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 FISCAL YEAR ENDED DECEMBER 31, 2003

                                    000-29743
                             -----------------------
                            (Commission file number)

                         HOME SERVICES INTERNATIONAL INC
--------------------------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

         Nevada                                                88-0409143
--------------------------------------------------------------------------------
(State or other jurisdiction                                (IRS Employer
of incorporation or organization)                         Identification No.)

      7373 E. DOUBLE TREE RANCH ROAD, SUITE 200, SCOTTSDALE, ARIZONA 85258
      --------------------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

                                  866-864-6638
                           ---------------------------
                           (Issuer's telephone number)

        SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE

           SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:

                               TITLE OF EACH CLASS
                          COMMON STOCK, $.001 PAR VALUE

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 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 [ ]

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

Revenue for the year ended December 31, 2003:  $0.00

There is a limited trading market for the registrant's  Common Stock. There were
1,529,405  shares of Common  Stock,  and 250,000  shares of class "A"  preferred
stock issued and outstanding as of December 31, 2003.

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None

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

                                       1
<PAGE>


--------------------------------------------------------------------------------
                        HOME SERVICES INTERNATIONAL, INC.
--------------------------------------------------------------------------------
                            INDEX TO THE FORM 10-KSB
                  FOR THE THREE-MONTHS ENDED DECEMBER 31, 2003

                                TABLE OF CONTENTS


PART I.

Item 1. Description of Business ............................................  3

Item 2. Description of Property ............................................  5

Item 3. Legal Proceedings ..................................................  5

PART II

Item 5. Market for Common Equity and Related Stockholder Matters ...........  6

Item 6.  Management's Discussions and Analysis or Plan of Operations .......  6

Item 7.  Financial Statements .............................................. 10

PART III

Item 9. Directors, Executive Officers, Promoter and Control
    Persons; Compliance With Section 16(a) of the Exchange Act ............. 27

Item 10. Executive Compensation ............................................ 28

Item 11. Securities Ownership of Certain Beneficial Owners and Management .. 28

Item 12. Certain Relationships and Related Transactions .................... 29

Item 13.  Exhibits and Reports on Form 8-K ................................. 29

Item 14 - Controls and Procedures .......................................... 29

CERTIFICATIONS.............................................................. 31

SIGNATURES.................................................................. 32


                                       2
<PAGE>
                                     PART I

This Annual Report on Form 10-KSB contains statements that are  forward-looking,
including  statements  relating  to  anticipated   operating  results,   growth,
financial  resources,  the  development  of new markets,  the  development,  and
acceptance  of our  business  strategy  and new  applications  for our  existing
products.   Investors  are  cautioned   that,   although  we  believe  that  our
expectations  are based on reasonable  assumptions,  forward-looking  statements
involve  risks and  uncertainties  which may affect our business and  prospects,
including changes in economic and market conditions, acceptance of our products,
maintenance of strategic alliances and other factors discussed elsewhere in this
Form 10-KSB.

Item 1. Description of Business

Background

Tel-Voice Communications,  Inc. ("Tel-Voice") was incorporated under the laws of
the State of Nevada  on  December  31,  1996 to engage in any  lawful  corporate
activity,  including,  but not limited to,  selected  mergers and  acquisitions.
Smartdotcom,  Inc.  was  incorporated  under  the laws of the State of Nevada on
April 19, 1999. On June 30, 2000,  Smartdotcom  became a wholly owned subsidiary
of Tel-Voice through a reverse merger.  Tel-Voice issued 4,376,895 shares of its
common  stock all of the issued and  outstanding  common  stock of  Smartdotcom.
Prior to the merger, Tel-Voice had no business activity and therefore, pro forma
operating  results as if the acquisition had taken place at the beginning of the
periods  presented have not been presented.  Smartdotcom has been treated as the
acquirer and accordingly, Smartdotcom is presented as the continuing entity, and
the historical financial statements are those of Smartdotcom.

Overview of Discontinued Business

In December  2002,  the Company  determined  it would abandon its efforts of its
only operating business segment.

We were an all-inclusive telecom,  video,  Internet,  entertainment and security
provider. We were in the business of enhancing the lives of our subscribers, who
benefit from the added value of  high-quality  services  and a fully  integrated
system made available by a single  company.  Subscribers are afforded the luxury
of accessing  these  services using state-of  the-art  technology  that includes
hardware, software and network connectivity.

We  were  also a  content  provider.  Once  logged  off the  community  network,
subscribers  may  access the  Internet  and a host of  special  offerings,  over
multi-speed  connections.  Subscribers  enjoy the benefit of  exclusive  network
content and global Internet service.

1-866-UNIONET
-------------

1-866-Unionet  was our  private  network,  customized  for more than 17  million
potential  labor  union  subscribers.   Once  deployed,  this  multipurpose  and
interactive network will generate on-going revenue for our partners and us. This
network  also  incorporates  sponsor  participation  with a potential  of over 3
billion advertising dollars.  This model is representative of all our solutions,
including  our  integrated   communities,   business  networks,  and  all  other
subscriber groups.

We intended to develop the subscriber base from within the union membership,  we
will utilize the SmartFone and other interactive  devices to connect subscribers
to a private and secure Intranet.  Offering members both an exclusive  Intranet,


                                       3
<PAGE>

and a gateway  for  Internet  access,  establishes  a market for our current and
future technologies.  Our unique technical  infrastructure allows simple "plug &
play"  flexibility.   1-866-Unionet's  network  design  offered  cost  effective
scalable services. Unions and labor organizations were to have a financial stake
in their own technology solution.

Overview of New Business

Because  the Company had  determined  that it would exit the  telecommunications
business,  it developed a new business  plan to become a provider of services to
homebuyers.

Home Services International Inc. (HSVI) intended to act as a holding company for
service  businesses  related to the home  building  and home buying that want to
expand into  national  markets.  HSVI  intended to  acquire,  joint  venture and
develop such businesses. Businesses that were intended targets included mortgage
broking,  mortgage  originations  and  lending,  construction  lending and other
services that would benefit propsective home buyers.

HSVI expected to have 2 roles in the joint ventures or aquisitions:

     1.   To act as the financing  intermediary between the business's that have
          adpoted the HSVI program.

     2.   To distribute the interest earnings and profits to the shareholder who
          have provided the financing.


The  corporate  offices  of HSVI  would not  require a large  infrastructure  or
overhead to operate this business:

          o    each  business  unit would be  trained to operate  independently,
               except for the financing

          o    the JV  partners  would  have the  responsibility  to manage  and
               coordinate the business unit relationship

This feature of the business meant most of the revenues  generated  would result
in high  profit  margins  and cash  flow  that can be  distributed  back the the
shareholders.  The first phase of this would be to pay dividends directly on the
preferred shares we intend to issue in raising capital.

As of December 29, 2003 the above Business Plan was abandoned. An opportunity to
merge with INTERNAL COMMAND  INTERNATIONAL INC. was negotiated with an effective
date  of  January  2,  2004.  The  merged   companies   became   INTERNAL  HYDRO
INTERNATIONAL INC.

Subject  to  the  terms  and  conditions  of  the  Merger   Agreement  (Plan  of
Reorganization)  and pursuant to Section  368(a)(1)(B)  of the Internal  Revenue
Code of 1986,  as amended,  the parties to the  Agreement  shall effect a Type B
reorganization (the  "Reorganization")  whereby all of the outstanding shares of
ICI common  stock will be  exchanged  for  5,000,000  shares of the HSVI Class A
Preferred Stock.

INTERNAL HYDRO  INTERNATIONAL  INC. owns an alternative power system. The Energy
Commander IV (EC IV) is a patented technology,  utilizing  wastewater,  fluid or
gas flow from any source  where flow  pressure  is present,  and yet wasted,  to
create electricity.  The system takes in the wasted pressure flow, where it goes
through the heart of the system, and into pistons that create massive mechanical
forces,  all of which is transferred to a generator  creating both  electricity,


                                       4
<PAGE>

and optional air  pressure,  both being for direct use or storage.  The water or
gas then moves out of the unit,  to it's  original  destination,  without  added
waste. The system is noiseless and emission free

IHI has  prepared a business  model that will market the EC IV system  through a
distributors  network  around  the  world.  Numerous  municipalities,  counties,
manufacturing, textile, petroleum, residential development, and other industries
have  entered into  agreements  and intents  with IHI for  application  of these
units.


Employees

As of December 31, 2003, the company employed 1 full time individual.


Item 2. Description of Property

The Company leases its principal executive office,  which is located in a shared
office facility in Scottsdale,  Arizona at an annual rent of $1,500.  This lease
is month to month


Item 3. Legal Proceedings

The Company is involved in pending litigation in one matter. The matter involves
a claim of $10,000 for  non-payment for services.  The Company  believes that it
has a valid defense and it intends to defend this matter.

The Company has accrued  $36,800  related to the  abandoned  office  lease.  The
former  landlord  has filed a claim  against the Company.  However,  the Company
believes that it will be successful  in settling this  obligation  for an amount
less that what is accrued.

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

No matter was submitted to a vote of security  holders during the fourth quarter
of the year ended December 31, 2003.

                                       5
<PAGE>

                                     PART II


Item 5. Market for Common Equity and Related Stockholder Matters

The  Company's   common  stock  under  the  registered  name  of  Home  Services
International,  Inc.  was first  quoted in June of 2002,  and now  trades on the
Over-the-Counter ("OTC") Bulletin Board under the symbol "HSVI".

Set forth below are the high and low  closing  prices for the  Company's  common
stock as reported on the OTC Bulletin Board for the last four quarters:

        Quarter Ended                       High            Low
        ------------------                ------          -----
        December 31, 2003                  $7.25           $4.50
        September 30, 2003                $10.75          $3.75
        June 30, 2003                     $14.05          $5.00
        March 31, 2003                   $ 10.01          $1.48


The above quotations  represent  inter-dealer  quotations without retail markup,
markdown or commissions and may not represent actual transactions.


Record Holders

As of December 31, 2003 the Company had 105 shareholders of record.

Dividends

The Company has never  declared or paid any cash  dividends on our common stock.
Any  future  determination  relating  to  dividend  policy  will  be made at the
discretion  of our Board of  Directors  and will  depend on a number of factors,
including the future earnings,  capital  requirements,  financial  condition and
future  prospects  and such  other  factors as the Board of  Directors  may deem
relevant.

RECENT  SALES OF  UNREGISTERED  SECURITIES;  USE OF PROCEEDS  FROM  UNREGISTERED
SECURITIES

Sale of Common Stock.

There were no  underwriting  discounts or  commissions  in  connection  with the
Private Placement.

The proceeds from the Private  Placement were used by the Company for funding of
general corporate purposes.


Item 6.  Management's Discussions and Analysis or Plan of Operations

General

The following discussion and analysis should be read in conjunction with the our
consolidated  financial  statements  and  related  footnotes  for the year ended
December 31, 2003 included in this Annual Report on Form 10-KSB.  The discussion
of results,  causes and trends  should not be construed to imply any  conclusion
that such results or trends will necessarily continue in the future.

                                       6
<PAGE>


Background and Overview

Tel-Voice Communications,  Inc. ("Tel-Voice") was incorporated under the laws of
the State of Nevada  on  December  31,  1996 to engage in any  lawful  corporate
activity,  including,  but not limited to,  selected  mergers and  acquisitions.
Smartdotcom,  Inc.  ("Smartdotcom") was incorporated under the laws of the State
of Nevada on April 19, 1999. On June 30, 2000, Smartdotcom became a wholly owned
subsidiary of Tel-Voice  through a reverse merger.  Tel-Voice  issued  4,376,895
shares of its common stock for all of the issued and outstanding common stock of
Smartdotcom.  Prior  to the  merger,  Tel-Voice  had no  business  activity  and
therefore,  pro forma operating results as if the acquisition had taken place at
the beginning of the periods presented have not been presented.  Smartdotcom has
been treated as the acquirer and  accordingly,  Smartdotcom  is presented as the
continuing entity. The historical financial statements are those of Smartdotcom.

In December of 2002, the Company  determined  that its business plan of becoming
an all-inclusive  telecom,  messaging and  communications  provider would not be
successful.  We therefore have wound down those operations and are now searching
for new  business  ventures.  We have  incurred net losses of  $2,364,460  since
inception.

In December of 2002, TVCM reorganized,  to become a "home services  provider" to
attract  investors and  customers.  The Company  intends to become a provider of
services  to  homebuyers.   Our  services  will  include  design,   construction
management  and financing  for  individuals  building  their own custom home. We
intend to raise  capital in order to broker and originate  residential  mortgage
loans.

The  Company  issued   "stock-for-debt"  and  rolled  back  the  share  issuance
outstanding 28.9 to 1. Tel-Voice Communications, Inc., now know as Home Services
International Inc., is postured to grow and attract investment thus allowing the
company to meet it's obligations and provide increased shareholder value.

Plan of Operation
-----------------

Because  the  Company  determined  that it  would  exit  the  telecommunications
business,  it developed a new business  plan to become a provider of services to
homebuyers.

The  Company   intended  to  assemble  a  management  team  that  would  include
experienced  managers  in the  fields of  telecommunications,  technology,  home
building and  construction,  franchise  sales and  marketing,  and finance.  The
Company was seeking  acquisition targets that would provide synergies within the
complete process of acquiring land, construction and financing of new homes.

The company intended to duplicate these in a franchise-type manner, so that HSVI
could create EBU's  (Entrepreneurial  Business Units) in several other cities or
communities. Any acquisition target was to have been in the "home service" field
and provide a product or service to a homeowner.

As of December 29, 2003 the above Business Plan was abandoned. An opportunity to
merge with INTERNAL COMMAND  INTERNATIONAL INC. was negotiated with an effective
date  of  January  2,  2004.  The  merged   companies   became   INTERNAL  HYDRO
INTERNATIONAL INC.


                                       7
<PAGE>

Results of Operations

Year ended December 31, 2003 vs. December 31, 2002
--------------------------------------------------

Liquidity and capital resources

The  Company  has  incurred  additional  deficits  in cash flow  from  operating
activities.   As  a  part  of  the  Merger   Agreement  with  INTERNAL   COMMAND
INTERNATIONAL  INC., the current Chief Executive  Officer of HSVI, Jay Budd, has
and does affirm that the outstanding debts of HSVI have been properly structured
for management of the debt post-merger; namely, that the debt is in the hands of
suitable professional debt management team, including Fletcher & Associates, and
Harry J.  Miller,  PLLC,  that  there has been set  aside as part of the  issued
common stock for obligation and  satisfaction of the debt, and that the incoming
principals of ICI will be held harmless for this debt.

Critical Accounting Estimates

The  preparation  of our  financial  statements in  conformity  with  accounting
principles  generally  accepted  in the United  States of America  requires  our
management to make certain  estimates and  assumptions  that affect the reported
amounts  of assets and  liabilities  and  disclosure  of  contingent  assets and
liabilities at the date of the financial  statements and the reported amounts of
revenues and expenses during the reporting  period.  As such, in accordance with
the use of  accounting  principles  generally  accepted in the United  States of
America,  our actual  realized  results  may differ  from  management's  initial
estimates  as  reported.  A summary of our  significant  accounting  policies is
detailed  in the  notes  to the  financial  statements,  which  are an  integral
component of this filing.

Management  evaluates the  probability of the utilization of the deferred income
tax asset  related to the net  operating  loss carry  forwards.  The Company has
estimated a $1,201,000  deferred  income tax asset related to net operating loss
carry  forwards at December 31,  2003.  Management  determined  that because the
Company has yet to generate  taxable  income and that the  generation of taxable
income in the short term is uncertain, it was appropriate to provide a valuation
allowance for the total deferred income tax asset.

The Company  has  accrued  approximately  $343,000  in  obligations  to vendors,
consultants  and former  employees.  The Company is  attempting  to settle these
obligations, primarily through the issuance of common stock. Management believes
that the Company  will  ultimately  settle  these  obligations  for no more than
amounts accrued at December 31, 2003.  However,  the Company has made settlement
offers to numerous creditors. These offers are represented by a specified number
of shares.  Any settlements will be valued at the fair value of the stock at the
time the settlement is reached.


Forward looking statements

This report contains certain  forward-looking  statements  within the meaning of
Section 27A of the  Securities  Act of 1933, as amended,  and Section 21E of the
Securities Exchange Act of 1934, as amended. Stockholders are cautioned that all
forward-looking  statements  involve risks and  uncertainty,  including  without
limitation,  the ability of us develop our  technology  and execute our business
plan.  Although  we  believe  the  assumptions  underlying  the  forward-looking
statements  contained  herein are reasonable,  any of the  assumptions  could be
inaccurate,  and therefore,  there can be no assurance that the  forward-looking
statements contained in the report will prove to be accurate.

                                       8
<PAGE>

Off balance sheet arrangements

The Company's  liquidity has not dependent upon off balance sheet  transactions.
For the year ended  December  31,  2003,  the  Company did not engage in any off
balance sheet transactions.

                                       9
<PAGE>


Item 7.  Financial Statements



                HOME SERVICES INTERNATIONAL, INC. AND SUBSIDIARY

                        CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001

                                TABLE OF CONTENTS


                                                                       PAGE (S)

INDEPENDENT AUDITORS' REPORT  ............................................. 11

CONSOLIDATED BALANCE SHEETS ............................................... 12

CONSOLIDATED STATEMENTS OF OPERATIONS ..................................... 13

CONSOLIDATED STATEMENTS OF CASH FLOWS ..................................... 14

CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIENCY ........................ 15

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ............................16 - 26



                                       10
<PAGE>







                         INDEPENDENT ACCOUNTANTS' REPORT
                         -------------------------------



To the Stockholders and Board of Directors of
   Home Services International, Inc.:

We have audited the accompanying  balance sheet of Home Services  International,
Inc.  as of  December  31,  2003  and  the  related  statements  of  operations,
stockholders'  deficit  and cash  flows for each of the two years in the  period
ended December 31, 2003. These financial  statements are the  responsibility  of
Home Services International, Inc.'s management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Home Services International as
of December 31, 2003,  and the results of its operations and cash flows for each
of the two years in the period  ended  December  31, 2003,  in  conformity  with
accounting standards generally accepted in the United States of America.

As disclosed in Note 1, the accompanying financial statements have been prepared
assuming  that the Company  will  continue as a going  concern.  The Company has
experienced  material  operating losses and had a net working capital deficiency
of $1,035,842 at December 31, 2003.  Management is seeking equity capital and is
implementing  a  business  plan  that it  believes  will  result  in  profitable
operations.  There can be no assurances that the Company will obtain  sufficient
capital or that operations will become  profitable.  These and other  conditions
raise  substantial  doubt  about the  Company's  ability to  continue as a going
concern.  The accompanying  financial  statements do not include any adjustments
that might be  necessary  should the  Company be unable to  continue  as a going
concern.



/s/  EPSTEIN, WEBER & CONOVER, PLC
     Scottsdale, Arizona
     March 26, 2004

                                       11
<PAGE>




                        HOME SERVICES INTERNATIONAL, INC.

                                  BALANCE SHEET
                                  -------------
                             As of December 31, 2003


                                     ASSETS
                                     ------


CURRENT ASSETS
   Cash and equivalents                                         $        -
                                                               ------------
   Total current assets
                                                                          -
                                                               ------------
PROPERTY & EQUIPMENT
   Computers & Equipment                                              2,080
     (net of accumulated depreciation of $15,305)              ------------


            Total assets                                        $     2,080
                                                               ============

                      LIABILITIES AND STOCKHOLDERS' DEFICIT
                      -------------------------------------


CURRENT LIABILTIES
   Accounts payable                                             $   260,254
   Interest payable                                                  57,269
   Accrued liabilites                                                82,621
   Due to shareholder                                               128,963
   Notes payable                                                    506,735
                                                               ------------
            Total  current liabilities                            1,035,842


STOCKHOLDERS' DEFICIT
   Preferred stock, $0.001 par value 250,000 shares
     issued and outstanding                                             250
   Common stock, $0.0001 par value, 75,000,000
     shares authorized, 1,529,405 shares
     issued and outstanding                                           1,530
   Additional paid-in capital                                     2,117,853
   Accumulated deficit                                           (3,153,395)
                                                               ------------
            Total stockholders' deficit                          (1,033,762)
                                                               ------------
                Total liabilites and stockholders' deficit      $     2,080
                                                               ============



                 See accompanying notes to financial statements.

                                       F-2

                                       12
<PAGE>

                        HOME SERVICES INTERNATIONAL, INC.

                            STATEMENTS OF OPERATIONS
                            ------------------------
                 For the years ended December 31, 2003 and 2002

                                                          2003         2002
                                                    ----------- ------------

NET SALES                                            $        -  $         -

COST OF REVENUE                                               -            -
                                                    ----------- ------------
   GROSS PROFIT                                               -           -
                                                    ----------- ------------
GENERAL AND ADMINISTRATIVE EXPENSES                     757,771       75,365
                                                    ----------- ------------

   LOSS FROM OPERATIONS                                (757,771)     (75,365)
                                                    ----------- ------------

INTEREST EXPENSE                                         31,164       91,735
                                                    ----------- ------------
   LOSS BEFORE DISCONTINUED OPERATIONS AND
       INCOME TAXES                                    (788,935)    (167,100)
                                                    ----------- ------------
INCOME TAX PROVISION                                          -           -
                                                    ----------- ------------

   LOSS FROM CONTINUING OPERATIONS                     (788,935)    (167,100)
                                                    ----------- ------------

LOSS FROM DISCONTINUED OPERATIONS:
     Loss from operations of discontinued segment,
         no income tax effect                                 -   (1,032,864)
     Loss on abandonment of discontinued segement,
         no income tax effect                                 -      (38,297)
                                                    ----------- ------------
         Total discontinued operations                        -   (1,071,161)
                                                    ----------- ------------

NET LOSS                                             $ (788,935) $(1,238,261)
                                                    =========== ============
BASIC NET LOSS PER COMMON SHARE
   Continuing operations                             $    (0.66) $     (0.74)
   Discontinued operations                                    -        (4.74)
                                                    ----------- ------------

                                                     $    (0.66) $     (5.48)
                                                    =========== ============
DILUTED NET LOSS PER COMMON SHARE
   Continuing operations                             $    (0.66) $     (0.74)
   Discontinued operations                                    -        (4.74)
                                                    ----------- ------------
                                                      $   (0.66) $     (5.48)
                                                    =========== ============

WEIGHTED AVERAGE OF COMMON SHARES OUTSTANDING         1,222,711      225,924
                                                    =========== ============


                                       F-3

                                       13
<PAGE>


                 See accompanying notes to financial statements.



                        HOME SERVICES INTERNATIONAL, INC.

                            STATEMENTS OF CASH FLOWS
                            ------------------------
                 For the years ended December 31, 2003 and 2002
<table>
<caption>

                                                                                2003          2002
                                                                         ------------- -------------
<S>                                                                             <C>            <C>
OPERATING ACTIVITIES:
Net loss                                                                  $   (788,935) $ (1,238,261)
   Adjustments to reconcile net loss to cash used
      by operating activities:
      Loss from discontinued operations                                              -     1,130,161
      Depreciation and amortization                                              5,795         6,252
      Issuance of common and preferred stock for services performed            567,500       195,750
      Amortization of debt discount                                                  -        59,000
      Loss on settlement of liabilities in exchange for common stock           234,886             -
      Changes in assets and liabilities:
        (Increase) Decrease in other assets                                     14,111            96
         Increase in interest payable                                           31,164        35,648
        (Decrease) Increase in accounts payable and accrued liabilities       (167,287)      216,237
                                                                         ------------- -------------
         Cash provided from (used) by continuing operations                   (102,766)      404,883
         Cash used in discontinued operations                                        -      (686,328)
                                                                         ------------- -------------
            Net cash (used) by operating activities                           (102,766)     (281,445)
                                                                         ------------- -------------

INVESTING ACTIVITIES:

   Purchase of computer equipment and furniture                                      -        (2,000)
                                                                         ------------- -------------
            Net cash (used) by investing activities                                  -        (2,000)
                                                                         ------------- -------------
FINANCING ACTIVITIES:
   Proceeds from notes payable                                                       -       238,577
   Proceeds from shareholder advances                                          101,500        54,855
   Issuance of common stock for cash                                                 -        31,937
   Principal payments on notes payable                                               -       (54,502)
                                                                         ------------- -------------
            Net cash provided by financing activities                          101,500       270,867
                                                                         ------------- -------------

CHANGE IN CASH AND EQUIVALENTS DURING PERIOD                                    (1,266)      (12,578)
CASH AND EQUIVALENTS, BEGINNING OF PERIOD                                        1,266        13,844
                                                                         ------------- -------------
CASH AND EQUIVALENTS, END OF PERIOD                                       $          -  $      1,266
                                                                         ============= =============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
      Cash paid during the year for:

              Interest                                                    $          -  $          -

NONCASH INVESTING AND FINANCING ACTIVITIES:
      Issuance of common stock for services                               $    567,500  $    195,750
      Issuance of common stock for debt conversion                        $          -  $    173,996
      Issuance of common stock for accounts payable conversion            $    299,886  $    145,317
</table>

                 See accompanying notes to financial statements.

                                       F-4

                                       14
<PAGE>





                           HOME SERVICES INTERNATIONAL

                       STATEMENTS OF STOCKHOLDERS' DEFICIT
                       ------------------------------------
<table>
<caption>
                                                                                             Additional
                                                          Common Stock       Preferred Stock    Paid-in   Accumulated
                                                        Shares    Amount     Shares   Amount   Capital    Deficit       Total
                                                     ---------- --------- --------- --------- ----------- ------------ ------------
<S>                                                       <C>       <C>       <C>      <C>         <C>       <C>            <C>
BALANCE, DECEMBER 31, 2001                              206,202       206                         705,040   (1,126,199)    (420,953)

Common Stock Issued for Cash                              1,473         2                          31,935                    31,937

Conversion of Debt to Common Stock                       29,013        29                         173,967                   173,996

Common Stock Issued for Services                         26,125        26                         195,724                   195,750

Conversion of Accounts Payable for Common Stock          22,824        23                         145,295                   145,318

Net Loss                                                                                                    (1,238,261)  (1,238,261)

                                                     ---------- --------- --------- --------- ----------- ------------ ------------
BALANCE, DECEMBER 31, 2002                              285,637  $     286        -         - $ 1,251,961 $ (2,364,460) $(1,112,213)
                                                     ========== ========= ========= ========= =========== ============ ============

Common Stock Issued for Services                     1,193,787      1,194                         548,806                   550,000

Preferred Stock Issued for Services                                         250,000       250      17,250                    17,500

Conversion of Accounts Payable for Common Stock      49,981            50                         299,836                   299,886

Net Loss                                                                                                      (788,935)    (788,935)

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

BALANCE, DECEMBER 31, 2003                            1,529,405  $   1,530    250,000  $     250 $2,117,853 $(3,153,395)$(1,033,762)
                                                     ========== ========= ========= ========= =========== ============ ============
</table>

                See accompanying notes to financial statements.

                                       F-5

                                       15
<PAGE>

                        HOME SERVICES INTERNATIONAL, INC.
                                December 31, 2003

                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------


NOTE 1 - DESCRIPTION OF BUSINESS AND SIGNIGICANT ACCOUNTING POLICIES

Background and Nature of Business

Home Services  International,  Inc. ("HSI") (formerly Tel-Voice  Communications,
Inc.) was  incorporated  under the laws of the State of Nevada on  December  31,
1996 to engage in any lawful corporate activity,  including, but not limited to,
selected mergers and  acquisitions.  Smartdotcom,  Inc. ("SDC") was incorporated
under the laws of the State of Nevada on April 19, 1999.

On June 30, 2000,  SDC was acquired by Tel-Voice in a transaction  accounted for
as a reverse merger.  Tel-Voice  issued 4,376,895 shares of its common stock for
all of the issued and  outstanding  common  stock of SDC.  Prior to the  merger,
Tel-Voice  had no  business  activity.  For  accounting  purposes,  SDC has been
treated as the acquirer  and  accordingly,  SDC is  presented as the  continuing
entity, and the historical  financial statements are those of SDC. Tel-Voice and
SDC are collectively referred to as the "Company."

The Company  determined in December 2002 to abandon its only operating  business
segment which involved a technology that provides  private  electronic  networks
for labor unions and integrated  communities,  both of which include subscribers
of the unions and  communities.  The Company also  abandoned  its  1-866-Unionet
network.   These  business   components  have  been  presented  as  discontinued
operations for the year ended December 31, 2002.

Subsequent  to December  31,  2003,  the Company  merged with  Internal  Command
International,  Inc.  ("ICI")  through the issuance of  5,000,000  shares of the
Company's Series A Preferred stock. ICI is a development stage  enterprise.  ICI
intends to manufacture and distribute its  alternative  energy products that use
water pressure flow to generate electricity. In connection with this merger, the

Basis of Presentation

The  Company  follows  the  accrual  basis  of  accounting  in  accordance  with
accounting principles generally accepted in the United States of America and has
adopted a year-end of December 31.

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

Management further acknowledges that it is solely responsible for adopting sound
accounting  practices,   establishing  and  maintaining  a  system  of  internal
accounting  control and preventing and detecting  fraud. The Company's system of
internal  accounting  control is designed to assure,  among other items, that 1)
recorded  transactions  are valid; 2) valid  transactions  are recorded;  and 3)
transactions  are  recorded in the proper  period in a timely  manner to produce
financial  statements which present fairly the financial  condition,  results of
operations  and cash  flows of the  Company  for the  respective  periods  being
presented.
                                      F-6
                                       16
<PAGE>

Going Concern Uncertainty

The  accompanying  financial  statements  have been prepared in conformity  with
accounting principles generally accepted in the United States of America,  which
contemplate  continuation of the Company as a going concern. As reflected in the
accompanying  consolidated  financial statements,  the Company has had recurring
losses and negative cash flows from  operations,  and negative  working capital.
The Company has abandoned it's only operating business segment and is attempting
to raise  capital  seek  acquisition  targets and commence  operations  in a new
business segment. There are no assurances that the Company will be successful in
any of  these  endeavors.  These  factors  raise  substantial  doubt  about  the
Company's  ability  to  continue  as a going  concern.  Without  realization  of
additional  capital, it would be unlikely for the Company to continue as a going
concern. The financial statements do not include any adjustments relating to the
recoverability  and  classification  of recorded asset  amounts,  or amounts and
classification  of  liabilities  that might be  necessary  should the Company be
unable to continue its existence.

Discontinued Operations

The Company  discontinued its operations of electronic networks for labor unions
and integrated  communities  on December 1, 2002.  The Company  intends to enter
into new businesses through acquisitions.

Principles of Consolidation

The  accompanying  consolidated  financial  statements  include the  accounts of
Tel-Voice and its wholly owned  subsidiary,  SDC. All intercompany  accounts and
transactions have been eliminated.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.

Fair Value of Financial Instruments

The  carrying  amount of cash,  accounts  payable,  notes  payable  and  accrued
liabilities, as applicable, approximates fair value due to the short term nature
of these items.

Cash and Cash Equivalents

The Company  considers all highly  liquid  investments  purchased  with original
maturities of three months or less to be cash equivalents.

Concentration of Credit Risk

The Company  places its cash in what it believes to be  credit-worthy  financial
institutions.  However,  cash balances may exceed FDIC insured levels at various
times during the year. There were no bank balances  exceeding  insured limits at
December 31, 2003.
                                      F-7


                                       17
<PAGE>

Revenue

There was no revenue generated in the years ended December 31, 2003 and 2002.

Income Taxes

Income  taxes are  provided  for  based on the  liability  method of  accounting
pursuant to  Statement  of  Financial  Accounting  Standards  ("SFAS")  No. 109,
"Accounting  for Income  Taxes."  Deferred  income taxes,  if any, are recorded,
using enacted tax rates expected to apply,  to reflect the tax  consequences  on
future years of differences  between the tax bases of assets and liabilities and
their financial reporting amounts at each year-end.

Loss Per Share

The Company calculates loss per share in accordance with SFAS No. 128, "Earnings
Per Share,"  which  requires  presentation  of basic  earnings per share ("Basic
EPS") and diluted  earnings per share ("Diluted  EPS"). The computation of Basic
EPS is  computed  by  dividing  loss  available  to common  stockholders  by the
weighted average number of outstanding common shares during the period.  Diluted
EPS gives effect to all dilutive  potential common shares outstanding during the
period. The computation of Diluted EPS does not assume  conversion,  exercise or
contingent  exercise of  securities  that would have an  antidilutive  effect on
earnings.

Stock Based Compensation

In  1996,  SFAS  No.  123  "Accounting  for  Stock-Based  Compensation,"  became
effective for the Company.  SFAS No. 123, which  prescribes  the  recognition of
compensation  expense  based on the fair  value of  options  on the grant  date,
allows  companies to continue  applying APB 25 if certain pro forma  disclosures
are made assuming hypothetical fair value method, for which the Company uses the
Black-Scholes option-pricing model.

The Company  accounts for employee stock options in accordance  with  Accounting
Principles  Board  Opinion No. 25 ("APB 25"),  "Accounting  for Stock  Issued to
Employees." Under APB 25, the Company recognizes no compensation expense related
to employee  stock  options,  as no options are granted at a price below  market
price on the date of grant.

For non-employee stock based compensation,  the Company recognizes an expense in
accordance with SFAS No. 123 and values the equity  securities based on the fair
value of the security on the date of grant. For stock-based  awards the value is
based on the  market  value  for the stock on the date of grant and if the stock
has  restrictions  as to  transferability  a discount  is  provided  for lack of
tradability.   Stock   option   awards  are  valued   using  the   Black-Scholes
option-pricing model.

Advertising

The  Company  expenses  advertising  costs  as  incurred.  The  Company  had  no
advertising expense in the year ended December 31, 2003.

Recently Issued Accounting Pronouncements

     In April 2002, the Financial  Accounting  Standards  Board ("FASB")  issued
SFAS No. 145,  Rescission  of  Statements  No. 4, 44 and 64,  Amendment  of FASB
Statement No. 13, and Technical
                                      F-8


                                       18
<PAGE>

     Correction. SFAS No. 145 requires that gains and losses from extinguishment
of debt be classified as  extraordinary  items only if they meet the criteria in
APB No. 30. The provisions of APB No. 30 distinguish  transactions that are part
of an entity's  recurring  operations from those that are unusual and infrequent
and  meet  the  criteria  for  classification  as  an  extraordinary  item.  The
provisions of SFAS No. 145 are effective  for fiscal years  beginning  after May
15, 2002 with early application encouraged. The adoption of SFAS No. 145 did not
have a material effect on its financial position or results of operations.

     In July 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated
With Exit or Disposal  Activities.  SFAS No. 146 requires costs  associated with
exit or  disposal  activities  to be  recognized  when  they are  incurred.  The
requirements  of SFAS No. 146 apply  prospectively  after December 31, 2002. The
adoption  of SFAS  No.  146 did not  have a  material  effect  on its  financial
position or results of operations.

     In October  2002,  the FASB issued SFAS No.  147,  Acquisitions  of Certain
Financial Institutions.  SFAS No. 147 is effective October 1, 2002. The adoption
of SFAS No. 147 will not have a material  effect on its  financial  position  or
results of operations.

     In  November  2002,  the  FASB  issued   Interpretation   ("FIN")  No.  45,
Guarantor's  Accounting and Disclosure  Requirements  for Guarantees,  Including
Indirect  Guarantees  of  Indebtedness  of  Others.  FIN No.  45  clarifies  the
requirements  for  a  guarantor's  accounting  for  and  disclosure  of  certain
guarantees  issued  and  outstanding.   The  initial   recognition  and  initial
measurement  provisions of FIN No. 45 are  applicable  to  guarantees  issued or
modified after December 31, 2002. The disclosure  requirements of FIN No. 45 are
effective for financial  statements  for periods ending after December 15, 2002.
The  adoption  of FIN No. 45 did not have a  material  effect  on its  financial
position or results of operations.

     In December 2002, the FASB issued SFAS No. 148,  Accounting for Stock-Based
Compensation  - Transition  and  Disclosure - an amendment of FASB Statement No.
123. SFAS No. 148 amends SFAS No. 123, Accounting for Stock-Based  Compensation,
to provide  alternative methods of transition for a voluntary change to the fair
value-based  method of accounting  for  stock-based  employee  compensation.  In
addition,  SFAS No. 148 amends the  disclosure  requirements  of SFAS No. 123 to
require  prominent  disclosures in both interim and annual financial  statements
about the method of accounting for  stock-based  employee  compensation  and the
effect of the method used on reported  results.  SFAS No. 148 is  effective  for
financial statements issued for fiscal years ending after December 15, 2002. The
adoption  of SFAS  No.  148 did not  have a  material  effect  on its  financial
position or results of operations.

     In January  2003,  the FASB  issued FIN No. 46,  Consolidation  of Variable
Interest  Entities,  and amended the Interpretation in December 2003. FIN No. 46
states that  companies  that have  exposure to the economic  risks and potential
rewards from another entity's assets and activities have a controlling financial
interest  in a  variable  interest  entity and should  consolidate  the  entity,
despite  the  absence  of  clear  control  through  a  voting  equity  interest.
Disclosure  of  significant  variable  interest  entities  is  required  in  all
financial  statements  issued  after  January 31, 2003,  regardless  of when the
variable  interest  was  created.  The  adoption  of FIN No.  46 will not have a
material effect on its financial position or results of operations.
                                      F-9


                                       19
<PAGE>

     In April 2003, the FASB issued SFAS No. 149,  Amendment of Statement 133 on
Derivative  Instruments and Hedging Activities,  effective for contracts entered
into or modified  after June 30, 2003.  SFAS No. 149  clarifies  when a contract
meets the characteristics of a derivative,  clarifies when a derivative contains
a financing  component and amends  certain other  existing  pronouncements.  The
adoption  of SFAS  No.  149 will not have a  material  effect  on its  financial
position or results of operations.

     In May 2003, the FASB issued SFAS No. 150,  Certain  Financial  Instruments
with  Characteristics  of Both Liabilities and Equity.  SFAS No. 150 established
standards for how a company clarifies and measures certain financial instruments
with  characteristics  of both liabilities and equity.  It requires a company to
classify such instruments as liabilities,  whereas they previously may have been
classified as equity.  SFAS No. 150 is effective  for all financial  instruments
entered into or modified  after May 31, 2003. The Company  anticipates  that the
adoption  of SFAS  No.  150 will not have a  material  effect  on its  financial
position or results of operations.

NOTE 2 - RELATED PARTY TRANSACTIONS

The Company  borrows  funds from  officers and  stockholders  from time to time.
Also,  amounts due to officers  include  unpaid  salaries for the  Company's two
officers and Company related expenses paid by the Company's CEO.

Due to/from officer  represents  advances/repayments  to/from the Company's CEO,
and expenses paid by the Company on behalf of the CEO.

During the year ended  December  31, 2003, a  significant  shareholder  advanced
funds to the Company of $101,500 for payment of operating expenses.

During the year ended December 31, 2002, the Company paid a salary to its CEO of
$40,864.  The CEO waived the  remaining  unpaid  portion of his $180,000  annual
salary.  In addition,  in 2002, the CEO advanced $87,300 as notes payable to the
Company and was repaid  $4,200.  In the year ended  December 31,  2002,  the CEO
received 15,744 shares of common stock as repayment of $81,900 in notes payable.
The CEO paid expenses on behalf of the Company of $50,182.

In addition the Company paid  automobile  expenses of $0 and $4,546 on behalf of
the CEO in the years ended December 31, 2003 and 2002 respectively.

The Company's  balance due to the Company's CEO was $27,463 at December 31, 2003
and 2002.

The Company has notes due to minority stockholders of $250,000. Interest expense
recognized  on these notes was $12,000 for each of the years ended  December 31,
2003 and 2002. Interest accrued related to these notes is $26,667 and 14,667 for
the years ended December 31, 2003 and 2002, respectively.

                                      F-10

                                       20
<PAGE>

NOTE 3 - NOTES PAYABLE

Notes payable at December 31, 2003 comprise the following:

      Notes payable - stockholders  at December 31, 2003 represent
      loans made by minority stockholders. The notes bear interest
      at 0% to 8% per annum and are due from  January  2003 and on
      demand. Notes are collateralized by substantially all of the
      assets of the Company                                          $250,000


      Notes payable to individuals,  interest at 8% per annum, due
      on demand, and unsecured.                                       256,735

                                                                  -----------
      Total notes payable                                            $506,735
                                                                  ===========


The Company granted warrants in connection with the debt financing raised in the
year ended December 31, 2001.  There were 5,190 warrants  issued to purchase the
Company's  common  stock at $28.90 per share.  The Company  determined  the fair
value of the  warrants to be $17.05 per share using the minimum  value method of
estimating  the fair value of the  warrants.  A total  discount  of $88,500  was
recorded on debt with a face value of $150,000.  The discount was amortized over
the 18-month term of the notes.  At December 31, 2003 and prior to the beginning
of the year then ended,  the amount was fully  amortized and charged to interest
expense.

NOTE 4 - STOCKHOLDERS' DEFICIENCY

During the year ended  December  31,  2003,  the  Company  declared a 1 for 28.9
reverse  stock  split.  The  number  of  shares  presented  in  these  financial
statements  has been  retroactively  restated  for all  periods to reflect  this
reverse stock split.

The Company  issues its common stock from time to time to  compensate  employees
and consultants as consideration for services rendered.  These shares are valued
at the trading  value on the date of grant.  During the year ended  December 31,
2003, the Company issued 1,193,787 shares of its common stock and 250,000 shares
of its  preferred  stock valued at $550,000 and $17,500.  Shares of common stock
granted for  services are valued at the trading  value of the shares.  Shares of
preferred  stock  granted for  services  are valued at the trading  value of the
common stock because the preferred  stock has rights and privileges very similar
to those of the common stock.

During the year ended  December 31, 2002,  the Company  placed 867,225 shares of
its common stock in an escrow account. These shares are contingently issuable as
they  are to be  issued  to  creditors  as part of a plan to  negotiate  Company
obligations  through  an  intermediary.  The  Company  is  attempting  to settle
obligations  by  negotiating  with  creditors  to take  Company  common stock as
payment  for the  obligations.  During the year ended  December  31,  2002,  the
Company had not issued any of these shares to  creditors.  During the year ended
December 31, 2003, the Company negotiated a settlement in which 49,981 shares of
common stock were issued out of escrow to settle a creditor  obligation that had
an original balance of $65,000. The settlement was recorded at the trading value
of the shares on the date of settlement. That value was $299,866. The result was
an  additional  expense of  $234,866  charged to  operations  for the year ended
December 31, 2003.
                                      F-11


                                       21
<PAGE>

During the year ended  December 31, 2002, the Company issued 1,473 shares of its
common stock for cash at $21.68 per share.

Also during the year ended  December 31, 2002,  the Company  converted  debt and
trade accounts payable of $319,313 for 51,837 shares of its common stock.

In  connection  with stock  offerings,  the  Company  issued  2,307  warrants to
purchase the Company's  stock at $21.68 per share.  The warrants expire in 2007,
five years from the date of issuance. Also, 5,190 warrants were issued at $28.90
per share in  connection  with debt (See Note 3). The  warrants  expire in 2005,
five years from issuance.

The Company has authorized  10,000,000  shares of Serial  Preferred  Stock.  The
Company's board of directors is authorized to designate terms of various series'
of preferred  stock.  At December 31, 2003, the Company has designated  Series A
Convertible  Preferred  Stock.  The Series A Preferred  Stock is  convertible to
common stock on a one for one basis at any time at the option of the holder. The
Series A Preferred  Stock has identical  voting rights as those of the Company's
common stock.  The Series A Preferred  Stock has a 10% cumulative  dividend.  At
December 31. 2003, there were cumulative  undeclared dividends of $18,750 on the
Series A Preferred Stock.


NOTE 5 - FURNITURE AND EQUIPMENT

Furniture  and  equipment  is  stated  at cost  less  accumulated  depreciation.
Depreciation  is recorded on a  straight-line  basis over the  estimated  useful
lives of the assets of 3 years. Depreciation expense for the year ended December
31, 2003 and 2002 was $5,795 and $16,252, respectively.

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

      Office and computer equipment                              $     17,385

      Less accumulated depreciation                                   (15,305)
                                                                 ------------

      Furniture and equipment, net                               $      2,080
                                                                 ============


NOTE 6 - STOCK OPTIONS

On May 1, 2000 the Company  reserved for issuance an aggregate of 34,602  shares
of common stock under its stock option plan.

The  Company  has  adopted  only the  disclosure  provisions  of SFAS  No.  123,
"Accounting  for Stock-Based  Compensation."  It applies  Accounting  Principles
Bulletin ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees," and
related  interpretations  in  accounting  for its Stock Option Plan and does not
recognize  compensation  expense  for its  Stock  Option  Plan  other  than  for
restricted stock and options issued to outside third parties.

There were no stock  options  granted nor was there any pro forma  effect of the
vesting of options  granted in previous  periods in the years ended December 31,
2003 and 2002.

There were 27,682  options  available  for future grant at December 31, 2003 and
2002 under the Company's stock option plan.
                                      F-12

                                       22
<PAGE>

NOTE 7 -INCOME TAXES

The  components of the  provision for income taxes for years ended  December 31,
2003 and 2002 are as follows:

                                                         2003              2002
                                               ---------------  ---------------
      Current tax provision (benefit)           $    (315,738)   $     (485,722)
      Deferred tax provision (benefit)                315,738           485,722
                                               ---------------  ---------------

      Total income tax provision (benefit)     $            0    $            0
                                               ==============   ===============

The  reconciliation  of the effective  income tax rate to the Federal  statutory
rate is as follows:

                                                 2003                  2002
                                        -------------------  -------------------
     Federal statutory rates            $ (266,238)  (34)%    $ (421,009)  (34)%
     State income taxes                    (47,336)   (6)%       (74,296)   (6)%
     Valuation allowance for
        operating loss carry forwards      315,574    40%        493,046     40%
     Other                                       0     -%          2,258      -%
                                        -------------------  -------------------
         Effective rate                 $        0   (-0-)%   $ (- 0 -)   (-0-)%
                                        ===================  ===================

At December 31, 2003,  the Company had federal net operating loss carry forwards
of  approximately  $3,003,000  that  expire  from  2013 to 2023  and  state  net
operating loss carry forwards of approximately  $2,990,000 that expire from 2005
to 2008.  Substantially  all of the  deferred  income  tax  asset of  $1,214,000
relates to income tax benefits from net operating loss carry  forwards.  Because
of the current  uncertainty  of realizing the benefits of the tax carry forward,
an equal valuation  allowance has been established.  The full realization of the
tax benefit  associated  with the carry forward depends  predominantly  upon the
Company's ability to generate taxable income during the carry forward period.

Deferred  tax assets and  liabilities  reflect  the net tax effect of  temporary
differences  between the carrying amount of assets and liabilities for financial
reporting  purposes  and  amounts  used for  income  tax  purposes.  Significant
components of the Company's  deferred tax assets and liabilities at December 31,
2003 are as follows:

     Contributions carry forwards                             $         6,700
     Differences in book/tax bases of accrued compensation              6,000
     Net operating loss carry forwards                              1,201,000
                                                             ----------------
            Deferred income tax asset                               1,213,700
            Less:  valuation allowance                             (1,212,000)
                                                             ----------------
     Total deferred income tax asset                                    1,700
     Deferred income tax liability related to
     book/tax differences in bases of property and equipment           (1,700)
                                                             ----------------

            Net deferred income tax asset                     $             0
                                                             ================

The  Company's  valuation  allowance  increased  by  approximately  $316,000 and
$493,000 during the years ended December 31, 2003 and 2002, respectively.
                                      F-13

                                       23
<PAGE>


NOTE 8 - COMMITMENTS AND CONTINGENCIES

The Company  abandoned its corporate office lease in the year ended December 31,
2003. The former landlord has filed a claim against the Company, and the Company
is actively  seeking a settlement.  As of December 31, 2003,  the Company has an
accrued liability of $25,287 related to the office lease. Total rent expense for
the years ended  December  31, 2003 and 2002 was $0 and  $58,000,  respectively.
There are no future minimum lease payments as of December 31, 2003.

The Company has accrued  $36,800  related to the  abandoned  office  lease.  The
former  landlord  has filed a claim  against the Company.  However,  the Company
believes that it will be successful  in settling this  obligation  for an amount
less that what is accrued.

The Company has  obligations to numerous  creditors and vendors.  The Company is
attempting to settle these obligations, primarily through the issuance of common
stock.  Management  believes  that the  Company  will  ultimately  settle  these
obligations for no more than amounts accrued at December 31, 2003. However,  the
Company has made  settlement  offers to  numerous  creditors.  These  offers are
represented by a specified  number of shares.  Any settlements will be valued at
the fair value of the stock at the time the settlement is reached.

NOTE 9 - CAPITAL LEASE

The  Company  leases  certain  office  equipment  under a  capital  lease.  This
equipment was  repossessed  for non-payment in the year ended December 31, 2002.
At that time, all payments were  accelerated and certain  interest and financing
charges were added to the amount due in accordance with the lease agreement. The
total amount accrued at December 31, 2003 under this  agreement is $42,770.  The
Company  recognized  a loss  on this  event  of  $26,660  and is  attempting  to
negotiate a settlement with the lessor.

NOTE 10 - BUSINESS SEGMENTS

The Company had operated in one business segment,  private  electronic  networks
for labor unions.  The Company started its operations in the private  electronic
networks in the year ended  December 31, 2001.  Substantially  all the operating
revenue for the years ended December 31, 2002 and 2001 related to the electronic
network for labor unions segment.  The Company ceased  operating in this segment
in December 2002.

NOTE 11- DISCONTINUED OPERATIONS

In the year ended  December  31,  2002,  the  Company  determined  that it would
abandon its operations  electronic network for labor unions segment. At December
31, 2003, the Company had no operating segments.


                                      F-14

                                       24
<PAGE>

<table>
<caption>
     ------------------ ----------------- -------------- ----------------- --------------- ---------------
                                            Remaining                       Revenues for    Revenues for
                                             Assets         Remaining      the year ended  the year ended
                                          at December      Liabilities        December        December
         Segment           Method of        31, 2002     at December 31,      31, 2002        31, 2002
      Identification        Disposal                           2002
     ------------------ ----------------- -------------- ----------------- --------------- ---------------
     ------------------ ----------------- -------------- ----------------- --------------- ---------------
      <S>                    <C>              <C>              <C>                <C>           <C>
     Electronic
     network for        Abandonment           NONE          $ 534,193            $ 71,266     $ 5,207
     labor unions
     ------------------ ----------------- -------------- ----------------- --------------- ---------------
</table>

The Company  recognized  a total loss on the  abandonment  of assets,  primarily
office  equipment,  of  $38,297.  There are certain  liabilities  related to the
abandonment of the office lease and equipment  lease that have been  accelerated
to recognize the obligations under those agreements as of December 31, 2002. The
effect of  accelerating  these  liabilities  resulted in accruing an  additional
$36,800 for the office lease and  recognizing a loss of $26,660 on the equipment
lease.  The Company also has accrued payroll and payroll taxes of  approximately
$52,000 at December 31, 2002.


NOTE 12- LOSS PER SHARE

Outstanding  options and warrants  were not  considered in the  calculation  for
diluted  earnings  per share  for the years  ended  December  31,  2003 and 2002
because the effect of their inclusion would be antidilutive.

<table>
<caption>
                                                     2003                                    2002
                                     Loss       Shares    Per share         Loss       Shares    Per share
                               -------------------------------------  -------------------------------------
<S>                                  <C>          <C>        <C>             <C>         <C>        <C>
   Net (Loss)                   $ (788,935)                           $(1,238,261)
   Discontinued operations               0                              1,071,161
                               -----------                           -----------
   Continuing operations         (788,935)                              (167,100)
   Preferred stock dividends      (18,750)                                     0
                               -----------                           -----------

   Basic Loss Per Share:

   Loss available to common
   stockholders                $  (807,685)     1,222,711  $(0.66)     $(167,100)       225,924     $(0.74)
                                -----------                          -----------

   Effect of dilutive securities       N/A                                   N/A

   Diluted Loss Per Share                                   $(0.65)                                  $(0.74)
                                                         ==========                                =========
</table>

Warrants  and options to purchase  7,497 and 10,669  shares of common stock were
outstanding  and excluded  from the loss per share  calculation  at December 31,
2003 and 2002 respectively.
                                      F-15


                                       25
<PAGE>

NOTE 13 - SUBSEQUENT EVENTS

On January 2, 2004, the Company entered into an agreement with Internal  Command
International,   Inc.  ("ICI")  to  merge  with  the  Company.  The  merger  was
effectuated  through the issuance of 5,000,000  shares of the Company's  Class A
Preferred Stock in exchange for all of the outstanding  common stock of ICI. The
transaction  also included the issuance of an additional  500,000  shares of the
Company's Class A Preferred Stock to consultants as  consideration  for services
rendered in connection with the merger.

As a result of the merger  transaction with ICI, the former  stockholders of ICI
will hold a majority of the  Company's  voting stock.  For financial  accounting
purposes,  the acquisition is a reverse acquisition of the Company by ICI, under
the purchase method of accounting,  and will be treated as a recapitalization of
the Company with ICI as the acquirer.

As a result of the merger transaction with ICI, the former ICI stockholders will
hold approximately 75% of the Company's voting stock.

                                      F-16

                                       26
<PAGE>


                                    PART III

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

The  following  table sets forth the name,  age and position with the Company of
each officer and director as of the date of this Report.

Our current directors, executive officers and key employees are as follows:


     Name                     Age    Position
     Jay Budd                 48     Chairman  of the Board and Chief  Executive
                                     Officer

     Robert Lee               37     Director



Jay H.  Budd,  President  and CEO,  has over 10  years of  strategic  consulting
experience,  including leading  telecommunications clients such as MCI, Northern
Telecom, Bell Canada Enterprises,  Erickson,  Turner Broadcasting,  AEGIS, Royal
Bank of Canada,  and Hong Kong Shanghai Bank, as well as a host of leading cable
companies.   Mr.  Budd's  consulting  experience  has  been  on  development  of
interactive  transaction-based  content  programs  delivered both through public
access and in-home devices.

Robert E. Lee, Director, has more than fifteen years of experience in technology
integration,  product  development  and engineering  management.  By leading R&D
organizations  in the design & development  of  business-oriented  products that
utilize  advanced  communication,  custom  electronic  design  &  packaging  and
sophisticated  software  components,  Mr. Lee has  pioneered  many  leading-edge
interactive  delivery  technologies.  Credited in bringing to market the world's
first   videoconferencing   kiosk,   the   formulation  of  Aegis   Technologies
award-winning  OEM interactive  video kiosk product line, and the development of
an Internet-based interactive video call software utility. Additionally, Mr. Lee
has directed the development of an interactive  apartment network  incorporating
sleek  interactive  kiosks,  multi-function  set-top boxes and advanced  network
infrastructure,  and has authored several technology patents. Currently, Mr. Lee
does not spend his full time working for the Company.

None of our  directors,  executive  officers or key  employees is related to any
other of our directors, executive officers or key employees.

Pursuant to Section 16 (a) of the Securities Exchange Act of 1934, and the rules
issued  thereunder,  our directors  and executive  officers are required to file
with the  Securities  and Exchange  Commission  and the National  Association of
Securities Dealers, Inc. reports of ownership and changes in ownership of common
stock and other equity  securities  of the  Company.  Copies of such reports are
required to be  furnished  to us. Based solely on a review of the copies of such
reports furnished to us, or written  representations  that no other reports were
required,  we believe that,  during our fiscal year ended December 31, 2000, all
of our  executive  officers and  directors  complied  with the  requirements  of
Section 16 (a).


                                       27
<PAGE>

Item 10. Executive Compensation

The  following  table sets forth the annual  compensation  paid to our executive
                    officers for the three fiscal years ended December 31, 2003.

                                                    Other           Long-term
 Name and                                           Annual          Compensation
 Principal Position    Year   Salary ($) Bonus ($)  Compensation    Awards ($)
-------------------- ------- ---------- ---------- ------------- ---------------
Jay Budd              2003                  -                             -
Chairman of the       2002     30,000       -        15,410               -
Board and CEO         2001    186,557       -        66,500               -


ADDITIONAL INFORMATION CONCERNING THE BOARD OF DIRECTORS OF THE COMPANY

During the year ended  December 31, 2003, the Board of Directors met 2 times and
held 1 meeting via unanimous consent in lieu of a special meeting. A majority of
the  directors  was  present at each  meeting,  all  constituting  a quorum.  In
addition to regularly scheduled meetings, a number of Directors were involved in
numerous informal  discussions with management,  offering advice and suggestions
on a broad range of corporate matters.

Item 11. Securities Ownership of Certain Beneficial Owners and Management

The  following  table sets forth  certain  information  as of December  31, 2003
regarding  the record and  beneficial  ownership of our common stock by: (i) any
individual or group (as that term is defined in the federal  securities laws) of
affiliated individuals or entities who is known by us to be the beneficial owner
of more than five percent of the  outstanding  shares of our common stock;  (ii)
each of our  executive  officers  and  directors;  and (iii)  the our  executive
officers and directors as a group.

Name and Address of                   Number of Shares             Percent
 Beneficial Owner                    Beneficially Owned (1)       of Class (2)
-------------------                  ----------------------       -------------
Jay Budd                                      117,647 (3)              07.69%
8283 North Hayden Road
Suite 250
Scottsdale, AZ  85258

Robert Lee                                          -                  -
8283 North Hayden Road
Suite 250
Scottsdale, AZ  85258

All directors and officers                    117,647                  07.69%
as a group  (1 person)

______________


(1)  Except as otherwise indicated, we believe that the beneficial owners of our
     common stock listed above,  based on information  furnished by such owners,
     have sole investment and voting power with respect to such shares,  subject
     to community property laws where applicable.

(2)  The following  percentages are based upon 1,529,405  shares of common stock
     issued and  outstanding at December 31, 2003. The number of shares has been
     retroactively adjusted for the 1 for 28.9 reverse stock split that occurred
     in January of 2003.

                                       28
<PAGE>

Item 12. Certain Relationships and Related Transactions


Item 13.  Exhibits and Reports on Form 8-K

                                  EXHIBIT INDEX

The following exhibits are filed as part of this Annual Report on Form 10-KSB or
are incorporated herein by reference:

Exhibit         Description
---------       ------------------------------
3.1.1           Articles of Incorporation (1)
3.1.2           Amended Articles of Incorporation (1)
3.2             Bylaws (1)
10.1            Lock-up agreement with Hagit Bernstein (1)
10.2            Lock-up agreement with Raphi Shram (1)
10.3            Lock-up agreement with Naomi Shram (1)
10.4            Stock Purchase Agreement and Plan of Reorganization (2)
21.1            Subsidiaries of Registrant (F)


(1)  Incorporated  by reference to the  Exhibits to the  Registration  Statement
     filed by the Registrant on Form 10SB dated March 1, 2000.

(2)  Incorporated  by reference  to the Exhibits to the Current  Report filed by
     the Registrant on Form 8-K/A dated December 11, 2000.

F    Filed herewith

Reports filed on Form 8-K

Item 14 - Controls and Procedures
--------------------------------------

     As required by Rule 13a-14 under the Exchange Act,  within 90 days prior to
the filing date of this report,  the Company  carried out an  evaluation  of the
effectiveness of the design and operation of the Company's  disclosure  controls
and  procedures.  This evaluation was carried out under the supervision and with
the  participation  of the Company's  management,  including the Company's Chief
Executive  Officer.  Based upon that  evaluation,  the Company's Chief Executive
Officer  concluded  that the Company's  controls and  procedures  are effective.
There have been no significant  changes in the Company's internal controls or in
other factors that could  significantly  affect internal controls  subsequent to
the date the Company carried out this evaluation.

     Disclosure  controls and procedures are controls and other  procedures that
are  designed  to  ensure  that  information  required  to be  disclosed  in the
Company's  reports  filed or  submitted  under  the  Exchange  Act is  recorded,
processed,  summarized  and reported  within the time  periods  specified in the
Securities and Exchange  Commission's rules and forms.  Disclosure  controls and
procedures  include controls and procedures  designed to ensure that information
required to be  disclosed  in Company  reports  filed under the  Exchange Act is
accumulated  and  communicated  to  management,  including the  Company's  Chief
Executive   Officer  as  appropriate,   to  allow  timely  decisions   regarding
disclosures.

                                       29
<PAGE>

     The Company has confidence in its internal  controls and procedures and has
expanded  its efforts to develop and improve  its  controls.  Nevertheless,  the
Company's  management,  including the Chief Executive  Officer,  does not expect
that the Company's disclosure procedures and controls, or its internal controls,
will  necessarily  prevent all error or intentional  fraud. An internal  control
system, no matter how well conceived and operated,  can provide only reasonable,
but not absolute,  assurance that the  objectives of such internal  controls are
met.  Further,  the design of an internal  control  system must reflect the fact
that the  Company  is subject  to  resource  constraints,  and the  benefits  of
controls  must be  considered  relative to their costs.  Because of the inherent
limitations  in all internal  control  systems,  no  evaluation  of controls can
provide  absolute  assurance  that all internal  control  issues or instances of
fraud, if any, within the Company be detected.

                                       30
<PAGE>


                                  CERTIFICATION
                                  -------------

I, Jay Budd, Chief Executive Officer and President, certify that:

1.  I have  reviewed  this  annual  report  on  Form  10-KSB  of  Home  Services
International, Inc.;

2.  Based on my  knowledge,  this  annual  report  does not  contain  any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

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

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

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

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

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

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's   Board  of  Directors  (or  persons   performing   the  equivalent
functions):

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

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

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

     April 8, 2004.


/s/ Jay Budd
-------------------
Jay Budd, Chairman, President and
Chief Executive Officer


                                       31
<PAGE>



                                   SIGNATURES


Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Action of 1934,  as amended,  the  registrant  has duly caused this Report to be
signed on its behalf by the undersigned, thereunto duly authorized.


                                               Home Services International, Inc.

                                             By:   /s/ JAY BUDD
                                                  -----------------------------
                                                   Jay Budd
                                                   CHAIRMAN OF THE BOARD




Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
this  Report has been  signed  below by the  following  persons on behalf of the
registrant and in the capacities and on the dates indicated.


   Signature               Title                              Date

  /s/ JAY BUDD
--------------------------
      Jay Budd             Chairman of the Board and CEO     April 8, 2004

  /s/ ROBERT LEE
-------------------------
      Robert Lee            Director                          April 8, 2004




                                       32
<PAGE>