ten subsidiaries into
independent companies.  The rationale behind this move was that each
independent company would be better suited to obtain their own funding, and to
develop and execute their distinct business plans.  eCom would then be able to
develop and streamline its business plan as well.  This belief was based in
part on eCom's experience with potential business partners who sought
involvement with only one operating segment of eCom's multi-faceted business.


On December 1, 2003, eCom's Board of Directors approved the spin-off, and USA
SportsNet, Inc. emerged as an independent company, and subsequently changed its
name to American Capital Holdings, Inc.("the Company"), in anticipation of
making a certain acquisition.  After the spin-off, the Company was presented
with an opportunity to acquire certain assets of a company then known as
American Capital Holdings, Inc., now known and referred to as ACHI.  On January
12, 2004, the Company entered into an Asset Purchase Agreement with ACHI
whereby the Company agreed to acquire certain assets of ACHI in return for 95%
of the total stock ownership of the Company.  In order to accomplish this
transaction, the Company effected a 20-to-1 reverse stock split, which reduced
its outstanding shares to 2,497,756 shares, and agreed to issue ACHI 49,995,112
shares.  ACHI agreed to accept the issuance of 13,561,804 at closing, and
assigned the right to receive these shares to its principle, Barnard A.
Richmond, who is now the President of the Company.  The remaining 36,393,308
shares were reserved for issuance by the Company in connection with future
acquisitions and financing.
                                     4
AMERICAN CAPITAL HOLDINGS, INC.



The Spin Off.  On December 1, 2003, the Board of Directors of eCom approved the
spin-off of the Company.  They voted to issue to the shareholders of eCom one
share of the Company for every one share of eCom owned as of the record date of
January 5, 2004.  Fractional shares are to be purchased by the Company. No
payment will be required of the eCom shareholders.

Pursuant to Staff Legal Bulletin No. 4 issued September 16, 1997, the SEC has
addressed the Division of Corporation Finance's views regarding whether the
registration requirements of Section 5 of the Securities Act of 1933 applies to
spin-offs.  The Division has taken the view that the subsidiary does not have
to register a spin-off under the Securities Act when it meets certain
requirements.

1.  The parent company's shareholders do not provide consideration for the
    spun-off shares;
2.  The spin-off is pro-rata to the parent company's shareholders;
3.  The parent company provides adequate information about the spin-off and
    the subsidiary to its shareholders and to the trading markets;
4.  The parent company has a valid business purpose for the spin-off; and
5.  If the parent company spins-off "restricted securities," it has held
    those securities for at least two years.

The Company believes that the spin-off of ACH shares to the shareholders of
eCom meets the above requirements and does not have to register the spin-off
company under the Securities Act.  As a result, the common shares to be issued
pursuant to the spin-off company may be issued without restriction except for
affiliates of eCom.

Assets Acquired from American Capital Holdings, Inc. The assets acquired from
ACHI consist primarily of approximately $10.8 million of investment interests
in ten developing companies (described below), approximately $5.3 million of
restricted securities, approximately $233,000 of marketable securities,
approximately $100,000 in cash, and proprietary investment programs known as
Energy Tax Incentive Preferred Securities ("ETIPS")and Guaranteed Principal
Insured Convertible Securities ("GPICS") which ACHI had developed See the
American Capital Holdings balance sheet included in the Financial Statements
section of this report.

Acquisition of Spaulding.  On December 30, 2003, prior to the Company's
acquisition from ACHI, ACHI entered into a letter agreement with Spaulding
Ventures, LLC, pursuant to which ACHI agreed to acquire all of Spaulding's
assets in return for 2,093,351 shares of ACHI common stock, plus warrants to
purchase a total of 209,335 additional shares of ACHI common stock at a
purchase price of $6.00 per share. As part of its acquisition from ACHI of the
assets ACHI acquired from Spaulding, the Company has agreed to replace the
shares and warrants issued by ACHI with shares and warrants of the Company.  In
order to facilitate the distribution of these securities by Spaulding to its
shareholders, the Company intends file a Registration Statement with the
Securities and Exchange Commission registering the distribution to Spaulding's
shareholders of both the acquisition shares and the shares to be issued upon
exercise of the warrants.  American Capital has closed out the operations of
Spaulding Ventures.
                                     5
AMERICAN CAPITAL HOLDINGS, INC.


Assets Acquired from Spaulding.  The assets acquired by ACHI from Spaulding,
and subsequently acquired by the Company from ACHI, consist primarily of equity
ownership positions in ten developing companies.  The companies included; Smart
Pill Holding Corp., Brilliant Roadways, Inc., @Visory, LLC., eSmokes, Inc.,
Efficien, Inc., IS Direct Agency, Inc., Solid Imaging, Ltd., Century Aerospace
Corporation., Traffic Engine, Inc. and Metroflex, Inc.  (See Financial
Statement Footnote E)

Activity Since May 31, 2004.  Since May 31, 2004, the Company's plan of
operation has changed significantly.  The Company is currently focused on
providing provide balance sheet funding options for unfunded government and
private sector pension plan liability.  For a current description of the
Company's plan of operation, see "Description of Business" in the Company's
Amended and Restated Registration Statement on Form 10SB, as filed with the
Securities and Exchange Commission on January 11, 2005.

Employees.  The Company currently has seven employees, none of which are full
time employees, since they all also provide services to affiliated companies.

RISK FACTORS

The risk factors discussed below could cause our actual results to differ
materially from those expressed in any forward-looking statements. See
"Forward-Looking Statements." Although we have attempted to list
comprehensively these important factors, we caution you that other factors may
in the future prove to be important in affecting our results of operations. New
factors emerge from time to time and it is not possible for us to predict all
of these factors, nor can we assess the impact of each such factor on the
business or the extent to which any factor, or combination of factors, may
cause actual results to differ materially from those contained in any forward-
looking statement.

The risks described below set forth what we believe to be the most material
risks associated with the purchase of our common stock. Before you invest in
our common stock, you should carefully consider these risk factors, as well as
the other information contained in this prospectus.


LACK OF OPERATING HISTORY.  To date, we have been participating exclusively in
activities associated with the start-up of the Company, including structuring
the Company, acquiring assets, negotiating the acquisition of the insurance
subsidiaries needed to sell our products, obtaining the required licenses for
our intended insurance subsidiaries, and formulating our marketing strategies.
We have not yet commenced operations, and thusly have had no significant
revenues since inception.  Until our pending acquisitions of Universe Life and
Cosmopolitan Life are completed, and until they are capitalized sufficiently to
obtain the insurance licenses needed to underwrite our products, we will use
the services of third-party insurance carriers in connection with any sales of
our products, which will reduce our net revenues.  We have not yet realized
revenues from sale of our products, and have incurred a net loss of
$(4,638,264) since inception, of which $(3,023,199)are asset write-downs.

                                     6

AMERICAN CAPITAL HOLDINGS, INC.

We expect our acquisition of Cosmopolitan Life to be completed by May 31, 2005,
and some of the proceeds of this offering are designated for additional
expansion capitalization of those subsidiaries.  We intend to begin sales of
our products within 60 days, regardless of the status of this offering, but do
not expect significant net revenues until after our acquisitions Cosmopolitan
Life is complete.

SPECULATIVE NATURE OF THE COMPANY'S PROPOSED OPERATIONS.  The success of our
proposed plan of operation will depend primarily on our ability to sell the
proprietary products we have created.  There can be no assurance that we will
be successful in these efforts.

WE WILL FACE INTENSE COMPETITION.  We are and will continue to be only one
participant in the business of selling life insurance backed financial
products.  Although we have applied for a patent on our product addressing
Statement 45, we will face competition from companies who may offer a similar
product that have greater financial resources, broader arrays of products,
higher ratings and stronger financial performance, which may impair our ability
to retain existing customers, attract new customers and maintain our
profitability and financial strength. We operate in a highly competitive
industry. Many of our competitors are substantially larger and enjoy
substantially greater financial resources, broader and more diversified product
lines and more widespread agency relationships. Our products can be expected to
face competition with products sold by other insurance companies, financial
intermediaries and other institutions based on a number of factors, including
premium rates, policy terms and conditions, service provided to distribution
channels and policyholders, ratings by rating agencies, reputation and
commission structures.

THERE ARE NUMEROUS CONFLICTS OF INTEREST THAT MAY ARISE BETWEEN AMERICAN
CAPITAL HOLDINGS AND ITS OFFICERS AND DIRECTORS.  Because some of our directors
are in the business of providing services to the insurance industry, they could
encounter conflicts of interest from time to time between the interests of the
Company and the interests of their clients.  Douglas Sizemore provides
consulting services to various insurance companies.  Norman E. Taplin is an
attorney specializing in insurance regulatory matters.  Michael Camilleri owns
an actuarial firm which provides services to various insurance entities.
Resulting conflicts of interest will be resolved through exercise of such
judgment as is consistent with the fiduciary duties of management to the
Company.

NO PUBLIC MARKET CURRENTLY EXISTS.  Although we intend to apply for listing of
our Common Stock on the American Stock Exchange, there is currently no public
market for the Company's common stock.  There can be no assurance, however,
that a market will in fact develop, or that a shareholder ever will be able to
sell his shares without considerable delay.  If a market should develop, the
price may be highly volatile.  Factors such as those discussed in this "Risk
Factors" section may have a significant impact upon the market price of the
Company's stock.

                                     7




AMERICAN CAPITAL HOLDINGS, INC.


WE WILL REQUIRE ADDITIONAL CAPITAL. We have not yet begun sales of our
products, and will therefore require additional capital to sustain us until
sales begin and we are able to receive revenues from those sales.  We may also
require additional capital in the future to sustain growth and achieve
favorable ratings.  The required capital may not be available when needed or
may be available only on unfavorable terms.  Our long-term strategic capital
requirements will depend on many factors including the accumulated statutory
earnings of our life subsidiary and the relationship between the statutory
capital and surplus of our life subsidiary and (i) the rate of growth in sales
of our products; and (ii) the levels of credit risk and/or interest rate risk
in our invested assets. To support long-term capital requirements, we may need
to increase or maintain the statutory capital and surplus of our life
subsidiary through additional financings, which could include debt, equity,
financial reinsurance and/or other surplus relief transactions. Such
financings, if available at all, may be available only on terms that are not
favorable to us. In the case of additional equity offerings, dilution to our
shareholders could result, and/or such securities may have rights, preferences
and privileges that are senior to those of our common stock. In the case of
debt offerings or placements, the holders of the debt will have rights
preferences and privileges that are senior to those of our common stock. If we
cannot maintain adequate capital, we may be required to limit growth, and such
action could adversely affect our business, financial condition and results of
operations.

CHANGES IN STATE AND FEDERAL REGULATION MAY AFFECT OUR PROFITABILITY.  We are
subject to regulation under applicable insurance statutes, including insurance
holding company statutes, in the various states in which our current and
intended life subsidiaries write insurance. Insurance regulation is intended to
provide safeguards for policyholders rather than to protect shareholders of
insurance companies or their holding companies. Regulators oversee matters
relating to trade practices, policy forms, claims practices, guaranty funds,
types and amounts of investments, reserve adequacy, insurer solvency, minimum
amounts of capital and surplus, transactions with related parties, changes in
control and payment of dividends.

State insurance regulators and the National Association of Insurance
Commissioners, or NAIC, continually re-examine existing laws and regulations,
and may impose changes in the future.  Our current and intended life
subsidiaries are subject to the NAIC's risk-based capital requirements which
are intended to be used by insurance regulators as an early warning tool to
identify deteriorating or weakly capitalized insurance companies for the
purpose of initiating regulatory action. Our current and intended life
subsidiaries also may be required, under solvency or guaranty laws of most
states in which they do business, to pay assessments up to certain prescribed
limits to fund policyholder losses or liabilities of insolvent insurance
companies. In addition, federal legislation and administrative policies in
several areas, including pension regulation, age and sex discrimination,
financial services regulation, securities regulation and federal taxation, can
significantly affect the insurance business. As increased scrutiny has been
placed upon the insurance regulatory framework, a number of state legislatures
have considered or enacted legislative proposals that alter, and in many cases
increase, state authority to regulate insurance companies and holding company
                                     8

AMERICAN CAPITAL HOLDINGS, INC.

systems.  The regulatory framework at the state and federal level applicable to
our insurance products is continuously evolving. The changing regulatory
framework could affect the design of such products and our ability to sell
certain products. Any changes in these laws and regulations could materially
and adversely affect our business, financial condition and results of
operations.

OUR COMMON STOCK IS CURRENTLY CLASSIFIED AS "PENNY STOCK" AND IS NOT A SUITABLE
INVESTMENT FOR ALL INVESTORS. Our common stock is a penny stock and is not a
suitable investment for all investors. Generally, a penny stock is a security
that (i) is priced under five dollars, (ii) is not traded on a national stock
exchange or on NASDAQ (as opposed to the Over the Counter Bulletin Board or the
"pink sheets"), and (iii) is issued by a company that has less than $5 million
in net tangible assets and has been in business less than three years.
Because our common stock is not yet publicly traded, and we have less than
$5,000,000 of net tangible assets, our common stock is currently classified as
"penny stock." While we intend to apply for listing on the American Stock
Exchange, there can be no assurance that we will be successful.  If our common
stock does not become listed on the American Stock Exchange, or on another
exchange or the NASDAQ, or if our common stock does not trade at or above $5.00
per share, or if we do not maintain at least $5,000,000 of net tangible assets,
our common stock will continue to be classified as a penny stock. Penny stocks
are subject to Securities and Exchange Commission rules that impose special
sales practice requirements upon broker-dealers that sell such securities to
persons other than established customers or accredited investors.
Consequently, the rule may affect the ability of purchasers of our common stock
to buy or sell in any market that may develop.  In addition, the Securities and
Exchange Commission has adopted a number of rules to regulate "penny stocks".
These rules may further affect the ability of owners of our common stock to
sell their shares in any market that may develop for them.  Potential investors
should be aware that, according to the Securities and Exchange Commission
Release No. 34-29093, the market for penny stocks has suffered in recent years
from patterns of fraud and abuse.  Such patterns include:

*  control of the market for the security by one or a few broker-dealers that
   are often related to the promoter or issuer;
*  manipulation of prices through prearranged matching of purchases and   sales
   and false and misleading press releases;

*  "boiler room" practices involving high pressure sales tactics and
   unrealistic    price projections by inexperienced sales persons;
*  excessive and undisclosed bid-ask differentials and markups by selling
   broker-dealers; and
*  the wholesale dumping of the same securities by promoters and broker-dealers
   after prices have been manipulated to a desired level, along with the
   inevitable collapse of those prices with consequent investor losses.






                                     9


AMERICAN CAPITAL HOLDINGS, INC.


We advise you to consult with your investment, tax and other professional
financial advisors prior to purchasing our stock. No independent rating agency
has reviewed our financial condition to determine whether the stock is a
suitable investment for any purchaser.  The stock may not be a suitable
investment for you based on your ability to withstand a loss of your investment
or other aspects of your financial situation, including your income, net worth,
financial needs, investment risk profile, return objectives, investment
experience and other factors. Prior to purchasing any stock, you should
consider your investment allocation with respect to the amount of your
contemplated investment in our stock in relation to your other investment
holdings and the diversity of those holdings.

ITEM 2. DESCRIPTION OF PROPERTY.

The Company does not own any real property.  The Company leases its
headquarters, consisting of approximately 1.022 square feet of office and
warehouse space located at 100 Village Square Crossings, Suite 202, Palm Beach
Gardens, Florida.  The lease is for a term of one year, at a rental of $2,687
per month including sales tax.


ITEM 3. LEGAL PROCEEDINGS.

The Company is not a party to any legal proceedings, except for an Involuntary
Bankruptcy Petition filed by the Company, as one of three (3) petitioning
creditors, against eCom that is currently pending in the Federal District Court
in Broward County, Florida.  American Capital Holdings, Inc. is a creditor of
eCom and the spin-offs of eCom, and is initiating the bankruptcy proceedings as
means to reorganize eCom and the spin-offs of eCom due to failed or failing
businesses, and lost shareholder value. In 1999, eCom reached market
capitalization of over $250 million.  Since 1999, market capitalization has hit
record lows of approximately $120 thousand, and currently ranges between $500
thousand and $1 million.  The bankruptcy filing will allow the Company to
reorganize and/or divest their interest in order to pursue profitable
strategies as a means of restoring lost shareholder value.



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


There were no matters submitted to a vote by the security holders during the
fiscal quarter ended May 31, 2004.



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

MARKET FOR COMMON STOCK.  There is currently no trading market for the
Company's Common Stock and there can be no assurance that any trading market



                                     10

AMERICAN CAPITAL HOLDINGS, INC.


will ever develop or, if such a market does develop, that it will continue.
The Company intends to file a Registration Statement with the Securities and
Exchange Commission to register for resale certain shares previously issued,
and to register additional shares for sale in order to raise additional
capital.  Upon effectiveness of the Registration Statement, the Company intends
to have its common stock listed for trading on the American Stock Exchange.

If, for any reason, the Company does not meet the qualifications for listing on
a major stock exchange, the Company's securities may be traded in the over-the-
counter ("OTC") market. The OTC market differs from national and regional stock
exchanges in that it (1) is not sited in a single location but operates through
communication of bids, offers and confirmations between broker-dealers and (2)
securities admitted to quotation are offered by one or more broker-dealers
rather than the "specialist" common to stock exchanges.
SECURITY HOLDERS.  The Company has approximately 5,500 shareholders. The
Company has 1,621,209 shares subject to options, at an exercise price of $.01
per share.

DIVIDENDS.  There have been no cash dividends declared or paid since the
Company was formed, and no dividends are contemplated to be paid in the
foreseeable future.

RECENT SALES OF UNREGISTERED SECURITIES.  In February 2004, the Company issued
13,561,804 shares of its common stock to American Capital Holdings, Inc. in
connection with the Company's acquisition of certain assets from that company
(See "Description of Business - Acquisition of American Capital Holdings").
Inasmuch as American Capital Holdings had access to comprehensive information
about the Company, the shares were issued in reliance upon Section 4(2) of the
Securities Act.  A legend was placed on the certificates stating that the
securities were not registered under the Securities Act and setting forth
appropriate restrictions on their transfer or sale.


ITEM 6. MANAGEMENT'S PLAN OF OPERATION.

Our primary business is insurance and related financial products.  In addition
to traditional offerings such as life insurance, health insurance, and
annuities, we will offer financial strategies which utilize insurance as a part
of their structure.  American Capital Holdings, Inc. owns the patent and the
trademarks for five proprietary products:

      GPICS(tm) -- Guaranteed Principle Insured Convertible Securities

         ETIPS(tm) -- Energy Tax Incentive Preferred Securities

         ETICS(tm)  -- Equipment Tax Incentive Convertible Securities

         GPACS(tm) -- Guaranteed Pension Accounting Contract Solutions

         GPACS(tm)--  Government Pension Accounting Contract Solutions
                                     11


AMERICAN CAPITAL HOLDINGS, INC.


We intend to use the insurance products of our subsidiaries as part of a plan
to reduce currently unfunded government and private sector pension plan
liability, addressing the needs of governmental and private sector businesses
regarding unfunded pension liabilities and other post-employment benefit
("OPEB") liabilities.  By purchasing whole and term life insurance products for
a pool of employees, of which the employer is beneficiary, and utilizing the
tax benefits of mandatory participation in a tax-qualified retirement plan, an
employer can realize numerous financial benefits, as described in greater
detail below.  We intend to collect premiums and commissions on the insurance
products sold as a part of the structuring, and also collect a consulting fee
for the product itself.  Until our pending acquisitions of Universe Life and
Cosmopolitan Life are completed, and they are capitalized sufficiently to
obtain the insurance licenses needed to underwrite our products, we will use
the services of third-party insurance carriers in connection with any sales of
our products.

Our GPACS(TM) products, which refers to both the Guaranteed Pension Accounting
Contract Solutions product and the Government Pension Accounting Contract
Solutions product, relate to a business method of adjusting the balance sheet
of a business or governmental organization, and particularly to a system for
organizing the unfunded obligations of the organization so that the liability
on the balance sheet is offset by an asset.  The product also provides a
systematic investing capability to enhance the profitability of the
organization via investment income, and the improved treatment of tax
obligations via qualified plans which exempt OPEB income from FICA tax.  The
restructuring of the balance sheet in such a manner can generate favorable
financial implications such as improved borrowing scenarios, reduction in the
cost of insurance coverage, and increases in the value of outstanding or newly-
issued bonds.

American Capital Holdings, Inc. plans to utilize the existing sales and
marketing divisions of both IS Direct Agency, Inc. and Cosmopolitan Life
Insurance Company to target the municipalities and school boards in the states
in which the subsidiaries are licensed to sell our financial products.

Our GPICS(TM), ETIPS(TM) and ETICS(TM) products are investment structures
designed to maximize the benefit of energy and equipment tax incentives, in
order to facilitate investment in energy-related and other business
enterprises.  An essential feature of these products is a guarantee of the
principal invested,  as a result of the structuring of the investment.  When
and if these products are utilized, when applicable, they will require separate
SEC registration statements and/or insurance product approvals in the states in
which the products are utilized. The sale of these products generates
consulting revenue from the strategic planning provided by the Company.

Our plan of operation includes the underwriting of the insurance aspects of our
products through our subsidiaries.  Pending approvals of our above described
proposed acquisitions of Universe Life and Cosmopolitan Life, we will use third
party insurance carriers.  However, upon receiving the approvals, which are
expected in due course, we will retain as much premium and commission money as
possible within our subsidiaries.  We expect to be able to support operating
expenses with operating revenues beginning in our fourth quarter.

                                     12
AMERICAN CAPITAL HOLDINGS, INC.


IS Direct Agency, Inc.

American Capital Holdings, Inc. purchased IS Direct Agency ("IS Direct") for
800,000 shares of the common stock of American Capital Holdings.  The
acquisition was completed May 20, 2004.  Included in this acquisition are the
assets listed below:

IS Direct Term Quick Website           IS Direct Agency Name
Insurance Licenses                     Software
Business Process Methods               Trademarks
Customers                              Prospective Customers
Vendor Relationships                   Insurance Carrier Relationships
Broker Relationships

IS Direct is an insurance agency which currently sells primarily term and whole
life insurance products.  However, upon the completion of our proposed
acquisition of Universe Life, a life, health, and annuities carrier, the scope
of products available for sale by IS Direct is expected to broaden.  In
addition to placing the insurance components of our financial products, IS
Direct will also sell term life products, annuities, and other traditional
insurance products.  We expect most of the insurance products sold by IS Direct
will eventually be underwritten by Universe Life.

Universe Life

Universe Life is a life insurance company which we expect to use to underwrite
the insurance policies required by our GPACS products.  We have an agreement to
purchase Universe Life, which is planned as another wholly-owned subsidiary of
the Company, pending regulatory approval of the change in control by the
Insurance Commissioner of the State of Idaho.  The agreement stipulates a
purchase price of $100,000 in exchange for 100% ownership.  Universe Life will
be acquired through receivership with no existing operations, but the process
for reinstatement is in progress and should be completed by August 31, 2005.

Universe Life is a life, health and annuities insurance carrier, which is
currently licensed to operate in twenty-three (23) states.  Universe Life will
be initiating the application process to become licensed in all remaining
states, and expects to obtain the necessary licenses to operate in all fifty
(50) states in the near future.  We expect Universe Life to be domiciled in the
State of South Carolina, with its principal offices in Charleston.  We
anticipate merging Universe and Cosmopolitan in the near future as means of
jointly utilizing each company's capital surplus resources and/or licenses.

Our application for approval of our acquisition of Universe Life has been filed
with the Insurance Commissioner of the State of Idaho.  We expect to receive
regulatory approval for our purchase of Universe Life by August 31, 2005.

Cosmopolitan Life

On October 30, 2004, we entered into an agreement to purchase one-hundred
(100%) percent of the voting shares of Cosmopolitan Life for $500,000 and a
surplus note in the amount of $250,000.  We expect to close our acquisition of
Cosmopolitan Life by May 31, 2005, upon regulatory approval by the Arkansas
                                     13
AMERICAN CAPITAL HOLDINGS, INC.


Department of Insurance.  Upon closing, we intend to contribute additional
capital to Cosmopolitan Life, from the amount raised pursuant to this offering,
in order to provide capital for expansion and additional licensing.

Cosmopolitan Life is a stipulated premium insurer chartered in 1931 in the
State of Arkansas. A "stipulated premium insurer" is one issuing policies or
certificates promising money or other benefits to a policyholder upon his or
her disability or, upon his or her decease, to his or her legal representatives
or beneficiaries designated by him or her, which money or benefit is derived
from stipulated premiums collected in advance from those policyholders and from
interest and other accumulations.  Since 1998, Cosmopolitan Life has offered
both direct and re-insurance coverage related to health and dental care plans,
with a specialty in providing stop-loss coverage for self-funded employer
plans.

Until 1998, Cosmopolitan Life was engaged exclusively in providing burial/final
expense insurance, and was operated as a small stipulated premium carrier in
association with the funeral home business.  In 1998, Cosmopolitan Life was
acquired by Stephen E. Whitwell and Matt Lile, who implemented plans to grow
the company. In 1998 a dental insurance product was file-approved and marketing
commenced.  Cosmopolitan Life also became involved in providing specific stop-
loss coverage for self-funded employer plans for which there was a retro-
session agreement.  In 2001, Cosmopolitan Life introduced a new product,
Employers Choice Health Plan, referred to as ECHP.  Recently, most of
Cosmopolitan Life's revenues have been realized from re-insurance assumed,
while its dental product has been a small but profitable segment for the
company.  Cosmopolitan Life sees great opportunity for each product to expand
and to have great growth potential with the added authority by way of either
obtaining Certificate of Authority in additional jurisdictions or by
affiliating with an issuing carrier with authority in other jurisdictions to
enter into a quota share agreement.



















                                     14



PART II

                        FINANCIAL STATEMENTS


American Capital Holdings, Inc.                          May 31, 2004



INDEX - PART F/S

                                                             PAGE NO.

        FINANCIAL STATEMENTS

        Independent Auditors' Report . . . . . . . . . . . . .  F-2

        Consolidated Balance Sheet
         May 31, 2004  . . . . . . . . . . . . . . . . . . . .  F-3

        Consolidated Statement of Operations
         For The Twelve Months Ended May 31, 2003 and 2004 . .  F-4

        Consolidated Statement of Changes in Shareholders' Equity
         From June 1, 2003 Through May 31, 2004  . . . . . . .  F-5

        Consolidated Statement of Cash Flows
         For The Twelve Months Ended May 31, 2003 and 2004 . .  F-6

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






















                                      F-1




                        Wieseneck, Andres & Company, P.A.
                         Certified Public Accountants
                        772 U. S. Highway 1, Suite 100
                       North Palm Beach, Florida  33408
                               (561) 626-0400

Thomas B. Andres, C.P.A.*, C.V.A.                     FAX (561) 626-3453
Paul M. Wieseneck, C.P.A.
*Regulated by the State of Florida


                       Independent Auditors' Report


To the Board of Directors and Stockholders
American Capital Holdings, Inc.

We have audited the accompanying consolidated balance sheet of American Capital
Holdings, Inc. as of May 31, 2004 and the related consolidated statements of
operations, changes in shareholders' equity and cash flows for the twelve
months ending May 31, 2003 and 2004.  These consolidated financial statements
are the responsibility of the company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.

We conducted our audits in accordance with standards established by 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. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to in the first
paragraph present fairly, in all material respects, the consolidated financial
position of American Capital Holdings, Inc. as of May 31, 2004 and the results
of its consolidated operations and cash flows for the period from June 1, 2003
through May 31, 2004, in conformity with accounting principles generally
accepted in the United States of America.



/s/Wieseneck, Andres & Company, P.A.

North Palm Beach, Florida
November 10, 2004






                                      F-2


AMERICAN CAPITAL HOLDINGS, INC.
CONSOLIDATED BALANCE SHEET
MAY 31, 2004

   ASSETS
       Current Assets
            Cash and Cash Equivalents                  $      22,614
            Notes Receivable                                 138,952
            Loans Receivable Related Parties (net)            27,067
            Prepaid Expenses                                  87,197
                                                          ------------
                Total Current Assets                         275,830
                                                         ------------

       Property and Equipment, net                            43,472
                                                         ------------

       Other Assets
            Marketable Securities                          5,896,196
            Intangible Assets, net                            27,649
            Goodwill                                       8,209,071
            Security Deposit                                   3,110
                                                        ------------
                Total Other Assets                        14,136,026
                                                         ------------
   TOTAL ASSETS                                        $  14,455,329
                                                         ============
   LIABILITIES & STOCKHOLDERS' EQUITY
     Liabilities
            Current Liabilities
               Accounts Payable                        $      27,806
               Accrued Expenses                               11,021
               Loan Payable Related Party                     57,681
               Current Portion of Notes
                   and Loans Payable                         834,977
                                                         ------------
               Total Current Liabilities                     931,485
                                                         ------------
        Total Liabilities                                    931,485
                                                         ------------
        Stockholders' Equity
            Common Stock $.0001 par value, 100 million
             shares authorized, 15,723,903 shares issued
             and outstanding, 1,300,000 shares unissued        1,702
            Paid-in-Capital                               14,686,363
            Accumulated Deficit                             (651,224)
            Accumulated Comprehensive Loss                  (512,997)
                                                         ------------
     Total Stockholders' Equity                           13,523,844

TOTAL LIABILITIES & STOCHHOLDERS' EQUITY               $  14,455,329
                                                         ============

See accompanying summary of accounting policies and notes to financial
statements.

                                     F-3
AMERICAN CAPITAL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED MAY 31, 2004 and 2003
                                                      2004               2003
                                               _____________      ____________
    Revenues
            Net Sales                           $          -      $         -
            Cost of Sales                             (3,952)               -
                                                 ------------     ------------
                Gross Profit                          (3,952)               -

    Operating Expenses
            General and Administrative               122,647                -
            Bad Debt                                 343,995                -
            Sales and Marketing                       13,391                -
            Impairment Expense                         6,493                -
                                                 ------------     ------------
          Total Operating Expenses                   486,526                -

                                                 ------------     ------------
          Loss from Operations                      (490,478)               -
                                                 ------------     ------------
    Other Income (Expense)
            Interest Income                            2,260                -
            Interest Expense                         (23,006)               -
            Loss on Disposition of Common Stock     (140,000)               -

                                                 ------------     ------------
                Net Other Expenses                  (160,746)               -
                                                 ------------     ------------
 Net Loss Before Other Comprehensive Losses         (651,224)               -
                                                 ------------     ------------
    Other Comprehensive Income / (Loss)
        Unrealized Holding Loss During Period       (537,604)               -
        Unrealized Holding Gain During Period         24,607)               -
                                                 ------------     ------------
    Net Other Comprehensive Loss                    (512,997)               -
                                                 ------------     ------------
Net Loss                                         $(1,164,221)     $         0
                                                 ============     ============


Basic and Diluted
 Net Loss Per Common Share                       $      (.18)     $       .00
                                                 ============     ============


Weighted Average Shares Outstanding                6,551,685                5
                                                 ============     ============


See accompanying summary of accounting policies and notes to financial
statements.



                                      F-4
AMERICAN CAPITAL HOLDINGS, INC.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FROM JUNE 1, 2003 THROUGH MAY 31, 2004

                  Number          Add'l Paid
                    Of    At Par  in Capital  Retained  Accum. other      Total
                  Shares   Value  & Treasury  Earnings  Comprehen-  Stockholder
                  Issued  $.0001    Stock       (Loss)   sive Inc.       Equity
                ---------- ------ ----------- ---------- ---------- -----------
Balance,
 May 31, 2003           5  $   0     $    0    $     0    $     0    $       0

Cancellation of
 Common Stock held
 by eCom eCom          (5)     0          0          0          0            0

Issuance of
 Common Stock to
 eCom eCom.com Inc.
 shareholders    2,497,756    250          -          -          -         250

Issuance of
 Common Stock
 for the acquisition
 of ACHI, Inc.
 assets.        13,226,147  1,322  13,176,443        -          -   13,177,765

Issuance of
 Detachable warrants     -      -      10,050        -          -       10,050

Purchase of
 IS Direct Agency NY
 for 800,000,
 subscribed but
 unissued shares         -     80     999,920        -          -    1,000,000

Conversion of
 $500,000 Debt to
 stock - unissued        -     50     499,950        -          -      500,000

Accumulated other
 comprehensive
 loss, net               -      -          -         -    (512,997)   (512,997)

Net Operating Loss       -      -          -   (651,224)         -    (651,224)
                ---------- ------ ----------- ---------- ---------- -----------
Balance,
  May 31, 2004  15,723,903 $1,702 $14,686,363 $(651,224) $(512,997) $13,523,844
                ========== ====== =========== ========== ========== ===========



See accompanying summary of accounting policies and notes to financial
statements.


                                      F-5
AMERICAN CAPITAL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MAY 31, 2004 and 2003

                                                         2004         2003
                                                     ----------   ----------
Cash Flows From Operating Activities
    Cash received from customers                            -     $      -
    Cash paid to suppliers of goods
        and services                               $ (143,268)           -
    Income Taxes Paid                                       -            -
    Interest Paid                                     (13,691)           -
    Interest Received                                       -            -
                                                _______________ _____________
        Net Cash Flows Used in
         Operating Activities                        (156,959)           -
                                                _______________ _____________
Cash Flows From Financing Activities
    Proceeds of Loans from Stockholders               329,997            -
    Proceeds of Loans from Related Company             57,661            -
    Collection of Loan From Related Company            25,793            -
    Loan to Related Company                           (27,067)           -
    Loan to Related Company                          (343,995)           -
    Purchase of Common Stock                         (362,816)           -
    Loan Proceeds Converted to Common Stock           500,000            -
                                                _______________  _____________
Net Cash Flows Provided By
         Financing Activities                         179,573            -
                                                _______________  _____________
Net Increase in Cash                                   22,614            -

Cash and Cash Equivalents at
 Beginning of Period, June 1, 2003 and 2002                 0            0
                                                _______________  _____________
Cash and Cash Equivalents at
End of Period, May 31, 2004 and 2003              $    22,614     $      0
                                                ===============  =============















See accompanying summary of accounting policies and notes to financial
statements.


                                     F-6

AMERICAN CAPITAL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MAY 31, 2004 and 2003


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

Reconciliation of Net Loss to Net Cash Flows Used in Operating Activities


    Net Loss                                     $ (1,164,221)     $        -
    Cash was increased by:
        Other Comprehensive Income                    512,997               -
        Loss on Disposition of Common Stock           140,000               -
        Valuation Loss                                  6,493               -
        Amortization                                        -               -
        Depreciation                                    3,952               -
        Bad Debt adjustment                           343,995               -
        Increase in Accounts Payable                   27,806               -
        Increase in Accrued Expenses                    1,706               -
    Cash was decreased by
        Increase in Prepaid Expenses                  (26,577)              -
        Increase in Security Deposits                  (3,110)              -
                                                _______________  _____________
        Net Cash Flows Used in
         Operating Activities                    $   (156,959)    $         -
                                                ===============  =============


Supplemental Disclosures
Of Non Cash Investing and
Financing Activities:
------------------------
On February 29, 2004 the Company acquired approximately $137,000 in notes
receivable, common and preferred stock in various entities valued at $3.1
million, equipment of $47,000, intangible assets of $6,000, intellectual
property valued at $3.5 million, various prepaid assets valued at $92,000,
goodwill of $7.2 million and assumed $1,005,000 in debt for the issuance of
13,226,147 shares of the Company's common stock.










See accompanying summary of accounting policies and notes to financial
statements.



                                      F-7
AMERICAN CAPITAL HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
TWELVE MONTHS ENDED MAY 31, 2004

NOTE A - NATURE OF OPERATIONS

American Capital Holdings, Inc. (the "Company") was incorporated in the State
of Florida on January 27, 1999 as U S Amateur Sports Company, a wholly owned
subsidiary of eCom eCom.com, Inc.("eCom") which trades on the OTC/Bulletin
Board under the symbol 'ECEC.' On March 19, 2003, the Company changed its name
to USA SportsNet Company, and on December 12, 2003 changed its name to American
Capital Holdings, Inc. in connection with its spin off by eCom and its
acquisition of certain assets of a company formerly known as American Capital
Holdings, Inc. (now known as ACHI, Inc.)  The Company's main office is located
at 100 Village Square Crossing, Suite 202, Palm Beach Gardens, Florida 33410,
and the telephone number is (561) 207-6395.

IS Direct Agency, Inc. ("ISDA"), a wholly-owned subsidiary of the company, was
incorporated in the State of Florida on May 20, 2004.  On May 21, 2004 ISDA
acquired the assets of IS Direct Agency, Inc., a New York Corporation.  ISDA
provides internet based term life insurance quotes.

While a wholly owned subsidiary of eCom, the Company developed an e-commerce
Internet infrastructure. This product provided an affordable, user-friendly
technological platform and professional resources to facilitate web business
development.  It also operated an on-line business as a test model using
Company developed e-commerce concepts to sell sports products.

The Spin-Off.  The Company was one of ten wholly owned subsidiaries of eCom,
with varying business plans.  In recent years, eCom concluded that it did not
have the financial resources necessary to develop all of its ten business units
collectively.  eCom decided to spin off its subsidiaries into independent
companies in the belief that independent companies, each with a distinct
business, would be better able to obtain necessary funding and develop their
business plans.  This belief was based in part on eCom's experience with
potential business partners which sought involvement with only one of eCom's
subsidiaries, rather than involvement with the multi-faceted eCom.

On December 1, 2003, the Board of Directors of eCom approved the spin-off of
the Company.  They voted to issue to the shareholders of eCom one share of the
Company for every one share of eCom owned as of the record date of January 5,
2004.  Fractional shares will be purchased by the Company. No payment was
required of the eCom shareholders.

Acquisition from American Capital Holdings.  After the spin off of the Company
was completed, the Company was presented with an opportunity to acquire certain
assets of American Capital Holdings, Inc. (now known as, and referred to
hereafter as ACHI).  On January 12, 2004, the Company entered into an Asset
Purchase Agreement with ACHI whereby the Company acquired certain assets, and
assume certain liabilities of ACHI in return for the issuance of common stock of
the Company in an amount equal to 84.1% of the total ownership of the Company.
In order to accomplish this transaction, the Company effected a 20 to 1 reverse
stock split, which reduced its outstanding stock to 2,497,756 shares, and agreed


See accompanying independent accountants' audit report.
                                      F-8
AMERICAN CAPITAL HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
TWELVE MONTHS ENDED MAY 31, 2004

NOTE A - NATURE OF OPERATIONS (CONTINUED)

to issue to ACHI 49,955,112 shares.  ACHI agreed to accept the issuance of
13,561,804 shares at closing, and assigned its right to receive the 13,561,804
shares to its principle, Barney A. Richmond, now the President of the Company.
The remaining 36,393,308 shares were reserved for issuance by the Company in
connection with future acquisitions and financings.  The Company then changed
its name to American Capital Holdings, Inc., and ACHI changed its name to ACHI,
Inc.  Of the 36,393,308 shares reserved for future issuance, 2,162,099 shares
have now been issued to the shareholders of Spaulding Ventures, LLC, in
replacement of shares of ACHI to be issued to Spaulding in connection with a
prior acquisition of assets by ACHI from Spaulding.


NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation, Use of Estimates
The Company maintains its accounts on the accrual basis of accounting. The
preparation of financial statements in conformity with U.S. generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Revenue Recognition
Revenue and dividends from investments are recognized at the time the
investment dividends are declared payable by the underlying investment.
Capital gains and losses are recorded on the date of sale of the investment.

Cash
Cash consists of deposits in banks and other financial institutions having
original maturities of less than ninety days.

Allowance for Doubtful Accounts
It is the policy of management to review the outstanding accounts receivable
at year end, as well as the bad debt write-offs experienced in the past, and
establish an allowance for doubtful accounts for uncollectible amounts.

Depreciation
Property and equipment are recorded at cost and depreciated over the
estimated useful lives of the related assets. Depreciation is computed using
the straight-line method.




See accompanying independent accountants' audit report.




                                      F-9
AMERICAN CAPITAL HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
TWELVE MONTHS ENDED MAY 31, 2004


NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Amortization
The accounting for a recognized intangible asset acquired after June 30, 2001
is based on its useful life to the Company.  If an intangible asset has a
finite life, but the precise length of that life is not known, that intangible
asset shall be amortized over management's best estimate of its useful life.
An intangible asset with an indefinite useful life is not amortized.  The
useful life to an entity is the period over which the asset is expected to
contribute directly or indirectly to the future cash flows of that entity.

Investments
Investments are stated at the lower of cost and market value.


NOTE C -  NOTES RECEIVABLE

Notes Receivable at May 31, 2004 consist of the following:

   An 8% non-collateralized note that matures in December 2004,
   Interest is payable quarterly.  Included in the balance is
   $11,963 of accrued interest receivable.                        $ 111,963

   A 4% non-collateralized note due on demand.  Included in
   the balance is $1,989 of accrued interest receivable.             26,989
                                                                  ----------
       Total Notes Receivable                                     $ 138,952
                                                                  ==========

Management has made a determination that all of the notes receivable are
collectable and therefore, has not established an allowance for doubtful
accounts.


NOTE D - LOANS RECEIVABLE RELATED PARTIES

The three loans receivable from related corporate entities are non-
collateralized, non-interest bearing and are due on demand.

The loans due as of May 31, 2004 are as follows:

    eCom eCom.com Inc.       $  27,067
    Freedom 4 Wireless, Inc.   343,995
     Less bad debts           (343,995)
                              ---------
        Total                $  27,067
                              =========



See accompanying independent accountants' audit report.
                                     F-10
AMERICAN CAPITAL HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
TWELVE MONTHS ENDED MAY 31, 2004


NOTE E - INVESTMENTS

The Company accounts for its investments in common stock using the cost
method for those investments which the Company does not own a controlling
interest.  These investments are currently recorded at cost.  The Company's
share of the investors earnings or losses, if any, are not available at the
date of these financial statements.  No quoted market price is available for
these investments.

The Company accounts for investments in common stock for which there is a
quoted market price as an Available-for-Sale security under Statement of
Financial Accounting Standards No. 115, Accounting for Certain Investments in
Debt and Equity Securities.

On May 31, 2004, investments consisted of the following:

Cost Method of Accounting
Investment Securities at Cost
   @Visory, LLC                          $   112,500
   Brilliant Coatings, Inc.                  250,000
   Century Aerospace Corporation             285,000
   eSmokes, Inc.                             100,000
   Efficien, Inc.                            287,000
   Smartpill Diagnostics, Inc.               770,000
   Metroflex, Inc.                           900,000
                                          -----------
Total Equity Method Securities at Cost     2,704,500

Available-for-Sale method of accounting
Air Media Now, Inc.                        2,933,019
eCom eCom.com Inc.                           258,678
                                          -----------
    Total Available-for-Sale securities    3,191,697
                                          -----------
Total Investment Securities              $ 5,896,197
                                          ===========

Cost Method Securities:


@Visory, LLC is a limited liability company located in East Aurora NY.  The
Company owns 250,000 Series A units of @Visory LLC.  The Company's investment
amounts to 1.2% of the outstanding units of @Visory, LLC.  @Visory, LLC is
taxed as a partnership, not publicly traded.  As of May 31, 2004 @Visory,
LLC had investments in the following companies: Appraisal.com; SmartPill
Diagnostics; Efficien; Liquid Matrix; Saturn Internet Reservations;
StudentVoice; Synacor; and Yipee, Inc.


See accompanying independent accountants' audit report.

                                     F-11
AMERICAN CAPITAL HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
TWELVE MONTHS ENDED MAY 31, 2004

NOTE E - INVESTMENTS (CONTINUED)

Brilliant Coatings is a Nevada Corporation.  The Company owns 15,000,000 common
shares of Brilliant Coatings.  The Company's investment amounts to 2.3% of the
outstanding common shares of Brilliant Coatings Inc.

Century Aerospace is a Delaware Corporation.  The Company owns 57,000 common
shares of Century Aerospace.  The Company's investment amounts to .7% of the
outstanding common shares of Century Aerospace

eSmokes, Inc is a Florida Corporation.  The company owns 300,000 common shares
of eSmokes, Inc.  The Company's investment amounts to 3.3% of the outstanding
shares of eSmokes, Inc.

Efficien, Inc. is a Delaware Corporation.  The Company owns 500,000 common
shares of Efficien. The Company's investment amounts to 11.9% of the
outstanding common shares of Efficien, Inc.  Efficent specializes in the
development of internet based applications to improve the efficiency of
hospital supply and material flow through an integrated application service
provider (ASP) solution.

SmartPill Diagnostics, Inc. is a Delaware Corporation.  The Company owns
1,194,824 Series A preferred shares of SmartPill Diagnostics, Inc.  The
Company's investment amounts to 11.60% of the outstanding shares of SmartPill
Diagnostics, Inc.  SmartPill Diagnostics is a leading developer of SmartPill
Capsule endoscopy technology.   About the size of a vitamin pill, the SmartPill
Capsule is a capsule endoscopy device that uses patented technology to measure
peristaltic pressure, pH and transit time, and determine real-time location;
factors that aid Gastroenterologists in the diagnosis of such GI motility
disorders as Gastroparesis and Dyspepsia.  The patient benefits from a more
accurate diagnosis and a more comfortable, non-invasive, non-surgical approach
to GI exploratory examinations.


Metroflex, Inc. is a Delaware Corporation.  The Company owns 900,000 common
shares of Metroflex, Inc.  Metroflex's MetroFlexCard operates as a MasterCard
debit card. The card enables employers to set up programs through which
employees can pay for commuter expenses-mass transit and parking expenses on a
pretax basis.

Available-for-Sale Securities:

eCom eCom.com, Inc. is a Florida Corporation and trades on the OTC/BB:ECEC. The
company which was the former parent of USA SportsNet Company now American
Capital Holdings, Inc., owns 1,437,100 common shares of eCom.  The Company's
investment amounts to 2.9% of the outstanding shares of eCom.  The cost for
this investment as of May 31, 2004 was $235,071.  On May 31, 2004 the
market value based on a closing bid price of 0.16 per share was $258,678.  The
difference in cost versus market value is recorded as Accumulated Other
Comprehensive Income of $23,607.
See accompanying independent accountants' audit report.

                                     F-12
AMERICAN CAPITAL HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
TWELVE MONTHS ENDED MAY 31, 2004

NOTE E - INVESTMENTS (CONTINUED)

On February 29, 2004, American Capital Holdings, Inc. purchased certain assets
from ACHI, Inc.   One of the assets that ACHI, Inc. owned, and that was
acquired by American Capital Holdings, Inc., was 53,910,922 common shares of
Air Media Now, Inc.  The only assets recorded on the books of Air Media Now,
Inc. at date of acquisition were the rights to use certain Intellectual
Property that had been developed by the company plus 500,000 common shares of
eCom eCom.com, Inc.  American Capital Holdings, Inc. owns approximately 90% of
the outstanding common shares of Air Media Now, Inc. and, therefore,
consolidated the assets and operations of Air Media Now, Inc. at May 31, 2004.
Management determined that the fair value of the common stock of Air Media Now,
Inc., which is traded on the pink sheets, was $2,933,019 ($.05 x 53,910,922
shares) at May 31, 2004 and, therefore, recognized the ownership of this common
stock as a marketable security and available for sale. The loss in value of
$(536,604) Air Media Now stock is recognized as a comprehensive loss in the
current period and as an Accumulated Comprehensive Loss in stockholders'
equity.

NOTE F - PROPERTY AND EQUIPMENT

Equipment consisting of various Cisco routers, switches, cables, and dual speed
hubs were acquired from a company owned by a majority stockholder of American
Capital Holdings, Inc.  The equipment is being used to support a hosting
operations center.  Depreciation expense of $3,952 has been recorded as of May
31, 2004.

NOTE G - PREPAID EXPENSES

Prepaid expenses consist principally of amounts paid for auditing work for the
Company, along with marketing and research material to be used for investor
relations.

NOTE H - INTANGIBLE ASSETS

Intangible assets consist of website and software development costs for IS
Direct, and fees related to applications for patents and trademarks.

NOTE I - OTHER ASSETS

Other assets consist primarily of security deposits on the lease of office
facilities.


NOTE J - Loan Payable Related Party

A non-interest bearing, non-collateralized loan payable to a related company in
the amount of $57,681 is due on demand.

See accompanying independent accountants' audit report.

                                     F-13

AMERICAN CAPITAL HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
TWELVE MONTHS ENDED MAY 31, 2004


NOTE K - PROMISSORY NOTES

Promissory Notes as of May 31, 2004 consisted of:
                                                        May 31, 2004
                                                      ---------------
Four interest bearing, non-collateralized
loans.  The loans have various maturities
throughout 2004.                                         $ 494,950
                                                         ----------
     Total Notes Payable                                   494,950
     Less Current Portion                                 (494,950)
                                                         ----------
     Net Long-term Debt                                  $       0
                                                         ==========
The short-term notes payable mature as follows:
     May 31, 2004                                        $ 494,950
                                                         ==========
Two non-interest bearing, non-collateralized loans
     due on demand                                       $ 340,027
                                                         ==========

The notes and loans can be converted to shares of the Company's $.0001 par
value common stock at the option of the holder.  The notes pay interest at 10%
per annum.  Interest is paid quarterly.  The loan can be converted at 80% of
the average closing price of Company's common stock for the preceding five (5)
consecutive trading days with a floor of $1.  The holder of a $500,000 10% note
payable with accrued interest of $9,315 agreed on May 7, 2004 to convert their
debt to common shares.  By Agreement, the shares of common stock at conversion
will not be issued until the effective date of the Company's filings with the
United States Securities & Exchange Commission.

NOTE L - WARRANTS

The Company has issued 1,005,000 (505,000 + 500,000) detachable warrants for
each dollar of debt as described in Note K above.  Management has determined
that the value of the detachable warrants to be $.01 on the date of issuance
and have charged paid in capital $10,050 during the period.  Each warrant
entitles the holder to purchase one (1) share of common stock at $.01.  The
Company also issued 400,000 warrants to one of the former owners of IS Direct
Agency for providing his insurance licensing in all fifty states.  The warrants
can be exercised for $.01 each.  An additional 216,209 warrants were issued in
connection with the Spaulding acquisition, one warrant for every ten shares
owned.  Each unit of Spaulding entitled the owner to one warrant with an
exercise price of $6.00 each.





See accompanying independent accountants' audit report.

                                     F-14
AMERICAN CAPITAL HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
TWELVE MONTHS ENDED MAY 31, 2004


NOTE L - WARRANTS (CONTINUED)

The following is a summary of warrants through May 31, 2004:

       Outstanding warrants at the beginning of the year           0
       Warrants issued                                     1,621,209
       Warrants expired                                            0
       Warrants exercised                                          0
                                                         ------------
       Warrants outstanding at May 31, 2004                1,621,209

The warrants expire as follows:

       Expiration Date                  Number of Warrants
       --------------------             ------------------
       September 30, 2004                       75,000
       January 31, 2005                          130,000
       August 15, 2005                         300,000
       December 15, 2005                       500,000
       December 31, 2005                       216,209
       Warrants expiring beyond 2005           400,000
                                          -------------
                                             1,621,209
                                          =============


NOTE M - COMMITMENTS AND CONTINGENCIES

The Company leases approximately 1200 feet office facilities in Palm Beach
Gardens, Florida under an operating lease of $3,297 per month which expires on
January 31, 2005.  ISDA leases approximately 200 square feet of office
facilities in Buffalo, NY under a month to month agreement of $425.00 per
month. Future minimum lease payments including sales tax as of May 31, 2004
are:
Fiscal Years ending:

            May 31, 2005                        26,373
                                               -------
            Total Minimum Lease Payments      $ 26,373

Rent expense for the Twelve month period ending May 31, 2004 was $8,579.

NOTE N - INCOME TAXES

No provision for federal and state income taxes has been recorded
because the Company has incurred net operating losses since inception.  The
Company's net operating loss carry-forward as of May 31, 2004 totals
approximately $495,000.  These carry-forwards, which will be available to
offset future taxable income, and expire beginning in May 31, 2024.

See accompanying independent accountants' audit report.
                                     F-15
AMERICAN CAPITAL HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
TWELVE MONTHS ENDED MAY 31, 2004


NOTE N - INCOME TAXES (CONTINUED)

The Company does not believe that the realization of the related net
deferred tax asset meets the criteria required by generally accepted
accounting principles and, accordingly, the deferred income tax asset arising
from such loss carry forward has been fully reserved.

The Company accounts for income taxes in accordance with FASB Statement No.
109, Accounting for Income Taxes (FASB 109). Under FASB 109, income taxes are
provided for the tax effects of transactions reported in the financial
statements and consist of taxes currently due plus deferred taxes related to
certain income and expenses recognized in different periods for financial and
income tax reporting purposes. Deferred tax assets and liabilities represent
the future tax return consequences of those differences, which will either be
taxable or deductible when the assets and liabilities are recovered or settled.

Deferred taxes also are recognized for operating losses and tax credits that
are available to offset future taxable income and income taxes, respectively.
A valuation allowance is provided if it is more likely than not that some or
all of the deferred tax assets will not be realized.


NOTE O - STOCKHOLDERS' EQUITY

To facilitate the purchase of the assets of ACHI, the Company recorded a one
for twenty reverse split on the Effective Date of the currently outstanding
common stock, while maintaining the conversion and exercise prices of the
Senior Notes, the Secured Notes, the Subordinated Notes and the related
warrants.  All prior period share and per-share amounts have been restated to
account for the reverse split.  Any fractional shares remaining after the
reverse split will be paid out in cash to the shareholder on the Effective
Date.

Warrants were granted to Promissory Noteholders with detachable warrants.
Management has determined that the fair value of each warrant is $0.01.

The computation of diluted loss per share before extraordinary item for the
year ended May 31, 2004 does not include shares from potentially dilutive
securities as the assumption of conversion or exercise of these would have an
anti-dilutive effect on loss per share before extraordinary items.  In
accordance with generally accepted accounting principles, diluted loss per
share from extraordinary item is calculated using the same number of potential
common shares as used in the computation of loss per share before extraordinary
items.

NOTE P - DEFERRED TAX ASSET

Deferred income taxes are provided for temporary differences between the
financial reporting and income tax basis of the Company's assets and
See accompanying independent accountants' audit report.
                                     F-16

AMERICAN CAPITAL HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
TWELVE MONTHS ENDED MAY 31, 2004

NOTE P - DEFERRED TAX ASSET (CONTINUED)

liabilities.  Temporary differences, net operating loss carry forwards
and valuation allowances comprising the net deferred taxes on the balance
sheets is as follows:

                                                      May 31, 2004
                                                     --------------
         Loss carry forward for tax purposes          $    495,075
                                                     ==============
         Deferred tax asset (34%)                          168,326
         Valuation allowance                              (168,326)
                                                     --------------
         Net deferred tax asset                                  -
                                                     ==============
No provision for federal and state income taxes has been recorded because the
Company has incurred net operating losses since inception. The Company's net
operating loss carry-forward as of May 31, 2004 was approximately
$495,000. These carry-forwards, which will be available to offset future
taxable income, will expire through the year 2024.

The Company does not believe that the realization of the related net deferred
tax asset meets the criteria required by generally accepted accounting
principles and, accordingly, the deferred income tax asset arising from such
loss carry forward has been fully reserved.


NOTE Q - RELATED PARTY TRANSACTIONS

The Company has accounts receivables due from two related company entities.
eCom eCom.com, Inc. owes $27,067 for services paid to the Company's transfer
agent and accountant.  Freedom 4 Wireless, Inc. owes the Company $343,995 for
working capital and inventory purchased by ACHI, subsequently purchased by the
Company on February 29, 2004.  These related party transactions totaled
$371,062 on May 31, 2004.

NOTE R - RECENT ACCOUNTING PRONOUNCEMENTS

The FASB issued SFAS No. 143, Accounting for Asset Retirement Obligations with
an effective date for financial statements issued for fiscal years beginning
after June 15, 2002.  The statement addresses financial accounting and
reporting for obligations related with the retirement of tangible long-lived
assets and the costs associated with asset retirement.  The statement requires
he recognition of retirement obligations which will, therefore, generally
increase liabilities; retirement costs will be added to the carrying value of
long-lived assets, therefore, assets will be increased; and depreciation and
accretion expense will be higher in the later years of an assets life than in
earlier years.  The Company adopted SFAS No. 143 at January 1, 2002.  The
adoption of SFAS No. 143 had no impact on the Company's operating results or
financial positions.

See accompanying independent accountants' audit report.
                                     F-17
AMERICAN CAPITAL HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
TWELVE MONTHS ENDED MAY 31, 2004


NOTE R - RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)

The FASB also issued SFAS No. 144, Accounting for the Impairment or Disposal
of Long-Lived Assets and is effective for financial statements issued for
fiscal years beginning January 1, 2002.  This statement addresses financial
accounting and reporting for the impairment or the disposal of long-lived
asset.  An impairment loss is recognized if the carrying amount of a long-
lived group exceeds the sum of the undiscounted cash flow expected to result
from the use and eventual disposition of the asset group.  Long-lived assets
should be tested at least annually or whenever changes in circumstances
indicate that its carrying amount may not be recoverable.  This statement
does not apply to goodwill and intangible assets that are not amortized.  The
Company adapted SFAS No. 144 in the first quarter of 2002. The adoption of SFAS
No. 144 had no impact on the Company's operating results or financial position.

In April 2002, the FASB issued SFAS No. 145, "Rescission of the FASB Statements
No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical
Corrections"("SFAS No. 145"). SFAS No. 145 eliminates the requirement to
classify gains and losses from the extinguishment of indebtedness as
extraordinary, requires certain lease modifications to be treated the same as a
sale-leaseback transaction, and makes other non-substantive technical
corrections to existing pronouncements. SFAS No. 145 is effective for fiscal
years beginning after May 15, 2002. SFAS No. 145 was adopted on June 1, 2003
and did not have a material effect on the Company's financial position or
results of operations.

The FASB issued SFAS No. 150, "Accounting for Certain Financial Instruments
with Characteristics of both Liabilities and Equity" and is effective for
financial instruments entered into after May 31, 2003.  This Statement
establishes standards for how an issuer classifies and measures in its
statement of financial position certain financial instruments with
characteristics of both liabilities and equity.  It requires that an issuer
classify a financial instrument that is within its scope as a liability because
that financial instrument embodies an obligation of the issuer.  The Company
has adopted SFAS No. 150 and the adoption has had no impact on the Company's
operating results or financial position.

Goodwill and intangible assets acquired prior to July 1, 2001 will continue to
be amortized and tested for impairment in accordance with pre- SFAS No. 142
requirements until adoption of SFAS No. 142. Under the provision of SFAS
No.142, intangible assets with definite useful lives will be amortized to their
estimated residual values over those estimated useful lives in proportion to
the economic benefits consumed. Such intangible assets remain subject to the
impairment provisions of SFAS No. 121. Intangible assets with indefinite useful
lives will be tested for impairment annually in lieu of being amortized. The
impact of adopting SFAS Nos. 141 and 142 will not cause a material change in
the Company's consolidated financial statements as of the date of this report.

See accompanying independent accountants' audit report.

                             F-18

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

During the last two fiscal years, the Company has not had any changes in
or disagreements with its accountants.

Item 8A. Controls and Procedures.

As of the end of the period covered by this report, based on an evaluation of
the Company's disclosure controls and procedures (as defined in Rules 13a-15(e)
and 15d-15(e) under the Securities Exchange Act of 1934), the Chief Executive
and Chief Financial Officer of the Company has concluded that the Company's
disclosure controls and procedures are effective at the reasonable assurance
level to ensure that information required to be disclosed by the Company in its
Exchange Act reports is recorded, processed, summarized and reported within the
applicable time periods specified  by the SEC's rules and forms.

There were no changes in the Company's internal controls over financial
reporting during the year ended May 31, 2004 that have materially affected, or
are reasonably likely to materially affect, our internal control over financial
reporting.

PART III

ITEM 7. DIRECTORS, EXECUTIVE OFFICERS AND CONTROL PERSONS.

The following individuals are our executive officers and the members of our
board of directors.  Each director is elected at our annual meeting of
shareholders and holds office until the next annual meeting of shareholders, or
until his or her successor is elected and qualified.  Our by-laws permit the
board of directors to fill any vacancy and such director may serve until the
next annual meeting of stockholders or until his or her successor is elected
and qualified.  The board of directors elects officers annually and their terms
of office are at the discretion of the board.

Name                        Age                       Positions Held
-----                     ------                    --------------------
Barney A. Richmond          53                   Chairman/President/Secretary
                                                 Director

Richard C. Turner           45                   Treasurer/Chief Financial
                                                 Officer/Director

Mathew Salmon               46                   Director

Barry M. Goldwater, Jr.     66                   Director

Douglas Sizemore            74                   Director

Norman E. Taplin            54                   Director

Michael Camilleri           51                   Director


                                     33


Barney A. Richmond has been President and a Director of the Company since its
acquisition of certain assets from ACHI in January 2004, and was President and
a Director of ACHI prior to that time.  From 1985 to the present, Mr. Richmond
has been an independent advisor and investor in assisting companies, as well as
individuals, regarding public offerings, mergers, reverse mergers and a variety
of corporate financing issues.  Mr. Richmond has also been an investor in
numerous reorganizations and business turnarounds, including many substantial
bankruptcy reorganizations.  Mr. Richmond has been a member of the Boards of
Directors of The Richmond Company, Inc., Benny Richmond, Inc., 877 Management
Corporation, King Technologies, Inc., King Radio Corporation, United States
Financial Group, Inc., JSV Acquisition Corporation, Chase Capital, Inc,
Berkshire International, Inc. and Dunhall Pharmaceuticals, Inc.

Richard C. Turner has been Treasurer and Chief Financial Officer of the Company
since June 2001, and became a Director of the Company in February 2004.  From
September 1990, until he joined the Company in June 2001, Mr. Turner was
employed as an accountant by Glenn G. Schanel, CPA, where he was responsible
for corporate and individual tax returns, business write-up services, and
business consulting services, including computer and database management.
Prior to 1990, Mr. Turner was Vice President of Finance at First American Bank,
Lake Worth, Florida, where he was responsible for the bank's financial
reporting, budgeting and cost accounting.

Michael Camilleri has been a Director of the Company since November 2004, and
holds a number of positions within the insurance industry.  He is a principal
of Preferred Insurance Capital Consultants, LLC. Preferred specializes in
actuarial, litigation support and insurance management consulting services. Mr.
Camilleri serves as a director and General Counsel of First Commercial
Insurance Company, and as a director and officer of various insurance related
affiliates of First Commercial.  Mr. Camilleri is also President of Newport
Star Reinsurance Company, Inc.; a director and Vice President of CEIB Marketing
Group, LLC; President, Treasurer and Vice President of Spoleto Holdings, LLC;
and Manager of Power One Real Estate Investments, LLC.  Within the last five
years, Mr. Camilleri has also served as Secretary of Accident Insurance
Company, Inc., President and CEO of AmTrust Insurance Company, and Senior Vice
President of Insurance Services Offices, Inc.. From 1996 to 1999, he was
President of Insurance Data Resources, Inc. (IDR) and IDR Statistical Services,
Inc. (IDRSS), national workers compensation rating organizations. Prior to
joining IDR in 1996, Mr. Camilleri was a senior partner and head of the
insurance regulatory and health practices for Adorno & Zeder, P.A. From 1978 to
1991 he was with the National Council on Compensation Insurance, Inc. (NCCI),
where he served as Senior Vice President and General Counsel. At NCCI, Mr.
Camilleri directed the Legal, National Affairs, Public Affairs and Residual
Markets division. During his career with NCCI, he managed countrywide workers
compensation assigned risk plans and reinsurance pools, established a prototype
National Affairs Department, managed all internal and external affairs,
provided oversight on multi state and federal issues including testimony before
U.S. Congress, and served as Secretary to the Board of Directors. Mr. Camilleri
is the author of texts and articles on workers compensation and health care and
is a frequent speaker on workers compensation and health related issues at
national conferences.

Barry M. Goldwater, Jr., has been a Director of the Company since November
2004.  Mr. Goldwater is President of B2 Solutions, which represents client
companies before Congress and various branches of the United States Government,

                                     34
as well as the California and Arizona state legislatures . Prior to joining B2
Solutions, Mr. Goldwater served as a General Partner for 13 equipment leasing
partnerships. Mr. Goldwater's background includes 14 years as a United States
Congressman and 8 years as a Series 7 Registered Representative in the
securities brokerage industry and a member of the New York Stock Exchange.
..While in Congress, Mr. Goldwater served on committees that had jurisdiction
over Energy, Aviation, Space, Defense and Public Works. Mr. Goldwater served on
the Joint Committee on Energy, which responded to the oil crisis on 1974.

Matthew Salmon has been a Director of the Company since January 2004.  Since
November 2000, Mr. Salmon has been President of Upstream Consulting, a Public
Affairs consulting company. From November 1994 until November 2000, Mr. Salmon
served in the United States House of Representatives, representing Arizona's
First Congressional District.

Douglas Sizemore has been a Director of the Company since November 2004.  Mr.
Sizemore has been President of Accident Insurance Company, Inc., since 2003,
and has also been a self-employed insurance consultant since 2000.  From 1995
to 2000, Mr. Sizemore was Commissioner of Insurance for the State of Tennessee.
Prior to his position as Commissioner of Insurance, Mr. Sizemore was President
of Johnston City Insurance Agency, Inc., dating back to 1959.

Norman E. Taplin has been a Director of the Company since November 2004.  Mr.
Taplin is an attorney, concentrating his practice in the areas of regulatory
insurance, administration law, corporate and commercial law representing
companies, industries, business matters involving governmental regulation, the
securing and maintaining of licenses, governmental approvals and other
regulatory issues, real estate, estate planning and probate. He is also
involved in matters regarding the establishment of new businesses, real estate
developments, and other transactions which may or may not involve governmental
regulation. Mr. Taplin has been active in insurance matters since 1975 and has
represented a variety of insurance companies in the United States, District of
Columbia and select foreign jurisdictions. He is also a member of NALC, and has
been appointed to the Hurricane Advisory Board in Georgia.

Our Board of Directors has determined that we have at least one financial
expert, Richard C. Turner, serving on our audit committee.  Since Mr. Turner is
an officer of the Company, as well as a director, he is not considered
independent.

A Code of Ethics that applies to our chief executive and senior financial
officers, as well as a Code of Business Conduct and Ethics that applies to all
employees, have been drafted and presented to our Board of Directors for
review.  Both Codes will be considered for adoption by the Board of Directors
at its next meeting.

ITEM 8. EXECUTIVE COMPENSATION.

Prior to January 5, 2004, when the Company was spun off from eCom, our
executive officers were paid by eCom.  After the Company was spun off from
eCom, Richard C. Turner, our Chief Financial Officer, has been paid an annual
salary of $50,000, plus a minimum annual bonus of $50,000.  No other executive
officer currently receives compensation from the Company.
We have agreed to issue to our independent directors, but have not yet issued,
warrants to purchase a total of 1,500,000 shares of our Common Stock at an

                                     35

exercise price of $.01 per share, as compensation for their directorial and
consulting services.

ITEM 9. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

As of May 31, 2004, and as of January 15, 2005, there were a total of
15,723,903 shares of the Company's stock outstanding.  In addition, as of
January 15, 2005, there were 2,250,000 shares of common stock subscribed for,
but not yet issued, pursuant to the conversion of certain convertible notes
previously issued by the Company.  In addition, the Company has issued warrants
to purchase an additional 1,931,209 shares of common stock, and has committed
to issue another 4,500,000 warrants to purchase common stock.  The table below
shows the number of shares of common stock held as of January 15, 2005, by (a)
each director and executive officer of the Company, (b) the directors and
executive officers of the Company as a group, and (c) each person known by us
to be the beneficial owner of more than 5% of the Company's outstanding stock.
All percentages assume the shares currently subscribed for are issued and
assumes all of the warrants are issued and exercised.
                                           Number of             % of Shares
Name and Address                           Shares Owned          Outstanding
-----------------------                    --------------      ---------------
Barney A. Richmond, Director & President       7,084,048             29.0%
601 Seafarer Circle
Jupiter, FL 33477

Richard C. Turner, Director &
Chief Financial Officer                          230,870               .9%
4200 Oak Street
Palm Beach Gardens, FL 33418

Matthew Salmon, Director                         500,000(1)           1.9%
2700 N. 3rd Street, Suite 2012
Phoenix, AZ  85004

Barry M. Goldwater, Jr., Director                250,000(1)           1.0%
3104 E. Camelback, Suite 274
Phoenix, AZ  85016

Douglas Sizemore, Director                       250,000(1)           1.0%
707 Rambling Road
Johnson City, TN 37604

Norman E. Taplin, Director                       250,000(1)           1.0%
1555 Palm Beach Lakes Blvd, Ste 1510
West Palm Beach, FL 33401

Michael Camilleri, Director                      250,000(1)           1.0%
2101 NW Corporate Blvd. Suite 415
Boca Raton, FL 33431

David W. Pong(2)                               2,000,000              8.2%
161 San Antonio Way
Sacramenta, CA 95819
-----------------------                    --------------      ---------------
All Directors & Executive Officers
     as a group (7 persons)                    8,814,918             36.1%

1 Represent warrants to purchase common stock which the Company has committed to
issue.

2  All shares are held by the David W. Pong Revocable Trust.  Includes 380,000
shares currently owned, 810,000 shares to be issued pursuant to the conversion
of convertible notes held by the Trust, and warrants to purchase an additional
810,000 shares.


ITEM 10. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

There have been no transactions, and there are no proposed transactions,
between the Company and any of its Directors, executive officers or
beneficial owners of five percent or more of the Company's Common Stock,
or any member of their immediate families, as to which the Director,
officer, beneficial owner, or family member had a material interest.

On February 29, 2004 the Company received intellectual property rights when t
acquired 53,910,922 common shares of Air Media Now, Inc. from ACHI, a related
company.  The fair value of the publicly traded shares of Air Media Now, Inc.
at date of receipt was $3,469,622.

ITEM 11. EXHIBITS AND REPORTS ON FORM 8-K.

(a) Exhibits

Exhibit No.     Description
                31.1  Certification of principal executive officer

                31.2  Certification of principal financial officer

                32    Section 1350 Certification

(b) Reports on Form 8-K

The Company filed no reports on Form 8-K during the period covered by this
Report.



ITEM 12.  PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Audit Fees.
The aggregate fees billed to the Company for professional services rendered for
the audit of the Company's annual financial statements, review of the Company's
quarterly financial statements, and other services normally provided in
connection with statutory and regulatory filings or engagements was $0 for the
fiscal year ended May 31, 2003, and $23,625 for the fiscal year ended May 31,
2004.

Other Fees.

Other fees billed to the Company by accountants for consultation services,
research and client assistance totaled $0 for the fiscal year ended May 31,
2003, and $0 for the fiscal year ended May 31, 2004.
                                    37

SIGNATURES

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

American Capital Holdings, Inc.
(Registrant)

By   /s/ Barney A. Richmond
     ----------------------
     Barney A. Richmond, President

Date  April 28, 2005
     -----------------

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

By   /s/ Barney A. Richmond
     ----------------------
     Barney A. Richmond, President and Director

Date  April 28, 2005
     -----------------

By   /s/ Richard C. Turner
     ---------------------
     Richard C. Turner, Chief Financial Officer and Director

Date  April 28, 2005
     -----------------

By   /s/ Michael Camilleri
     ---------------------
     Michael Camilleri, Director

Date  April 28, 2005
     -----------------
By   /s/ Norman E. Taplin
     --------------------
     Norman E. Taplin, Director

Date   April 28, 2005
     ------------------

                                        38
Exhibit 31.1
I, Barney A. Richmond, certify that:
(1) I have reviewed this Annual Report on Form 10-KSB/A of American Capital
Holdings, Inc.;
(2) Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;
(3) Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the small
business issuer as of, and for, the periods presented in this report;
(4) The small business issuer's other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-
15(f)) for the small business issuer and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the small business issuer, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the small business issuer's disclosure
controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the small business issuer's internal
control over financial reporting that occurred during the small business
issuer's most recent fiscal quarter (the small business issuer's fourth fiscal
quarter in the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the small business issuer's internal
control over financial reporting; and
(5) The small business issuer's other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the small business issuer's auditors and the audit
committee of the small business issuer's board of directors (or persons
performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the small business issuer's ability to record,
process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the small business issuer's internal
control over financial reporting.

Date: April 28, 2005

/s/ Barney A. Richmond
--------------------------
Barney A. Richmond
President





I, Richard C. Turner, certify that:
(1) I have reviewed this Annual Report on Form 10-KSB/A of American Capital
Holdings, Inc.;
(2) Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;
(3) Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the small
business issuer as of, and for, the periods presented in this report;
(4) The small business issuer's other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-
15(f)) for the small business issuer and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the small business issuer, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the small business issuer's disclosure
controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the small business issuer's internal
control over financial reporting that occurred during the small business
issuer's most recent fiscal quarter (the small business issuer's fourth fiscal
quarter in the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the small business issuer's internal
control over financial reporting; and
(5) The small business issuer's other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the small business issuer's auditors and the audit
committee of the small business issuer's board of directors (or persons
performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the small business issuer's ability to record,
process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the small business issuer's internal
control over financial reporting.

Date: April 28, 2005

/s/ Richard C. Turner
---------------------------
Richard C. Turner
Chief Financial Officer



Exhibit 32
In connection with the Annual Report of American Capital Holdings, Inc. (the
"Company") on Form 10-KSB/A for the period ending May 31, 2004 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"),
Barney A. Richmond, President of the Company, and Richard C. Turner, Chief
Financial Officer of the Company, certify, pursuant to 18 U.S.C. 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the
best of my knowledge and belief:

(1)   the Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

(2)  the information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations
of the Company.


      /s/    Barney A. Richmond
      ---------------------------
      Barney A. Richmond
      President
      Date: April 28, 2005


      /s/     Richard C. Turner
      --------------------------
      Richard C. Turner
      Chief Financial Officer
      Date: April 28, 2005