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, 2005           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 is not  required  to file  reports  pursuant  to
Section 13 or 15(d) of the Exchange Act [ ]

     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  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. [ ]

<PAGE>

     Indicate by check mark whether the  registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act) Yes [ ] No [ X ]

     The issuer's revenues for its most recent fiscal year were $1,944,885.

     Based on the closing sales price of the Common Stock on April 10, 2006,
the aggregate market value of the voting stock of registrant held by
non-affiliates was $2,024,001.

     The registrant has 70,679,198 shares of common stock outstanding as of
April 10, 2006 and 21,788,333 issued and outstanding Special Class B
Exchangeable Shares of the registrant's wholly-owned subsidiary InteliSys
Acquisition Inc. The Special Class B Exchangeable Shares may be exchanged by the
holder thereof at any time on a one-for-one basis for common stock of the
registrant. If not exchanged prior to December 31, 2012, the Special Class B
Exchangeable Shares will be automatically exchanged for shares of common stock
of the registrant on that date. See Note 2 (a) to the registrant's financial
statements contained in this annual report for additional information regarding
the Special Class B Exchangeable Shares.

Documents Incorporated By Reference:  None

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

<PAGE>

TABLE OF CONTENTS                                                        PAGE

Cautionary Statement for Forward Looking Information                        4
PART I
         Item 1.    Description of Business                                 5
         Item 2.    Description of Property                                18
         Item 3.    Legal Proceedings                                      18
         Item 4.    Submission of Matters to a
                    Vote of Security Holders                               18

PART II
         Item 5.    Market for Common Equity and Related
                    Stockholder Matters                                    19
         Item 6.    Management's Discussion and Analysis
                    or Plan of Operation                                   22
         Item 7.    Financial Statements                                   28
         Item 8.    Changes in and Disagreements with
                    Accountants on Accounting
                    and Financial Disclosure                               54
         Item 8A.   Controls and Procedures                                54

PART III
         Item 9.    Directors, Executive Officers, Promoters
                    and Control Persons; Compliance with Section 16(a)
                    of the Exchange Act                                    55
         Item 10.   Executive Compensation                                 57
         Item 11.   Security Ownership of Certain Beneficial Owners
                    and Management and Related Stockholder Matters         59
         Item 12.   Certain Relationships and Related Transactions         61
         Item 13.   Exhibits and Reports on Form 8-K                       62
         Item 14.   Principal Accountant Fees and Services                 64

SIGNATURES

<PAGE>

CAUTIONARY STATEMENTS FOR FORWARD-LOOKING INFORMATION

InteliSys Aviation Systems of America Inc. (the "Company" or "we" or "our") has
made forward-looking statements 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 related to our financial leverage; (g) risks that rapid
technological changes may render our technology obsolete; (h) risks to our
customers; (i) disruptions in capital markets; and (j) risks related to the fact
that we are not yet profitable and may 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.

All dollar amounts reported in this Annual Report on Form 10-KSB are in United
States dollars unless otherwise noted. The approximate conversion rate as of
December 31, 2005 was CAD $1.00 for USD $.8577.

                                                                               4

<PAGE>

                                     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 that can be deployed in a cost effective manner. Our
software assists airline operators in key areas such as reservation sales and
distribution, passenger services, e-commerce, aircraft crew management, employee
record keeping, regulatory compliance, capacity planning and resource allocation
while managing maintenance requirements to seamlessly optimize operations. The
Company offers Application Service Provider ("ASP") or hosted solutions as well
as self-hosted solutions based on multiple year contracts with monthly billings
based on application usage. The majority of our clients utilize the ASP model as
it allows them to access our solutions using a secure internet connection,
thereby reducing their infrastructure investment requirements and costs. This
model is particularly attractive for startup airlines as it also allows a
relatively short implementation time and does not require the client to employ
significant IT resources. In addition, the Company offers professional services
for customized application development and deployment as well as custom report
generation for client data.

Over the past several years, the Company has taken significant measures to
transform itself from a research and development operation to a profitable
production-oriented operation.

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. The Company was incorporated in 1999 and during
the period 1999 to 2001, the Company focused on identifying client requirements
and developing a suite of products which utilized a common, centralized database
structure and an innovative deployment methodology. The first commercial product
release was in June 2001 after which, under a new management team, our research
and development was cut back, and focus was applied towards sales, marketing and
support of our existing, developed modules. Staff was restructured and downsized
to better support the new focus.

During the years 2001 to 2005, the Company signed contracts with 25 clients,
primarily for provision of the Reservations Management System. In 2005, the
Company focused on additional development for the Reservation System, primarily
to ensure the scalability of our solutions for larger clients and to meet new
security requirements established by the credit card and e-commerce industry.
This phase of development was completed in July 2005 and all existing clients
were migrated to the new application platform by October 2005. During 2005, our
staff was restructured to meet the operational requirements which allowed us to
better meet the support requirements of our clients while also resulting in
significant ongoing savings in salary expense.

                                                                               5

<PAGE>

Since 2001, the Company has utilized a regional sales structure with a
combination of direct sales presence and sales agents located at strategic
locations worldwide. At present, we have a sales presence in North America,
Asia-Pacific, the Middle East and Europe. As of April 2006, 51% of revenues are
generated from Canadian clients with the remaining 49% from clients in the
Middle East and Asia-Pacific.

As a result of our continuous product improvement and organizational
streamlining, we believe the Company is now well positioned to continue on the
aggressive growth path it has achieved since commercialization of its products:

1)       The airline industry is now undergoing continuous growth in most areas
         of the world and has shown a significant recovery since the events of
         September 11, 2001. In Canada, the passenger airline market grew 5.5%
         in 2003, 8.7% in 2004 and an estimated 4.4% in 2005 based on enplaned
         passengers, according to Statistics Canada.

2)       Low Cost airlines are responsible for an increasing share of the
         passenger travel market as travelers are becoming increasingly cost
         conscious. According to Official Airline Guides Inc (OAG), in Europe
         low cost carriers are responsible for 24% more flights in April 2006
         than a year ago. New low cost carriers are continuing to emerge in most
         areas of the world. This is a market in which the Company has proven
         its ability to successfully sell into. The scalability which has been
         developed and tested in the reservation system should allow the Company
         to market to successively larger clients.

3)       The Company maintains a close relationship with current clients. Annual
         meetings are held with clients to document their ongoing requirements
         and to ensure application enhancements meet these requirements. This
         also allows the Company to identify new products which can then be
         marketed to existing clients.

4)       The Company has undergone significant restructuring of staff in order
         to position us to take on larger clients in different geographic
         regions. The Company now provides live 7/24/365 support which allows
         quick response to clients located in any geographic region. In
         addition, both infrastructure and staff have been configured to allow
         expansion of our client base with minimal increase in staff and
         infrastructure expenses.

5)       We now have an experienced sales presence in both the Middle East and
         Asia-Pacific markets where the growth of low cost carriers has been
         most prominent in the past two years.

                                                                               6

<PAGE>

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 written
consent of the Company's shareholders. The name change was 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.

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.

                                                                               7

<PAGE>

The Amelia software is comprised of the following modules:

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

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. Both new and existing
customers may require our custom programming services. For new customers, the
scope of development work is determined during the requirements definition
phase, and is charged to the client as part of the fees which are payable at
contract signature, and prior to work commencing. For existing clients whose
business model undergoes changes or who wish to undertake expanded
functionality, the scope is determined in detailed client consultation sessions.
Any custom development work is carried out against a detailed specification
document which is approved by the client before work commences.

Implementation Services - InteliSys' Methodology

We provide implementation support to our clients in order to provide a smooth
transition from the client's existing systems to the Amelia solution. We employ
our own implementation methodology which has been fine-tuned since mid-2001.
Proper implementation 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. Our methodology uses a
check-list approach to map, or link the airlines existing or planned business
model to specific Amelia functionality. Implementation also includes assisting
the clients with their own infrastructure and technical set-up where needed.
Typically, implementation labor costs are included in the one-time fees payable
by the client at contract signature, and prior to work commencing.

Support

We provide technical and application support to our clients via staff who are
onsite 7/24/365. Primary methods of client contact are phone, e-mail or MSN
Messenger. We are the first response support facility for all technical areas,
including client side infrastructure and communications issues. We invest
significant technical and management resources into our support and response
services as these constitute our presence with the client. It has been
demonstrated that the quality and capacity of our front-line support systems has
a definite effect on the clients' positive perception of InteliSys. Furthermore,
a well-developed support system can absorb and address a wide range of support
requests which allows our more expensive, key development staff to focus on
development work rather than being distracted by day-to-day support items.

                                                                               8

<PAGE>

Education and Training

Training is provided by an IASA-provided trainer at the client site or at our
headquarters. 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. 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. Our implementation methodology also contains steps to
ensure the training has been properly received and the trainees are sufficiently
qualified to manage and use the system properly. Typically, implementation labor
costs are included in the one-time fees payable by the client at contract
signature, and prior to work commencing.

The Market

Since the tragedy of terrorist attacks on September 11th, 2001, the
low-fare/low-cost airline market has experienced significant growth. This market
segment 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. Recently, the dramatic increase in fuel
costs has impacted all airlines globally. This has raised the importance of
cost-containment for airlines further. Therefore, airlines are placing more
emphasis on deployment of IT systems in efforts to contain their costs while not
compromising on service or product and brand quality. In their efforts to
bolster their bottom-line, air carriers also seek ways to increase revenues from
streams other than fares. Our systems allow an airline to offer additional
services to their clients without incurring significant additional costs as well
as opening new revenue opportunities. Examples of this include: mobile phone
integration, surcharge for seat selection and retail-type online sales of
products and services.

Since 2003, we have focused on our industry's emerging markets in addition to
our North American and "Western" markets. The regions of Asia, Australasia,
Middle East, Africa and Eastern Europe have demonstrated the highest rates of
deployment of new Low Fare or budget airlines. Our systems are well suited to
these markets as it supports a hybrid aviation model which blends legacy and
modern Low Fare carrier models, and which is required in this market.

Competition

Our market is highly competitive. Our primary competitor in the airline
reservation market is Navitaire, a well-financed international organization.
Other competitors include smaller independent firms including Radixx, and Air
Kiosk as well as divisions of larger corporations such as Sabre, SITA and
Videcom. Most of our competitors have significantly greater financial, marketing
and other resources than we have.

                                                                               9

<PAGE>

Our management feels the Company differentiates itself from its competitors by
offering a hybrid distribution model, allowing our clients to combine use of
legacy sales distribution channels combined with the low cost distribution
channels provided via the internet. Airlines operating in emerging markets, such
as Asia, Australasia, Middle East, Africa and Eastern Europe, are unable to
operate in the same manner as most low fare airlines in more developed countries
operate. Airlines in the emerging markets require some aspects found among the
legacy carriers such as interaction with travel agents, cash payments, and
in-person transactions combined with aspects provided via internet. The
Company's systems seamlessly and effectively support integration of these
models.

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 high-availability data center with complete redundant system
backup, built and maintained to standards imposed by the Credit Card Industry as
well as clients such as Amex Canada and Transport Canada. The redundant power,
communication and environment systems allow us to host complex, sensitive,
mission-critical and high-availability applications without significant risk of
down time or interrupted operations due to technical outages.

Demonstration and evaluation implementations are not hosted from the production
environment. For security, the data center has card access control 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 battery-powered uninterruptible power system with automatic
switching to an automatically engaged diesel generator with provision for
continuous fuel supply. Primary communication is provided via a redundant 10MB
fiber optic link to the Internet; secondary communication is provided by a 512KB
frame relay connection.

As at April 10, 2006, we have secured an independent hosting location and
equipment which will provide additional data and processing redundancy for our
systems. This site is separate and removed from our primary data center and is
also a secure facility with redundant electrical power, internet connectivity,
environmental controls and fire suppression systems.

Marketing

In addition to direct sales to new and operating airlines around the world, we
intend to expand existing customer relationships by introducing upgrade programs
for customers, and strategically positioning the "integrated suite" concept
(i.e. selling other components of the Amelia suite to existing customers).

                                                                              10

<PAGE>

Marketing Strategies

Direct Marketing: We currently market our products and services via a direct
sales force, utilizing telemarketing, email campaigns, sales agents, referrals
and industry contacts.

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.

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.

The Company routinely secures a non-disclosure agreement with any firm or
consultant with whom the Company undertakes to divulge any technical
information.

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<PAGE>

Employees

As of April 10, 2006, we employed 17 individuals, 14 of whom were engaged in
operations and customer service, 2 in sales, marketing and related activities
and 1 in finance and administration. Our success is highly dependent on our
ability to attract and retain qualified employees.

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

Factors that May Affect Future Results

Limited Operating History

We have a limited operating history which makes it difficult to evaluate our
prospects. Additionally, we have a history of operating losses and we may not be
profitable in the future:

Five years ago, we emerged from our development stage. As of December 31, 2005,
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, 2005, we have incurred cumulative losses of
$11,744,212.

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.

We may need to raise additional capital to expand our operations and execute our
business plan. 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:

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 and recurring revenues to conduct our operations for the
next 12 months, our continued operations in general will depend upon the
sustainability of cash flow from our operations, or our ability to raise
additional funds if required 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.

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<PAGE>

Our ability to have profitable operations is dependent on our ability to meet
the needs of our market on an ongoing basis:

Our financial performance will depend, in part, on continued 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. If we are
unsuccessful in addressing the needs of our market, or are unable to adapt our
product to accommodate the market, this may have a negative impact on our
financial performance.

Over time, our target customers may have a wide range of competing products to
choose from, which competition may offer better or different features from our
software products. Such increased competition will make it more difficult for us
to increase our sales, which will have a negative impact on our operating
results and financial condition:

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.

In order to be successful in our market, we must keep pace with the rapid
technological change and our customers' needs for improved or new products to
meet new industry standards. Our results of operations will be negatively
impacted if we cannot provide our customers with such improvements or 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 interpret the needs of the market, enhance
our current products accordingly 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.

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<PAGE>

We expect to expand our operations to international markets, which will subject
us to various factors that may affect our ability to generate sales from these
international markets or impair our ability to repatriate our profits from
overseas markets:


We are expanding our operation into Europe, the Middle East and Asia, which will
require ongoing 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 continue to be successful, and the
failure of such efforts could have a material adverse effect on our business,
operating results and financial condition. Our operations outside North America
are subject to additional risks including:

o        changes in or interpretations of foreign law that may adversely affect
         our ability to sell our products, perform services or repatriate
         profits to the Canada;
o        the imposition of tariffs;
o        hyperinflation or economic or political instability in foreign
         countries;
o        conducting business in places where business practices and customs are
         unfamiliar and unknown;
o        the imposition of restrictive trade policies, including export
         restrictions; o worldwide political conditions;
o        the imposition of inconsistent laws or regulations;
o        the imposition or increase of investment requirements and other
         restrictions by foreign governments;
o        longer collection cycles for account receivables;
o        uncertainties relating to foreign laws and legal proceedings;

Foreign Currency Fluctuations May Negatively Affect Our Financial Results

International markets are important to our Company's operations. All foreign
contracts from which revenues were generated in 2005 were based on Contracts
using United States currency as the contract basis. Sales outside Canada
represented approximately 49% of revenues for 2005. As the Company's primary
operating expenses are settled in Canadian currency, fluctuations of the value
of the Canadian Dollar versus the United States dollar can have a significant
impact on the Company's results of operations.

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<PAGE>

Failure to Attract,  Train and Retain Skilled  Employees Could Adversely  Affect
Operating Results

Our future success will depend largely upon our ability to attract, train and
retain 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.

If we fail to develop and maintain an effective system of internal controls, we
may not be able to accurately report our financial results or prevent fraud, as
a result, current and potential shareholders could lose confidence in our
financial reports, which could harm our business and the trading price of our
common stock:

Effective internal controls are necessary for us to provide reliable financial
reports and effectively prevent fraud. Section 404 of the Sarbanes-Oxley Act of
2002 requires us to evaluate and report on our internal controls over financial
reporting and have our independent registered public accounting firm annually
attest to our evaluation, as well as issue their own opinion on our internal
controls over financial reporting, beginning with our Annual Report on Form
10-KSB for the fiscal year ended December 31, 2007. We plan to prepare for
compliance with Section 404 by strengthening, assessing and testing our system
of internal controls to provide the basis for our report. The process of
strengthening our internal controls and complying with Section 404 is expensive
and time consuming, and requires significant management attention, especially
given that we have not yet undertaken any efforts to comply with the
requirements of Section 404. We cannot be certain that the measures we will
undertake will ensure that we will maintain adequate controls over our financial
processes and reporting in the future. Furthermore, if we are able to rapidly
grow our business, the internal controls that we will need will become more
complex, and significantly more resources will be required to ensure our
internal controls remain effective. Failure to implement required controls, or
difficulties encountered in their implementation, could harm our operating
results or cause us to fail to meet our reporting obligations. If we or our
auditors discover a material weakness in our internal controls, the disclosure
of that fact, even if the weakness is quickly remedied, could diminish
investors' confidence in our financial statements and harm our stock price. In
addition, non-compliance with Section 404 could subject us to a variety of
administrative sanctions, including the suspension of trading, ineligibility for
listing on the OTC Bulletin Board, one of the Nasdaq Stock Markets or national
securities exchanges, and the inability of registered broker-dealers to make a
market in our common stock, which would further reduce our stock price.

We may have defects in our software that could negatively  affect our results of
operations due to re-allocation of resources to cure such defects;

Complex software products may contain undetected errors or "bugs." Errors or
"bugs" may not be detected until after the delivery of the software. These
errors could result in delayed market acceptance or claims against us by
customers, which could lead to adverse affects to our operations, because we
would have to devote financial and human resources on fixing these "errors" or
"bugs" rather than on other areas such as expanding our sales.

                                                                              15

<PAGE>

We may face product liability claims that may not be effectively limited by
contractual restrictions limiting such liability that are contained in our
software license agreements.

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. In the event of such a claim, we would have to
devote financial and human resources to such matters, which will affect our
ability to generate revenue and improve our products.

Our relationships with our clients would be seriously harmed if we experienced
any business interruptions at our data centers.

Our operations are vulnerable to interruption by fire, telecommunications
failures, terrorist attacks and other events beyond our control. If a
simultaneous business interruption occurs at all our data centers, it could
seriously harm us or our customers as we would be unable to deliver our product
to our clients, who would in turn face grave difficulties as they operate
without access to the IT systems we provide to them. If we had such an
interruption, we could lose customers to competitors and we could also lose
potential business due to such interruptions.

If we fail to protect our intellectual property or become subject to dispute
regarding our intellectual property, we will have to devote financial and human
resources to such matters, which will affect our ability to generate revenue and
improve our products. As a result our results of operations would be negatively
impacted:

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.

                                                                              16

<PAGE>

Control by Current Shareholders

Our Officers and Principal Shareholders own or control approximately 49% 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. We have no
independent Directors to conduct Audit and Compensation Committee functions,
which functions are currently conducted by the Board of Directors. Consequently,
there is a potential conflict of interest in Board decisions that may adversely
affect the Company's ability to become a listed security on a NASDAQ Market and
as a result adversely affect the stock liquidity.

We have limited trading in our shares of common stock, which trading will not
improve unless we increase our sales, become profitable and secure more active
market makers:

As of April 10, 2006, there has been a moderate level of trading of our common
stock. There can be no assurance that a regular trading market for our
securities will continue to develop or that 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 Such risks could have
an adverse affect on the stock's future liquidity

                                                                              17

<PAGE>

We are subject to Penny Stock regulations, which may make it more difficult for
you to sell your shares of our common stock:

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.

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 February 28, 2007. The annual rent
on such lease is $96,531. We believe that existing facilities are adequate to
support our activities for the foreseeable future.

Item 3. Legal Proceedings.

During the first quarter of 2005, the Company received notice that a former
employee is taking legal action against the Company for wrongful dismissal
during June, 2001. The individual has filed a claim against the Company in civil
court for as yet unspecified damages. The Company has retained legal counsel to
defend against the claim and discovery in the case is currently scheduled to
commence in September, 2006. 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, 2005.

                                                                              18

<PAGE>

                                     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 2005, 2004 and 2003, respectively:

Calendar Year              High Bid Low Bid

2005:

First quarter              $ .045           $ .025
Second quarter             $ .035           $ .008
Third quarter              $ .035           $ .0052
Fourth quarter             $ .02            $ .0045

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.

As of April 10, 2006 we had approximately 410 holders of record of the Common
Stock and 43 holders of record of the Class B Exchangeable Shares.

                                                                              19

<PAGE>

Dividend Policy

As of April 10, 2006 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


The following table sets forth information about the common stock available for
issuance under compensatory plans and arrangements as of December 31, 2005.

<TABLE>
<CAPTION>
                                                                                                      (c)
                                                                                             Number of securities
                                            (a)                                              remaining
                                         Number of                     (b)                   available for future
                                         securities to be        Weighted-average            issuance under
                                         issued upon             exercise price of           equity compensation
                                         exercise of             outstanding options         plans (exluding
                                         outstanding             under equity                securities reflected in
                                         options                 compensation plans          column (a))
Plan Category
------------------------------------   ----------------------- --------------------------  -------------------------------
<S>                                          <C>                    <C>                             <C>
Equity compensation plan approved            6,304,212              $0.0064                         28,555,788
by security holders


Equity compensation plans not
approved by security holders                 --                       --                             --

</TABLE>

Total

The Company's only equity  compensation plans are the InteliSys Aviation Systems
of America Inc.  2005 Stock  Option  Plan,  the  InteliSys  Aviation  Systems of
America Inc. 2004 Stock Option Plan and the 2000 Stock Option and Stock Issuance
Plan.

Recent Sales of Unregistered Securities

The following issuances were made under Section 4(2) of the Securities Act of
1933, as an issuance not involving a public offering. The issuances were made to
parties familiar with us and our operations. The parties were given an
opportunity to ask questions about us and to receive information about us. No
advertising or solicitation was used in connection with these issuances.

                                                                              20

<PAGE>

During the year ended December 31, 2005, we issued 10,000,000 shares of common
stock to an employee in settlement of $50,000 accrued expenses and commissions
owed to the employee. During the year ended December 31, 2004, we 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 during the year ended December 31,
2005.
During the year ended December 31, 2005, the Company agreed to issue 1 share of
preferred stock to a shareholder in settlement of $12,500 accrued commissions
owed to the shareholder. The preferred stock remains issuable at December 31,
2005.

                                                                              21

<PAGE>

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.

                                                                              22

<PAGE>

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 software
solutions hosting services to low-cost airlines, small and mid-sized regional
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 $11,744,212. Our balance sheet remains highly leveraged. Our current
liabilities exceed our current assets by $2,061,981. In the past, 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 improves, 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.
For the 12 month period ending December 31, 2005, sales increased by 20%, gross
profit increased by 43% and the net loss improved by 88% for an improvement of
$2,782,125. Our primary financial objective in 2006 is to address past
liabilities in order to rebalance our financial position, which we believe could
allow us to achieve long term financial viability.

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.            In 2004 and 2005, the airline industry exhibited positive growth
              and in some geographic areas, passenger volumes exceeded the pre
              9/11/2001 levels. In Canada, the total enplaned/deplaned
              passengers surpassed the pre-9/11 levels in 2004 and continues to
              exhibit positive growth through 2005 ( Source: Statistics Canada).
              In Asia and the Middle East, new low-cost airlines are
              continuing to emerge and the Company has been successful in both
              these markets.

3.            During 2005, we added security procedures and features to our
              solutions and organization to comply with the Credit Card Industry
              Standards which became mandatory in 2005 for companies which
              process or handle credit card data. This provides prospective new
              clients a reliable benchmark to evaluate our security procedures
              and policies.

                                                                              23

<PAGE>

4.            Beginning in 2nd quarter 2005, we undertook extensive improvement
              of the reservation software to allow implementation for clients
              with significantly larger reservation volumes. We believe this
              increase in scalability of our solutions will open up additional
              markets for the Company allowing us to compete for a larger market
              share.

5.            During 2004 and 2005, we completed numerous enhancements to our
              reservation system in order to better position it to the emerging
              and rapidly growing market segment of low-cost airlines.

6.            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 2nd Quarter 2005, we undertook a
              restructuring of staff which significantly reduced the ongoing
              cost of staff salaries.

7.            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. During 2005 we used
              operating revenues to settle several large creditor accounts. 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 outstanding debts in a reasonable and fair
              manner, providing the company with a stronger financial position.

8.            During 2005, we renegotiated agreements with several large
              creditors providing for achievable repayment schedules and
              removing these debts from default.

9.            We anticipate that the results of the activities mentioned above
              will allow the Company to better position itself to secure equity
              financing in the future. This additional financing would be used
              to improve our market penetration 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.

     Our revenue model consists primarily of recurring monthly revenues from our
     clients, supplemented by revenues from professional services. Our present
     levels of recurring revenue satisfy our operational cash requirements,
     expansion of our infrastructure and servicing long-standing debt.

     The Company will be releasing a new version of its reservation system in
     2006. We feel the additional features and functionality in this enhanced
     version will further differentiate our system from that of our competitors,
     and result in additional sales resulting in increased one-time and
     recurring revenues. A partial list of these enhancements are:

a.       Integrated, on-line retail-type sales of products and services
b.       Advanced seat selection, with optional charge to the passenger for this
c.       Tools to allows the passenger to locate best fares with the airline
d.       Mobile telephone support
e.       Enhanced travel agency and accounting tools
f.       Group booking support
g.       Interfaces to third party travel and consolidation systems
h.       Integrated cargo and freight management

                                                                              24

<PAGE>

The Company intends to continue to utilize revenues from existing clients while
aggressively pursuing new revenue from both existing and new clients in order to
satisfy cash requirements for the next 12 months. Based on the Company's present
and projected revenues, the Company's management is not actively seeking
additional equity or debt financing during the next 12 months. The Company has
expended considerable effort during the past 12 months in identifying and
engaging new prospective clients while also continuing improvement of the
Company's key products to ensure marketability to new clients. During the past
year, the Company has had considerable success in settling existing debt by
either paying out the debt or renegotiating terms of repayment. The Company
intends to continue with this debt settlement process as revenues permit during
the next 12 months.

The Company plans to continue aggressively seeking new customers and emerging
markets while continuing to remain customer-focused and provide new customer
driven product enhancements. During 2005, 51% of revenue was generated from
Canadian clients. During 2006, we expect a larger portion of revenues from
outside of Canada as our international clients reservation volumes are
increasing more quickly than our Canadian Clients and we will be bringing at
least one additional international client onstream during 2006. 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 20% increase for the period ended
December 31, 2005 as compared to the same period ended in 2004. This impressive
growth follows a 56% increase in revenues for the year ended December 31, 2004
as compared to the same period ended in 2003 as evidenced in our 10-KSB filed
for the year ended December 31, 2004. We believe that these figures support our
opinion that our sales and marketing strategy has been successfully implemented.

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 $1,944,885 for the
year ended December 31, 2005 as compared to $1,619,601 for the year ended
December 31, 2004, an increase of $325,284 or 20%. This increase was primarily
due to an increase in client base and an increase in the reservation volumes of
our existing clients. The increase in clients was the direct result of the
Company's continued success in 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. The variable recurring revenues are based on
the passenger reservation volumes. In addition to the monthly recurring revenue
stream, the Company provides consulting and customization services to customers.

Cost of service delivery increased to $1,142,215 during the year ended December
31, 2005 as compared to cost of delivery charges of $1,058,051 during the same
period ended December 31, 2004. The increase in expense is directly related to
higher sales revenues in 2005 as compared to sales revenues for 2004. Cost of
sales as a percentage of sales decreased from 65.3% in 2004 to 58.7% in 2005.

                                                                              25

<PAGE>

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, 2005  increased to $802,670  (41.3%) from  $561,550
(34.7%)  during the same period  ended  December 31, 2004.  This  represents  an
increase  of 42.99% in year over year  gross  profit  and an  increase  in gross
margin of 6.6%.

Selling, general and administrative expenses decreased from $2,717,757 in 2004
to $1,106,527 for the year ended December 31, 2005, a decrease of $1,611,230.
The decrease is a result of the Company substantially reducing use of
consultants for business planning as well as staff restructuring .

In 2005 the Company realized $255,027 in gains in debt settlement compared to
$13,743 for the same period ended December 31, 2004, an increase of $241,284.

The net loss for the year ended December 31, 2005 was $388,035 as compared to a
net loss of $3,170,160 for the year ended December 31, 2004, an improvement of
$2,782,125.

Basic net loss per share was $0.005 in 2005 as compared to $0.06 in 2004.

Liquidity and Capital Resources

On December 31, 2005, the Company had a cash and cash equivalents deficiency of
$15,755.

Net cash provided by operating activities was $98,136 for the year ended
December 31, 2005. Net cash provided by operating activities for the year ended
December 31, 2005 resulted primarily from the net loss for the period, gain on
settlement on debt, decreases in payables and increase in deferred revenues
partially offset by non-cash expenses.

Net cash used in investing activities for the year ended December 31, 2005 was
$23,976. Net cash used in investing activities related to investment in capital
assets.

Net cash used in financing activities was $90,139 for the year ended December
31, 2005. During the year, the Company had net loss from the issuance of capital
stock of $1,285, repayments of bank indebtedness of $28,786 and repayments of
$62,638 in long-term debt.

Changes in exchange rates affected cash balances by $15,979 in 2005.

The Company had a cash and cash equivalents deficiency of $15,755 on December
31, 2005.

The Company had net working capital deficiencies of $2,061,981 and $2,874,707
for the years ended December 31, 2005 and 2004 respectively.

                                                                              26

<PAGE>

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 $745,656 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.

                                                                              27

<PAGE>

Item 7.     Financial Statements.

The Consolidated Financial in this Annual Report begin on Page F-1
                                                                              28

<PAGE>

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 and
financial officer is 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:

o     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;

o     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;

o     evaluated the effectiveness of the issuer's disclosure controls and
      procedures as of the end of the fiscal year December 31, 2005 (the
      "Evaluation Date").

Based on his evaluation as of the Evaluation Date, his conclusion about the
effectiveness of the disclosure controls and procedures were that;

o     the number of internal control deficiencies over corporate governance in
      aggregate constituted a `material weakness'. The deficiencies noted herein
      surrounded the documentation of existing internal controls of our IT
      security policy, our disaster recovery plan and regulatory reports and the
      documentation of such processes;

o     the absence of an audit committee and our lack of effective monitoring
      controls constitute a material weakness. Also identified are deficiencies
      in monitoring the internal control structure, policies associated with
      communicating control risks and the effects of such risks on our financial
      reporting process to our board of directors;

o     the number of internal control deficiencies over financial reporting in
      aggregate constituted a `material weakness'. The deficiencies noted herein
      surrounded the monitoring controls over the preparation of financial
      statements; and

o     also, there was a significant deficiency due to an inadequate segregation
      of duties with respect to the revenue and expenditures cycles as
      incompatible tasks are performed by the same accounting personnel.

The Company believes that any of the abovementioned deficiencies, significant
deficiency, or material weaknesses in the Company's internal controls do not
materially affect the fairness or accuracy of the presentation of the Company's
financial condition and results of operation in the Company's historical
financial statements as set forth in the Company's reports previously filed with
the SEC under the Securities Exchange Act of 1934.

                                                                              29

<PAGE>

The following tasks represent what management believes to be the most
significant actions necessary to address existing deficiencies, significant
deficiencies and material weaknesses in the Company's controls:

o       Recruit independent board members with required knowledge and expertise
        to provide oversight as audit committee members;

o       Review of the Company's current policies and procedures to develop
        processes so that incompatible duties are not performed by one
        individual or that there are specific compensating controls if
        incompatible duties cannot be avoided; and

o       Develop, document and implement appropriate controls related to IT
        security policies and disaster recovery/business continuity plans and
        develop monitoring controls to ensure compliance with Sarbanes-Oxley
        Section 404. External resources will be engaged to assist with ensuring
        plans, policies and controls that are documented and implemented for the
        Company are appropriate.

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, 2005 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, 2005 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               40            President, CEO, CFO
                                              and Director

Jock English                    56            Chief Operating Officer,
                                              Vice President, Sales and
                                              Marketing, Secretary and Director

                                                                              30

<PAGE>

Mr. Gallant served as our Chief Financial Officer from May 31, 2003 until his
termination on February 28, 2005.

Ralph Eisenschmid -  Founder/President  and Director,  Chief Executive  Officer,
Chief Financial Officer

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 - Chief Operating  Officer and Vice President,  Sales and Marketing
and Director

Mr. English has over 25 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 entire Board of
Directors of the Company performs the functions of audit, nominating and
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.

                                                                              31

<PAGE>

We are not aware of any instances in fiscal year 2005 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 Ralph Eisenschmid in March 2005.

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, 2005, 2004 and 2003, for services of Ralph
Eisenschmid, our President and CEO, Jock English, COO, VP Sales and Marketing
and Denis Gallant, former CFO (collectively, the "named executives").

                                                                              32

<PAGE>
<TABLE>
<CAPTION>

Summary  of  Annual Compensation
                                    Annual Compensation       Awards               Payouts
                                  ----------------------------------------------------------
                                                              Securities
                                                             ------------
                                                         Other
                                                         Annual      Restricted                    Long-Term   All other
Name and                                                 Compen-     Stock       Underlying        Incentive   compen-
Principle Position        Year     Salary ($) Bonus ($)  sation      Awards      Options ($)       Plans ($)   sation ($)
------------------------------------------------------------------------------------------------------------------------------------
<S>                       <C>      <C>         <C>      <C>          <C>        <C>                 <C>         <C>
Ralph                     2005     $80,912     $0        $12500(1)   $12,500(9)         $0          $0          $0
Eisenschmid               2004     $89,308     $0              $0           $0  $49,732(2)          $0          $0
President,                2003     $56,875     $0              $0           $0          $0          $0          $0
CEO

Jock                      2005     $47,807     $0       $18,567(1)   $50,000(8)         $0          $0          $0
English                   2005                           $4,250(5)
Vice Pres.,               2004     $34,193     $0              $0           $0  $48,873(3)          $0          $0
Sales &                   2003     $41,600     $0              $0           $0          $0          $0          $0
Marketing


Denis                     2005     $18,889     $0         $4250(5)          $0          $0          $0   $1,878(9)
Gallant                   2004    $100,000     $0       $13,783(4)          $0  $26,550(6)          $0   $6,480(9)
Chief                     2003     $33,540     $0              $0           $0          $0          $0          $0
Financial
Officer

</TABLE>

(1) Represents commissions
(2) Mr. Eisenschmid received 1,657,746 options to purchase common stock
(3) Mr. English received 1,629,108 options to purchase common stock
(4) Monies earned in 2003 but only paid in 2004
(5) Monies earned in 2004 but only paid in 2005 . Mr. Gallant resigned as the
    Company's Chief Financial Officer on February 28, 2005
(6) Mr. Gallant received 885,000 options to purchase common stock
(7) Car allowance
(8) Mr. English received 10,000,000 shares of common stock for settlement of
    debt
(9) Mr. Eisenschmid received 1 preferred share for settlement of debt

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

         The following tables summarize (i) the options granted in 2005 to the
executive officers named in the Summary Compensation Table above, (ii) the
potential value of these options at the end of the option term assuming certain
levels of appreciation of our common stock, (iii) the number of shares acquired
by such named executive officers upon the exercise of options in 2005 and the
value realized thereon, and (iv) the number and value of all options held by
such executive officers at the end of fiscal 2005

                                                                              33

<PAGE>

                            OPTION/SAR GRANTS IN 2005

<TABLE>
<CAPTION>
                             Number of
                             Securities      % of Total
                             Underlying      Options Granted
                             Options         to Employees in   Base Price   Exercise or
Name                         Granted (#)     Fiscal Year(%)    ($/Share)    Expiration Date     5% ($)      10% ($)
----                         -----------     --------------    ---------   ------------------   -------     ---------
<S>                          <C>             <C>               <C>         <C>                  <C>         <C>
Ralph Eisenschmid                (1)

Jock English                     (1)

Denis Gallant (2)                (1)
-------------
</TABLE>

(1)      The Company did not grant any stock appreciation rights (SARs) or stock
         options to the named executives in 2005.

(2)      Mr. Gallant resigned as the Company's Chief Financial Officer on
         February 28, 2005
<TABLE>
<CAPTION>
                                                     AGGREGATED OPTION EXERCISES IN 2005
                                                   AND FISCAL YEAR END STOCK OPTION VALUES

                               Number of
                               Shares Acquired    Value           Number of Securities Underlying       Value of Unexercised
                               Upon Exercise      Realized        Unexercised Options                   In-the-Money
   Name                            (#)              ($)           At Year End (#)                       Options ($) (1)
  ------                       ---------------    -----------    -------------------------------        ----------------------------
                                                                  Exercisable      Unexercisable        Exercisable    Unexercisable
                                                                  -----------      -------------        -----------    -------------
<S>                               <C>             <C>             <C>              <C>                  <C>             <C>
Ralph Eisenschmid                 300,000         $  9,000           1,357,746           0               $  23,081         0
Jock English                      700,000         $ 22,750             929,108           0               $  15,794         0
Denis Gallant (2)                 285,000         $  9,975                   0           0                                 0

</TABLE>
(1)      Based on the closing price for our common stock on December 31, 2005 of
         $0.017 per share.

(2)      Mr. Gallant resigned as the Company's Chief Financial Officer on
         February 29, 2005.

                                                                              34

<PAGE>

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

The following table lists, as of March 31, 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 90956531 shares of InteliSys
Aviation Systems of America Inc. common stock issued and outstanding. Also
includes shares of common stock issuable in exhange for the Special Class B
Exchangeable Shares held by each person and shares of common stock issuable upon
the exercise of outstanding options held by each person.


Officers, Directors,
5% Shareholder                   No. of Shares              Beneficial Ownership
                                                                     %

Ralph Eisenschmid                 14,704,851 (1)(2)(3)              16%
65 Matheieu-Martin
Grand Barachois
New Brunswick
Canada E4P 7V7

Jock English                      12,429,108 (4)(5)                 14%
113 Cap Brule  Road
Boudreau West,
New Brunswick
Canada E1P 6J1

Mohamed Juman                     11,157,694 (6)                    12%
PO Box 743
Manama
Kingdom of Bahrain

Californian Securities S.A.
Edificio Bilbao Plaza, Suite 418
Avenida Bilbao, Panama City
Republic de Panama                10,218,507                        11%

Pacific Continental Securities
UK) Ltd.
80 Cannon Street
London
EC4N 6HL
England                           11,213,105                        12%

All directors and
executive officers as
a Group (2 persons)               17,133,959                        30%

                                                                              35

<PAGE>

(1) Includes 12,563,772 shares of common stock issuable in exchange for
InteliSys Acquisition Co. Special Class B Exchangeable Shares held by Mr.
Eisenschmid.

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

(3) Includes 1,357,746 shares issuable upon the exercise of outstanding stock
options issued as part of the Company's 2004 Stock Option Plan.

(4) Includes 929,108 shares issuable upon the exercise of outstanding stock
options issued as part of the Company's 2004 Stock Option Plan.

(5) Includes 1,500,000 shares of common stock issuable in exchange for InteliSys
Acquisition Co. Special Class B Exchangeable Shares held by Mr. English.

(6) Includes 2,666,667 shares of common stock issuable in exchange for InteliSys
Acquisition Co. Special Class B Exchangeable Shares held by Mr. Juman.

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.

                                                                              36

<PAGE>

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

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

<TABLE>
<CAPTION>
<S>                 <C>

--------------- -- -------------------------------------------------------------------------------------------------------
Exhibit Number                                            Description
--------------- -- -------------------------------------------------------------------------------------------------------
3.1                Articles of Incorporation of Apta Holdings, Inc. (filed as Exhibit 3.01 to the registrant's
                   Registration Statement on Form 10-SB (SEC File No. 0-26777) filed on July 21, 1999 (the "Form 10-SB")
                   and incorporated herein by reference).
--------------- -- -------------------------------------------------------------------------------------------------------
3.2                By-Laws of Apta Holdings, Inc. (filed as Exhibit 3.02 to the Form 10-SB and incorporated herein by
                   reference).
--------------- -- -------------------------------------------------------------------------------------------------------
3.3                Certificate of Amendment of Certificate of Incorporation of the registrant (filed as Annex I to the
                   Schedule 14C filed on March 12, 2004 and incorporated herein by reference).
--------------- -- -------------------------------------------------------------------------------------------------------
10.1               InteliSys Aviation Systems of America, Inc. 2005 Stock Option Plan (filed as Exhibit 4.3 to the
                   registrant's registration statement on Form S-8 (SEC File No. 333-125582) filed on June 16, 2005 (the
                   "2005 Form S-8") and incorporated herein by reference).
--------------- -- -------------------------------------------------------------------------------------------------------
10.2               Form of Stock Option Agreement under the 2005 Stock Option Plan (filed as Exhibit 4.4 to the 2005
                   Form S-8 and incorporated herein by reference).
--------------- -- -------------------------------------------------------------------------------------------------------
10.3               InteliSys Aviation Systems of America, Inc. 2004 Stock Option Plan (filed as Exhibit 4.3 to
                   the registrant's registration statement on Form S-8 (SEC File No. 333-114887) filed on April 27, 2004
                   (the "2004 Form S-8") and incorporated herein by reference).
--------------- -- -------------------------------------------------------------------------------------------------------
10.4               Form of Stock Option Agreement under the 2004 Stock Option Plan (filed as Exhibit 4.4 to
                   the 2004 Form S-8 and incorporated herein by reference).
--------------- -- -------------------------------------------------------------------------------------------------------
10.5               Indenture, Bill of Sale and Assignment of Assets, Properties and Business of ARCA Corp., effective as
                   of June 28, 1999, made by ARCA Corp. in favor of Apta Holdings, Inc. (filed as Exhibit 10.01 to the
                   Form 10-SB, and incorporated herein by reference).
--------------- -- -------------------------------------------------------------------------------------------------------
10.6               Instrument of Assumption of Liabilities, effective as of June 28, 1999, made by Apta Holdings, Inc.
                   in favor of ARCA Corp. (filed as Exhibit 10.02 to the Form 10-SB, and incorporated herein by
                   reference).
--------------- -- -------------------------------------------------------------------------------------------------------
10.7               Provisional Workout Agreement made with the Department of Housing and Urban Development (Project No.
                   934-94W4), effective as of January 1. 1994 (filed as Exhibit 10.03 to Amendment No. 1 to the
                   registrant's registration statement on Form 10-SB/A filed on October 18, 1999 (the "Amended Form
                   10-SB"), and incorporated herein by reference).
--------------- -- -------------------------------------------------------------------------------------------------------
10.8               Storage Tank Agreement, dated November 20, 1996, between Resource Properties XXIII, Inc. and S.V.G.
                   Properties, L.P. (filed as Exhibit 10.04 to the Amended 10-SB, and incorporated herein by reference).
--------------- -- -------------------------------------------------------------------------------------------------------
10.9               Apartment Management Agreement, made as of November 25, 1996, between S.V.G. Properties, L.P. and H.
                   James Santoro, Inc. (filed as Exhibit 10.05 to the Amended 10-SB, and incorporated herein by
                   reference).
--------------- -- -------------------------------------------------------------------------------------------------------
10.10              Voting and Exchange Agency Agreement, made as of the 22nd day of November, 2002, between Apta
                   Holdings, Inc., Ralph Eisenschmid (in trust for Intelisys Acquisition Inc.) and Carbonaro Sugar
                   Swerzas LLP (filed as Exhibit 99.3 to the definitive Information Statement on Schedule 14C filed on
                   December 3, 2002 (the "2002 Information Statement") and incorporated herein by reference).
--------------- -- -------------------------------------------------------------------------------------------------------
                                                                              37
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
<S>                 <C>
--------------- -- -------------------------------------------------------------------------------------------------------
10.11              Share Exchange Agreement, dated as of November 15, 2002 by and among Ralph Eisenschmid (in
                   trust of Intelisys Acquisition Inc. and Intelisys (Nova Scotia) Company), Convergix Inc., Apta
                   Holdings, Inc., Ralph Eisenschmid, Harry J. Santoro and Stephen M. Robinson (filed as Exhibit 99.4 to
                   the 2002 Information Statement and incorporated herein by reference).
--------------- -- -------------------------------------------------------------------------------------------------------
10.12              Asset Sale Consulting Agreement, made as of the 22nd day of November, 2002, by and between
                   Harry J. Santoro and Stephen M. Robinson (filed as Exhibit 99.6 to the 2002 Information Statement and
                   incorporated herein by reference).
--------------- -- -------------------------------------------------------------------------------------------------------
10.13              Support Agreement, made the 22nd  day of November, 2002, by and between Apta Holdings, Inc.
                   and Ralph Eisenschmid (in trust for Intelisys Acquisition Inc. and Intelisys (Nova Scotia) Company
                   (filed as Exhibit 99.13 to the 2002 Information Statement and incorporated herein by reference).
--------------- -- -------------------------------------------------------------------------------------------------------
10.14              Guaranty of Principals (filed as Exhibit 99.13 to the 2002 Information Statement and
                   incorporated herein by reference).
--------------- -- -------------------------------------------------------------------------------------------------------
10.15              Share Exchange Agreement, dated November 22, 2002, among Apta Holdings, Inc. , Harry J.
                   Santoro, Stephen M. Robinson, Convergix Inc., Ralph Eisenschmid in Trust for Intelisys Acquisition
                   Inc., a company to be incorporated, Ralph Eisenschmid in Trust for Intelisys (Nova Scotia) Company,
                   an Unlimited Liability Company to be formed, and Ralph Eisenschmid (on his own behalf and as attorney
                   and agent for the shareholders of Convergix Inc.) (filed as Exhibit 10.06 to the Current Report on
                   Form 8-K, dated November 22, 2002, filed on December 4, 2002 (the "2002 Form 8-K"), and incorporated
                   herein by reference).
--------------- -- -------------------------------------------------------------------------------------------------------
10.16              Support Agreement; dated November 22, 2002, between Apta Holdings, Inc., Ralph Eisenschmid in Trust for
                   Intelisys Acquisition Inc., a company to be incorporated, and Ralph Eisenschmid in Trust for Intelisys
                   (Nova Scotia) Company, an Unlimited Liability Company to be formed (filed as Exhibit 10.07 to the 2002
                   Form 8-K and incorporated herein by reference).
--------------- -- -------------------------------------------------------------------------------------------------------
10.17              Asset Sale Consulting Agreement, dated November 22, 2002, between Harry J. Santoro and
                   Stephen M. Robinson, and Intelisys Aviation Systems U.S.A. Inc. (filed as Exhibit 10.08 to the 2002
                   Form 8-K and incorporated herein by reference).
--------------- -- -------------------------------------------------------------------------------------------------------
10.18              2001 Stock Option and Stock Incentive Plan of the Registrant (filed Exhibit 4 to
                   Registrant's proxy statement on Schedule 14C, dated April 17, 2001, filed with the Securities and
                   Exchange Commission on April 17, 2001).
--------------- -- -------------------------------------------------------------------------------------------------------
11.1               Statement re:  Computation of Earnings per Share (filed as Exhibit 11.01 to the Form 10-SB, and
                   incorporated herein by reference).
--------------- -- -------------------------------------------------------------------------------------------------------
                                                                              38
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
<S>                 <C>
--------------- -- -------------------------------------------------------------------------------------------------------
16.1               Letter from Grant Thorton LLP, dated March 18, 2006 (filed as Exhibit 16.1 to Amendment No. 1 to the
                   Current Report on Form 8-K, dated March 14, 2006, filed on March 23, 2006 and incorporated herein by
                   reference).
--------------- -- -------------------------------------------------------------------------------------------------------
16.2               Letter from Haefiele Flanagan & Co., p.c., dated February 19, 2003 (filed as Exhibit 16 to the
                   Current Report on Form 8-K, dated February 19, 2003, filed on February 21, 2003 and incorporated
                   herein by reference).
--------------- -- -------------------------------------------------------------------------------------------------------
21.1               List of Subsidiaries of Registrant (filed as Exhibit 21.1 to the Form 10-SB, and incorporated herein
                   by reference).
--------------- -- -------------------------------------------------------------------------------------------------------
23.1               Consent of Grant Thornton, LLP*
--------------- -- -------------------------------------------------------------------------------------------------------
23.2               Consent of Sherb & Co.*
--------------- -- -------------------------------------------------------------------------------------------------------
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.*
--------------- -- -------------------------------------------------------------------------------------------------------

</TABLE>
*Filed herewith.

(b)                        Reports on Form 8-K. The Company has not filed any
                           Reports on Form 8-K during the last quarter of the
                           fiscal year of December 31, 2005.

Item 14.  Principal Accountant Fees and Services.

         Grant Thornton LLP has served as the Company's Principal Accountant
from February 19, 2003 until March 14, 2006 and has advised the Company that it
does not have any material financial interests in, or any connection with (other
than as independent registered public accounting firm), the Company. Sherb & Co.
has been engaged as the Company's Principal Accountant since March 15, 2006.

         The following is a summary of the fees billed to us by Grant Thorton
LLP  and Sherb and Co., LLP for professional services rendered for the fiscal
years ended December 31,
2005 and 2004:

                               Fiscal year ending    Fiscal year ending
                               December 31, 2005     December 31, 2004
                              --------------------  ----------------------
Audit Fees                       $ 101,276           $ 84,160
Audit Related Fees               $       0           $  2,491
Tax Fees                         $  13,206           $ 14,737
All Other Fees                   $   2,064           $      0

                                                                              39

<PAGE>

         Audit Fees. Consists of fees billed for professional services rendered
for the audit of our consolidated financial statements and review of interim
consolidated financial statements included in quarterly reports and services
that are normally provided by Grant Thorton in connection with statutory and
regulatory filings or engagements.

         Audit Related Fees. Consists of fees billed for assurance and related
services that are reasonably related to the performance of the audit or review
of our consolidated financial statements and are not reported under "Audit
Fees".

         Tax Fees. Consists of fees billed for professional services for tax
compliance, tax advice and tax planning. These services include preparation of
federal and state income tax returns.

         All Other Fees.  Consists of fees for product and services other than
the services reported above.

Policy on audit committee pre-approval of audit and permissible non-audit
services of independent auditors

         The Board of Directors' policy is to pre-approve all audit and
permissible non-audit services provided by the independent auditors. These
services may include audit services, audit related services, tax services, and
other services. Pre-approval is generally provided for up to one year, and any
pre-approval is detailed as to the particular service or category of services
and is generally subject to a specific budget. The independent auditors and
management are required to periodically report to the Board of Directors
regarding the extent of services provided by the independent auditors in
accordance with this pre-approval and the fees for the services performed to
date. The Board of Directors may also pre-approve particular services on a
case-by-case basis.

                                                                              40

<PAGE>

                                   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:April __, 2006             By: /s/ Ralph Eisenschmid, President and Chief
                                Executive Officer (principal executive officer)

In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this Report to be signed on its behalf by the undersigned,
thereunto duly authorized, on April __, 2006.

    Signature                            Title                           Date
------------------------    --------------------------------------- ------------

 /s/ Ralph Eisenschmid       President, Chief Executive           April 20, 2006
----------------------       Officer, Chief Financial Officer
     Ralph Eisenschmid       and Director
                             (Principal Executive Officer)

/s/Jock English              Chief Operating Officer, Vice        April 20, 2006
---------------              President, Sales and Marketing
   Jock English              Secretary and Director

                                                                              41

<PAGE>

                                      InteliSys Aviation Systems of America Inc.
                                                                    Consolidated
                                                            Financial Statements
                                                      December 31, 2005 and 2004
                                                                 (in US dollars)





<PAGE>

Contents

                                                                 Page




Independent Auditors' Report                                  F-1 - F-2

Consolidated Balance Sheets                                         F-3

Consolidated Statements of Operations                               F-4

Consolidated Statements of Shareholders' Deficiency                 F-5

Consolidated Statements of Cash Flows                               F-6

Notes to the Consolidated Financial Statements                 F-7-F-24



<PAGE>

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.



                                                         /s/ GRANT THORNTON LLP
Moncton, New Brunswick, Canada                           Chartered Accountant
May 10, 2005

                                       F-1

<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders
Intelisys Aviation Systems of America, Inc.

We have audited the accompanying consolidated balance sheet of InteliSys
Aviation Systems of America, Inc. and Subsidiaries as of December 31, 2005 and
the related consolidated statements of operations, changes in shareholders'
deficiency and cash flows for the year then ended. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of InteliSys Aviation
Systems of America, Inc. and Subsidiaries as of December 31, 2005 and the
results of their operations and their cash flows for the year then ended, in
conformity with accounting principles generally accepted in the United States of
America.

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


                                                    /s/SHERB & CO., LLP
                                                    Certified Public Accountants

Boca Raton, Florida
April 5, 2006

                                       F-2

<PAGE>

<TABLE>
<CAPTION>

InteliSys Aviation Systems of America Inc.
Consolidated Balance Sheets
As at December 31, 2005 and 2004
(in US dollars)                                                         2005                 2004

<S>                                                               <C>                 <C>

Assets
Current assets
   Receivables (net of allowance for doubtful accounts of
       $7,300 & $143,737 December 31, 2005 & 2004
       respectively)(Note 4)                                      $      246,315      $       239,536
   Prepaid expenses                                                       20,674               44,349
                                                                   --------------      ---------------
Total current assets                                                     266,989              283,885

Capital assets (net of accumulated depreciation of
   $773,675 & $788,153 December 31 2005 & 2004
   respectively) (Note 5)                                                451,731              571,744
Other intangibles                                                             15                   14
                                                                   --------------      ---------------
                                                                   $     718,735       $      855,643
                                                                   ==============      ===============
Liabilities
Current liabilities
   Bank indebtedness (Note 6)                                     $       15,755      $        44,237
   Accounts payable                                                    1,287,356            1,257,530
   Accrued expenses and other liabilities                                498,623              541,363
   Deferred revenue                                                       10,980               25,748
   Current portion of long-term debt (Note 7)                            301,831            1,082,014
   Current portion minority interest (Note 9)                            214,425              207,700
                                                                   --------------      ---------------
   Total current liabilities                                           2,328,970            3,158,592

Long-term debt (Note 7)                                                  967,561              192,827
Convertible debt (Note 8)                                                 79,037               76,562
                                                                   --------------      ---------------
                                                                       3,375,568            3,427,981
                                                                   --------------      ---------------
Minority interest (Note 9)                                             1,715,400            1,661,692
                                                                   --------------      ---------------

Commitments and contingency (Notes 12, 17)

Shareholders' Deficiency
Capital stock - common (Note 10)                                          92,417               70,394
Additional paid in capital (Note 10)                                   8,300,789            7,921,066
Common stock issuable (Note 10)                                                -               20,509
Preferred stock issuable (Note 10)                                        12,500                    -
Subscriptions receivable                                                  (7,500)                   -
Accumulated other comprehensive loss                                  (1,026,227)            (889,822)
Accumulated deficit                                                  (11,744,212)         (11,356,177)
                                                                   --------------      ---------------
                                                                      (4,372,233)          (4,234,030)
                                                                   --------------      ---------------
                                                                  $      718,735      $       855,643
                                                                   ==============      ===============
Continuance of operations (Note 1)

                       See accompanying notes to the consolidated financial statements.
</TABLE>
                                                    F-3
<PAGE>

<TABLE>
<CAPTION>
InteliSys Aviation Systems of America Inc.
Consolidated Statements of Operations
For the years ended December 31, 2005 and 2004
(in US dollars)                                                         2005                 2004

<S>                                                               <C>                 <C>
Revenue                                                         $      1,944,885      $     1,619,601

Cost of service delivery                                               1,142,215            1,058,051
                                                                -----------------     -----------------

Gross profit                                                             802,670              561,550
                                                                -----------------     -----------------

Costs and expenses:
   Selling, general and administrative expenses (Note 18)              1,106,527            2,717,757
   Depreciation and amortization                                         130,826              142,670
   Loss on disposal of fixed assets                                       25,332                    -
   Bad debt recovery (Note 16)                                           (43,306)                   -
                                                                -----------------     -----------------

Loss before undernoted                                                  (416,709)          (2,298,877)

Other income (expenses)
   Interest expense                                                     (226,353)            (208,152)
   Interest income                                                             -               15,269
   Gain on debt settlement (Note 11)                                     255,027               13,743
   Shareholder settlement                                                      -             (692,143)
                                                                -----------------     -----------------
                                                                           28,674            (871,283)
                                                                -----------------     -----------------

Net loss before income taxes                                            (388,035)          (3,170,160)

Income taxes (Note 13)                                                         -                    -
                                                                -----------------     -----------------

Net loss                                                        $       (388,035)    $     (3,170,160)
                                                                   ==============      ===============

Net loss per share-basic and diluted (Note, 14)                 $         (0.005)              ($0.06)


Weighted average number of shares
   outstanding - basic and diluted                                    79,886,736           56,651,535


                                   See accompanying notes to the consolidated
financial statements.
</TABLE>
                                       F-4
<PAGE>


InteliSys Aviation Systems of America Inc.
Consolidated Statement of Shareholders' Deficiency
For the years ended December 31, 2005 and 2004
(in US dollars)

<TABLE>
<CAPTION>
                                                                                                          Accumulated
                                        Common   Additional  Common   Preferred                             other
                              Common    Capital   Paid-In    Shares    Shares  Subscriptions Accumulated comprehensive
                              Shares     Stock    Capital    issuable issuable   receivable   Deficit        loss          Total
<S>                          <C>         <C>      <C>       <C>      <C>       <C>         <C>             <C>            <C>
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                1,530,612     1,531    471,878                                                                473,409
Stock issued for
cash consideration           20,813,611    20,813    882,132                                                                902,945
Stock issued for
consulting
and other services            8,165,000     8,165    925,179                                                                933,344
Stock issued as part
of a shareholder settlement   1,821,429     1,821    690,322                                                                692,143
Stock issued for debt
settlement                    1,633,619     1,634    291,383                                                                293,017
Stock issuable for
settlement of employee debt                                   20,509                                                         20,509
Stock options issued to
employees                                            149,270                                                                149,270
Comprehensive income:
Net loss                                                                                    (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     0          0     (11,356,177)      (889,822)   (4,234,030)
                             -------------------------------------------------------------------------------------------------------
Stock issued on exercise of
stock options (Note 10)       1,285,000     1,285                                                                             1,285
Stock issued for settlement
of shareholder
debt (Note 10)               11,025,430    11,025     59,484  (20,509)                                                       50,000
Stock issuable for
settlement of shareholder
debt (Note 10)                                                         12,500                                                12,500
Stock options issued for
consulting services (Note 10)                        242,741                                                                242,741
Stock options issued to
employees                                             18,504                                                                 18,504
Stock subscribed  Note 10)     10,600,000  10,600                              (10,600)                                          0
Stock returned in settlement of
consulting services (Note 10)    (886,800)   (887)   (17,736)                    3,100                                      (15,523)
Capital Contribution (Note 15)                        76,730                                                                 76,730
Net Loss                                                                                      (388,035)
Currency translation
adjustment                                                                                                   (136,405)
Total comprehensive loss                                                                                                   (524,440)
                             -------------------------------------------------------------------------------------------------------
Balance - December 31, 2005  92,467,531   $92,417 $8,300,789      $ - $12,500  $(7,500)   $(11,744,212)   $(1,026,227)  $(4,372,233)
                             =======================================================================================================

                                      See accompanying notes to the consolidated financial statements

</TABLE>
                                                                   F-5
<PAGE>

<TABLE>
<CAPTION>

InteliSys Aviation Systems of America Inc.
Consolidated Statements of Cash Flows
For the Years Ended December 31, 2005 and 2004
(in US dollars)                                                         2005                 2004


Operating activities:
<S>                                                               <C>                   <C>
Net loss                                                          $     (388,035)       $  (3,170,160)
Adjustments to reconcile net loss to net cash used
   in operations
       Items not affecting cash:
        Depreciation and amortization                                    130,826              142,670
        Stock based compensation - consultants (Note 10)                 242,741            1,453,336
        Stock based compensation - return of shares (Note 10)            (18,623)                   0
        Stock based compensation - employees (Note 10)                    18,504              149,270
        Stock issued as part of shareholder settlement (Note 10)               0              692,143
        Gain on debt settlement                                         (255,027)             (13,743)
        Bad debt expense                                                   9,171                    0
        Loss on disposal of fixed assets                                  25,332                    0
Changes in non-cash working capital items
        Accounts receivable                                              (17,306)             (97,900)
        Scientific Research and Experimental Development tax credit            0              166,168
        Prepaid expenses                                                   5,421               88,020
        Accounts payable and accrued liabilities                         360,145              (69,140)
        Deferred revenue                                                 (15,013)             (35,365)
                                                                  ---------------       --------------
Net cash provided (used in) operating activities                          98,136             (694,701)
                                                                  ---------------       --------------

Investing activities
   Acquisition of property and equipment                                 (23,976)            (106,339)
                                                                  ---------------       --------------

Financing activities
   Proceeds from the issuance of capital stock                             1,285              902,945
   Net proceeds from long term debt                                            0               55,000
   Net repayment of bank indebtedness                                    (28,786)             (17,039)
   Repayment of long-term debt                                           (62,638)            (195,250)
                                                                  ---------------       --------------
   Net cash (used in) provided by financing activities                   (90,139)             745,656
                                                                  ---------------       --------------

Effects of exchange rates on cash                                        (15,979)              55,384
                                                                  ---------------       --------------

Net increase (decrease) in cash                                                -                    -

Cash,  beginning of period                                                     -                    -
                                                                  ---------------       --------------

Cash, end of period                                               $            -        $           -
                                                                  ===============       ==============
Supplemental cash flow information

   Interest paid                                                  $       27,917        $      63,990
                                                                  ===============       ==============
Non-cash operating, investing and financing activities
   Stock issued as part of shareholder settlement                 $       62,500        $     692,143
   Stock issued for settlement of employee debt                   $            0        $      20,509
   Stock issued to settle debt                                    $            0        $     104,682
   Stock based compensation                                       $      242,622        $     149,270
   Payable to minority interest                                   $            0        $      13,440


                      See accompanying notes to the consolidated financial statements
</TABLE>
                                                  F-6
<PAGE>

InteliSys Aviation Systems of America Inc.
Notes to the Consolidated Financial Statements
December 31, 2005
(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, Intelisys Aviation Systems of America
Inc. (hereinafter known as "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, 2005 and
December 31, 2004, the Company has working capital deficiencies of $2,061,979
and $2,874,708 respectively and net shareholders' deficiencies of $4,372,231 as
at December 31, 2005 and $4,234,030 at December 31, 2004. 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

The Company has continued with the execution of its business plan and has been
successful in signing 25 customers since it has begun its marketing efforts in
2001. The Company's product is gaining acceptance with the signing of customers
in geographic areas of the world the Company considers key.

Geographic Information
                                                  Revenues *

     Canada                                       $1,020,530
     United Arab Emirates                            593,956
     Other foreign countries                         330,400
                                                  ----------
     Total                                        $1,944,886
                                                  ----------

     *Revenues are attributed to countries based on location of customer for the
year ended December 31, 2005.

The Company has increased its revenues since commercialization efforts began in
2001 and is continuously looking at ways to further diversify its revenue stream
by increasing its product offering and further promoting its consulting
services. Due to the higher risk associated with airlines in the current
economic climate and since InteliSys has a significant component of foreign
business, InteliSys has taken steps to insure all foreign and selected domestic
accounts against default of payment or insolvency of the client. Insurance was
taken out with EDC (Export Development Corporation) and insures all receivables
with a recovery of 90% for receivables which are past due 90 days.

Management recognizes the need to continue its managed growth while at the same
time addressing its leveraged balance sheet. The investment made in developing
the product and implementing the infrastructure required to deliver the product,
has burdened the Company with a large amount of debt.

Management continues to focus on seeking new customers and seeking new sources
of revenue to help it continue its growth strategy and satisfy its debt
obligations. No assurance can be given that the Company will be successful in
generating higher revenues or in raising additional capital.

                                       F-7

<PAGE>

InteliSys Aviation Systems of America Inc.
Notes to the Consolidated Financial Statements
December 31, 2005
(in US dollars)

1. Ability to continue operations (continued)

As indicated in the consolidated financial statements, the Company has incurred
losses from continuing operations of $388,034 and $3,170,160 for the years ended
December 31, 2005 and 2004 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 revenue.

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.

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.

                                       F-8

<PAGE>

InteliSys Aviation Systems of America Inc.
Notes to the Consolidated Financial Statements
December 31, 2005
(in US dollars)


2. Summary of significant accounting policies (continued)

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:

b) Principles of consolidation

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

o        InteliSys Acquisition, Inc.
o        InteliSys (Nova Scotia) Co.
o        CONVERGix, Inc.
o        InteliSys Aviation Systems Inc.
o        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. The Company has increased its
revenues since commercialization efforts began in 2001 and is

                                       F-9

<PAGE>

InteliSys Aviation
Systems of America Inc.
Notes to the Consolidated Financial Statements
December 31, 2005
(in US dollars)

c) Accounts Receivable (continued)

continuously looking at ways to further diversify its revenue stream by
increasing its product offering and further promoting its consulting services.
Due to the higher risk associated with airlines in the current economic climate
and since InteliSys has a significant component of foreign business, InteliSys
has taken steps to insure all foreign and selected domestic accounts against
default of payment or insolvency of the client. Insurance was taken out with EDC
(Export Development Corporation) and insures all receivables with a recovery
rate of 90% for receivables which are past 90 days.

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.

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.

                                      F-10

<PAGE>

InteliSys Aviation Systems of America Inc.
Notes to the Consolidated Financial Statements
December 31, 2005
(in US dollars)

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.

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.

                                      F-11

<PAGE>

InteliSys Aviation Systems of America Inc.
Notes to the Consolidated Financial Statements
December 31, 2005
(in US dollars)

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.

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.

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. Intelisys Acquistion Inc. Special Class B
Exchangeable Shares are included in the weighted average number of shares of
common stock outstanding. These Special Class B Exchangeable Shares may be
exchanged by the holder thereof at any time on a one-for-one basis for common
stock of the Company. 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. In addition, at December 31, 2005, there are 5,944,212 stock
options issued and unexercised, which are not part of total of common stock
outstanding.

At December 31, 2005 and 2004, the effect of outstanding convertible debt has
not been included in the diluted loss per share as such amounts would be
anti-dilutive.

                                      F-12

<PAGE>

InteliSys Aviation Systems of America Inc.
Notes to the Consolidated Financial Statements
December 31, 2005
(in US dollars)

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.

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.

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.

                                      F-13

<PAGE>

InteliSys Aviation Systems of America Inc.
Notes to the Consolidated Financial Statements
December 31, 2005
(in US dollars)

3.       Concentrations

Concentrations of Credit Risk

At December 31, 2005, two significant customers accounted for 57% of trade
accounts receivable which are 29% and 28% respectively. At December 31, 2004,
two significant customers accounted for 61% of trade accounts receivable which
are 49% and 12% respectively.

Concentration in Operations

For the year ended December 31, 2005, one significant customer accounted for 30%
of revenue. In 2004, two significant customers accounted for 35% of revenue.



4.   Accounts receivables               2005                  2004
                                        ----                  ----

Accounts receivable - trade        $    248,691           $  376,930
Allowance for doubtful accounts          (7,300)            (143,737)
Other                                     4,924                6,343
                                    ------------          -----------

                                   $    246,315           $  239,536


<TABLE>
<CAPTION>

5.   Property and equipment                                 2005                             2004
                                                            ----                              ----

                                             Accumulated       Net                    Accumulated    Net
                                 Cost        Depreciation      Book Value   Cost     Depreciation  Book Value

<S>                            <C>           <C>             <C>         <C>           <C>         <C>
Computer equipment and
  software                     $  815,991    $   578,113     $  237,878  $  905,112    $  581,404  $ 323,708
Leasehold improvements            220,735         70,802        149,933     213,822        56,994    156,828
Office furniture and equipment    188,680        124,760         63,920     195,442       117,127     78,315
Trade show booth                        0              0              0      36,662        23,928     12,734
Library                                 0              0              0       8,859         8,700        159
                               ----------   ------------     -----------  ----------   ----------  ---------

                               $1,225,406   $    773,675     $  448,731  $ 1,359,897   $  788,153  $ 571,744

</TABLE>

Depreciation expense for the years ended December 31, 2005 and 2004 was $130,826
and $142,670 respectively. Disposals of fixed assets resulted in a loss of
$25,332.

6. Bank indebtedness

The Company has an authorized operating line of credit of $ 34,308 (2004 -
$33,200) which bears interest of prime plus 3.50% (8.00 as at December 31,
2005). As of December 31, 2005, the Company had written checks in excess of the
operating line of credit in the amount of $ 15,755 (December 31, 2004 - $11,037)

                                      F-14

<PAGE>

InteliSys Aviation Systems of America Inc.
Notes to the Consolidated Financial Statements
December 31, 2005
(in US dollars)

<TABLE>
<CAPTION>
7.       Long-term debt
<S>                                                                                   <C>                <C>
                                                                                        2005              2004
Atlantic Canada Opportunities Agency (ACOA) unsecured repayable contribution,
non-interest bearing except for delinquent balance. Repayments to begin May 2,
2006 of $610, $1,287 for the next 8 months, $2,144 for the next 15 months,
$3,431 for the next 9 months and a final payment of $2,821. Payment on interest
charged on delinquent payments beginning November 1, 2005 for $258 for 5 months,
$1,286 for one month and a final payment
of $677.                                                                                $ 76,764        $  74,360

ACOA unsecured repayable contribution, non-interest bearing except for
delinquent balance, repayment is calculated as 3% of the gross annual sales.
Repayment to begin January 2, 2006 of $323, $343 for the next 2 months, $1,715
for the next 10 months $2,144 for the next 15 payments, $2,573 for the next 10
payments, $4,289 for the next 9 payments and a final payment of $1,833. Payments
on interest charged on delinquent payments beginning November 1, 2005 for $345
for 2 months, and a final payment
of $21.                                                                                  276,022          267,378

Long-term loan, non-interest bearing loan. Payments
originally starting in 2006. Contract terminated by client
in Dec 2005 resulting in forfeiture of entire deposit
amount according to terms of signed contract.                                                  0          55,000

ACOA, Amelia marketing loan, unsecured repayable contribution, non-interest
bearing, except for delinquent balance. Repayments to begin August 2, 2006 for
101 consecutive monthly payments ranging in amounts of $446 to $8,577. Payments
on interest charged on delinquent payments beginning November 1, 2005 for $258
for 5 months,
$1,287 for one month and a final payment of $840.                                        377,485         365,664

Promissory notes, unsecured, bearing interest at varying rates between 6.0% -
26%, which were repayable
between August 2001 and January 2003.                                                    297,053         333,161


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 $625, beginning November 15, 2002, followed by
27 consecutive payments of $1,888 beginning February 15, 2003 to April 2005,
followed by 1 payment September 15, 2005 of $2,200, followed by 16 consecutive
payments of $2,183 starting October 15, 2005.                                             28,377         44,420

</TABLE>
                                      F-15

<PAGE>

InteliSys Aviation Systems of America Inc.
Notes to the Consolidated Financial Statements
December 31, 2005
(in US dollars)

<TABLE>
<CAPTION>

7. Long-term debt (continued)
                                                                                          2005                  2004
<S>                                                                                  <C>                   <C>
Shareholder loan, bearing interest at 8% compounded monthly, repayable in 1
payment of $1000 in September 2005, followed by 3 monthly payments of $2,000,
followed by monthly payments
of $3000 until the principal and interest have been paid in full.                         212,161             133,375

Shareholder loan, non-interest bearing, no set terms of repayment                           1,530               1,483
                                                                                      ------------         -----------
                                                                                        1,269,392           1,274,841
Less current portion of long-term debt                                                    301,831           1,082,014
                                                                                      ------------         -----------

                                                                                      $   967,561           $ 192,827
</TABLE>

The aggregate maturities of long-term debt for each of the five years subsequent
to December 31, 2005 are approximately as follows:


                          2006                       $  301,831
                          2007                          143,612
                          2008                          144,882
                          2009                          128,041
                          2010                           78,586
                          and thereafter                472,441
                                                     -----------

                          Total                      $ 1,269,393

At December 31, 2005 the Company is in default on principal and interest
payments for many of its obligations as follows:

         Principal payments in default               $  206,995
         Interest payments in default                   299,915
                                                     ------------
                                                     $  506,910

All debt and interest in default is included in current liabilities at December
31, 2005. The Company is attempting to refinance both its long-term and
short-term debt obligations. No waivers have been obtained by the Company.

                                      F-16

<PAGE>

InteliSys Aviation Systems of America Inc.
Notes to the Consolidated Financial Statements
December 31, 2005
(in US dollars)

8. Convertible debt

Convertible debt at December 31, 2005 and 2004 consists of debt which is
convertible into the Company's common stock.

                                              December 31     December 31
                                                 2005            2004
Shareholder loan, bearing interest at 8%,
convertible into 3,000,000 common
shares at a share price of $0.026 on or
before June 2006.                              $ 68,616       $  66,400

Shareholder loan, non-interest
bearing convertible into
Common shares at the market price
at the date of conversion.                       10,421          10,162
                                              ----------      ----------

                                               $ 79,037       $  76,562


At December 31, 2005, 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.


9.       Minority interest

At December 31, 2005 and 2004, 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.

                                      F-17

<PAGE>

InteliSys Aviation Systems of America Inc.
Notes to the Consolidated Financial Statements
December 31, 2005
(in US dollars)



10.      Capital stock

At December 31, 2005, the Company is authorized to issue:

1)       10,000,000 shares of preferred stock, par value $0.001 per share.

2)       100,000,000 shares of common stock, par value $0.001 per share.

At December 31, 2005, there are 70,679,198 shares of common stock and 1 share of
preferred 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, 2005 and have
been included in calculating the basic loss per share. During the year ended
December 31, 2005, the Company issued 1,285,000 shares of common stock pursuant
to the exercise of some of the Company's outstanding stock options for
consideration of $1,285. During this same period, the Company also issued
10,600,000 shares of subscribed common stock pursuant to the exercise of some of
the Company's outstanding stock options for subscriptions receivable of $10,600.

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.

During the year ended December 31, 2005, the Company issued 10,000,000 shares of
common stock at a value of $0.005 per share to an employee in settlement of
$50,000 accrued expenses and commissions owed to the employee. During the year
ended December 31, 2004, the Company agreed to issue 1,025,430 shares of common
stock at a value of $0.02 per share to an employee in settlement of $20,509 owed
to the employee. The shares were issued during the year ended December 31, 2005.
During the year ended December 31, 2005, 886,800 shares of common stock were
returned to the Company in settlement of consulting services in the amount of
$18,623 at a value of $0.02 per share and subscriptions receivable in the amount
of $3,100.

                                      F-18

<PAGE>

InteliSys Aviation Systems of America Inc.
Notes to the Consolidated Financial Statements
December 31, 2005
(in US dollars)


10. Capital stock (continued)
During the year ended December 31, 2005 the company recorded a forgiveness of
debt by a shareholder in the amount of $76,730 which has been recorded as
capital contribution, see note 15 (h).

During the year ended December 31, 2005, the Company agreed to issued 1 share of
preferred stock in settlement of $12,500 accrued commissions owed to the
shareholder. The preferred stock remains issuable at December 31, 2005.

Stock options

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.

During the year ended December 31, 2004, 1,285,000 Stock Options were issued to
management under its 2004 Stock Option Plan as filed with the Securities and
Exchange Commission in April 2004. During the year ended December 31, 2005 all
of these options were exercised.

During the year ended December 31, 2005, the Company issued 10,600,000 stock
options to consultants in lieu of payment for services, under its 2005 Stock
Option Plan as filed with the Securities and Exchange Commission in June 2005,
valued at $242,741. The per share weighted average fair value of $0.03 for these
stock options was estimated using the Black-Scholes option pricing model with
the assumptions of risk-free interest rate of 4.13%, volatility of 290%,
expected life of 10 years. As at December 31, 2005, all options have been
exercised. During the year, 886,800 shares were returned for consulting services
not performed to a total of $18,623.

During the year ended December 31, 2005, the Company issued 3,109,000 stock
options to employees, under it's 2004 Stock Options Plan as filed with the
Securities and Exchange Commission in April 2004, valued at $18,504. In October
2005, the per share weighted average fair value of $.0006 for 2,809,000 stock
options was estimated using the Black-Scholes option pricing model with the
assumptions of risk-free interest rate of 4.16%, volatility of 290.7%, expected
life of 10 years. In November 2005, the per share weighted average fair value of
$.0055 for 300,000 stock options was estimated using the Black-Scholes option
pricing model with the assumptions of risk-free interest rate of 4.06%,
volatility of 290.7%, expected life of 10 years.

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

Amount        Exercise price   Date exercisable           Expiration

 2,286,854     $ 0.001          immediately               December 31, 2014
   548,358     $ 0.03           immediately               December 31, 2014
 1,872,662     $ 0.006          immediately               October  25, 2015
   936,338     $ 0.006          December 31, 2006         October  25, 2015
   300,000     $ 0.0055         immediately               November 25, 2015
----------
5,944,212

                                      F-19

<PAGE>

InteliSys Aviation Systems of America Inc.
Notes to the Consolidated Financial Statements
December 31, 2005
(in US dollars)

Stock option activity is presented below:
                                                                  Weighted
                                                                   average
                                      Number of shares           exercise price

Outstanding, December 31, 2003            650,000                    $0.10

Granted in 2004                         4,937,670                    $0.009

Exercised in 2004                        (600,000)                   $0.001

Forfeited                                       0                         -
                                     -------------              -------------
Outstanding, December 31, 2004          4,987,670                   $0.022

Granted in 2005                        13,709,000                   $0.0021

Exercised in 2005                     (11,885,000)                  $0.001

Forfeited in 2005                        (867,458)                  $0.0825
                                     -------------              -------------
Outstanding, December 31, 2005          5,944,212                  $0.0063
                                     =============              =============



11. Gain on debt settlement

During the year ended December 31, 2005, the Company reached a settlement with
certain unsecured trade creditors that resulted in the Company recording a gain
on debt settlement of $69,742 (2004 - $13,743).

During the year ended December 31, 2005, the Company reached a settlement with a
2 shareholders, with ownership interest each of which are less than 10%, for
interest on a promissory notes resulting in the Company recording a gain on debt
settlement of $137,322 and $14,138 respectively.

During the year ended December 31, 2005, the Company was released from its
obligation to repay an infrastructure loan of $52,567 with a client due to early
termination of the contract with resulting forfeiture of the loan amount by the
client.

During the year ended December 31, 2005, the Company reached a settlement with a
consultant for early termination of the consultancy agreement resulting in a
loss of $18,743 due to return of prepaid consulting fees.

                                      F-20

<PAGE>

InteliSys Aviation Systems of America Inc.
Notes to the Consolidated Financial Statements
December 31, 2005
(in US dollars)

12.      Commitments

The Company is committed to minimum annual lease payments under an operating
lease for office space, in Shediac, NB, which expires in February 2007. The
minimum payments required under this lease for each of the two years subsequent
to December 31, 2005 are approximately as follows:

            January 1, 2006 to December 31, 2006                 $ 96,530
            January 1, 2007 to February 28, 2007                   17,038


13.      Income taxes


         The components of the Company's deferred tax assets and liabilities are
approximately as follows:

                                                   2005               2004
                                                   ----               ----
         Temporary differences:
         Accrued wages                         $     72,900       $     37,500
         Net operating loss carryforwards         2,550,000          3,086,500
                                               --------------     ------------
         Deferred tax asset                       2,622,900          3,124,000

         Valuation allowance                     (2,622,900)        (3,124,000)
                                               --------------     ------------

         Net deferred tax asset                $          -        $        -
                                               ==============     =============

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:

                                                     2005               2004
                                                     ----               ----

  Tax at blended U.S. / Canadian statutory rates      35%                35%
  Change in valuation allowance                      (35%)              (35%)
                                                     -----              -----
  Tax recovery (expense)                               -                  -


At December 31, 2005, the Company had net operating loss carryforwards of
approximately $5,823,500 available to offset future taxable income, which expire
through 2011 and $1,168,800 which expire through 2015. Utilization of these loss
carryforwards is dependant on future taxable income.

The Company's actual tax benefit differs from the expected tax benefit as
follows:

                                                      2005               2004
                                                      ----               ----
 Expected tax benefit at statutory rates            $ (95,000)      $  (310,700)
 Adjustment to prior year valuation allowance         415,600                 -
 Permanent differences                                180,500            88,700



(Decrease) increase in valuation allowance          (501,100)           222,000
                                                    ----------      ------------
                                                    $      -        $         -
                                                    ==========      ============

                                      F-21

<PAGE>

InteliSys Aviation Systems of America Inc.
Notes to the Consolidated Financial Statements
December 31, 2005
(in US dollars)

14.      Loss per share

The following table sets forth the computation of loss per share for the years
ended December 31, 2005 and 2004:

Numerator:                                        2005                 2004
                                                  ----                 ----
Net loss - basic and diluted                    $(388,035)         $(3,170,160)

 Denominator
 Weighted average number of shares
 outstanding during the period                 79,886,736          56,651,535

     Loss per share                               ($0.005)             ($0.06)


15. Related party transactions

(a) Accounts payable and accruals at December 31, 2005 include amounts owing to
shareholders, officers and employees of $502,912 (December 31, 2004 - $600,987).

(b) Promissory notes at December 31, 2005 include amounts owing to related
parties and to shareholders of $246,469 (December 31, 2004 - $154,076).

(c) During the year ended December 31, 2005, the Company expensed $60,574 (2004
- $37,948) of interest charges on a loan payable to shareholder.

(d) During the year ended December 31, 2005, the Company paid interest of $7,720
(2004 - $8,554) on a shareholder's personal debt which is related to personal
property of the shareholder that was pledged as security for the Company's debt
obligations.

(e) During the year ended December 31, 2005, the Company expensed $103,467
(2004-$65,835) for consulting fees performed by a shareholder of the Company.

(f) During the year ended December 31, 2005, the Company settled an outstanding
debt with a shareholder writing off $142,704 in accrued interest.

(g) During the year ended December 31, 2005, the Company expensed $31,918 (2004
- $NIL) for interest charges on outstanding expenses owing to a shareholder.

(h) During the year ended December 31, 2005, the Company received a gain on debt
settlement from a shareholder and officer in the amount of $76,730 which was
recorded as a capital contribution.

                                      F-22

<PAGE>

InteliSys Aviation Systems of America Inc.
Notes to the Consolidated Financial Statements
December 31, 2005
(in US dollars)

16.       Bad debt recovery

During the year ended December 31, 2005, the Company collected $43,306 from a
former customer. The amount was recognized as part of the allowance for doubtful
accounts as at December 31, 2004. The Company has recorded the collection as a
bad debt recovery on its statement of operations for the year ended December 31,
2005. The customer has since ceased operations and the subsequent balance that
remained in the allowance for doubtful accounts has been written off as at
December 31, 2005.

17.      Contingency

During the first quarter ended March 31, 2005, 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.
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



18. Schedule of selling, general and administrative expenses


                                                    2005               2004
                                                    ----               ----

Finance and administrative wages & benefits      $  175,821        $  302,274
Bad debts                                             9,171           134,013
Stock issued for consulting and other services      227,218           933,344
Stock issued for financing fees                           -           473,409
Stock based compensation                             18,504           149,270
Stock issued to settle debt                               -           104,682
Professional and consulting fees                    381,980           366,324
Rent                                                 96,530            95,159
Telecommunications                                   79,070            70,464
Insurance                                            49,548            37,496
Other general expenses                               68,685            51,322
                                                -------------    ---------------
                                                $ 1,106,527      $  2,717,757

19.      Reclassifications

Certain of the 2004 comparative figures have been reclassified to conform to the
financial statement presentation adopted for the current period. Such
reclassifications had no effect on the reported Net Loss.

                                      F-23

<PAGE>

InteliSys Aviation Systems of America Inc.
Notes to the Consolidated Financial Statements
December 31, 2005
(in US dollars)


20.      Subsequent Events

In 2005, the Company renegotiated an agreement with a current client to include
a Service Level Agreement (SLA) which provides for penalties for service levels
below a defined level, such penalties to be calculated against current month's
billings. Under the agreement, penalties cannot exceed the total monthly billing
in any month. All other current client contracts do not have SLA penalty
provisions.

In January 2006, the Company issued 2,300,000 stock options to employees.

In February 2006, the Company signed a Letter of Intent to enter into a contract
with a new customer to provide its services to an airline operator in Saudi
Arabia. The final agreement is currently under negotiation with signing expected
by May 31, 2006

In February and March 2006, the Company signed leasing agreements valued at
$48,990 for computer infrastructure required for a secondary backup
installation. The lease term is 40 months with a buyout of $5,861 at end of
lease term.

In April 2006, the Company received notice that a client in Saskatchewan, Canada
was terminating their contract with the Company for reservation system services.

                                      F-24