United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549



FORM 10-KSB

ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the Year Ended December 31, 2004

Commission File Number:  0-26777



InteliSys Aviation Systems of America Inc.



(Name of small business issuer in its charter)



Delaware

22-3662292

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)



815 Bombardier Street

Shediac, New Brunswick, Canada

E4P 1H9

(Address of principal executive offices)

(Zip Code)



Issuer's telephone number, including area code:  (506) 532-8515



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



None



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



Common Stock, par value $.001 per share

(Title of Class)



Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

[ X ]

No

[   ]



Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.   [   ]



The issuers revenues for its most recent fiscal year were $1,619,601.



Based on the closing sales price of the Common Stock on April 29, 2005, the aggregate market value of the voting stock of registrant held by non-affiliates was $1,378,201.



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The registrant has 50,966,498 shares outstanding as of April 29, 2005 and 21,788,333 issued and outstanding Special Class B Exchangeable Shares in the registrants wholly-owned subsidiary InteliSys Acquisition Inc. As outlined in Note 2 (a) to the Financial Statements, the exchangeable shares have equal voting rights and equal economic value as the common shares of the registrant as they may be exchanged by the holder thereof at any time on a one-for-one basis for common stock of the registrant, and if not exchanged prior to December 31, 2012, they will be exchanged for common shares of the registrant on that date.



Documents Incorporated By Reference:  None



Transitional Small Business Issuer Disclosure Format (check one):  Yes [ ]  No [X].



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TABLE OF CONTENTS

PAGE





PART I



Item 1.

Description of Business



Item 2.

Description of Property



Item 3.

Legal Proceedings



Item 4.

Submission of Matters to a Vote of Security Holders





PART II



Item 5.

Market for Common Equity and Related Stockholder Matters



Item 6.

Management's Discussion and Analysis or Plan of Operation



Item 7.

Financial Statements



Item 8.

Changes in and Disagreements with Accountants on Accounting and

Financial Disclosure



Item 8A.

Controls and Procedures



PART III





Item
9.

Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act



Item 10.

Executive Compensation



Item 11.

Security Ownership of Certain Beneficial Owners



and Management and Related Stockholder Matters



Item 12.

Certain Relationships and Related Transactions



Item 13.

Exhibits and Reports on Form 8-K



Item 14.

Principal Accountant Fees and Services





SIGNATURES



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CAUTIONARY STATEMENTS FOR FORWARD-LOOKING INFORMATION



InteliSys Aviation Systems of America Inc. (the "Company" or "we" or "our") has made forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) in this report that are subject to risks and uncertainties, such as statements about our plans, objectives, projections, expectations, assumptions, strategies, or future events. Other written or oral statements, which constitute forward-looking statements, also may be made from time to time by or on behalf of the Company. Words such as "may," "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "will," "should," "could," variations of such words, and similar expressions are intended to identify such forward-looking statements. Similarly, statements that describe the Company's future plans, objectives, or goals also are forward-looking statements. These statements are not guarantees of future performance and are subject to a number of risks, uncertainties, and other factors, including those discussed below and elsewhere in this report, that could cause actual results to differ materially from future results, performances, or achievements expressed or implied by such forward-looking statements. Consequently, undue reliance should not be placed on these forward-looking statements. The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.



The Company believes that the following  factors, including but not limited to the risk factors contained herein, could affect its future performance and cause actual  results of the Company to differ materially from those expressed in or implied  by forward-looking statements made by or on behalf of the Company:  (a) general economic conditions; (b) regulatory changes or interpretations of such regulations; (c) uninsurable risks, including acts of terrorism; (d) unexpected losses, (e) risks related to competition from established and emerging competitors; (f) risks that our revenues are highly dependent on the travel industry which is experiencing a prolonged decrease in business; (g) risks related to our financial leverage; (h) risks that rapid technological changes may render our technology obsolete; (i) risks to our customers; (j) disruptions in capital markets; and (k) risks related to the fact that we are not yet profitable and need additional capital to fund our operations.



Subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above and contained elsewhere in this Annual Report on Form 10-KSB.





PART I





Item 1.  Description of Business.



InteliSys Aviation Systems of America Inc. is a provider of integrated software solutions for regional, mid-sized airlines and fleet operators. Our software enables air carriers to improve their operations by providing solutions that are integrated, adaptable and can be deployed in a cost effective manner. In addition, our software assists airline operators in key areas such as



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reservation sales and distribution, passenger services, employee record keeping, regulatory compliance, capacity planning and resource allocation while managing maintenance requirements to seamlessly optimize operations.



Corporate History



In August of 2003, the Company changed its name from Apta Holdings, Inc. to InteliSys Aviation Systems of America Inc. (IASA) pursuant to a consent of the Companys shareholders, to better reflect its new business activities.



The Company was incorporated on June 4, 1999. We were engaged in two lines of business, owning and operating income producing real estate, and a finance business which originated and serviced loans to individuals and to businesses. The real estate business was spun off in 2000. The finance business was sold on December 31, 2002.



On December 31, 2002, we acquired Convergix, Inc., a Canadian corporation, pursuant to a share exchange agreement dated November 20, 2002.  Pursuant to the agreement, IASA issued 3,295,000 shares of its common stock plus 21,788,333 "exchangeable shares"  in InteliSys Acquisition, Inc. a subsidiary of IASA.  The exchangeable shares have equal voting rights and equal economic value as IASA common shares.  These shares may be exchanged by the holder at any time on a one-for-one basis for IASA common shares, and if not exchanged prior to December 31, 2012, will be exchanged for IASA common shares on that date.  Throughout this document, the exchangeable shares are treated as common stock equivalents.  All references to IASA common stock include the exchangeable shares unless otherwise noted.



The address and telephone number of our main office is 815 Bombardier Street, Shediac, New Brunswick, Canada, E4P 1H9, (506) 532-8515 or 1-877-532-8515



Cynaptec Information Systems Inc. ("Cynaptec"), also a New Brunswick corporation, is a wholly-owned subsidiary of Convergix.  Convergix also owns 53% of the issued and outstanding shares of InteliSys Aviation Systems Inc. ("InteliSys"), a Canadian corporation, with the remaining 47% being owned by Cynaptec

.



All dollar amounts reported herein are in United States dollars unless otherwise noted.  The approximate conversion rate as of December 31, 2004 was CAD $1.00 for USD $.83.



Development of the Business



InteliSys is an emerging leader in airline information technology solutions and solutions delivery.  A history of business-focused software development and computer systems engineering, coupled with proven airline management skills, have made InteliSys a solid choice for discerning aviation  professionals.



Our mission is to be a leading provider of comprehensive and integrated software solutions for low fare, regional, and mid-sized airlines and aviation-related organizations.



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The Company started as a sole proprietorship in the mid 1980s and early operations involved identifying requirements and providing IT solutions for small and mid-sized airlines.  As the Companies experience grew, it became apparent that there was a viable market for customizable, packaged airline management software geared specifically for the small to mid-sized airline market. Research revealed that small and mid-sized airlines operate using a significantly different type of business model than that used by large carriers, and that this model was under-served from an automation standpoint.



In April of 1999, we relocated to Shediac, New Brunswick in order to join forces with Cynaptec, an Information Technology integrator.



In January 2001, Convergix  Inc. was incorporated and Cynaptec became a wholly owned subsidiary of Convergix.  Convergix also owned 53% of the issued and outstanding common shares of InteliSys.  Cynaptec owns the remaining 47% of InteliSys.



We then embarked on a project to complete the development of an integrated suite of comprehensive airline management software. The resulting suite was branded as "Amelia".



In June 2001, under a new management team, our research and development was curtailed, and focus was applied towards sales and marketing of our existing, developed modules. Cynaptec's operations were wound down and its personnel laid off. Presently, our principle business is providing our software to our customer base using the Application Service Provider (ASP) model.  This model allows us to deliver our software solutions using the internet, thereby reducing the infrastructure investment requirements of our customers, making our solution a cost effective alternative of running this area of our customers operations.  We currently provide services to 19 clients. Client contracts are generally for terms of thirty-six to sixty months with fixed and volume-based charge components.





Products and Services



Software



Amelia is a fully integrated enterprise suite of airline management software that optimizes business processes to modernize the way airlines are managed.  It is the refined aviation business process that combines data manipulation, communications, computer networks and real-time functionality. The value of accurate and timely information has been apparent by the spectacular successes of businesses that use it effectively.



Amelia is delivered to our customers, using a combination of secure internet connection, high speed Client software and basic web browsers.  Using a thin-Client and browser-based delivery methodology, our system provides excellent response time with minimum bandwidth requirements.





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The Amelia software is comprised of the following modules:



- Passenger Reservation and Booking Engine
- Online Web Booking for Passengers, Travel Agencies and Corporations
- Flight, Crew and Aircraft Scheduling
- Aviation Regulatory Compliance Tools
- Flight Operations and Flight Watch
- Maintenance and Inventory
- Integration with the Global Distribution System
- Low Cost Freight Management





The Amelia solution can be rapidly activated.  Airlines can be brought online in a matter of days or weeks.  Our ASP model allows our customers to avoid investment in expensive computer hardware infrastructure.



The Amelia system has been developed to target the mid-sized and low cost carriers (LCCs). Recent implementations in Africa, Asia-Pacific and the Middle East have demonstrated the systems suitability for use in these emerging markets. The regional and LCC segments of the airline industry are well developed in the Western world. However, in the secondary centers, and non-Western world, the low cost travel phenomenon has just only begun. The business and distribution model for carriers operating in these regions is significantly different to that of Western carriers. Therefore, there is a need for their IT systems to accommodate for this difference. For example, Western carriers can predicate their distribution model on the assumption the majority of their travelers will have a credit card and will use the internet. This is not the case among the emerging markets. However, we have been successful in configuring and deploying the Amelia suite for use in these regions and for their specific demographic needs.



We feel that this positions the Company very well to continue its penetration into this emerging market as well as in the classic carrier markets. Of note is the rapidly expanding traveler market drawn from among large population bases in the Middle East, India, Asia-Pacific and Africa.





Hosting Services



We provide the Amelia solution to our customers on a hosted basis.  The databases, applications, web services, e-commerce and communication servers are maintained at our on-site data center.  This allows our customers to fully utilize the latest version of our software with minimal additional investment in hardware.   The advantage to us is that it provides us with a recurring revenue stream.



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Custom Programming



We derive significant revenues from custom programming work whereby our developers customize existing applications for a specific client's configuration, or develop completely new functionality.



Implementation Services



We provide implementation support to our clients in order to provide a smooth transition from the client's existing systems to the Amelia solution.  This requires significant time in assessing the client's ability and capacity to adopt a new solution and to determine the solutions scope and fit within the client's organization.  Follow up is provided to ensure training was received in a timely manner and that the client is using all aspects of the solution effectively.  Implementation also includes assisting the clients with their own infrastructure and technical set-up.



Support



We provide 24x7x365 technical and application support to our clients.  Primary method of contact is e-mail or MSN Messenger.  Telephone access is provided through our phone system and forwarded to assigned technicians' mobile phones and pagers for off-hours support.  We are the first response support facility for all technical areas, including client side infrastructure and communications issues.



Education and Training



Training is provided by an IASA-provided trainer.  Typically, this training is carried out at the client's site.  Training is also available through remote sessions during which the trainer "shadows" the client side user, employing the shadow functionality in the operating software.  This permits the user and the trainer to collaborate and work together in a single session.  Implementation and Training is available in English, French, Spanish and German.



The Market



Since the tragedy of September 11th, 2001, the low-fare/low-cost airline market has enjoyed tremendous growth and has redefined how consumers now travel by offering a multitude of choices among carriers. Air travel is becoming increasingly price driven. The traveling public has demonstrated a willingness to forgo many of the perks offered by the larger carriers in order to reduce their cost of travel. This has created a very competitive environment where the small to mid-sized carriers are aggressively seeking ways to cut their operating costs in order to pass even further savings onto their passengers. Cost-effective deployment of IT systems used to manage costs is one of their main areas of focus.



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Competition



We compete in a marketplace with a large number of vendors. These vendors range from small owner-managed operations to large, well-financed international organizations. Aside from the Upper Tier, there is no dominant vendor or organization. We believe that the majority of competitors and customers are using older technology than that which we provide.



We estimate that there are currently approximately 74 companies that provide one or more of the services which we provide.  We believe that most of these competitors do not provide as comprehensive a set of services as we do. We consider the following companies to be our principal competitors:



OpenSkies

Air Kiosk

Sabre (U.S.) AIMS









The marketplace is highly competitive.  Technology and its applications within the aviation industry are in a rapid and continual state of change.  To be effective, we must continue to develop and market offerings that meet changing user needs and respond to technological  changes on a timely and cost effective basis.



Operations



We operate a fully redundant data center built and maintained to standards imposed by clients such as Amex Canada and Transport Canada.  The redundant power, communication and environment systems allow us to host complex, sensitive and high-availability applications.



Demonstration and evaluation implementations are not hosted from the production environment.  For security, the data center has card access and video surveillance as well as motion alarms connected to the facility's monitored alarm system.  Fire protection is provided by an FM-2000 inert gas (halon-like) system.  Backup power is provided via three banks of hard-wired UPS's and an automatically engaged diesel generator.  Primary communication is provided via a primary 10MB fiber optic link to the Internet; secondary communication is provided by a 512KB frame relay connection.



Marketing



We intend to expand existing customer relationships by introducing upgrade programs for customers, and strategically positioning the "integrated suite" concept (i.e. selling other parts of the Amelia suite to existing customers).



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Marketing Strategies



Direct Marketing:  We currently market our products and services via a direct sales force, utilizing telemarketing and direct mail.



Alliance Partner Strategy:  We are developing a program to attract alliance partners who will market our products outside of North America.



Advertising:    Given that the market and prospects are readily identifiable and industry players are very well documented, we focus our advertising plan on Airline Industry publications and journals highlighting specific major events and trade shows.



Product Development



Our product development platform is based on an Internet architecture comprised of interconnected database servers, application servers and client computers or devices running thin-client software or web browsers.  Internet computing allows business information and applications to be managed from centralized locations.  End users can access their data and applications through thin-client software or standard web browsers.  Database servers manage the underlying business information, while application servers run the business applications.  Professional information technology managers typically manage these servers.  In contrast, traditional client/server computing architectures require that each client computer run and manage its own applications and also be updated every time an application changes.  We believe that the network-centric design of our software for Internet computing improves network performance and data quality and helps our customers better control installation, maintenance and training costs associated with information technology infrastructure.  We will continue to enhance our existing products and develop new products to meet the changing needs of our customers.



Intellectual Property and Other Proprietary Rights



We rely primarily on a combination of copyright and trademark laws, trade secrets, confidentiality procedures and contractual provisions to protect our proprietary technology. For example, we license our software pursuant to signed license agreements which impose certain restrictions on the licensees' ability to utilize the software. In addition, we seek to avoid disclosure of our trade secrets, including requiring those persons with access to our proprietary information to execute confidentiality agreements with us and restricting access to our source code. We seek to protect our software, documentation and other written materials under trade secret and copyright laws, which afford only limited protection.



We have applied to register five trademarks to protect the Amelia software system, one in Canada (application no. 1032998) and four in the United States (applications nos. 76135724, 76135723, 76135722 and 76135721).  Of these, the Canadian application and one U.S. application (no. 76135724, for business management consulting services) have been allowed (but not yet registered); the other applications have been granted a first extension of time to file a statement of use.



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Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or to obtain and use information that we regard as proprietary. Policing unauthorized use of our products is difficult, and, while we are unable to determine the extent to which piracy of its software products exists, software piracy can be expected to be a persistent problem. In addition, the laws of many countries do not protect our proprietary rights to as great an extent as do the laws of the United States. There can be no assurance that our means of protecting our proprietary rights will be adequate or that our competitors will not independently develop similar technology.



To date, we have not been notified that our products infringe the proprietary rights of third parties, but there can be no assurance that third parties will not claim infringement by us with respect to current or future products. We expect that software product developers will increasingly be subject to infringement claims as the number of products and competitors in our industry segment grows and the functionality of products in different industry segments overlaps. Any such claims, with or without merit, could be time-consuming, result in costly litigation, cause product shipment delays or require us to enter into royalty or licensing agreements. Such royalty or licensing agreements, if required, may not be available on terms acceptable to us or at all, which could have a material adverse effect upon our business, operating results and financial condition.



Employees



As of December 31, 2004, we employed 20 individuals, 16 of whom were engaged in operations and customer service, 2 in sales, marketing and related activities and 2 in finance and administration. Our success is highly dependent on our ability to attract and retain qualified employees. The loss of any of our key personnel could have a material adverse effect on our business, operating results and financial condition.

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Factors that May Affect Future Results



Limited Operating History; History of Operating Losses:



Fours years ago, we emerged from our development stage. As of December 31, 2004, we had entered into a number of contracts for the provision of our software products, and only commenced sales in 2001. Accordingly, we have only a modest but growing history upon which an evaluation of our prospects and future performance can be made. Such prospects must be considered in the light of risks and difficulties frequently encountered by emerging businesses facing competition in an evolving and ever-changing industry, where products have yet to obtain widespread commercial acceptance and are characterized by rapid technological obsolescence



From inception through December 31, 2004, we have incurred cumulative losses of $11,356,177.



Future operating results will depend on many factors, including the growth of our targeted market, demand for our products, the level of product and price competition, our success in expanding our direct sales force and distribution channels, and our ability to develop and market new products and control costs, together with general economic conditions and other factors common to all businesses.



Significant Capital Requirements and a Need for Additional Financing:



We have a need for cash in order to pay obligations currently due in a timely manner, and to finance our business operations. Although we believe that we have sufficient resources to conduct our operations on an ongoing basis, our continued operations thereafter will depend upon the availability of cash flow from our operations, or our ability to raise additional funds through equity or debt financing. There is no assurance that we will be able to obtain additional funding when it is needed, or that such funding, if available, will be obtainable on terms acceptable to us. If our operations do not produce the necessary cash flow, or if we cannot obtain needed funds, we may be forced to reduce or cease our activities with consequent loss to investors. In addition, should we incur significant presently unforeseen expenses or delays, we may not be able to accomplish our goals.



We have no other current arrangements with respect to, or sources of, additional financing and there can be no assurance that additional financing will be available to us on commercially reasonable terms, if at all. Any inability to obtain additional financing could have a material adverse effect on us, including possibly requiring us to significantly curtail or cease our operations.



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Development of Markets Required for Successful Performance by IASA:



Our financial performance will depend, in part, on market acceptance of Amelia and our hosting services, and on whether we can meet and adapt to the requirements of our customers, both in terms of performance and price. Achieving market acceptance for our products will require substantial marketing efforts and the expenditure of significant funds.



Competition:



New trends and development of new technologies could have an adverse effect on our current technology. The market is subject to rapid change. Competitors vary in size and in the range of products and services they offer. We expect to experience additional competition from other established and emerging companies. Increased competition could result in price reductions fewer customer orders, reduced gross margins and loss of market share, any of which could have a material adverse effect on our business, operating results and financial condition.



Rapid Technological Change and Dependence on New Products:



The market for our software is characterized by rapid technological change, frequent new product introductions and evolving industry standards. The introduction of products incorporating new technologies and the emergence of new industry standards could render existing products obsolete and unmarketable. The life cycles of our products are difficult to estimate. Our future success will depend largely upon our ability to enhance our current products and to develop and introduce, on a timely basis, new products that keep pace with technological developments and emerging industry standards, and address the increasingly sophisticated needs of our customers. There can be no assurance that we will be successful in developing and marketing product enhancements or new products that respond to technological change or evolving industry standards, that we will not experience difficulties that could delay or prevent the successful development, introduction and marketing of these products, or that our new products and product enhancements will adequately meet the requirements of the marketplace and achieve market acceptance. We have previously experienced delays in the development and introduction of new products and product enhancements. The length of these delays has varied depending upon the size and scope of the project and the nature of the problems encountered. If we are unable to develop and introduce new products or enhancements of existing products in a timely manner or if we experiences delays in the commencement of commercial shipments of new products and enhancements, our business, operating results and financial condition would be materially adversely affected.





Risks Associated with International Operations:



We plan to expand our operation into Europe, the Middle East and Asia, which will require significant management attention and financial resources. We have committed and continue to commit significant resources to developing international sales and support channels. There can be no assurance that our efforts to develop international sales and support channels will be successful, and the failure of such efforts could have a material adverse effect on our business, operating results and financial condition.



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Management of Growth and Dependence on Key Personnel:



The success of IASA will be largely dependent on the efforts of our management. We have no employment agreements with individuals in various managerial positions, and there can be no assurance that such persons will continue their employment with us. The loss of the services of one or more of such key personnel could have a material adverse effect on our ability to maximize our use of our products and technologies or to develop related products and technologies. Our future success will depend largely upon our ability to attract, retain and motivate highly skilled employees. Qualified employees are in great demand and are likely to remain a limited resource for the foreseeable future. There can be no assurance that we will be able to continue to attract and retain sufficient numbers of highly skilled employees. If we are unable to hire, train and retain qualified engineers and our management is unable to manage growth effectively, our business, operating results and financial condition could be adversely affected.



RISK OF NON-COMPLIANCE WITH THE SECTION 404 OF THE SARBANES-OXLEY ACT OF 2002.

Beginning in Fiscal 2006, Section 404 of the Sarbanes-Oxley Act of 2002 ("the Act") will require the Company to include an internal control report of management in its Annual Report on Form 10-KSB. The internal control report must contain (i) a statement of management's responsibility for establishing and maintaining adequate internal control over financial reporting, (ii) a statement identifying the framework used by management to conduct the required evaluation of the effectiveness of our internal control over financial reporting, (iii) management's assessment of the effectiveness of our internal control over financial reporting as of the end of our most recent fiscal year, including a statement as to whether or not internal control over financial reporting is effective, and (iv) a statement that the Company's independent auditors have issued an attestation report on management's assessment of internal control over financial reporting.

Management acknowledges its responsibility for internal controls over financial reporting and seeks to continually improve those controls. In addition, in order to achieve compliance with Section 404 of the Act within the prescribed period, beginning in Fiscal 2005, the Company will engage in a process to document and evaluate its internal controls over financial reporting. In this regard, management will dedicate internal resources, engage outside consultants and adopt a detailed work plan to (i) assess and document the adequacy of internal control over financial reporting, (ii) take steps to improve control processes where appropriate, (iii) validate through testing that controls are functioning as documented and (iv) implement a continuous reporting and improvement process for internal control over financial reporting. The Company believes the process commencing in Fiscal 2005 for documenting, evaluating and monitoring its internal control over financial reporting will be consistent with the objectives of Section 404 of the Act and will ensure that the material weaknesses identified by the auditor during the Fiscal 2004 year end audit will be remediated.

In addition, the Company will have to improve its financial controls as they relate to the material weaknesses as discussed. The Company can provide no assurance as to its, or its independent auditors, conclusions at December 31, 2006 with respect to the effectiveness of its internal control over financial reporting under Section 404 of the Act. The existence of the above factors and circumstances create a risk that the Company, or its independent auditors, will not be able to conclude at December 31, 2006 that the Company's internal controls over financial reporting are effective as required by Section 404 of the Act.





Risk of Software Defects:



Software products are complex and may contain errors or defects, especially when first introduced or when new versions or enhancements are released. Despite product testing by us and by our potential customers, there can be no assurance that defects and errors will not be found in new products or in new versions or enhancements of existing products after commencement of commercial shipment. Such discovery could result in failure to achieve market acceptance, which could have a material adverse effect upon our business, operating results and financial condition.



Product Liability:



Our license agreements with our customers  typically contain provisions designed to limit our exposure to potential product liability claims. It is possible, however, that  the limitation of liability provisions contained in our license agreements may not be effective as a result of federal, state or local laws or ordinances or unfavorable judicial decisions. Although we have not experienced any product liability claims to date, the license and support of our software may entail the risk of such claims.  A successful product liability claim brought against us would have a material adverse effect upon our business, operating results and financial condition.



Business Interruptions:



Our operations are vulnerable to interruption by fire, power loss, telecommunications failures, terrorist attacks and other events beyond our control.  We do not have adequate insurance against business interruptions. If a business interruption occurs, it could seriously harm us or our customers.



Patent Infringement:



It could be alleged that we have infringed on certain patents or other intellectual property rights of others. Responding to such claims, regardless of their merit, can be time consuming, costly and a diversion of management's attention and resources, and could cause us to incur significant expenses.





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Control by Current Shareholders:



Our Officers and Principle Shareholders own approximately 37% of the shares outstanding. Accordingly, such persons may be able to significantly influence  the election of all our directors, increase the authorized capital, dissolve, merge, sell our assets, and generally direct our affairs.  See "Management,"  "Principal  Shareholders"   and   "Certain Transactions."



No Assurance of Public Market:



As of the date of this Form 10-KSB, there has been minimal trading of our common stock.  There can be no assurance that a regular trading market for our securities will develop or that, if developed, it will be sustained.  The trading price of our securities could be subject to wide fluctuations, in response to quarterly variations in our operating results, announcements by us or others, developments affecting us, and other events or factors.  In addition, the stock market has experienced extreme price and volume fluctuations in recent  years.  These fluctuations have had a substantial effect on the market prices for many companies, often unrelated to the operating performance of such companies, and may adversely affect the market prices of the securities.



No Dividends:



Neither Convergix nor IASA has paid any cash or other dividends on our Common Stock and neither expects to declare or pay any cash dividends in the foreseeable future.



Penny Stock Regulation:



The  regulations of the Securities and Exchange Commission promulgated under the Securities Exchange Act of 1934 (the "Exchange Act") require additional disclosure relating to the market for penny stocks in connection with trades in any stock defined as a penny stock. Commission regulations define a penny stocks to be an equity security that has a market price of less than $5.00 per share, subject to certain exceptions. Unless an exception is available, those regulations require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock market and the  risks associated  therewith,  and impose various  sales  practice requirements on broker-dealers who sell penny stocks to persons other  than established customers and accredited  investors (generally institutions). In addition, the broker-dealer must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer's account. Moreover, broker-dealers who recommend such securities to persons other than established customers and accredited investors must make a special written suitability determination for the purchaser and receive the purchaser's written agreement to a transaction prior to a sale.  If our  securities become subject  to  the  regulations applicable to penny stocks, the market liquidity for our securities could be severely affected. In such an event, the regulations  on penny stocks could limit the  ability  of broker-dealers to sell our securities and thus the ability of purchasers of our securities to sell their securities in the secondary market.

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Item 2.  Description of Property.



We do not own any real property. Our principal administrative, sales, marketing, support and product development facility occupies 6,600 square feet in Shediac, New Brunswick, Canada. The lease expires on December 31, 2007.  The annual rent on such lease is $119,520. We believe that existing facilities are adequate to support our activities for the foreseeable future.





Item 3. Legal Proceedings.





In February 2004, the Company received notice that a shareholder is contemplating litigation against the Company for the alleged breach of a memorandum of understanding, related to share subscriptions and other compensation, which was entered into on April 17, 2002 and amended on November 22, 2002.



The Companys position was that it fully satisfied its obligation under the memorandum of understanding in 2002 and that no further liability existed to the shareholder at December 31, 2002 and December 31, 2003.  However, the shareholders interpretation of the agreement was different from that of the Company.



To settle this dispute, the Company has issued 1,821,429 shares of its common stock to the shareholder, which have been recorded in 2004 at their fair value on the date of issuance ($692,143).  The Company and shareholder are currently in negotiations to settle the outstanding balance owed to the shareholder.  The outstanding balance of $296,490 (2003 - $ 221,757) has been recorded in accrued liabilities.



Subsequent to the December 31, 2004 year end, the Company received notice that a former employee is taking legal action against the Company for wrongful dismissal.  No provision has been made in the financial statements for this contingent loss because the outcome of the claim is not currently determinable.  This claim has not been resolved and the outcome and amount of this claim is not determinable





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



No matters were submitted to a vote of security holders during the quarter ended December 31, 2004.



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PART II



Item 5.  Market for Common Equity and Related Stockholder Matters.



In 1999 our common stock began trading on the Over-the-Counter Bulletin Board sponsored by the National Association of Securities Dealers, Inc. under the symbol "IYSA.OB". The following table sets forth the range of high and low bid prices of the Company's Common Stock for the quarters indicated through the fourth quarter of 2004 and 2003, respectively:





Calendar Year

High Bid

Low Bid



2004:



First quarter

$ .65

$ .19



Second quarter

$ .30

$ .06

Third quarter

$ .10

$ .02

Fourth quarter

$ .03

$ .01





2003:



First quarter

$ .25

$ .04

Second quarter

$ .08

$ .06



Third quarter

$ .10

$ .06



Fourth quarter

$ .32

$ .10





The quotations reflect inter-dealer prices, without retail markups, markdowns, or commissions and do not necessarily represent actual transactions.  The quotations were derived from the National Quotation Bureau OTC Market Report.



The Company estimates that as of April 29, 2005 there were approximately 425 holders of record of the Common Stock and 45 holders of record of the Class B Exchangeable Shares.







Dividend Policy



As of April 29, 2005, there had been no dividends declared on the Companys Common Stock.

We have never declared or paid any cash dividends on our common stock nor do we anticipate paying any in the foreseeable future. Furthermore, we expect to retain any future earnings to finance our operations and expansion. The payment of cash dividends in the future will be at the discretion of our Board of Directors and will depend upon our earnings levels, capital requirements, any restrictive loan covenants and other factors the Board considers relevant.



---



Securities Authorized for Issuance under Equity Compensation Plans



Under the 2004 Stock Option Plan, the Company has authorized the issuance of up to 10,000,000 shares of its common stock.  As of April 29, 2005, the Company has issued 4,937,670 options to purchase shares of common stock to its employees and executive management.





Recent Sales of Unregistered Securities





None.



---

Item 6.  Management's Discussion and Analysis or Plan of Operation.



The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and the related notes thereto included elsewhere in this Form 10-KSB. The matters discussed herein contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, which involve risks and uncertainties. All statements other than statements of historical information provided herein may be deemed to be forward-looking statements. Without limiting the foregoing, the words believes, anticipates, plans, expects and similar expressions are intended to identify forward-looking statements. Factors that could cause actual results to differ materially from those reflected in the forward-looking statements include, but are not limited to, those discussed under the heading Factors that May Affect Future Results and elsewhere in this report and the risks discussed in our other filings with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect managements analysis, judgment, belief or expectation only as of the date hereof. We undertake no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.



CRITICAL ACCOUNTING POLICIES



We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States, and make estimates and assumptions that affect our reported amounts of assets, liabilities, revenue and expenses.  We base our estimates on historical experience and other assumptions that we believe are reasonable in the circumstances.  Actual results may differ from these estimates.



The following critical accounting policies affect our more significant estimates and assumptions used in preparing our consolidated financial statements.



The consolidated financial statements have been prepared on the going concern basis, which assumes the realization of assets and liquidation of liabilities in the normal course of operations.  If we were not to continue as a going concern, we would likely not be able to realize on our assets at values comparable to the carrying value or the fair value estimates reflected in the balances set out in the preparation of the consolidated financial statements.  There can be no assurances that we will be successful in generating additional cash from equity or other sources to be used for operations.  The consolidated financial statements do not include any adjustments to the recoverability of assets and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern



The Company accounts for software sales in accordance with Statement of Position (SOP) No. 97-2, Software Revenue Recognition.  SOP 97-2 generally requires revenues earned on software arrangements involving multiple elements to be allocated to each element based on the relative fair value of the element.



Revenue from license fees is recognized when persuasive evidence of an agreement exists, delivery of the product has occurred, the fee is fixed or determinable, and collectability is probable.  The Company maintains certain provisions for product returns and rebates in accordance with SFAS No. 48 Revenue Recognition when Right of Return Exists.  The Company considers arrangements regarding certain customers with payment terms extending beyond customary payment terms not to be fixed or determinable.  If the fee is not fixed or determinable, revenue is deferred and recognized when payments become due from the customer providing that all other revenue recognition criteria have been met.



---



Software subscription, support, consulting service, and training program revenue included in multiple-element arrangements is deferred and recognized on a straight-line basis over the term of the software subscription and support agreement.  The fair value of the undelivered elements (software subscription, specified upgrades, support, consulting services and training) is generally determined based on the price charged for the undelivered element when sold separately.



OVERVIEW





Plan of Operation

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



Our goal is to be a leading provider of software solutions and hosting services to small and mid-sized airlines and aircraft fleet operators. To meet that goal, we invested heavily to develop an integrated software solution called Amelia. The development cycle and computer hardware integration took longer that anticipated, causing a delay in our commercialization efforts.  As a result, the Company has an accumulated deficit of $11,356,177.  Our balance sheet remains highly leveraged.  Our liabilities exceed our assets by $4,234,030.  The Company has not been able to meet its obligations as they come due.  However, now that the software and hardware development is substantially complete and as our ability to offer additional modules of our software to existing and prospective clients, we have been able to concentrate our efforts on our sales and marketing activities to further commercialize our product on a worldwide basis.  We believe as our product and our marketing activities continue their maturing process, our financial results will improve.  We also believe that our financial results will improve for the following reasons:



1.

Through our marketing efforts, product enhancements and additional modules that are now available,

we feel our competitive edge is growing and our presence in our target market is becoming stronger, thereby increasing our ability to continually sign on new customers in the near future.



2.

We have taken an aggressive approach at controlling our costs and making necessary cost saving decisions to provide the Company with cash savings beginning in the 2nd quarter of 2005. These cash savings will further increase by the end of the 3rd quarter when all of the cost saving measures become effective.



3.

We have informal agreements with many of our creditors, some of which we have already been able to settle, that will allow us to continue to function as a going concern .  As more of the cash savings mentioned above become available for debt settlements, we feel we will be in a better position to continue servicing some of the old outstanding debts in a reasonable manner, providing the company with a stronger financial position.

---



4.

We anticipate that the results of the activities mentioned above will allow the Company to better position itself to secure debt or equity financing in the future.  This additional financing would be used to pay down some of our debt as well as improve our working capital situation.  There can be no assurance that the Company will be able to secure any other additional financing on commercially reasonable terms, if at all.



The Company plans to continue aggressively seeking new customers and emerging markets while continuing to remain customer-focused and provide new product enhancements.  We believe that the focus of our entire team will allow the Company to continue its pattern of strong revenue growth as evidenced by the 56% increase for the period ended December 31, 2004 as compared to the same period ended in 2003.  This impressive growth follows a 117% increase in revenues for the year ended December 31, 2003 as compared to the same period ended in 2002 as evidenced in our 10-KSB filed for the year ended December 31, 2003.  We believe that these figures support our opinion that our sales and marketing strategy has been successfully implemented.



The Company also plans to continue to aggressively seek new sources of financing in order to continue with its growth strategy.  There is no assurance that the Company will be able to secure additional financing on commercially reasonable terms, if at all.



Results of Operations

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



The following discussion and analysis should be read in conjunction with the Consolidated Financial Statements and Notes thereto appearing elsewhere in this Form 10 KSB.



InteliSys Aviation Systems of America Inc. had revenues of $1,619,601 for the year ended December 31, 2004 as compared to $1,039,429 for the year ended December 31, 2003, an increase of $580,172 or 56%.  This increase was primarily due to an increase in client base.  The increase in clients was the direct result of the Companys continued success in their marketing activities since emerging from its development stage in 2001.  The Companys revenue stream is made up of monthly fixed and variable recurring revenues from its customers whose contracts vary from 12 to 120 months in length.  In addition to the monthly recurring revenue stream, the Company provides consulting and customization services to customers.



Of particular note is that the Company signed contracts with new customers in two new and emerging regions: Asia-Pacific and Africa. These are emerging markets for the Companys target industry segment, and further validate the suitability and quality of its products for this market. It also validates the Companys ability to deliver hosted solutions to these key geographic areas.





Cost of service delivery increased to $1,058,051 during the year ended December 31, 2004 as compared to cost of delivery charges of $816,904 during the same period ended December 31, 2003.  The increase in expense is directly related to higher sales revenues in 2004 as compared to sales revenues for 2003.



Consequently, due to the substantial increase in revenues partially offset by a slight increase in the Companys cost of service delivery, the gross profit for the year ended December 31, 2004 increased to $561,550 from $222,525 during the same period ended December 31, 2003.  This represents an increase of 152% in gross profit for the year ended December 31, 2004.



---

Selling, general and administrative expenses increased to $2,717,757 in 2004 from $1,736,362 for the year ended on December 31, 2003, an increase of $981,395.  The increase is the result of the Company engaging certain consultants to help with the execution of the Companys business plan as well as the Company incurring a bridge loan fee.  In the aggregate, these charges represent approximately $1,406,753 in expenses for the year ended December 31, 2004.  Furthermore, the Company incurred approximately $104,682 in expenses for the conversion of a promissory note due to a shareholder into common shares and $149,270 in expense to record the issue of stock options to its employees during the year ended December 31, 2004. During the year ended December 31, 2003, the Company recorded an expense of $698,955 to recognize the cost of inducing a shareholder to forgo a redemption option on exchangeable shares that were issued in 2002.  This was a one-time charge for the year ended in December 31, 2003.





The increase of selling, general and administrative expenses has outweighed the increase of revenues resulting in an increase in the operating loss for the year ended December 31, 2004 as compared to the same period ended December 31, 2003.  The net operating loss for the year ended December 31, 2004 was $3,170,160 as compared to a net operating loss of $1,441,926 for the year ended December 31, 2003, an increase of $1,728,234.



The Companys interest expense

was $208,152 for the year ended December 31, 2004 as compared to $97,371 for the same period ended December 31, 2003, an increase of $110,781.



During the year ended December 31, 2004, the Company reached settlement with certain creditors, resulting in the Company recognizing a gain of $13,743.



During the course of the year ended December 31, 2003, the Company reached a settlement with its former bank by using the proceeds from promissory notes provided by two shareholders to settle its outstanding debt.  The settlement resulted in the Company recognizing a gain from debt settlement of $65,586.



Furthermore, during the year ended December 31, 2003, the Company also reached a settlement with certain creditors that resulted in the Company recording a gain on debt settlement of $252,153.



During the year ended December 31, 2004, the Company recorded a charge of $692,143 in connection with a shareholder dispute settlement (refer to Part I, Item 3. legal proceedings).



Net losses have increased from $743,525 in 2003 to $3,170,160 for the year ended December 31, 2004.



Basic net loss per share was $0.06 in 2004 as compared to $0.03 in 2003.



Liquidity and Capital Resources



On January 1, 2004, the Company had a cash and cash equivalents deficiency of $28,076.



---

Net cash used in operating activities was $694,701 for the year ended December 31, 2004.  Net cash used in operating activities for the year ended December 31, 2004 resulted primarily from the net loss for the period, increases in receivables, decreases in prepaid expenses,  payables, deferred revenues and scientific research and experimental development tax credits partially offset by non-cash expenses.



Net cash used in investing activities for the year ended December 31, 2004 was $106,339.  Net cash used in investing activities related to investment in capital assets.



Net cash used in financing activities was $762,695 for the year ended December 31, 2004.  During the year, the Company received proceeds from the issuance of capital stock for cash consideration of $902,945, net proceeds from long term debt of $

55,000 offset by repayments of $195,250 in long-term debt.



Changes in exchange rates affected  cash balances by $55,384 in 2004.



The Company had a cash and cash equivalents deficiency of $11,037 on December 31, 2004.



The Company had net working capital deficiencies of $2,874,707 and $2,396,270 for the years ended December 31, 2004 and 2003 respectively.



On January 1, 2003, the Company had $39,633 in cash and cash equivalents.



Net cash used in operating activities was $229,449 for the year ended December 31, 2003.  Net cash used in operating activities for the year ended December 31, 2003 resulted primarily from the net loss for the period, increases in receivables and prepaid expenses, offset by increase in payables and non-cash expenses.



Net cash provided by investing activities for the year ended December 31, 2003 was $Nil.



Net cash provided by financing activities was $148,950 for the year ended December 31, 2003.  During the year, the Company received net proceeds from long term debt of $120,999 as well as proceeds of $31,008 from bank indebtedness.  The Company also received proceeds from convertible debt of $62,017 for the year ended December 31, 2003.  These proceeds were offset by the repayment of an operating loan of $65,074.



Changes in exchange rates affected cash balances by $12,590 in 2003.



Cash decreased by $39,633 in 2003.



The Company had no cash and cash equivalents at December 31, 2003.



With respect to years beyond the year ended 2004, we may be required to raise additional capital to meet our long term operating requirements.  Although our revenues have increased since the commercialization of our products, our expenses are and may continue to exceed our revenues in the foreseeable future.  Accordingly, the company may not be able to fund its operations from internally generated funds for the foreseeable future.  Our cash requirements depend on several factors, including marketing activities, personnel expenses, legal costs, accounting costs and investor relations expenses.   However, we believe that the Company will be able to continue as a going concern through at least January 1, 2006.



---



We have no other commitments for any additional financing, and there can be no assurance that any such commitments can be obtained on favorable terms, if at all.

---



Item 7.

Financial Statements.



























InteliSys
Aviation Systems of America Inc.

Consolidated

Financial
Statements

December
31, 2004 and 2003

(in
US dollars)









---

Contents







Page









Independent
Auditors' Report

1



Consolidated
Balance Sheets

2



Consolidated
Statements of Operations

3



Consolidated
Statements of Shareholders' Deficiency

4



Consolidated
Statements of Cash Flows

5



Notes
to the Consolidated Financial Statements

6
- 22









---

Report
of Independent Registered Public Accounting Firm



To the Stockholders
of

InteliSys Aviation
Systems of America Inc.



We
have audited the accompanying consolidated balance sheets of InteliSys Aviation
Systems of America Inc. as of December 31, 2004 and 2003 and the related
consolidated statements of operations, shareholder's deficiency and cash flows
for the years then ended.  These consolidated financial statements are the
responsibility of the Company's management.  Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.



We
conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States).  Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement.  The
Company is not required to have, nor were we engaged to perform an audit of its
internal control over financial reporting.  Our audits included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Company's
internal control over financial reporting.  Accordingly, we express no such
opinion.  An audit also includes examining, on a test basis, evidence
supporting the amounts of disclosures in the consolidated financial statements,
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall consolidated financial statement
presentation.  We believe that our audits provide a reasonable basis for
our opinion.



In
our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
InteliSys Aviation Systems of America Inc. as of December 31, 2004 and 2003 and
the consolidated results of its operations and its cash flows for the years then
ended in conformity with accounting principles generally accepted in the United
States of America.



The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern.  As discussed in Note 1 to
the financial statements, the Company has incurred recurring losses from
operations and has a working capital deficiency that raise substantial doubt
about its ability to continue as a going concern.  Management's plans in
regard to these matters are also described in Note 1.  The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.



[fins001.jpg]





Moncton,
New Brunswick, Canada



May
10, 2005

Chartered
Accountant















1

---

InteliSys Aviation Systems of America Inc.

Consolidated
Balance Sheets

As
at December 31, 2004

 and 2003

(in
US dollars)

2004

2003





Assets

Current
assets

Receivables
(Notes 2(c)(m), 4)

$

239,536

$

132,150

Scientific
Research and Experimental Development

tax
credit receivable

-

155,039

Prepaid expenses

44,349

66,183

Total
current assets

283,885

353,372



Property
and equipment (Notes 2(d), 5)

571,744

578,175

Other
intangibles

14

13





$

855,643

$

931,560

________________________________________________________________________________





Liabilities

Current
liabilities

Bank
 indebtedness (Note 6)

$
       44,237

$

59,284

Accounts payable (Note 2(m))

1,257,530

1,
 332,176

Accrued
liabilities (Note 2 (m))

541,363

452,859

Deferred
revenue (Note 2(i))

25,748

57,020

Current
portion of long-term debt (Notes 2(m),
8
 )

1,082,014



848,303

Current
portion minority interest (Note 10)



207,700



-



Total
current liabilities

3,158,592

2,
 749,642



Convertible
debt (Notes 2(m),
9
 )

76,562

71,434

Long-term
debt (Notes 2(m),
8
 )

192,827

674,222

3,427,981

3,495,298



Minority
interest (Note
10
 )

1,661,692

1,731,646



Comittment
and contingencies (Notes 13, 19)



Shareholders'
Deficiency

Capital
stock (Notes 2(a),
11
 )

70,394

36,430

Additional
paid in capital (Notes 2(a),
11
 )

7,921,066

4,510,902

Common
stock issuable (Note 11)

20,509

-

Accumulated
other comprehensive
loss (Note 2(j))

(
 889,822
)

(656,699)

Deficit

(
 11,356,177
)

(
 8,186,017
)

(4,
 234,030
)

(4,295,384)



$

855,643

$

931,560



____________________________________________________________________________________

Continuance of operations (Note 1)



See
accompanying notes to the consolidated financial statements.







2

---

InteliSys Aviation Systems of America Inc.

Consolidated
Statements of Operations

For
the years ended December 31,
200
 4

 and
200
 3

(in
US dollars)

200
4

200
3





Revenue
(Note 2 (i))

$

1,619,601

$

1,039,429



Cost
of service delivery

1,058,051

816,904



Gross
profit

561,550

222,525



Costs
and expenses:

Selling,
general and administrative expenses (Note 18)

2,717,757

1,736,362



Loss
before undernoted

(
 2,156,207
)

(1,513,837)



Other
income (
expenses
 )

Interest expense

(
 208,152
)

(97,371)

Depreciation and amortization

(142,670)

(148,457)

Gain on debt settlement (N
 ote
12)

13,743

317,739

Shareholder settlement (Note 17)

(692,143)

-

Interest
income

15,269

-

(1,013,953)

71,911



Net
loss before income taxes

(
 3,170,160
)

(1,441,926)



Income
taxes (recovery)  (Note
1
 4)

-

(698,401)



Net
loss

$

(
 3,170,160
)

$

(
 743,525
)



Net
loss per share-basic and diluted (Notes 2(p),
1
 5)

$

(0.
0
 6)

$

(0.03)

____________________________________________________________________________________







See
accompanying notes to the consolidated financial statements.



3

---

InteliSys Aviation Systems of America Inc.

Consolidated
Statements of Shareholders' Deficiency

For
the years ended December 31, 2004 and 2003

(in
US dollars)



Accumulated
other

Common

Additional

Shares

Accumulated

Comprehensive

Shares

Amount

Paid
in Capital

Issuable

Deficit

loss

Total



Balance
- December 31, 2002

28,083,333

$

28,033

$

3,132,319

$

-

$

(7,442,492)

$

203,536

$

(4,078,604)



Stock
granted for

consulting
and other

services

2,100,000

2,100

127,900

-

-

-

130,000



Shares
issued as for cash

consideration

6,296,297

6,297

623,333

-

-

-

629,630



Beneficial
conversion on

issuance
of convertible debt

-

-

20,000

-

-

-

20,000



Stock
options issued for

consulting
and other services

-

-

103,350

-

-

-

103,350



Re-classification
of redeemable

shares

-

-

504,000

-

-

-

504,000



Comprehensive
income:



Net
loss (page 3)

-

-

-

-

(743,525)

-

-



Currency
translation adjustment

-

-

-

-

-

(860,235)

-



Total
comprehensive loss

-

-

-

-

-

-

(1,603,760)



Balance
- December 31, 2003

36,479,630

$

36,430

$

4,510,902

$

-

$

(8,186,017)

$

(656,699)

$

(4,295,384)



Stock
issued for financing

fees
(Note 11)

1,530,612

1,531

471,878

-

-

-

473,409



Stock
issued for cash

consideration
(Note 11)

20,813,611

20,813

882,132

-

-

-

902,945



Stock
issued for consulting

and
other services (Note 11)

8,165,000

8,165

925,179

-

-

-

933,344



Stock
issued as part of a

shareholder

settlement
(Note 17)

1,821,429

1,821

690,322

-

-

-

692,143



Stock
issued for debt

settlement
(Note 11)

1,633,619

1,634

291,383

-

-

-

293,017



Common
stock issuable for

settlement
of employee

debt
(Note 11)

-

-

-

20,509

-

-

20,509



Stock
options issued to

employees
(Note 11)

-

-

149,270

-

-

-

149,270



Comprehensive
income:



Net
loss (Page 3)

-

-

-

-

(3,170,160)

-

-



Currency
translation adjustment

-

-

-

-

-

(233,123)

-



Total
comprehensive loss

-

-

-

-

-

-

(3,403,283)



Balance
- December 31, 2004

70,443,901

$

70,394

$

7,921,066

$

20,509

$

(11,356,177)

$

(889,822)

$

(4,234,030)



_____________________________________________________________________________________________





See
accompanying notes to the consolidated financial statements.



4

---

InteliSys Aviation Systems of America Inc.

Consolidated
Statements of Cash Flows

For the Years Ended
December 31, 2004 and 2003

(in US
dollars)

2004

2003





Increase
(decrease) in cash and cash equivalents



Operating
activities



Net
loss from operations

$

(3,170,160)

$

(743,525)

Adjustments
to reconcile net loss to net cash used

in
continuing operations

Items
not affecting cash

Depreciation
and amortization

142,670

148,457

Gain
on debt settlement

(13,743)

(317,739)

Shares
issued for consideration other than cash

1,453,336

923,923

Stock
based compensation expense (Note 11)

149,270

103,350

Stock
issued as part of shareholder

settlement
(Note 17)

692,143

-

Interest
on redeemable shares

-

(76,191)

Changes
in non-cash working capital items

Accounts
receivable

(
 97,900
)

(58,035)

Scientific
Research and Experimental Development

tax
credit

166,168

(155,039)

Prepaid
expenses

88,020

(49,744)

Accounts
payable and accrued liabilities

(69,140)

10,015

Deferred
revenue

(
 35,365
)

(15,013)

Net
cash used in continuing operating activities

(
 694,701
)

(
 229,449
)



Financing
activities

Net
proceeds from the issuance of capital stock

902,945

-

Net proceeds from long-term debt

55,000

120,999

Net
proceeds from convertible debt

-

62,017

(Repayment)
net proceeds from bank indebtedness

-

31,008

Repayment
of long-term debt

(195,250)

-

Repayment
of operating loan

-

(
 65,074
)



Net
cash provided by financing activities

762,695

148,950



Investing
activities

Acquisition
of property and equipment (net)

(106,339)

-

Net
cash (used in) provided by investing activities

(106,339)

-



Effects
of exchange rates on cash

55,384

12,590







Net
increase (decrease) in cash and cash equivalents

17,039

(39,633)





Cash
 and cash equivalents, beginning of year

(28,076)

39,633





Cash
and cash equivalents, end of year

$

(11,037)

$

(28,276)



________________________________________________________________________________________________





Supplemental
cash flow information



Interest
paid

$

63,990

$

30,996



Non-cash
operating, investing and financing activities

Stock
issued as part of shareholder settlement

692,143

-

Stock
issued for settlement of employee debt

20,509

-

Stock
issued to settle debt

104,682

779,082

Stock
based compensation

149,270

103,350

Payable
to minority interest

13,440

-



____________________________________________________________________________________

See
accompanying notes to the consolidated financial statements.



5

---

InteliSys Aviation Systems of America Inc.

Notes
to the Consolidated Financial Statements

December 31, 2004

(in US dollars)





1.

Ability
to continue operations



The
accompanying consolidated financial statements have been prepared on a
going-concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business.  As indicated
in the consolidated financial statements, the Company has incurred significant
operating losses and negative cash flows from operations over the past two years
and has not been able to meet its obligations as they come due.  At
December 31, 2004

 and December 31, 2003, the Company has working capital deficiencies of
$2,874,707 and $2,396,270 respectively and net shareholders' deficiencies of
$4,234,030 as at December 31, 2004 and $4,295,384 at December 31, 2003.
 These factors, among others, strongly indicate that the Company might not
be able to continue as a going concern.  The consolidated financial
statements do not include any adjustments relating to the recoverability and
classification of recorded asset amounts, or the amount of and classification of
liabilities that might be necessary should the Company be unable to continue as
a going concern.  The Company's continuation as a going concern is
dependent upon its ability to achieve profitable operations, generate sufficient
cash flow to meet its obligations, and obtain additional financing.



Management's plans



As
indicated in the consolidated financial statements, the Company has incurred
losses from continuing operations of $3,170,160 and $1,441,927 for the years
ended December 31, 2004

 and 2003

 respectively.  The Company also has a severe working capital deficiency,
and a net shareholders' deficiency at year-end.  Since its inception, the
Company has devoted substantially all of its efforts to developing its products,
obtaining financing, assessing market demand, and obtaining customers.  The
success of the Company's operations and, ultimately, the attainment of
profitable operations are dependant on achieving a level of sales adequate to
support the Company's cost structure.



Management
continues to focus on seeking new customers and seeking new sources of
financing.

____________________________________________________________________________________



2.

Summary
of significant accounting policies



a)

Nature
of operations and basis of financial statement presentation



In
August of 2003, the Company changed its name from Apta Holdings, Inc. to
InteliSys Aviation Systems of America Inc ("IASA"), pursuant to a consent of
the Company's shareholders, to better reflect its new business activities.



IASA
was incorporated on June 4, 1999 in the State of Delaware.  IASA was
formerly engaged in two lines of business: owning and operating income producing
real estate, and a finance business which originated and serviced loans to
individuals and to businesses.  The real estate business was spun off in
2000.  The finance business was sold prior to December 31, 2002.



6

---

InteliSys Aviation Systems of America Inc.

Notes
to the Consolidated Financial Statements

December 31, 2004

(in US dollars)





2.

Summary
of significant accounting policies(continued)



On
December 31, 2002,
IASA
 acquired 100% of the issued and outstanding common stock of CONVERGix, Inc. ("CONVERGix"),
a Canadian corporation, pursuant to a share exchange agreement dated November
22, 2002. Under the share exchange agreement, IASA issued 3,295,000 shares of
its common stock plus 21,788,333 of Class B Special "exchangeable shares" of
Intelisys Acquisition, Inc., a 100% owned subsidiary of IASA.  The
exchangeable shares have equal voting rights and equal economic value as
IASA
 common stock.  These exchangeable shares may be exchanged by the holder at
any time on a one-for-one basis for IASA common stock, and if not exchanged
prior to December 31, 2012, will be exchanged for
IASA
 common stock on that date. As a result of the merger, the shareholders of
CONVERGix are now shareholders of IASA.  In conjunction with the merger,
all of the directors and officers of
IASA
 resigned and the shareholders have appointed a new board of directors and
officers, which consists of the directors and officers of CONVERGix.



The
merger was accounted for as a reverse acquisition and resulted in CONVERGix
becoming the accounting acquirer, whereby the historical financial statements of

IASA
 have become those of CONVERGix.



In
conjunction with the merger and recapitalization of CONVERGix, CONVERGix's
25,083,333 issued and outstanding common stock were reclassified into common
stock of
IASA
 or exchangeable shares of Intelisys Acquistion Inc., which represent
IASA
 common stock equivalents.  Because
IASA
 was inactive at December 31, 2002, net assets acquired were Nil.



CONVERGix
is incorporated under the New Brunswick Business Corporations Act in Canada and
is a holding company, which holds investments in two subsidiary companies whose
business activities include developing, marketing, installation and support of a
suite of aviation enterprise software for the global market.



CONVERGix
was incorporated on January 18, 2001 in connection with a corporate
reorganization of its two subsidiary companies, Cynaptec Information Systems
Inc. and InteliSys Aviation Systems Inc.  Following this reorganization,
CONVERGix owns 100% of the issued and outstanding common shares of Cynaptec
Information Systems Inc. and 53% of the issued and outstanding common shares of
InteliSys Aviation Systems Inc.  On March 31, 2001, the Company abandoned
its operations in Cynaptec Information Systems Inc. in order to concentrate on
the development and marketing of the "Amelia" software product developed by
Intelisys Aviation Systems Inc.



Cynaptec
Information Systems Inc. owns 47% of the issued and outstanding common shares of
InteliSys Aviation Systems Inc.



The
reorganization on January 18, 2001 did not result in a change of control of
Cynaptec Information Systems Inc. and InteliSys Aviation Systems Inc.



The
consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America and
include the following significant accounting policies:





7

---

InteliSys Aviation Systems of America Inc.

Notes
to the Consolidated Financial Statements

December 31,
200
 4

(in US dollars)





b)

Principles of
consolidation



The consolidated
financial statements include the accounts of InteliSys Aviation Systems of
America Inc., and its wholly-owned subsidiaries:

- InteliSys
    Acquisition, Inc.
- InteliSys
    (Nova Scotia) Co.
- CONVERGix,
    Inc.
- InteliSys
    Aviation Systems Inc.
- Cynaptec
    Information Systems Inc.



Significant inter-company transactions
have been eliminated on consolidation.



c)

Accounts
Receivable



The
majority of the Company's accounts receivable are due from companies in the
aviation industry that operate regional, low-fare/low cost airlines.
 Credit is extended based on evaluation of a customer's financial
condition and collateral is not required.  Accounts receivable are due
within 15-30 days and are stated at amounts due from customers net of an
allowance for doubtful accounts.  Accounts outstanding longer than the
contractual payment terms are considered past due.  The Company determines
its allowance by considering a number of factors, including the length of time
trade accounts receivable are past due, the Company's previous loss history,
the customer's current ability to pay its obligation to the Company, and the
condition of the general economy and the industry as a whole.  The Company
writes-off accounts receivable when they become uncollectible, and payments
subsequently received on such receivables are credited to the bad debt recovery
account
..



d)

Property
and equipment and depreciation



Property
and equipment is recorded at cost less accumulated depreciation.
 Depreciation is provided using the declining balance method over their
useful lives at the following annual rates:



Office
furniture and equipment:

20%

Computer
equipment and software

30%

Library

50%

Leasehold
improvements

7%



e)

Software
development costs



Software development
costs are accounted for in accordance with Statement of Financial Accounting
Standards No. 86, "Accounting for the Costs of Computer Software to be Sold,
Leased or Otherwise Marketed".  Under the standard, capitalization of
software development costs begins upon the establishment of technological
feasibility, subject to net realizable value considerations.  To date, the
period between achieving technological feasibility and the general availability
of such software has been short; therefore, software development costs
qualifying for capitalization have been immaterial.  Accordingly, the
Company has not capitalized any software developments costs and has charged all
such costs to research and development expense.  Research and development
costs are expensed as incurred, net of any investment tax credits.



8

---

InteliSys Aviation Systems of America Inc.

Notes
to the Consolidated Financial Statements

December 31, 2004

(in US dollars)





f)

Income taxes



The Company accounts
for income taxes on the liability method, as outlined by Statement of Financial
Accounting Standards 109, "Accounting for Income Taxes".  Income taxes
are provided for current taxes payable or refundable, and temporary differences
arising from the future tax consequences of events that have been recognized in
the Company's financial statements or income tax returns.  The effect of
income taxes is measured based on currently enacted tax laws and rate.  A
valuation allowance is provided for deferred tax assets when it is more likely
than not that some or all of such assets will not be realized.



g)

Cash and cash
equivalents



The Company considers
cash on hand and balances with banks, net of overdrafts, and checks in excess of
funds on deposit and investments in highly liquid temporary money market
investment instruments with original maturities of 90 days or less at the date
of purchase to be cash and cash equivalents.



h)

Use of estimates



The preparation of
financial statements in conformity with accounting principles generally accepted
in the United States of America require management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenues
and expenses, and disclosure of contingent liabilities in these financial
statements.  Actual results could differ from those estimates.



i)

Revenue
recognition



The Company accounts
for software sales in accordance with Statement of Position (SOP) No. 97-2, "Software
Revenue Recognition".  SOP 97-2 generally requires revenues earned on
software arrangements involving multiple elements to be allocated to each
element based on the relative fair value of the element.



Revenue from license
fees is recognized when persuasive evidence of an agreement exists, delivery of
the product has occurred, the fee is fixed or determinable, and
collectability
 is probable.  The Company maintains certain provisions for product returns
and rebates in accordance with SFAS No. 48 "Revenue Recognition when Right of
Return Exists".  The Company considers arrangements regarding certain
customers with payment terms extending beyond customary payment terms not to be
fixed or determinable.  If the fee is not fixed or determinable, revenue is
deferred and recognized when payments become due from the customer providing
that all other revenue recognition criteria have been met.



Software subscription,
support, consulting service, and training program revenue included in
multiple-element arrangements is deferred and recognized on a straight-line
basis over the term of the software subscription and support agreement.
 The fair value of the undelivered elements (software subscription,
specified upgrades, support, consulting services and training) is generally
determined based on the price charged for the undelivered element when sold
separately.



9

---

InteliSys Aviation Systems of America Inc
 .

Notes
to the Consolidated Financial Statements

December 31, 2004

(in US dollars)





j)

Comprehensive
(loss) income



Comprehensive income or
loss encompasses net income or loss and "other comprehensive income or loss",
which includes all other non-owner transactions and events that change
shareholders' (deficiency).  The Company's other comprehensive income
(loss) reflects the effect of foreign currency translation adjustments on the
translation of the financial statements from the functional currency of Canadian
dollars into the reporting currency of U.S. dollars







k)

Reporting
currency and foreign currency translation



The Company's
functional currency is the Canadian dollar since it is the currency of the
primary economic environment in which the Company operates.  Assets and
liabilities are translated into United States dollars using the current rate of
exchange at the balance sheet date.  Revenues, expenses, gains and losses
are translated into United States dollars using the weighted-average exchange
rate prevailing during the period.







l)

Stock-based
compensation



In accordance with the
accounting requirements of SFAS 123, "Share-Based Payments" the Company uses
the fair value - based method of accounting for stock based employee
compensation and stock based compensation to suppliers other than employees.



The fair value of each
option granted is estimated on the grant date using the Black-Scholes option
pricing model with the following assumptions:



2004

2003



Expected
dividend yield

-

-

Risk-free
interest rate

4.13%

2%

Volatility

199%

128%

Expected
lives

10
years

2
years

Per
share weighted average fair

Value
of stock options granted

$

.03

$

.16









m)

Financial
instruments



The Company's primary
financial instruments consist of receivables, current liabilities, convertible
debt and long-term debt.  The difference between the carrying values and
the fair market values of the primary financial instruments are not material due
to the short-term maturities and/or the credit terms of those instruments.



The fair value of
shareholder advances cannot be determined, as they do not include any terms of
payment (Note 8).





10

---

InteliSys Aviation Systems of America Inc.

Notes
to the Consolidated Financial Statements

December 31, 2004

(in US dollars)





n)

Recovery of
long-lived assets



The Company adopted
FASB Statement 144, 'Accounting for the Impairment and Disposal of Long-Lived
Assets' (SFAS 144).  SFAS 144 requires recognition of impairment losses
on long-lived assets when indicators of impairment are present and the
undiscounted cash flows estimated to be generated by those assets are less than
the assets' carrying amounts.



o)

Government
assistance



Government assistance
relating to the purchase of capital assets and other assets is recorded as a
reduction of the cost of such assets.  Government assistance relating to
current expenses is netted against the related expense.



p)

Loss
per share



The
Company computes net earnings (loss) per common share in accordance with SFAS
No. 128, "Earnings Per Share" (SFAS 128) and SAB No. 98 (SAB 98).
 Under the provisions of SFAS 128 and SAB 98, basic net earnings (loss) per
common share is computed by dividing the net earnings (loss) available to common
stockholders for the period by the weighted average number of shares of common
stock outstanding during the period.  Net earnings (loss) per share on a
diluted basis is computed by dividing the net earnings (loss) for the period by
the weighted average number of common and dilutive common stock equivalent
shares outstanding during the period.



At
December 31, 2004 and 2003
,
 the effect of outstanding convertible debt has not been included in the diluted
loss per share as such amounts would be anti-dilutive.





q)

Recent
accounting pronouncements



On December 16, 2004,
the Financial Accounting Standards Board ("FASB") issued SFAS No. 123(R),
"Share-Based Payment", which is a revision of SFAS No. 123 and supersedes
APB Opinion 25. SFAS No. 123(R) requires all share-based payments to employees,
including grants of employee stock options, to be valued at fair value on the
date of grant, and to be expensed over the applicable vesting period. Pro forma
disclosure of the income statement effects of share-based payments is no longer
an alternative. SFAS No. 123(R) is effective for all stock-based awards granted
on or after January 1, 2006. In addition, companies must also recognize
compensation expense related to any awards that are not fully vested as of the
effective date. Compensation expense for the unvested awards will be measured
based on the fair value of the awards previously calculated in developing the
pro forma disclosures in accordance with the provisions of SFAS No. 123.





The Company has adopted SFAS No. 123
(R) during 2004.  The implementation of which did not have a significant
effect on the Company's consolidated financial statement presentation and
disclosure.   We have not completed the calculation of this impact.





11

---

InteliSys Aviation Systems of America Inc.

Notes
to the Consolidated Financial Statements

December 31, 2004

(in US dollars)







q)

Recent
accounting pronouncements(continued)



On December 16, 2004,
the FASB issued SFAS No. 153, "Exchanges of Non-monetary Assets", which is
an amendment to APB Opinion No. 29. It states that the exchanges on non-monetary
assets should be measured based on the fair value of the assets exchanged.
Further, FSAS No. 153 eliminates the narrow exception for non-monetary exchanges
of similar productive assets and replaces it with a broader exception for
exchanges of non-monetary assets that do not have "commercial substance".
FSAS No. 153 is effective for financial statements for fiscal years beginning
after June 15, 2005. Earlier application is permitted for non-monetary asset
exchanges incurred during fiscal years beginning after the date that this
statement is issued. Management believes the adoption of this Statement will not
have an effect on the consolidated financial statements.



On November 24, 2004,
FASB issued SFAS No. 151, "Inventory Costs", which is an amendment to ARB
No. 43, Chapter 4. It clarifies the accounting for abnormal amounts of idle
facility expense, freight, handling costs, and wasted material (spoilage). The
FASB states that these costs should be expensed as incurred and not included in
overhead. Further, SFAS No. 151 requires that allocation of fixed production
overheads to conversion costs should be based on normal capacity of the
production facilities. SFAS No. 151 is effective for inventory costs incurred
during fiscal years beginning after June 15, 2005. Management believes the
adoption of this Statement will not have an effect on the consolidated financial
statements.



In December 2003, the
FASB issued FASB Interpretation No. 46 (revised December 2003), "Consolidation
of Variable Interest Entities." ("VIEs") ("FIN 46R") which addresses
how a business enterprise should evaluate whether it has a controlling financial
interest in an entity through means other than voting rights and accordingly
should consolidate the entity. FIN 46R replaces FASB Interpretation No. 46. "Consolidation
of Variable Interest Entities," which was issued in January 2003. The Company
has adopted FIN 46R as of March 31, 2004 for variable interests in VIEs. For any
VIEs that must be consolidated under FIN 46R that were created before January 1,
2004, the assets, liabilities and non-controlling interests of the VIE initially
would be measured at their carrying amounts with any difference between the net
amount added to the balance sheet and any previously recognized interest being
recognized as the cumulative effect of an accounting change. If determining the
carrying amounts is not practicable, fair value at the date FIN 46R first
applies may be used to measure the assets, liabilities and non-controlling
interest of the VIE. The adoption of FIN 46R did not have an effect on the
consolidated financial statements inasmuch as the Company has no interests in
any VIEs.







r)

Capital
stock issued for consideration other than cash.



Capital stock issued
for consideration other than cash is recorded at an estimate of the fair value
of the stock issued or issuable or at an estimate of the fair value of the goods
or services received, whichever is more readily ascertainable.

12

---

InteliSys Aviation Systems of America Inc.

Notes
to the Consolidated Financial Statements

December 31, 2004

(in US dollars)





3.

Concentrations



Concentrations
of Credit Risk



At
December 31,
200
 4, two

 significant customers accounted for 61% of trade accounts receivable and each
of these two

 customers accounted for more than 10% of trade accounts receivable.  At
December 31,
200
 3, six

 significant customers accounted for 88% of trade accounts receivable and each
of these six

 customers accounted for more than 10% of trade accounts receivable.





Concentration in
Operations



In
2004, two significant customers accounted for 35% of revenue and each of these
two customers accounted for more than 10% of revenue.   In 2003, four
significant customers accounted for 50% of revenue and each of these four
customers accounted for more than 10% of revenue.







4.

Accounts
receivables





2004

2003



Accounts
receivable - trade

$

376,930

$

160,511

Allowance
for doubtful accounts

(143,737)

(42,489)

Other

6,343

14,128



$

239,536

$

132,150



13

---

InteliSys Aviation Systems of America Inc.

Notes
to the Consolidated Financial Statements

December 31, 2004

(in US dollars)





5.

Property and equipment





















200
 4                    
2003



Accumulated            
NetAccumulated     
Net

Cost   
Depreciation Book ValueCost    
Depreciation   
Book Value



Computer equipment and

software

$

905,112

$

581,404

$

323,708

$

752,871

$

432,655

$

320,216

Leasehold improvements

213,822

56,994

156,828

199,501

41,600

157,901

Office furniture and equipment

195,442

117,127

78,315

174,755

91,964

82,791

Trade show booth

36,662

23,928

12,734

34,206

17,235

16,971

Library

8,
 859

8,700

159

8,265

7,969

296



$

1,
 359,897

$

788,153

$

571,744

$

1,169,598

$

591,423

$

578,175





6.

Bank indebtedness



The Company has an
authorized operating line of credit of $ 33,200 (2003 - $31,008) which bears
interest of prime plus 3.50%.  As of December 31, 2004
, the Company
 had written checks in excess of the operating line of credit in the amount of
$
 11,037 (2003 - $28,276)
..







7.

Bank operating
loans



On March 22, 2002, the
Company's two wholly owned subsidiaries, Cynaptec Information Systems Inc. and
InteliSys Aviation Systems Inc. entered into a forbearance agreement with their
Bank, which was further amended August 1, 2002.



At December 31, 2002,
the Company's wholly owned subsidiaries were in default of their forbearance
agreement due to non-payment.



On May 30, 2003, the
Company's two wholly owned subsidiaries, Cynaptec Information Systems Inc.,
and InteliSys Aviation Systems Inc., reached a settlement with their bank in
regards to the outstanding debt.  Under the settlement, the bank has
released all security pledged by the Company's two wholly owned subsidiaries
and guarantees from certain shareholders.  The debt settlement resulted in
the forgiveness of $65,586 of debt, which is recorded as other income on the
consolidated statement of operations for the year ended December 31, 2003.





14

---

InteliSys Aviation Systems of America Inc.

Notes
to the Consolidated Financial Statements

December 31, 2004

(in US dollars)





8.

Long-term debt

200
 4

200
 3







Atlantic Canada
Opportunities Agency (ACOA)

unsecured repayable
contribution, non-interest bearing

payments were to
begin Jan. 1, 2003, $315 for first 6 months,

$1,261 for
next 44 payments and a final of $641.   The Company



is currently in
default of this loan and in negotiations with ACOA

to have the
payment schedule amended.

$

74,360

$

69,380



Atlantic Canada
Opportunities Agency (ACOA)

unsecured repayable
contribution, non-interest bearing

repayment is
calculated as 3% of the gross annual sales

where first payment
was due January 1, 2003 and

subsequent repayments
are due monthly until the

contribution has been
repaid.  The Company is currently in

default of this loan
and in negotiations with ACOA to have

the Payment
schedule amended.

267,378

249,470



Gavella Corp.
promissory notes, secured by shareholder

guarantee and all of
the assets of the Company, bearing

interest at
12%, repayable on December 31, 2003.

-

101,407



Promissory note,
unsecured, bearing interest at 6%

per month, due
on demand.

33,234

31,008



Long-term loan,
non-interest bearing, repayable starting

in 2006.

55,000

-



ACOA, Amelia
marketing loan, unsecured repayable

contribution,
non-interest bearing, repayable in 39

monthly installments
of $5,256.  First repayment was

due February 1, 2004.
 The Company is currently in default

of this loan and in
negotiations with ACOA to have the

payment
schedule amended.

365,664

341,173



Promissory notes,
unsecured, bearing interest at

varying rates between
6.7% - 15%, which were repayable

between
 August 2001 and January 2003.

299,927

527,789



BDC leasehold loan,
secured by shareholder guarantee

and general security
agreement covering equipment,

bearing interest at
10.8%, repayable in 3 consecutive

monthly payments of
$631, beginning November 15, 2002,

followed by 43
consecutive payments of $2,113, beginning

February 15, 2003 and
one final payment of $2,163 on

September 15,
2006.

44,420

65,120



Former shareholder
loan, bearing interest at 26%,

repayable in minimum
monthly installments of $1,099,

beginning in December
2002 and continuing until balance

is paid in
full.

133,375

124,442



Shareholder loan,
non-interest bearing, no set terms

of repayment.

1,483

12,736

1,274,841

1,522,525

$1,035,102                
$ 861,209

Less current
portion of long-term debt

1,082,014

848,303



$

192,827

$

674,222





15

---

InteliSys Aviation Systems of America Inc.

Notes
to the Consolidated Financial Statements

December 31, 2004

(in US dollars)





8
 .

Long-term
debt(continued)



The
aggregate maturities of long-term debt for each of the five years subsequent to
December 31, 2004 are approximately as follows:



2005

$

1,082,014

200
 6

57,305



200
 7

47,404

200
 8

15,321



200
 9

15,321



and
thereafter

57,476



$

1,274,841





At
December 31,
200
 4

 the Company is in default on principal and interest payments for many of its
obligations as follows:



Principal
payments in default

$

1,056,660

Interest
payments in default

402,504



$

1,459,164



All
debt in default has been classified as part of current liabilities at December
31,
200
 4.  The Company is in the process of refinancing both its long-term and
short-term debt obligations.  No waivers have been obtained by the Company.







9.

Convertible
debt



Convertible
debt at December 31, 2004 consists of debt which is convertible into the Company's
common stock.





2004



2003





Shareholder
loan, bearing interest at 8%, convertible into

common shares at the
closing price of shares at the date

of conversion.
 Management is currently in negotiations with the

holder of the
convertible debt to convert the debt into the

Company's
common shares.

$

66,400

$

62,015



Shareholder
loan, non-interest bearing convertible into

Common shares
at the market price at the date of conversion.

10,162

9,419



$

76,562

$

71,434



At
December 31, 2004, the effect of outstanding convertible debt has not been
included in the earnings per share calculation for the year then ended; as such
amounts would be anti-dilutive.



There is no beneficial
conversion associated with the convertible debt.







16

---

InteliSys
Aviation Systems of America Inc.

Notes
to the Consolidated Financial Statements

December 31, 2004

(in US dollars)







10.

Minority
interest



At
December 31, 2004 and 2003, minority interest consists of preferred shares of
CONVERGix Inc. ("CONVERGix") and preferred shares of Cynaptec Information
Systems, Inc. ("Cynaptec").  The minority interest in CONVERGix arose
following the merger with IASA on December 31, 2002 as the preferred stock of
CONVERGix was not acquired by IASA in the merger (Note 2 (a)).  The
minority interest in Cynaptec arose following the Corporate re-organization on
January 18, 2001.  The preferred shares of Cynaptec are redeemable by the
holder in 2005.  Accordingly, the redemption value of the preferred shares
has been classified as a current liability.







11.

Capital
stock



At December 31,
200
 4, the Company is authorized to issue:



1)

10,000,000
shares of preferred stock, par value $0.001 per share.



2)

10
0
 ,000,000 shares of common stock, par value $0.001 per share.



At
December 31,
200
 4, there are 48,655,568 shares of common stock outstanding.  In addition,
there are 21,788,333 issued and outstanding Special Class B "Exchangeable
Shares" in
IASA's
 wholly owned subsidiary Intelisys Acquisition Inc.  As outlined in Note 2
(
 a
)
 , the exchangeable shares have equal voting rights and equal economic value as
IASA
 common shares as they may be exchanged by the holder at any time on a
one-for-one basis for
IASA
 common shares, and if not exchanged prior to December 31, 2012, will be
exchanged for
IASA
 common shares on that date.



Accordingly,
the Special Class B exchangeable shares have been accounted for as if they are
issued and outstanding in the Company at December 31, 2004 and have been
included incalculating the basic loss per share.



During
the year ended December 31, 2004, the Company issued 1,530,612 shares of common
stock valued at $473,409, the market value on the grant date, as compensation
for arranging a short term financing arrangement (a "bridge loan").



During
the year ended December 31, 2004, the Company issued 20,102,500 shares of common
stock for cash consideration of $828,445 as part of an offshore placement
agreement to investors who are not US persons, relying on an exemption provided
under Regulation S of the Securities Act of 1933.



During
the year ended December 31, 2004, the Company issued 711,111 shares of common
stock for cash consideration of $74,500 as part of an offshore placement to
investors who are not US persons, relying on an exemption provided under
Regulation S of the Securities Act of 1933.



During
the year ended December 31, 2004, the Company issued 8,165,000 shares of common
stock valued at $933,344, the market value on the date of the grants, to various
individuals for consulting services rendered.



During
the year ended December 31, 2004, the Company issued 1,821,429 shares of common
stock valued at $692,143, the market value on the grant date, as part of a
dispute settlement with a shareholder.



During
the year ended December 31, 2004, the Company issued 1,633,619 shares of common
stock as part of a debt settlement agreement.  In exchange for the shares,
the shareholder has released the Company from a promissory note obligation
valued at $188,335.





17

---

InteliSys Aviation Systems of America Inc.

Notes
to the Consolidated Financial Statements

December 31, 2004

(in US dollars)





11
 .

Capital
stock(continued)



During
the year ended December 31, 2004, the Company agreed to issue 1,025,430 shares
of common stock to an employee in settlement of $20,509 owed to the employee.
 The shares were issued in 2005.



Stock
options



During
the year ended December 31, 2003 the Company issued 650,000 stock options to a
shareholder, who is a non-employee, for consulting and other services, valued at
$103,350. The options may be exercised by the Optionee in whole or in multiples
of 1,000 shares at any time on or prior to December 31, 2005 for a purchase
price of $0.10 per share.  As at December 31, 2004, all 650,000 options
remain unexercised.



During
the year ended December 31, 2004, the Company issued 4,937,670 stock options to
its employees and executive management, under its 2004 Stock Option Plan as
filed with the Securities and Exchange Commission in April 2004, valued at
$149,270.



The
following table outlines the status of all of the Company's outstanding stock
options:



Amount

Exercise
price

Date
exercisable

Expiration



650,000

$0.10
                            immediately

December 31, 2005

3,571,854

$0.001
                          immediately
             December
31, 2014

510,544

$0.03
                            immediately
             December
31, 2014

255,272

$0.03
                            December
31, 2005    December 31, 2014



Stock option activity
is presented below:



Weighted
average

Number
of shares

exercise
price



Outstanding,
December 31, 2002

-

$

-



Granted

650,000                    
0.10



Outstanding, December
31,
2003                                          
 650,000
                       0.10



Granted
                                                                            4,937,670                     0.009



5,587,670

$0.02







12
..

Gain on debt settlement





During the year, the
Company reached a settlement with certain unsecured trade creditors that
resulted in the Company recording a gain on debt settlement of $13,743 (2003 -
$252,153)
..



During the year ended
December 31, 2003, the Company reached a settlement with the

 former bank of its two wholly-owned subsidiaries (Note 7).  The settlement
resulted in the Company recognizing a gain from debt settlement of $65,586.





18

---

InteliSys Aviation Systems of America Inc.

Notes
to the Consolidated Financial Statements

December 31, 2004

(in US dollars)





13
 .

Commitments



The
Company is committed to minimum annual lease payments under
an
 operating lease for office space.  The minimum payments required under
this
 lease for each of the three years subsequent to December 31,
200
 4

 are approximately as follows:



200
5

$
119,520

2006

119,520

2007

23,904









1
 4.

Income
taxes



The Company's provision (benefit) for
income taxes consist of the following for the years ended December 31:



2004

2003



Current

$

-

$

(698,401)

Deferred

-

-



$

-

$

(698,401)



The composition of the components of
tax provision (benefit) is as stated below for the years ended December 31:



2004

2003

Current



Deferred
income tax asset write down

$

-

$

-

Research
and Development tax credit

-

(698,401)



$

-

$

(698,401)



Deferred



Tax
benefit at statutory rates

$

(222,000)

$

(224,000)

Increase
in valuation allowance

222,000

224,000



-                   
      -

$

-

$

-



The
components of the deferred tax assets and liabilities at December 31, 2004 and
2003 are approximately as follows:





2004

2003



Net
operating loss carryforwards

$3,124,000

$

2,902,000

Valuation
allowance

(3,124,000)

(2,902,000)







$

-

$

-



19

---



InteliSys
Aviation Systems of America Inc.

Notes
to the Consolidated Financial Statements

December 31, 2004

(in US dollars)





14.

Income
taxes(continued)





The
reconciliation of income tax attributable to continuing operations computed at
the U.S. Federal and Canadian statutory tax rates to income tax expense is:



2004

2003



Tax
at blended U.S. / Canadian statutory rates

35%

35%

Change
in valuation allowance

(35%)

(35%)



Tax
recovery (expense)

-

-





At
December 31, 2004, the Company had operating loss carryforwards of approximately
$6,646,700 available to offset future taxable income, which expire through 2011
and $2,248,000 which expire in 2014.  Utilization of these carryforwards is
dependant on future taxable income.







15.

Loss per share



The following table
sets forth the computation of loss per share for the years ended December 31,
2004 and 2003:



Numerator:

2004

2003



Net
loss - basic and diluted

$(3,170,160)

$(743,525)



Denominator

Weighted
average number of shares outstanding

during
the period

56,651,535

29,549,691



Loss
per share

($0.06)

($0.03)







16.

Related
party transactions



(a)

Accounts
payable and accruals at December 31, 2004 include amounts owing to shareholders,
officers and employees of $600,987 (2003 - $761,543).



(b)

Promissory
notes at December 31, 2004 include amounts owing to a related party and to a
shareholder of $154,076 (2003 - $155,449).



(c)

During
the year, the Company expensed $37,948 (2003

 - $32,338) of interest charges on a loan payable to a related party.



(d)

During
the year, the Company paid interest of $9,220 (2003 - $8,554) on a shareholder's
personal debt which is related to personal property of the shareholder that is
pledged as security for the Company's debt obligations.



20

---



InteliSys Aviation Systems of America Inc.

Notes
to the Consolidated Financial Statements

December 31, 2004

(in US dollars)





16.

Related
party transactions(continued)



(e)

During
the year ended December 31, 2004, the Company expensed $65,835 (2003 - $ NIL)
for consulting fees performed by a related party.







17.

Shareholder
settlement



In February 2004, the
Company received notice that a shareholder was contemplating litigation against
the Company for the alleged breach of a memorandum of understanding, related to
share subscriptions and other compensation, which was entered into on April 17,
2002 and amended on November 22, 2002.



The Company's
position was that it fully satisfied its obligation under the memorandum of
understanding in 2002 and that no further liability existed to the shareholder
at December 31, 2002 and December 31, 2003.  However, the shareholder's
interpretation of the agreement was different from that of the Company.



To settle this dispute,
the Company has issued 1,821,429 shares of its common stock to the shareholder,
which have been recorded in 2004 at their fair value on the date of issuance
($692,143).  The Company and shareholder are currently in negotiations to
settle the outstanding balance owed to the shareholder.  The outstanding
balance of $296,490 (2003 - $ 221,757) has been recorded in accrued liabilities.







18.

Schedule
of selling, general and administrative expenses





2004

2003



Finance
and administrative wages & benefits

$

302,274

$

264,388

Bad
debts

134,013

49,452

Stock
issued for consulting and other services

933,344

130,000

Stock
issued for financing fees

473,409

-

Stock
based compensation

149,270

103,350

Stock
issued to settle debt

104,682

779,082

Professional
and consulting fees

366,324

170,077

Rent

95,159

88,093

Telecommunications

70,464

68,212

Insurance

37,496

37,887

Other
general expenses

51,322

45,821



$
2,717,757

$
1,736,362







21

---

InteliSys Aviation Systems of America Inc.

Notes
to the Consolidated Financial Statements

December 31, 2004

(in US dollars)





19.

Contingency



There is one
outstanding claim against the Company.  No provision has been made in the
financial statements for this contingent loss because the outcome of the claim
is not currently determinable.  This claim has not been resolved and the
outcome and amount of this claim is not determinable





20.

Subsequent events



In
February 2005, the Company entered into an informal agreement with the holder of
an unsecured promissory note that is currently in default.  According to
the repayment terms, the Company has agreed to repay the balance in full by
making monthly payments of $6,231 until the principal of $41,540 plus accrued
interest is paid in full.  The first monthly payment was made on March 15th,
2005.



In
February 2005, the Company signed a contract with a new customer to provide its
services to an operator in British Columbia, Canada.



In
April 2005, the Company accepted the resignation from Mr. Gallant, the Company's
chief financial officer.  Mr. Gallant has decided to pursue other business
interests but has agreed to provide consulting services to the Company as
required.  In the interim, the Company has engaged an independent
consultant to help with the day-to-day operations of the Company.



In January, February and April 2005,
1,285,000 stock options were exercised by management.



22





---

Item 8.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.



None





Item 8A.

Controls and Procedures.



Disclosure Controls and Procedures.    The issuer's principal executive officer and principal

financial officers, 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 issuer and has:



-

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under their supervision,  to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to them by others within those

entities, particularly during the period in which the periodic reports are

being prepared;



-

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under their 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;



-

evaluated the effectiveness of the issuer's disclosure controls and procedures as of the end of the fiscal year December 31, 2004 (the "Evaluation Date").



Based on their evaluation as of the Evaluation Date, his conclusion about the effectiveness of the disclosure controls and procedures were that nothing indicated:





-

any significant deficiencies in the design or operation of internal controls which could adversely affect the issuer's ability to record, process, summarize and report financial data;





-

any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer's internal controls; or

---





-

any material weaknesses in internal controls that have been or should be

identified for the issuer's auditors and disclosed to the issuer's auditors and the audit committee of the board of directors (or persons fulfilling the equivalent function).



In addition, the issuers disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act.



Internal Control Over Financial Reporting.    There have not been any changes in the Companys internal control over financial reporting (as such term is defined in Rules 13a-15(f) under the Exchange Act) during the Companys fourth fiscal quarter for the year ended December 31, 2004 that have materially affected, or are reasonably likely to materially affect, the Companys internal control over financial reporting.







PART III



Item 9.  Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act



Set forth below is certain information concerning each person who served as an executive officer during the year ended December 31, 2004 or is presently a director of the Company.  All officers  and directors hold office until their respective successors are elected and qualified, or until their earlier resignation or removal. There are no family relationships among any of our directors or executive officers.



The following sets forth the names and ages of our directors and executive officers:



Age               Title

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

Ralph Eisenschmid         38    President, CEO,

and Director



Jock English                   54     Vice President, Sales and

Marketing, Secretary

and Director







Ralph Eisenschmid - Founder/President



---

Mr. Eisenschmid created the InteliSys / Amelia concept in 1987. Over the past 17 years he has led the sales, implementation and development of a broad range of software for the operation and management of 19 mid-sized airlines. Prior to his career in aviation, he co-founded a software joint venture that developed and implemented innovative solutions for industries that included travel   services,   transportation,  construction,   and pharmaceuticals.   Mr. Eisenschmid was instrumental in designing, organizing, and implementing a new operating division of a domestic  airline to manage the operational needs  of  an international tour operator. As well as being a proven systems analyst and programmer, he has had experience as a licensed multi-engine commercial airline pilot. Mr. Eisenschmid speaks three languages, and has extensive real-world business experience implementing and supporting high performance airline technology solutions internationally.



Jock English - Vice President, Sales and Marketing and Chief Operating Officer



Mr. English has over 20 years experience in software development, marketing and sales. His primary experience has been in managing both sales and marketing of mission critical enterprise software systems for both U.S. and Canadian software firms.  During his employment with a U.S. based Fortune 300 software firm Mr. English was responsible for product introduction and initial sales activities for a family of software products to markets in over 50 countries.  Mr. English is a registered professional engineer in Canada and a holds both U.S. and Canadian private pilots licenses.



None of our directors holds any directorships in companies with a class of securities registered pursuant to Section 12 of the Securities Exchange Act or subject to the requirements of Section 15(d) of such Act or any company registered as an investment company under the Investment Company Act of 1940, as amended.



All directors hold office until the next annual meeting of stockholders or the election and qualification of their successors.  Our directors do not receive any compensation for their services as members of the Board of Directors, but are entitled to reimbursement for expenses incurred in connection with their attendance at Board of Directors' meetings.  Officers are appointed by the Board of Directors and serve at the discretion of the Board.



We do not have audit, nominating or compensation committees.  The Company is currently seeking independent board members to join its current board of directors.  The Company has not been successful in retaining independent board members in order to form its audit committee.



Section 16(a) Beneficial Ownership Reporting Compliance



Section 16(a) of the Exchange Act requires the Company's executive officers, directors and persons who beneficially own more than 10% of a registered class of the Company's equity securities to file with the Commission initial reports of ownership and reports of changes in ownership of Common Stock and other equity securities of the Company. Such persons are required by Commission regulations to furnish the Company with copies of all Section 16(a) forms they filed.



We are not aware of any instances in fiscal year 2004 when an executive officer, director or owners of more than 10% of the outstanding shares of our common stock failed to comply with the reporting requirements of Section 16(a) of the Securities Exchange Act of 1934, other than the Form 4s which should have been filed by Mohamed Ahmed Juman and Lloyd Poirier.

---



Code of Ethics



The Company has adopted a code of ethics that applies to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. For purposes of this Item, the term code of ethics means written standards that are reasonably designed to deter wrongdoing and to promote:



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

- full, fair, accurate, timely, and understandable disclosure in reports and documents that the issuer files with, or submits to, the Commission and in other public communications made by the issuer;

- compliance with applicable governmental laws, rules and regulations;

- the prompt internal reporting of violations of the code to the board of directors or another appropriate person or persons; and

- accountability for adherence to the code.



The Company hereby undertakes to provide to any person without charge, upon request, a copy of such code of ethics. Such request may be made in writing to the board of directors at the address of the issuer.



Item 10.  Executive Compensation.



The following table sets forth information with respect to compensation we paid for the years ended December 31, 2004, 2003 and 2002, for services of Ralph Eisenschmid, our President and CEO, Jock English, VP Sales and Marketing and Denis Gallant, former CFO.



Summary of Annual Compensation





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

Annual Compensation                          Awards             Payouts

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

Other                         Securities    Long-

Name and                                               Annual       Restricted       Underlying    Term      All other

Principle                                              Compen-        Stock            Options    Incentive   compen-

Position       Year     Salary ($)     Bonus ($)      sation ($)     Awards ($)          ($)      Plans ($)  sation ($)

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

<S>            <C>       <C>           <C>            <C>           <C>               <C>         <C>        <C>

Ralph          2004     $89,308         $  0          $0

0

$49,732 (5)

0           0

Eisenschmid,  2003    $56,875         
$  0         $0

$0

0

0           0

President,    2002     $78,750            0         
$12,087 (1)      1,007,954 (3)     0             0

0

CEO





Jock           2004     $34,193         $  0          $0



0

$48,873 (6)   0           0

English,       2003     $41,600         $  0         $ 0

$

0

0            0           0

Vice Pres.,    2002     $59,920         $  0         $26,073 (1)  $290,550 (4)           0            0           0

Sales &

Marketing



Denis

2004

$100,000

$   0

$13,783 (7)     0

$26,550 (8)

0

$6,480 (9)

2003     $33,540         $  0             $0

0

0            0           0

Gallant,

Chief

Financial

Officer

---



</TABLE>



(1)  Other annual compensation represents retroactive pay increases.

(2)  Represents commissions

(3)  Mr. Eisenschmid received 5,039,772 Exchangeable Shares to reflect his minimal pay during the past several years.

(4)  Mr. English received 1,500,000 Exchangeable shares to reflect his working for minimal pay since joining Convergix and in lieu of $9,450 in unpaid commissions.

(5)  Mr. Eisenschmid received 1,657,746 options to purchase common stock

(6)  Mr. English received 1,629,108 options to purchase common stock

(7)  Monies earned in 2003 but only paid in 2004

(8)  Mr. Gallant received 885,000 options to purchase common stock

(9)  Car allowance





We have no employment agreements with any of our executive officers or employees.





---



Item 11.  Security Ownership of Certain Beneficial Owners and Management.





The following table lists, as of April 2005, the number of shares of common stock beneficially owned by (i) each person or entity known to the Company to be the beneficial owner of more than 5% of the outstanding common stock; (ii) each officer and director of the Company; and (iii) all officers and directors as a group. Information relating to beneficial ownership of common stock by our principal stockholders and management is based upon information furnished by each person using "beneficial ownership" concepts under the rules

of the Securities and Exchange Commission. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or direct the voting of the security, or investment power, which includes the power to vote or direct the voting of the security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days.

Under the Securities and Exchange Commission rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary beneficial interest.



The percentages below are calculated based on 54,668,668 shares of InteliSys Aviation Systems of America Inc. common stock issued and outstanding, 21,788,333 shares of InteliSys Acquisition Co., exchangeable into shares of InteliSys Aviation Systems of America Inc. on a one-for-one basis (Exchangeable Shares) and 3,702,670 outstanding options to purchase shares of the Companys common stock.









Officers, Directors,

5% Shareholder             No. of Shares            Beneficial Ownership

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

%





Ralph Eisenschmid            14,704,851   (1)(2)(3)          19%

65 Matheieu-Martin

Grand Barachois

New Brunswick

Canada E4P 7V7



Jock English                        2,429,108     (1)(4)            3%

113 Cap Brule  Road

Boudreau West,

New Brunswick

Canada E1P 6J1





Mohamed Juman                 11,217,694     (1)           15%

PO Box 743

Manama

Kingdom of Bahrain



---

Lloyd Poirier                 4,116,429

5%

Costa Rica



Californian Securities S.A.

Edificio Bilbao Plaza, Suite 418

Avenida Bilbao, Panama City

Republic de Panama

8,889,395

12%



Pacific Continental Securities (UK) Ltd.

80 Cannon Street

London

EC4N 6HL

England

11,213,105

15%



All directors and

executive officers as

a Group (2 persons)          17,133,959

22%



----------

(1) Includes shares of InteliSys Acquisition Co., exchangeable into shares of

InteliSys Aviation Systems of America Inc. on a one-for-one basis (Exchangeable

Shares). Said shares are included by the Company in the computation of the

number of shares issued and outstanding.



(2) Includes 783,333 shares owned by Charlene Eisenschmid, wife of Ralph

Eisenschmid.



(3) Includes 1,357,746 outstanding stock options issued as part of the Companys 2004 Stock Option Plan.



(4) Includes 929,108 outstanding stock options issued as part of the Companys 2004 Stock Option Plan.



The persons or entities named in this table, based upon the information they have provided to us, have sole voting and investment power with respect to all shares of common stock beneficially owned by them.



---



Item 12.  Certain Relationships and Related Transactions



None of the following persons had any direct or indirect material interest in any transaction to which we were or are a party during the past two years, or in any proposed transaction to which the Company proposes to be a party:



a)

any director or officer;

b)

any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to our common stock; or

c)

any relative or spouse of any of the foregoing persons, or any relative of such spouse, who has the same house as such person or who is a director or officer of any parent or subsidiary.





Item 13.  Exhibits and Reports on Form 8-K.



(a)   We are filing the exhibits listed below with this Report:



Exhibit No.

Description



31.1

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.



32.1

Certification of the President and Chief Executive and Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



---



(b)

Reports on Form 8-K.  The Company has not been filed any Reports on Form 8-K during the last quarter of the fiscal year of December 31, 2004.























---











Item 14.  Principal Accountant Fees and Services.









Grant Thornton LLP has served as the Companys Principal Accountant since February 19, 2003. Their fees billed to the Company are set forth below:



|                   |  | Fiscal year ending
December 31, 2004 |        | Fiscal year ending
December 31, 2003 |        
|------------------ |  | ------------------------------------ | ------ | ------------------------------------ | -------
|Audit Fees         |  | $                                    | 84,160 |                                      | $      
|Audit Related Fees |  | $   2,491                            |        | $  2,340                             |        
|Tax Fees           |  | $                                    | 14,737 |                                      | $20,780
|All Other Fees     |  | $                                    | -      |                                      | $      





SIGNATURES



Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.





INTELISYS AVIATION SYSTEMS OF AMERICA INC.







|Date: May 16, 2005 | By: /s/ Ralph Eisenschmid, President and Chief Executive Officer (principal executive officer)
|------------------ | ----------------------------------------------------------------------------------------------





---

EXHIBIT 31.1



CERTIFICATION



CERTIFICATION

PURSUANT TO SECTION 302

I, Ralph Eisenschmid, President and Chief Executive Officer of Intelisys Aviation Systems of America Inc., certify that:

1.     I have reviewed this annual report on Form 10-KSB of Intelisys Aviation Systems of America Inc.

2.     Based on my knowledge, this annual 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 annual report;

3.     Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4.     The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a)        designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

b)        evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the Evaluation Date); and

c)        presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.     I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee of registrants Board of Directors (or persons performing the equivalent function):

a)        all significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability to record, process, summarize and report financial data and have identified for the registrants auditors any material weaknesses in internal controls; and

b)        any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal controls; and

6.     I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.





|Date: May 16, 2005 | By: /s/ Ralph Eisenschmid, President and Chief Executive Officer (principal executive officer)
|------------------ | ----------------------------------------------------------------------------------------------



---

EXHIBIT 31.2



CERTIFICATION



CERTIFICATION

PURSUANT TO SECTION 302

I, Ralph Eisenschmid, Chief Financial Officer of Intelisys Aviation Systems of America Inc., certify that:

1.     I have reviewed this annual report on Form 10-KSB of Intelisys Aviation Systems of America Inc.

2.     Based on my knowledge, this annual 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 annual report;

3.     Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4.     The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a)        designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

b)        evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the Evaluation Date); and

c)        presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.     I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee of registrants Board of Directors (or persons performing the equivalent function):

a)        all significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability to record, process, summarize and report financial data and have identified for the registrants auditors any material weaknesses in internal controls; and

b)        any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal controls; and

6.     I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.





|Date: May 16, 2005 | By: /s/ Ralph Eisenschmid
Chief Financial Officer (principal financial officer)
|------------------ | -------------------------------------------------------------------------------



---

EXHIBIT 32.1



CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002





The undersigned, Ralph Eisenschmid, President, Chief Executive and Financial

Officer, Secretary and Treasurer of InteliSys Aviation Systems of America Inc(the "Company") certifies, under the standards set forth and solely for the purposes of 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge, the Annual Report on Form 10-KSB of the Company for the year ended December 31, 2004 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in that Form 10-KSB fairly presents, in all material respects, the financial condition and results of operations of the Company.







Dated:  May 16, 2005

/s/ Ralph Eisenschmid

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Ralph Eisenschmid

President, Chief Executive and Financial Officer



A signed original of this written statement required by Section 906 has been

provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.



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