SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

                Annual Report Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934

                   For the Fiscal Year Ended December 31, 2004

                        Commission File Number: 000-19404

                          AMERICAN UNITED GLOBAL, INC.
             (Exact name of registrant as specified in its charter)

        DELAWARE                                          95-4359228
 (State of incorporation)                      (IRS Employer Identification No.)


                   108 Village Square, # 327 Somers, NY 10589
                    (Address of principal executive offices)

                                  425-869-7410
                         (Registrant's telephone number)

           Securities registered pursuant to section 12(g) of the Act:
                     Common Stock, par value $.01 per share


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 each 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 disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not 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-K or any amendment to this
Form 10-K. [_X_]

Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2).

YES [ ] NO [X]

The aggregate market value of any voting or non-voting common equity held by
non-affiliates as of June 30, 2004 was $2,012,217.50.

As of April 12, 2005, there were 8,487,399 shares outstanding of the
Registrant's common stock.

Documents incorporated by reference: None.

<PAGE>

                          AMERICAN UNITED GLOBAL, INC.
                           ANNUAL REPORT ON FORM 10-K
                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004
                                                                           Page

                                PART I

  Item 1. Business                                                      4
  Item 2. Properties                                                    4
  Item 3. Legal Proceedings                                             5
  Item 4. Submission of Matters to a Vote of Security Holders           5

                                PART II

  Item 5. Market for Registrant's Common Equity and Related             5
  Stockholder Matters and Issuer                                        6
  Purchases of Equity Securities
  Item 6. Selected Financial Data                                       7
  Item 7. Management's Discussion and Analysis of Financial Condition
  and Results of Operations                                             13
  Item 7A. Quantitative And Qualitative Disclosures About Market Risk   13
  Item 8. Financial Statements And Supplementary Data                   13
  Item 9. Changes In and Disagreements With Accountants On Accounting   13
  and Financial Disclosure
  Item 9A. Controls And Procedures                                      13
  Item 9B. Other Information1                                           13

                               PART III

  Item 10. Directors and Executive Officers of the Registrant           13
  Item 11. Executive Compensation                                       16
  Item 12. Security Ownership Of Certain Beneficial Owners And
  Management And Related Stockholder Matters                            17
  Item 13. Certain Relationships And Related Transactions               18
  Item 14. Principal Accounting Fees and Services                       21


                                     PART IV

  Item 15. Exhibits, Financial Statement Schedules                      21

Signatures

<PAGE>

                SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

THE FEDERAL SECURITIES LAWS PROVIDE FOR A SAFE HARBOR FOR CERTAIN
FORWARD-LOOKING STATEMENTS. THIS SAFE HARBOR PROTECTS US FROM LIABILITY IN A
PRIVATE ACTION ARISING UNDER EITHER THE SECURITIES ACT OF 1933 OR THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, FOR FORWARD-LOOKING STATEMENTS THAT ARE
IDENTIFIED AS SUCH AND ACCOMPANIED BY MEANINGFUL CAUTIONARY STATEMENTS OR ARE
IMMATERIAL.

WHEN USED IN THIS FORM 10-K, THE WORDS OR PHRASES "ESTIMATE", "INTENDS", "MAY",
"EVALUATING" OR SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY "FORWARD LOOKING
STATEMENTS" WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995, AS AMENDED. SUCH STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND
UNCERTAINTIES, INCLUDING BUT NOT LIMITED TO, OUR ABILITY TO CONTINUE AS A GOING
CONCERN, OUR ABILITY TO MAKE REQUIRED PAYMENTS ON SENIOR SECURED NOTES, OUR NEED
FOR ADDITIONAL FINANCING, OUR HISTORY OF LOSSES, THE SUCCESSFUL IDENTIFICATION
OF STRATEGIC BUSINESS PARTNERS, THE SUCCESSFUL EXECUTION OF AGREEMENTS WITH
STRATEGIC BUSINESS PARTNERS REQUIRED FOR THE IMPLEMENTATION OF BUSINESS PLANS
AND THE SUCCESSFUL IDENTIFICATION, ACQUISITION AND INTEGRATION OF ADDITIONAL
TARGET BUSINESSES. SUCH FACTORS COULD AFFECT OUR COMPANY'S, INCLUDING THAT OF
OUR SUBSIDIARIES', FINANCIAL PERFORMANCE AND COULD CAUSE OUR ACTUAL RESULTS FOR
FUTURE PERIODS TO DIFFER MATERIALLY FROM ANY OPINION OR STATEMENTS EXPRESSED
HEREIN WITH RESPECT TO FUTURE PERIODS. AS A RESULT, WE CAUTION READERS NOT TO
PLACE UNDUE RELIANCE ON ANY SUCH FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS
OF THE DATE MADE.

THE FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE
AND, EXCEPT AS REQUIRED BY LAW, WE UNDERTAKE NO OBLIGATION TO UPDATE ANY
FORWARD-LOOKING STATEMENT TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE ON
WHICH THE STATEMENT IS MADE OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED
EVENTS. IN ADDITION, WE CANNOT ASSESS THE IMPACT OF EACH FACTOR ON OUR BUSINESS
OR THE EXTENT TO WHICH ANY FACTOR OR COMBINATION OF FACTORS MAY CAUSE ACTUAL
RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN ANY FORWARD-LOOKING
STATEMENTS.


                                       3
<PAGE>

                                     PART I

ITEM 1. BUSINESS

AUGI was initially organized as a New York corporation on June 22, 1988 under
the name Alrom Corp. ("Alrom"), and completed an initial public offering of
securities in August 1990. Alrom effected a statutory merger in December 1991,
pursuant to which Alrom was reincorporated in the State of Delaware under the
name American United Global, Inc. ("AUGI").

We intend to focus our business strategy on acquisitions of operating businesses
in various sectors. However, other than as set forth below, we have not as yet
identified any definitive acquisition candidates or opportunities. Currently, we
own 13% of the common stock of Western Power & Equipment Corp. ("Western").

Western

Western commenced operations in November 1992 with the acquisition from Case
Corporation of seven retail distribution facilities located in Oregon and
Washington. Western became our subsidiary simultaneous with such acquisition.
Prior to November 1, 2000, Western was our 59.6% majority owned operating
subsidiary. On November 1, 2000, we distributed 777,414 shares of Western common
stock owned by us pursuant to the final court approved settlement of the
shareholder class action. Due to the distribution of the Western shares and
subsequent issuances of shares by Western, Western is no longer a majority owned
subsidiary of ours but we continue to own approximately 13% of Western's
outstanding common stock. Our 1,222,586 shares of Western are presently held in
escrow - see Legal Proceedings.

Informedix

InforMedix has developed a portable medical device linked to an integrated
hardware and software system that its management believes will enable
pharmaceutical and biotechnology companies to get new drugs to market faster and
at a lower cost than traditional methods.

On May 8, 2003, Informedix merged with a public entity whose name was changed to
Informedix Holdings, Inc. and 54,000 shares of their common stock were issued to
our company pursuant to the automatic conversion feature of the loan and all
accrued interest. On July 25, 2003, we loaned $20,000 to Informedix pursuant to
the terms of a 12% promissory note originally due January 31, 2004 which due
date was extended to April 2, 2004. The note was paid in full on that date. We
intend to distribute the 54,000 shares of Informedix that we hold to the holders
of our Series B-3 Preferred Stock as of June 10, 2003.

NY Medical

We acquired 55% of New York Medical, Inc., a New York corporation ("NY
Medical"), from Redwood Investment Associates, LLP ("Redwood") pursuant to an
amended and restated agreement and plan of merger agreement effective June 17,
2003 (the "Merger Agreement") and had intended to acquire the remaining 45%
pursuant to a share exchange agreement with NY Medical's employee stock option
plan (the "ESOP"), the holder thereof. However, the acquisition of NY Medical
has been rescinded ab initio, effective December 9, 2003, as is more fully set
forth under "Item 3. Legal Proceedings" and "Item 13. Certain Relationships and
Related Transactions."

Employees

As of the filing date of this Form 10-K, we employed 2 full-time employees,
neither of whom is a member of a union, and no part-time employees.

ITEM 2. PROPERTIES

Our principal corporate offices are located at 108 Village Square, # 327 Somers,
NY 10589.


                                       4
<PAGE>

ITEM 3. LEGAL PROCEEDINGS

Bridge Investment
In April 2004, certain bridge investors commenced an action against our company
in the Supreme Court of the State of New York, County of New York, alleging,
among other things, that we owe plaintiffs repayment of $700,000 in principal
face amount notes issued in connection with our intended acquisition of New York
Medical, a New York corporation (Altitude Group, LLC, Birch Associates, LLC and
D.C. Capital, LLC v. American United Global, Inc., Index No. 600936/04).
Plaintiffs filed a motion seeking summary judgment against us in aggregate
amount of $787,546, consisting of the allegedly outstanding principal and
interest on the notes as well as attorneys' costs, and we opposed that motion.
On September 24, 2004, judgment was rendered in favor of these three investors
in the amount of $840,695.79. We are currently attempting to settle this matter
with the plaintiffs on an amicable basis.

New York Medical, Inc.
New York Medical, Inc. and Redwood Investment Associates, L.P. vs American
United Global, Inc., et al. (Supreme Court, New York State, New York County). In
this suit, filed on December 12, 2003, plaintiffs seek a declaration that a
series of transactions by which we allegedly acquired Lifetime Healthcare
Services, Inc. ("Lifetime") and Lifetime acquired an interest in NY Medical from
Redwood (collectively "Transactions") were properly rescinded or, alternatively,
that because the Transactions were induced by fraudulent conduct of our company
and others, that the Transactions should be judicially rescinded. In addition to
the requests for equitable relief, plaintiffs also seek monitory damages in
excess of $5 million and exemplary damages in the amount of $15 million.

Currently, the suit has not proceeded past the filing and service of the
complaint. We have obtained an open-ended extension of time in which to answer
and/or move with regard to the complaint. We are attempting to resolve the
matter amicably. However, in the event litigation proceeds, it will be
aggressively defended.

Howard Katz
Howard Katz, a member of our board of directors, is in discussions with us over
the terms of a settlement of a debt that he claims we owe him. Mr. Katz'
resignation from our board of directors was requested in connection with the
intended acquisition of NY Medical, a request that was not affected by the
subsequent rescission of all agreements relating to such acquisition.
Nonetheless, we have not received such resignation as of the date of this annual
report of Form 10-K. We anticipate an expeditious settlement with Mr. Katz
regarding the amount of the debt and the payment terms thereof, in connection
with which we expect to obtain his letter of resignation from our board of
directors.

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

None.

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

Our shares of common stock are presently quoted on the pink sheets under the
symbol AUGB. Listed below are the high and low sale prices for the shares of our
common stock during the years ended December 31, 2004 and 2003. These quotations
reflect inter-dealer prices, without mark-up, mark-down or commission and may
not represent actual transactions.

                                        Common Stock
                                        ------------

                                    High             Low
                                    ----             ---

Fiscal 2003
-----------
First Quarter                       $1.25            $0.60
Second Quarter                      $2.50            $0.75
Third Quarter                       $2.375           $1.25
Fourth Quarter                      $2.75            $1.50


Fiscal 2004
-----------
First Quarter                       $2.75            $1.50
Second Quarter                      $2.50            $1.50
Third Quarter                       $4.50            $1.70
Fourth Quarter                      $2.00            $0.90

Fiscal 2005
-----------
First Quarter                       $1.65            $0.65


                                       5
<PAGE>

On April 12, 2005, there were approximately 147 holders of record of our common
stock then issued and outstanding.

As of April 13, 2005, the last sale price of the shares of our common stock as
reported on the pink sheets was $0.75.

Dividend Policy

We have never paid cash dividends and have no plans to do so in the foreseeable
future. Our future dividend policy will be determined by our board of directors
and will depend upon a number of factors, including our financial condition and
performance, our cash needs and expansion plans, income tax consequences, and
the restrictions that applicable laws and our credit arrangements then impose.

<TABLE>
<CAPTION>
                                Number of securities to be   Weighted-average exercise   Number of securities
                                  issued upon exercise of    price of outstanding        remaining available for
                                   outstanding options,      options, warrants and       future issuance under
                                    warrants and rights      rights                      equity compensation plans
<S>                                               <C>                             <C>                       <C>
Equity compensation plans
approved by security holders
           2001 Stock Option
           Plan                                   1,194,000                       $1.26                     806,000
Equity compensation plans not
approved by security holders
                                                       None                       - - -                        None
           Total                                  1,194,000                       $1.26                     806,000
</TABLE>


ITEM 6. SELECTED FINANCIAL DATA.

The Consolidated Statements of Operations set forth below with respect to fiscal
years 2001 and 2002 and the periods of August 1, 2002 through June 16, 2003 and
June 17, 2003 through December 31, 2003 and the Consolidated Balance Sheet Data
at July 31, 2002, June 16, 2003 and December 31, 2003 are derived from, and
should be read in conjunction with, the audited Consolidated Financial
Statements and Notes thereto of American United Global, Inc. included in this
Annual Report on Form 10-K. The Consolidated Statements of Operations Data set
forth below with respect to fiscal year 2000 and the Consolidated Balance Sheet
Data at July 31, 2000 and 2001 are derived from the audited Consolidated
Financial Statements of the Company which are not included in this Annual Report
on Form 10-K. The data set forth in the following tables should be read in
conjunction with, and are qualified in their entirety by, Management's
Discussion and Analysis of Financial Condition and Results of Operations and the
Company's Consolidated Financial Statements and Notes thereto appearing
elsewhere in this Annual Report on Form 10-K.

                                       6
<PAGE>

<TABLE>
<CAPTION>
                                             June 17, 2003   August  1,
                               Year Ended     Through        2002 Through
                              December 31,   December 31,    June 16,                  Year ended July 31,
                                 2004           2003           2003             2002         2001(1)         2000
                              -------------- -------------  -------------  -----------   --------------   -----------
<S>                           <C>            <C>            <C>            <C>           <C>             <C>
Net sales                     $        --    $        --    $        --    $        --   $        --     $  155,637

Loss from
continuing
operations                         (2,296)        (4,036)                      (1,217)        (6,400)        (7,030)
                                                                  (698)
Net Loss                           (2,296)        (4,036)                      (1,217)        (6,400)        (7,030)
                                                                  (698)
Basic and
Diluted Loss
 Per Share:

Loss from
continuing
operations                         (0.28)         (0.56)         (0.35)         (1.50)        (13.02)        (14.71)

Net loss                           (0.28)   $     (0.56)   $     (0.35)   $     (1.50)   $    (13.02)        (14.71)
</TABLE>


<TABLE>
<CAPTION>
                                                     Consolidated Balance Sheet Data (in $ thousands)
                                               Period  Ended               Year ended July 31
                                        ---------------------------    ------------------------------

                             December      December       June         2002         2001        2000
                             31, 2004      31, 2003       16, 2003
<S>                          <C>          <C>              <C>      <C>          <C>          <C>
Total                        $     128    $     584        1,424    $   3,000    $   1,724    $ 128,549
assets

Total                           (5,316)       4,242        2,700        3,587        2,909      115,413
liabilities

Working capital (deficit)       (5,188)      (3,658)      (1.276)        (587)      (2,137)     (17,579)

Stockholders' (deficiency)
 equity                      $  (5,188)   $  (3,656)   $  (1,276)   $    (587)   $  (1,185)   $   7,373
</TABLE>


(1)   For 2002 and 2001, Western has been accounted for under the equity method
      whereas in 2000 Western was included in the consolidated financial
      statements of AUGI.


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

The following discussion and analysis should be read in conjunction with the
selected historical financial data, financial statements and notes thereto and
the other historical financial information of our company contained elsewhere in
this Annual Report on Form 10-K. The statements contained in this Annual Report
on Form 10-K that are not historical are forward looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Exchange Act of 1934, including statements regarding our company's
expectations, intentions, beliefs or strategies regarding the future.
Forward-looking statements include, but are not limited to, our statements
regarding liquidity, anticipated cash needs and availability and anticipated
expense levels. All forward-looking statements included in this annual report of
Form 10-K are based on information available to our company on the date hereof,
and we assume no obligation to update any such forward-looking statement. Our
actual results could differ materially from those in such forward-looking
statements.

Overview


                                       7
<PAGE>

We own approximately 13% of the common stock of Western Power & Equipment Corp.
("Western") which engages in the sale, rental and servicing of light,
medium-sized and heavy construction, agricultural and industrial equipment,
parts and related products. The major supplier to Western is Case Corporation
and the items sold, rented and serviced include backhoes, excavators, crawler
dozers, compactors, log loaders, street sweepers and forklifts. Western operates
15 facilities in Nevada, Oregon, Washington, California and Alaska and sells to
contractors, governmental agencies and other customers primarily for use in the
construction of residential and commercial buildings, roads, levees, dams,
underground power projects, forestry projects, municipal construction and other
projects.

Prior to November 1, 2000, we were the majority shareholder of Western with a
59.6% ownership. The results of operations of Western were therefore
consolidated with those of AUGI in all prior fiscal years. On November 1, 2000
we distributed 777,414 shares of Western common stock owned by our company
pursuant to the final court approved settlement of the shareholder class action.
As a result, our ownership in Western became 36% and our investment in Western
has been accounted for under the equity method effective August 1, 2000. As a
result of the issuance of shares of Western common stock by Western, we
currently own approximately 13% of its outstanding common stock.

Results of Operations


The fiscal year ended December 31, 2004 compared to the period of June 17 2003
to December 31, 2003

General and administrative expenses for the year ended December 31, 2004 were
$1,265,000 compared to $1,281,000 for the six and one half month period ended
December 31, 2003. The higher monthly average in the six and one half month
period ended December 31, 2003 was primarily attributable to higher legal and
other professional fees having to do with the Lifetime merger, the NY Medical
acquisition and the rescission thereof as well as costs associated with the
abandoned private placement.

Net interest expense for the year ended December 31, 2004 was $869,000 compared
to $1,247,000 for the six and one half month period ended December 31, 2003. The
decrease is primarily due a charge of $1,083,000 in the 2003 period for the
beneficial conversion feature and warrants associated with the Bridge Notes for
which the comparable charge in 2004 was $417,000. This was somewhat offset by a
higher interest rate on the Bridge Notes in 2004 due to the Notes being in
default. In addition, the current year reflected $87,000 of interest expense
paid with common stock to the Rubin Family Irrevocable Stock Trust on a loan of
$218,000 (see Note 6).

The Period of June 17, 2003 through December 31, 2003 as compared to the Period
of August 1, 2002 through June 16, 2003


                                       8
<PAGE>

General and administrative expenses totaled $1,281,000 for the six and one half
months ended December 31, 2003 and $871,000 for the ten and one half months
ended June 17, 2003. The increase in the December period is primarily due to an
increase in legal and other professional fees associated with the Lifetime
merger, the New York Medical Inc. acquisition and the costs related to an
abandoned private placement and the Rescission Agreement.

Net interest expense for the ten and one half months ended June 16, 2003 was
$107,000 and was $1,247,000 for the six and one half months ended December 31,
2003. The increase was due to a charge of $1,083,000 for the beneficial
conversion feature of the 1,500,000 warrants that accompanied the Bridge Notes,
which is recorded as additional interest expense; in addition, as there was a
full reserve recorded against the debt due from NYMI, the previously accrued
interest income as of December 31, 2003 of approximately $61,000 on such note
was reversed. Slightly offsetting the expense increases was an increase in
interest income of $3,000 earned on notes receivable that were issued late in
the June 16 period and early in the December 31 period.

Other income of $280,000 in the period ended June 16, 2003 relates to reductions
of estimates of certain potential liabilities. There was no such comparable item
in the period ended December 31, 2003.

We have recorded a full valuation allowance against the deferred tax benefit for
net operating losses generated, since in management's opinion the net operating
losses do not meet the more likely than not criteria for future realization.

The Period of August 1, 2002 through June 16, 2003 as compared to the fiscal
year ended July 31, 2002

General and administrative expenses for the ten and one half month period ended
June 16, 2003 were $871,000 as compared to $1,154,000 for the year ended July
31, 2002. The expense for the period ended June 16, 2003 included a charge for
stock option compensation of $ 100,000 for which there was no comparable expense
in fiscal 2002 and professional fees and other costs of approximately $175,000
relative to the rescinded acquisition of Lifetime/NYMI for which there were no
comparable costs in the 2002 fiscal year. In addition, the 2002 fiscal year
included a charge for an executive bonus of $ 300,000, rent expense of $97,000
and $65,000 of costs relative to an abandoned registration of a rights offering
for which there was no comparable expense in the period ended June 16, 2003. Net
of these charges, the average expense per month was $57,000 in the June 16, 2003
period as compared to $ 58,000 for the 2002 fiscal year.

Net interest expense was $107,000 or $10,000 per month in the period ended June
16, 2003 as compared to $149,000 or $12,000 per month for the fiscal year 2002
period. The slight decrease in monthly net interest expense in the period ended
June 17,, 2003 is primarily attributable to interest income earned on various
loans for which there was no comparable item in the 2002 period.

Other income of $280,000 in the June 16, 2003 period is comprised of adjustments
to estimated accruals for which certain potential liabilities have been reduced.
There was no such item in the 2002 period.


Liquidity and Capital Resources

The Company's primary needs for liquidity and capital resources are the funding
of salaries and other administrative expenses related to the management of the
Company.

During the fiscal year ended December 31, 2004, cash, cash equivalents and
marketable securities decreased by $376,000. There were cash receipts of
$218,000 from the Rubin Family Irrevocable Stock Trust during the 2004 year in
the form of loans represented by Promissory Notes. There was also a sale of
marketable securities of $2,000. Cash receipts in 2003 were net proceeds of
$1,350,000 from the sale of the Bridge Notes on June 18, 2003. These funds plus
the then existing cash balance were expended as follows; $658,000 was used for
additional loans to NYMI and $70,000 was used for additional loans to other
companies; approximately $585,000 was used for expenses and professional fees
related to the rescinded acquisition of Lifetime and NYMI and approximately
$117,000 was used to fund day to day operations.

The Company's cash of $8,000 as of December 31, 2004 is not sufficient to
support current levels of operations for the next twelve months and it will be
necessary for the Company to continue to seek additional financing. In addition,
the Company is in default on certain unsecured indebtedness due to an unrelated
third party and expects to continue non-payment of this indebtedness. The
Company is also in default on the Bridge Notes but is exploring a settlement
that management hopes can be reached in the near future.

Since December 31, 2004, the Company has borrowed an additional $76,000 from the
Rubin Family Irrevocable Stock Trust through April 29, 2005.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Contractual Commitments and Other Obligations

We remain contingently liable for certain capital lease obligations assumed by
eGlobe, Inc. (eGlobe) as part of the Connectsoft Communications Corp. asset sale
that was consummated in June 1999 (see Note 6).

Critical Accounting Policies

Our consolidated financial statements are prepared in accordance with accounting
principles generally accepted in the United States (GAAP). These accounting
principles require us to make certain estimates, judgments and assumptions. We


                                       9
<PAGE>

believe that the estimates, judgments and assumptions upon which we rely are
reasonable based upon information available to us at the time that these
estimates, judgments and assumptions are made. These estimates, judgments and
assumptions can affect the reported amounts of assets and liabilities as of the
date of the financial statements, as well as the reported amounts of revenues
and expenses during the periods presented. To the extent there are material
differences between these estimates, judgments or assumptions and actual
results, our financial statements will be affected. The significant accounting
policies that we believe are the most critical to aid in fully understanding and
evaluating our reported financial results include the following:

Accounting for Income Taxes

We currently record a full valuation allowance against the deferred tax benefit
for net operating losses generated, since in management's opinion the net
operating losses do not meet the more likely than not criteria for future
realization.

Impairment of Investments

We review estimates of the value of our investments each reporting period and
record an impairment loss to the extent that our management believes that there
has been an impairment to the carrying value.

Use of Estimates

The preparation of the financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make certain estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Although these
estimates are based on the knowledge of current events and actions we may
undertake in the future, they may ultimately differ from actual results. We use
estimates, among others, to determine whether any impairment is to be
recognized.

Intangible Assets and Goodwill

We account for intangible assets and goodwill in accordance with Statement of
Financial Accounting Standards (SFAS) 142, "Goodwill and Other Intangible
Assets", which was adopted by we on February 1, 2002 in accordance with that
statement, goodwill and intangible assets with indefinite lives are no longer
amortized, but rather tested for impairment at least annually. Intangible assets
with estimable useful lives, consisting of patents, trademarks, and rights, are
amortized on a straight-line basis over the estimated useful lives of 5 to 15
years, and are reviewed for impairment in accordance with SFAS 144, "Accounting
for the Impairment of long-lived Assets".

Goodwill represents the excess of purchase price over the fair value of
identifiable assets acquired in a purchase business combination.

Goodwill and intangible assets with definite lives are tested annually for
impairment in accordance with the provisions of SFAS 142.

Impairment of goodwill is tested at the reporting unit level by comparing the
reporting unit's carrying amount, including goodwill, to the fair value of the
reporting unit. The fair values of the reporting units are estimated using a
combination of the income or discounted cash flows approach and the market
approach, which utilizes comparable companies' data. If the carrying amount of
the reporting unit exceeds its fair value, then a second step is performed to
measure the amount of impairment loss, if any. Any impairment loss would be
expensed in the consolidated statements of earnings. The impairment test for
intangibles with indefinite useful lives consists of a comparison of the fair
value of the intangible assets with its carrying amount. When the carrying
amount of the intangible assets exceeds its fair value, an impairment loss would
be recognized for the difference. Intangible assets with estimable lives and
other long-lived assets are reviewed for impairment when events or changes in
circumstances indicate that the carrying amount of an asset or assets group may
not be recoverable in accordance with SFAS 144. Recoverability of intangible
assets with estimable lives and other long- lived assets is measured by a
comparison of the carrying amount of an assets or asset group to future net
undiscounted pretax cash flows expected to be generated by the assets or asset
group. If these comparisons indicated that an asset is not recoverable, the
impairment loss recognized is the amount by which the carrying amount of the
asset or the asset group exceeds the related estimated fair value.


                                       10
<PAGE>

Recent accounting pronouncements

In June 2002, the Financial Accounting Standards Board (FASB) issued SFASNo.
146, "Accounting for Costs Associated with Exit or Disposal Activities." This
statement addresses financial accounting and reporting for costs associated with
exit or disposal activities and nullifies Emerging Issues Task Force (EITF)
Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits
and Other Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring)." The company adopted SFAS 146, effective February 1, 2003. The
adoption of SFAS 146 did not have a material impact on our company's financial
statements. The company has continued to account for employee-related
post-employment benefit costs, including severance payments, under the
provisions of SFAS No. 112, "Employer's Accounting for Post-Employment
Benefits."

In November 2002, FASB Interpretation No. 45, "Guarantor's Accounting and
Disclosure Requirements for Guarantees, Including Indirect Guarantees and
Indebtedness of Others," was issued. This interpretation requires the initial
recognition and initial measurement, on a prospective basis only, of guarantees
issued or modified after December 31, 2002. Additionally, certain disclosure
requirements were effective for financial statements ending after December 15,
2002. The adoption of this interpretation did not have an impact on our
company's financial statements.

In January 2003, FASB Interpretation No. 46 (FIN 46), "Consolidation of Variable
Interest Entities," (VIE's) was issued, and in December 2003, a revision to FIN
46 was issued. FIN 46 requires identification of our company's participation in
VIE's, which are defined as entities with a level of invested equity that is not
sufficient to fund future activities to permit them to operate on a stand-alone
basis, or whose equity holders lack certain characteristics of a controlling
financial interest. For entities identified as VIE's, FIN 46 sets forth a model
to evaluate potential consolidation based on an assessment of which party to a
VIE, if any, bears a majority of the risk of the VIE's expected losses, or
stands to gain from a majority of the VIE's expected returns. FIN 46 also sets
forth certain disclosures regarding interests in VIE's that are deemed
significant, even if consolidation is not required. This interpretation is
effective for all VIE's created after January 31, 2003. The adoption of this
interpretation did not have an impact on our company's financial statements.

In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities." SFAS 149 clarifies under what
circumstances a contract with an initial net investment meets the
characteristics of a derivative, amends the definition of an underlying
contract, and clarifies when a derivative contains a financing component in
order to increase the comparability of accounting practices under SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." The statement is
effective for contracts entered into or modified after June 30, 2003, and for
hedging relationships designated after June 30, 2003. The adoption of SFAS 149
did not have an impact on our company's financial statements.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." This statement
establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and equity. It
requires that an issuer classify a financial instrument that is within its scope
as a liability (or an asset in some circumstances). Many of those instruments
were previously classified as equity. The statement is effective for financial
instruments entered into or modified after May 31, 2003. The company adopted
this standard on June 1, 2003. Its adoption did not have an impact on our
company's financial statements.

In May 2003, the consensus on EITF Issue No. 01-08, "Determining Whether an
Arrangement Contains a Lease," was issued. The guidance in the consensus applies
to the purchase or sale of goods and services under various types of contracts,
including outsourcing arrangements. Based on the criteria in the consensus, both
parties to an arrangement are required to determine whether the arrangement
includes a lease within the scope of SFAS No. 13, "Accounting for Leases." The
new requirement applies prospectively to new or modified arrangements for
reporting periods beginning after May 28, 2003. Accordingly, as of August 1,
2003, the company accounted for new or modified arrangements based on this
guidance. Adoption of this standard did not have an impact on our company's
financial statements.

In December 2003, the FASB issued SFAS No. 132 (Revised 2003), "Employers'
Disclosures about Pensions and Other Post-retirement Benefits," which enhanced
the disclosure about pension plans and other post-retirement benefit plans, but
did not change the measurement or recognition principles for those plans. The


                                       11
<PAGE>

statement requires additional disclosures about the assets, obligations, cash
flows, and net periodic benefit cost of defined benefit pension plans and other
defined benefit post-retirement plans. Its adoption did not have an impact on
our company's financial statements.

In December 2003, the Financial Accounting Standards Board ("FASB") issued
Interpretation No. 46 ("FIN 46"), "Consolidation of Variable Interest Entities
which was originally issued in January 2003. FIN 46 or revised provides guidance
on the consolidation of certain entities when control exists through other
entities created after January 31, 2003. The Company does not hold a variable
interest in any enterprise. Accordingly, the Company does not expect the
provisions of FIN 46 to have a material effect on future interim or annual
financial statements.

On December 18, 2003 the SEC issued Staff Accounting Bulletin No. 104, Revenue
Recognition ("SAB 104"), which supersedes SAB 101, Revenue Recognition in
Financial Statements. SAB 104's primary purpose is to rescind accounting
guidance contained in SAB 101 related to multiple element revenue arrangements,
which was superseded as a result of the issuance of EITF 00-21, Accounting for
Revenue Arrangements with Multiple Deliverables. The adoption of SAB 104 did not
have a material impact the Company's financial position or results of
operations.

In December 2004, the FASB issued SFAS No. 123 (revised 2004), Share-Based
Payment, which is an amendment to SFAS No. 123, Accounting for Stock-Based
Compensation and supersedes APB Opinion No. 25, Accounting for Stock Issued to
Employees. This new standard eliminates the ability to account for share-based
compensation transactions using Accounting Principles Board (APB) No. 25,
Accounting for Stock Issued to Employees (APB 25) and requires such transactions
to be accounted for using a fair-valued-based method, with the resulting cost
recognized in the Company's financial statements. This new standard is effective
for annual periods beginning after June 15, 2005. The Company has not awarded or
granted any share-based compensation to date and, therefore, the adoption of
this standard is not expected to have any effect on the Company's financial
position or results of operations until such time as share-based compensation is
granted.

In December 2004, the FASB issued SFAS No. 153, Exchange of Non-monetary Assets.
SFAS No. 153 amends APB Opinion No. 29, Accounting for Non-monetary
Transactions, to eliminate the exception for non-monetary exchanges of similar
productive assets. The Company will be required to apply this statement to
non-monetary exchanges after December 31, 2005. The adoption of this standard is
not expected to have a material effect on the Company's financial position or
results of operations.

Financial Statements and Internal Controls

We believe it is critical to provide investors and other users of our financial
statements with information that is relevant, objective, understandable and
timely, so that they can make informed decisions. As a result, we have
established and we maintain accounting systems and practices and internal
control processes designed to provide reasonable assurance that transactions are
properly executed and recorded and that our policies and procedures are carried
out appropriately.

Financial Controls and Transparency

Our internal controls are designed to ensure that assets are safeguarded,
transactions are executed according to management authorization and our
financial systems and records can be relied upon for preparing our financial
statements and related disclosures. Our system of internal controls includes
continuous review of our financial policies and procedures to ensure accounting
and regulatory issues have been appropriately addressed, recorded and disclosed.
The independent auditors perform audits of our financial statements, in which
they examine evidence supporting the amounts and disclosures in our financial
statements, and also consider our system of internal controls and procedures in
planning and performing their audits.

Management Controls

Our management team is committed to providing high-quality, relevant and timely
information about our businesses. Management performs reviews of each of our
businesses throughout the year, addressing issues ranging from financial
performance and strategy to personnel and compliance.


                                       12
<PAGE>

In addition, see" Item 9A - Controls and Procedures" below.


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are exposed to market risk related to fluctuations in interest rates on our
debt. An increase in prevailing interest rates could increase our interest
payment obligations relating to variable rate debt.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

See page F-1 for an index to the Consolidated Financial Statements.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE.

Not applicable.

ITEM 9A. CONTROLS AND PROCEDURES.

We evaluated the effectiveness of the design and operation of our "disclosure
controls and procedures" ("Disclosure Controls") pursuant to Rules 13a-14(c) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") and our
"internal controls and procedures for financial reporting" (Internal Controls)
as of the end of the period covered by this Annual Report on Form 10-K. This
evaluation (the "Controls Evaluation") was done under the supervision and with
the participation of management.

Disclosure Controls are procedures that are designed with the objective of
ensuring that information required to be disclosed in our reports filed under
the Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the SEC's rules and forms. Disclosure Controls are also
designed with the objective of ensuring that such information is accumulated and
communicated to our management, including the Chief Executive Officer (CEO) to
allow timely decisions regarding required disclosure. Internal Controls are
procedures which are designed with the objective of providing reasonable
assurance that (1) our transactions are properly authorized; (2) our assets are
safeguarded against unauthorized or improper use; and (3) our transactions are
properly recorded and reported, all to permit the preparation of our financial
statements in conformity with generally accepted accounting principles in the
United States Of America.

Since the date of the Controls Evaluation to the date of this Annual Report,
there have been no significant changes in Internal Controls or in other factors
that could significantly affect Internal Controls, and no corrective actions
were required or taken with regard to significant deficiencies and material
weaknesses.

ITEM 9B. OTHER INFORMATION

Not applicable.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

Our directors serve until the next annual meeting of stockholders or until their
successors are elected and qualified. The executive officers serve at the
discretion of the Board of Directors in the absence of employment agreements.
The following information is submitted with respect to each of our directors and
executive officers as of the date of the filing of this annual report of Form
10-K.


Name                          Age        Positions presently held

Robert M. Rubin               64         Chairman of the Board of Directors and
                                         Chief Executive Officer

David M. Barnes               62         Chief Financial Officer and Director

Michael Metter                53         Director

Howard Katz (1)               64         Director


                                       13
<PAGE>

(1) Mr. Katz' resignation as a director of our company has been requested but as
at the date of this Form 10-K such resignation has not been received.

Robert M. Rubin. Mr. Rubin has served as the Chairman of our Board of Directors
since May 1991, and was our Chief Executive Officer from May 1991 to January 1,
1994. Between October 1990 and January 1, 1994, Mr. Rubin served as the Chairman
of the Board and Chief Executive Officer of our company and its subsidiaries;
from January 1, 1994 to January 19, 1996, he served only as Chairman of the
Board of our company and its subsidiaries. From January 19, 1996 to the present,
Mr. Rubin served as Chairman of the Board, President and Chief Executive
Officer. Mr. Rubin was the founder, President, Chief Executive Officer and a
Director of Superior Care, Inc. ("SCI") from its inception in 1976 until May
1986, when the business was sold to Olsten Corporation (NYSE). Mr. Rubin
continued as a director of SCI until the latter part of 1987. Mr. Rubin is also
a Director of Western Power and Equipment Corp. Mr. Rubin was a director of
Med-Emerg, Inc., a publicly held Canadian management company for hospital
emergency rooms and outpatient facilities until November 2001. Mr. Rubin was
also a director of StyleSite Marketing, Inc., which liquidated its assets for
the benefit of secured creditors in January 2000.

David M. Barnes. Mr. Barnes has served as our Chief Financial Officer since May
15, 1996, and was a director from November 8, 1996 through June 17, 2003. Mr.
Barnes resigned as a member of our board of directors effective on June 17, 2003
but was reappointed to our board of directors upon the effectiveness of the
rescission agreement with NY Medical. Mr. Barnes is also presently a member of
the Advisory Board of Interactive Imagination, Inc., a privately-held video game
developer based in Seattle, WA. Mr. Barnes is also a member of the board of
directors of each of SearchHelp, Inc. (OTC: SHLP) and In Veritas Medical
Diagnostics, Inc. (OTC: IVME).

Michael Metter. Mr. Metter has served as a Director since December 14, 2001. Mr.
Metter resigned as a member of our board of directors effective on June 17,
2003, but was reappointed to our board of directors upon the effectiveness of
the rescission agreement with NY Medical on May 27, 2004. Since March 2001, Mr.
Metter has been the President of RME International, Ltd.(RME) Mr. Metter also
currently consults to a broad range of businesses, including IT communications
and media businesses, on mergers, acquisitions, restructuring, financing and
other matters. From October 1998 to February 2001, Mr. Metter was a principal of
Security Capital Trading, Inc, and was a principal at Madison Capital from
September 1997 to October 1998. Prior thereto, Mr. Metter was the President of
First Cambridge Securities from October 1994 to August 1997.

Howard Katz. Mr. Katz has been a director since April 15, 1996, and was an
Executive Vice President from April 15, 1996 through July 31, 1998. Since August
1998 to the present Mr. Katz has been the Chief Executive Officer of Imagine
Networks, LLC., a company based in New York City that engages in advanced
technology and software development. Mr. Katz' resignation was requested in
connection with the contemplated acquisition of NY Medical, but such resignation
was never furnished to us.

Family Relationships

There is no family relationship between any of the directors and/or executive
officers, by blood, marriage or adoption.

Involvement in certain legal proceedings

Except as set forth herein, no officer or director of our company has, during
the last five years: (i) been convicted in or is currently subject to a pending
a criminal proceeding; (ii) been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to any federal or
state securities or banking laws including, without limitation, in any way
limiting involvement in any business activity, or finding any violation with
respect to such law, nor (iii) has any bankruptcy petition been filed by or
against the business of which such person was an executive officer or a general
partner, whether at the time of the bankruptcy of for the two years prior
thereto.


                                       14
<PAGE>

Compliance with Section 16 of the Exchange Act

Section 16(a) of the Securities Exchange Act, as amended (the "Exchange Act")
requires our executive officers and directors, and persons who beneficially own
more than ten percent of our common stock, to file initial reports of ownership
and reports of changes in ownership with the SEC and the National Association of
Securities Dealers, Inc. Executive officers, directors and persons who
beneficially own more than ten percent of our common stock are required by SEC
regulations to furnish us with copies of all Section 16(a) forms they file.

Based solely upon our review of the copies of reporting forms furnished to us,
and written representations that no other reports were required, we do not
believe that all filing requirements under Section 16(a) of the Securities
Exchange Act of 1934 applicable to our directors, officers and any persons
holding 10% or more of our common stock with respect to our fiscal year ended
December 31, 2003, were satisfied on a timely basis.

Code of Ethics

Our board of directors adopted a Code of Ethics that covers all executive
officers of our company and its subsidiaries. The Code of Ethics requires that
senior management avoid conflicts of interest; maintain the confidentiality of
information relating to our company; engage in transactions in shares of our
common stock only in compliance with applicable laws and regulations and the
requirements set forth in the Code of Ethics; and comply with other requirements
which are intended to ensure that such officers conduct business in an honest
and ethical manner and otherwise act with integrity and in the best interest of
our company.

All our executive officers are required to affirm in writing that they have
reviewed and understand the Code of Ethics.

Any amendment of our Code of Ethics or waiver thereof applicable to any of our
principal executive officer, principal financial officer and controller,
principal accounting officer or persons performing similar functions will be
disclosed on our website within 5 days of the date of such amendment or waiver.
In the case of a waiver, the nature of the waiver, the name of the person to
whom the waiver was granted and the date of the waiver will also be disclosed. A
copy of our Code of Ethics was attached as Exhibit 14 to our Form 10-K filed
with the SEC on July 16, 2004 and is incorporated herein by reference.

Audit Committee

Our board of directors has an audit committee comprised of Michael Metter. The
audit committee makes recommendations to our board of directors regarding the
independent auditors for our company, approves the scope of the annual audit
activities of our independent auditors, review audit results and will have
general responsibility for all of our auditing related matters.

The purpose of the Audit Committee is to assist our board of directors in the
oversight of the integrity of the consolidated financial statements of our
company, our company's compliance with legal and regulatory matters, the
independent auditor's qualifications and independence, and the performance of
our company's independent auditors. The primary responsibilities of the Audit
Committee are set forth in its charter, and include various matters with respect
to the oversight of our company's accounting and financial reporting process and
audits of the consolidated financial statements of our company on behalf of our
board of directors. The Audit Committee also selects the independent certified
public accountants to conduct the annual audit of the consolidated financial
statements of our company; reviews the proposed scope of such audit; reviews
accounting and financial controls of our company with the independent public
accountants and our financial accounting staff; and reviews and approves
transactions between us and our directors, officers, and their affiliates.

Accordingly, the Audit Committee discusses with our independent auditors, our
audited financial statements, including among other things the quality of our
accounting principles, the methodologies and accounting principles applied to
significant transactions, the underlying processes and estimates used by our
management in our financial statements and the basis for the auditor's
conclusions regarding the reasonableness of those estimates, in addition to the
auditor's independence.


                                       15
<PAGE>

Audit Committee Financial Expert

We do not have an audit committee financial expert. We have not yet been able to
identify and appoint a suitable nominee as of the date of this annual report.
Our management is currently diligently pursuing such a candidate.

Compensation of the Board of Directors

Directors who are also our employees do not receive additional compensation for
serving on the Board or its committees. Non-employee directors are not paid any
annual cash fee. In addition, directors are entitled to receive options under
our Stock Option Plan. All directors are reimbursed for their reasonable
expenses incurred in attending Board meetings. We intend to procure directors
and officers liability insurance.

Limitation on Liability and Indemnification of Directors and Officers Under
Delaware General Corporation Law a director or officer is generally not
individually liable to the corporation or its shareholders for any damages as a
result of any act or failure to act in his capacity as a director or officer,
unless it is proven that:

1. his act or failure to act constituted a breach of his fiduciary duties as a
director or officer; and

2. his breach of those duties involved intentional misconduct, fraud or a
knowing violation of law.

This provision is intended to afford directors and officers protection against
and to limit their potential liability for monetary damages resulting from suits
alleging a breach of the duty of care by a director or officer. As a consequence
of this provision, stockholders of ours will be unable to recover monetary
damages against directors or officers for action taken by them that may
constitute negligence or gross negligence in performance of their duties unless
such conduct falls within one of the foregoing exceptions. The provision,
however, does not alter the applicable standards governing a director's or
officer's fiduciary duty and does not eliminate or limit our right or any
stockholder to obtain an injunction or any other type of non-monetary relief in
the event of a breach of fiduciary duty.

As permitted by Delaware law, our By-Laws include a provision which provides for
indemnification of a director or officer by us against expenses, judgments,
fines and amounts paid in settlement of claims against the director or officer
arising from the fact that he was an officer or director, provided that the
director or officer acted in good faith and in a manner he or she believed to be
in or not opposed to our best interests. We have purchased insurance under a
policy that insures both our company and our officers and directors against
exposure and liability normally insured against under such policies, including
exposure on the indemnities described above.

Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers and controlling persons pursuant to the
foregoing provisions, or otherwise, we have been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.

ITEM 11. EXECUTIVE COMPENSATION

The following table summarizes the compensation for services rendered to our
company during fiscal years 2002, 2003 and 2004 by (i) our Chief Executive
Officer, and (ii) each of our other most highly compensated executive officers
whose total annual salary and bonus exceeded $100,000 and whose compensation is
required to be disclosed under SEC rules.

<TABLE>
<CAPTION>
                                  Annual Compensation ($)         Long Term Compensation
                                                                          Awards         Payouts
Name and                                             Other Annual Securities Underlying  LTIP      All Other
Principal Position         Year   Salary   Bonus     Compensation Options/ SARs(#)       Payouts   Compensation
------------------         ----   ------   -----     ------------ ----------------       -------   ------------
<S>             <C>        <C>  <C>        <C>    <C>                                   <C>       <C>
Robert M. Rubin (1)        2004 $265,000   - - -  - - -                                  - - -     - - -
                           2003 $274,000   - - -  - - -                                  - - -     - - -
                           2002 $253,000   - - -  - - -                                  - - -     - - -

David M. Barnes            2004 $45,000    - - -  - - -                                  - - -     - - -
                           2003 $120,000   - - -  - - -                                  - - -     - - -
                           2002 $150,000   - - -  - - -                                  - - -     - - -
</TABLE>


 (1) (1) Effective in July 1999, Mr. Rubin was entitled to an annual salary of
$225,000 plus a minimum increase each year equal to the percentage rise in the
New York City wage index (approximately 4% per year).


                                       16
<PAGE>

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         RELATED STOCKHOLDER MATTERS.

As of the most recent practicable date, our authorized capitalization consisted
of forty million shares of common stock, par value $0.01 per share. As of April
12, 2005, there were 8,487,399 shares of our common stock issued and
outstanding, all of which were fully paid, non-assessable and entitled to vote.
Each share of our common stock entitles its holder to one vote on each matter
submitted to our stockholders. The following table sets forth, as of such date,
the number of shares of our common stock owned by (i) each person who is known
by us to own of record or beneficially five percent (5%) or more of our
outstanding shares, (ii) each of our directors, (iii) each of our executive
officers and (iv) all of our directors and executive officers as a group. Unless
otherwise indicated, each of the persons listed below has sole voting and
investment power with respect to the shares of our common stock beneficially
owned.

<TABLE>
<CAPTION>
Name and Address                                   Amount Owned (1)    Percent of Class (2)

<S>                                                 <C>                          <C>
Rubin Family Irrevocable Stock Trust (3)
                                                    5,357,452                    63.12%
Robert M. Rubin (4)                                    33,680                         *
David M. Barnes (5)                                   749,500                     8.58%
C. Dean McLain (6)                                    962,000                    11.06%
Michael Metter (7)                                    130,000                     1.51%
Howard Katz (8)                                        64,000                         *
Vertex Capital Corp.                                  600,000                     7.07%
All officers and directors as a group (4 persons)   6,334,632                    70.82%
</TABLE>

* Less than one percent.

(1) Beneficial ownership is determined in accordance with the Rule 13d-3(d)(1)
of the Exchange Act, as amended and generally includes voting or investment
power with respect to securities. Pursuant to the rules and regulations of the
Securities and Exchange Commission, shares of common stock that an individual or
group has a right to acquire within 60 days pursuant to the exercise of options
or warrants are deemed to be outstanding for the purposes of computing the
percentage ownership of such individual or group, but are not deemed to be
outstanding for the purposes of computing the percentage ownership of any other
person shown in the table.

(2) Figures may not add up due to rounding of percentages.

(3) The Rubin Family Irrevocable Stock Trust (the "Trust") was created by Robert
M. Rubin, our chairman and chief executive officer, for the benefit of his wife
Margery Rubin and their children. Mr. Rubin disclaims beneficial interest in all
securities of our company held by the Trust.

(4) Includes (a) 80 shares of our common stock owned by Mr. Rubin and (b) 33,600
shares of our common stock underlying presently exercisable options.

(5) Includes options to purchase 249,500 shares of our common stock.


                                       17
<PAGE>

(6) Includes options to purchase 212,000 shares of our common stock.

(7) Includes options to purchase 110,000 shares of our common stock.

(8) Consists of options to purchase 64,000 shares of our common stock.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

On June 16, 2003, our company, Lifetime Acquisition Corp., a Delaware
corporation and wholly owned subsidiary of our company ("Merger Sub"), and
Lifetime Healthcare Services, Inc., a Delaware corporation ("Lifetime"), entered
into an Amended and Restated Agreement and Plan of Merger (the "Merger
Agreement").

Upon the terms and subject to the conditions set forth in the Merger Agreement,
Merger Sub was merged into Lifetime as of June 17, 2003 (the "Merger"). As a
result of the Merger, the outstanding shares of capital stock of each of Merger
Sub and Lifetime were converted or canceled, the separate corporate existence of
Merger Sub ceased, and Lifetime continued as the surviving corporation in the
Merger as a wholly owned subsidiary of our company.

Immediately prior to the Merger, 55% of the capital stock of NY Medical was
acquired by Lifetime pursuant to that certain Stock Purchase Agreement, dated
March 21, 2003, as amended (the "NY Medical Stock Purchase Agreement") entered
into by and among Lifetime, Redwood, and NY Medical.

Prior to the Merger, the Rubin Family Irrevocable Stock Trust (the "Trust")
owned approximately 77.6% of the shares of common stock, par value $.01 per
share of our company. In connection with the Merger, our company:

         o        issued to the former stockholders of Lifetime, an aggregate of
                  467,500 shares of our company's Series B-2 Convertible
                  Preferred Stock (the "B-2 Preferred"), convertible into an
                  aggregate of 9,350,000 shares of our common stock, which B-2
                  Preferred votes on an "as converted" basis with our common
                  stock on all matters as to which holders of our common stock
                  may vote; and

         o        entered into a certain agreement (the "Closing Agreement")
                  which was to govern the constitution of our board of directors
                  and materially impact its decision-making capability.

In contemplation of the Merger Agreement, we declared a stock dividend on our
common stock with a record date of June 10, 2003. The stock dividend took the
form of the issuance of 232,500 shares of our newly authorized and designated
Series B-3 Convertible Preferred Stock (the "B-3 Preferred") to the holders of
our common stock on the record date on a pro rata basis. Each share of the B-3
Preferred is convertible, on or after December 17, 2003, into 20 shares of our
common stock at the discretion of our board of directors. Accordingly, an
aggregate of 4,650,000 shares of our common stock would be issued to the record
holders of the B-3 Preferred if all shares of B-3 Preferred were converted. The
shares of B-3 Preferred vote together with our common stock on an "as converted
basis."

We attempted to consummate a private placement of our securities beginning in
September, 2003 in order to raise approximately $5.7 million to pay $2.0 million
principal amount of the Lifetime Note and retire the Landow Note, among other
purposes. In October 2003, Dr. Landow, acting on behalf of NY Medical, Tracy
Landow and Redwood, extended the due date to satisfy the payment events (the
"Payment Events") under the Closing Agreement. The Payment Events were postponed
from October 17, 2003 to November 17, 2003 in consideration for our agreement to
extend the due date of the $1,500,000 NY Medical Note payable to us to January
2, 2005.

We were unable to consummate the requisite financing by the extended date, and
in November 2003, Dr. Landow declared a default event. On December 5, 2003, a
written notice of a special telephonic meeting of the board of directors to be
held on Monday, December 8, 2003 was transmitted by Messrs. Landow, Fause and
Good to Messrs. Rubin and McLain; the purpose of the special meeting was, among
other things, to consider a possible rescission of the acquisition of 55% of the
capital stock of NY Medical by our company and the transactions relating
thereto.

On December 8, 2003, a telephonic meeting of the board was allegedly convened.
As a result of such alleged board meeting, minutes were prepared and executed by
Messrs. Landow, Fause and Good, and on December 9, 2003, a rescission agreement
among our company, Merger Sub, Lifetime, NY Medical, Redwood and the ESOP, dated
as of December 9, 2003 (the "Rescission Agreement") was entered into and
delivered to counsel to our company and Messrs. Rubin and McLain.


                                       18
<PAGE>

Under the terms of such Rescission Agreement:

         o        the Merger, Merger Agreement and all related documents were
                  cancelled and rescinded and rendered null and void, ab initio,
                  for all purposes, including for tax purposes;

         o        the NY Medical Stock Purchase Agreement, the acquisition of
                  capital stock of NY Medical and all transactions relating
                  thereto were cancelled and rescinded and rendered null and
                  void, ab initio, for all purposes, including for tax purposes;

         o        the share exchange agreement between our company and the ESOP
                  pursuant to which we were to acquire the remaining 45% of NY
                  Medical not acquired through the Merger Agreement (the "Share
                  Exchange Agreement") and all transactions relating thereto
                  were cancelled and rescinded and rendered null and void, ab
                  initio, for all purposes, including for tax purposes; and

         o        in order to enable us to repay the $1.5 million of bridge
                  notes (the "Bridge Notes") owed to certain investors in March
                  2004, NY Medical agreed under the terms of the Rescission
                  Agreement that "the NY Medical Note shall be modified such
                  that all principal and interest thereunder shall be due from
                  NY Medical to AUGI on March 30, 2004." In consideration of
                  such modification, the Rescission Agreement permits NY Medical
                  or its representatives to communicate directly with the
                  holders of the Bridge Notes for the purpose of, among other
                  things, negotiating an alternative mechanism for the payment
                  of the Bridge Notes.

Subsequent to December 9, 2003, Mr. Rubin objected to the December 8, 2003
meeting and the Rescission Agreement for a variety of reasons, including the
alleged failure to properly convene such meeting. On December 12, 2003, counsel
for NY Medical and Redwood commenced a lawsuit against our company, Lifetime,
Robert M. Rubin, Kenneth Orr and Robert DePalo in the New York State Supreme
Court seeking, among other things to declare the Rescission Agreement as valid
and effective and also seeking monetary damages against the defendants for
fraudulent inducement, unjust enrichment and breach of fiduciary duties and
breach of contract. Our company and our counsel believe that the suit is totally
without merit and that we have a number of valid defenses and counterclaims
against Dr. Landow and NY Medical.

Since late December 2003, the parties have been holding discussions with a view
toward settling the dispute, and the defendants in the above litigation have
been granted extensions to answer or otherwise plead.

On March 8, 2004, our corporate counsel advised counsel to NY Medical, Redwood
and its affiliates that each of our company and Messrs. Rubin and McLain, as
members of our board of directors, have reconsidered their position and that
they agree with NY Medical, Redwood, Dr. Landow, Tracy Landow and the ESOP that:

         o        effective as of December 9, 2003, the Merger, Lifetime Merger
                  Agreement and all related merger documents are null and void,
                  ab initio, for all purposes, including, without limitation,
                  for tax purposes;

         o        effective as of December 9, 2003, the NY Medical Stock
                  Purchase Agreement, the acquisition of capital stock of NY
                  Medical and all transactions contemplated thereby are null and
                  void, ab initio, for all purposes, including, without
                  limitation, for tax purposes;

         o        effective as of December 9, 2003, the Share Exchange Agreement
                  between our company and the ESOP and all transactions
                  contemplated thereby are null and void, ab initio, for all
                  purposes, including, without limitation, for tax purposes; and

         o        all principal amount of and accrued interest on the NY Medical
                  Note is, in fact, due and payable on March 30, 2004, and NY
                  Medical shall have the right to communicate directly with the
                  holders of the Bridge Notes for the purpose of, among other
                  things, negotiating an alternative mechanism for the payment
                  of the Bridge Notes.


                                       19
<PAGE>

Our counsel's letter did not condition acceptance of the above arrangements upon
a dismissal or voluntary settlement of the pending litigation, but rather
requested that NY Medical or its counsel advise as to mechanisms for NY Medical
to (a) communicate with the holders of the Bridge Notes, (b) effect full payment
on March 30, 2004 of the NY Medical Note, and (c) return the stock certificates
and other documents to effect the transactions contemplated by the Rescission
Agreements. To date, neither our company nor its counsel have been formally
contacted by NY Medical or its counsel concerning such matters.

As a result of the consummation of the transactions contemplated by the
Rescission Agreement:

         o        55% of the capital stock of NY Medical will be returned to
                  Redwood and the proposed Share Exchange with the ESOP
                  will be cancelled;

         o        the Merger is cancelled and rescinded, and all 467,500 shares
                  of our Series B-2 Preferred Stock issued to the former
                  stockholders of Lifetime are rendered null and void, without
                  any further value or rights, and returned to the treasury of
                  our company for cancellation;

         o        all stock options issued to Dr. Landow, Joseph Ciavarella, the
                  directors designated by Dr. Landow and other employees of NY
                  Medical are cancelled, which options were exercisable for an
                  aggregate of 2,100,000 shares of our common stock;

         o        effective as of December 9, 2003 each of Dr. Landow, Stuart
                  Fause and John Good is deemed to have resigned as a member of
                  our board of directors; and

         o        we cancelled the $5,500,000 Landow Note.

Effect of the Rescission of the NY Medical and Related Transactions.

As at the date of this filing, our company is in default in payment of the $1.5
million of Bridge Notes that were due and payable on March 17, 2004. On March
30, 2004, the $1.5 million of NY Medical Notes became due and payable. The NY
Medical Notes and our subordinated security interest in the assets of NY Medical
have been assigned to the holders of the Bridge Notes. We expect to negotiate
with representatives of NY Medical extensions of such obligations or otherwise
enter into compromise arrangements with the holders of the Bridge Notes. Our
company has been advised that NY Medical is currently negotiating to refinance
its indebtedness owed to DVI Business Credit Corp. ("DVI"), the senior secured
lender to NY Medical, that holds a first priority lien and security interest on
all of the assets of NY Medical. However, in April 2004, certain holders of the
Bridge Notes sued us for repayment thereof and in September 2004, a judgment was
rendered against us in the amount of $840,695.79 (see "Item 3. Legal
Proceedings").

In the event that NY Medical does not successfully refinance its obligations to
DVI, or should either we or the holders of the Bridge Notes demand payment of
the NY Medical Note and seek to foreclose on the assets of NY Medical, it may be
expected that DVI will foreclose on its priority lien on such NY Medical assets.
In such event it is probable that neither we nor the holders of the Bridge Notes
will receive significant net proceeds, if any, from the liquidation of the
collateral.

Our cash position as at the filing date of this report on Form 10-K is less than
$100,000. Inasmuch as we no longer own NY Medical or any other operating
business, in the event that any of the holders of the Bridge Notes are
successful in their suit against us, we will be unable to pay such Bridge Notes.
Accordingly, we would not be able to continue as a going concern, and may be
required to seek protection from our creditors under Chapter 11 of the Federal
Bankruptcy Act.

The Trust was issued an aggregate of 180,382 shares of B-3 Preferred, which have
since the date of issuance converted into 3,607,620 shares of common stock, but
gained no benefit therefrom not shared on a pro rata basis with all other
holders of our common stock as of June 10, 2003.


                                       20
<PAGE>

ITEM 14.          PRINCIPAL ACCOUNTANT FEES AND SERVICES

Aggregate fees billed to our company for the periods indicated by our principal
accountants, are as follows:


<TABLE>
<CAPTION>
                         Year ended December    June 17, 2003 to       August 1, 2002 to       Year ended July 31,
                         31, 2004               December 31, 2003      June 16, 2003          2002
<S>                      <C>                    <C>                    <C>                    <C>
AUDIT FEES
PriceWaterhouseCoopers                                                                        $22,000
Seligson &Giannatassio   $20,000                $10,000                $10,000
Eisner, LLP              $20,000                $10,000                $10,000

AUDIT RELATED FEES:
Seligson &Giannatassio   $13,000
Eisner, LLP                                     $10,000                $10,000
Bagell &Joseph                                                         $1,000

TAX FEES:
Robert Schulman                                                        $25,000

ALL OTHER FEES:
Bagell &Joseph                                                         $7,500
Eisner, LLP                                     $25,000                $35,000

Total                    $53,000                $55,000                $98,500                $22,000
</TABLE>


                                     PART IV

ITEM 15.          EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

         (a) The following documents are being filed as part of this Report:

            (1)   See page F-1 for an index of consolidated financial
                  statements. (2) Not applicable

            (3)   Exhibits:

            See 15(b) below for a listing of items filed as exhibits to this
Form 10-K as required by Item 601 of Regulation S-K.

      (b)   Exhibits:

            31.1  Certification of the Chief Executive Officer pursuant to
                  Section 302 of the Sarbanes-Oxley Act of 2002
                  ("Sarbanes-Oxley"). *

            31.2  Certification of the Chief Financial Officer pursuant to
                  Section 302 of the Sarbanes-Oxley Act of 2002
                  ("Sarbanes-Oxley"). *

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

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

      (c)   Financial Statement schedules:

            Financial Statement Schedules have been either omitted due to
inapplicability or because required information is shown in the Consolidated
Financial Statements or the Notes thereto.


                                       21
<PAGE>

                                   SIGNATURES

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

AMERICAN UNITED GLOBAL, INC.


By: /s/ Robert M. Rubin                                          June 7, 2005
-----------------------------
Robert M. Rubin
Chief Executive Officer

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

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

/s/ Robert M. Rubin        CEO and Chairman of the Board            June 7, 2005
-------------------
Robert M. Rubin

/s/ David M. Barnes        Chief Financial Officer and Director     June 7, 2005
-------------------
David M. Barnes

------------------         Director                                 June 7, 2005
Howard Katz

/s/ Michael Metter         Director                                 June 7, 2005
------------------
Michael Metter

<PAGE>

                          AMERICAN UNITED GLOBAL, INC.
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                           Page
                                                                          Number

  Independent Auditors' Report ...........................................  F-1
  Consolidated Balance Sheets December 31, 2004,
     December 31, 2003 and June 16, 2003 .................................  F-2
  Consolidated Statements of Operations for the year ended
     December 31, 2004, the period of June 17, 2003 through
  December 31, 2003, and the period of August 1, 2002
     through June 16, 2003 ...............................................  F-3
  Consolidated Statements of (Deficit) Equity for
     each of the  Periods ................................................  F-4
  Consolidated Statements of Cash Flows for the year ended
     December 31, 2004, the period of June 17, 2003 through
  December 31, 2003 and the period of August 1, 2002
     through June 16, 2003 ...............................................  F-5
  Notes to the Consolidated Financial Statements .........................F-6-12

<PAGE>

REPORT OF THE INDEPENDENT REGIGISTERED ACCOUNTING FIRM

To the Stockholders and
Board of Directors
American United Global, Inc & Subsidiaries

We have audited the accompanying balance sheets of American United Global, Inc &
Subsidiaries as of December 31, 2004 and 2003 and the related statements of
operations, change in stockholders' equity and cash flow for the year ended
December 31, 2004 and for the period August 1, 2002 to June 16, 2003 and for the
period June 16, 2003 to December 31, 2003. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits 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 the 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 American United Global, Inc &
Subsidiaries as of December 31, 2004 and 2003, and the result of its operations
and its cash flows for the year ended December 31, 2004 and for the period
August 1, 2002 to June 16, 2003 and for the period June 16, 2003 to December 31,
2003 in conformity with accounting principles generally accepted in the United
States of America.

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. The realization of a major portion of its
assets is dependent upon its ability to meet its future financing requirements,
and the success of future operations. These factors raise substantial doubt
about the Company's ability to continue as a going concern. The financial
statements do not include any adjustments that might result from this
uncertainty.


Seligson & Giannattasio, LLP
N. White Plains, NY
May 31, 2005


                                      F-1
<PAGE>

                          AMERICAN UNITED GLOBAL, INC.
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                  ASSETS
                                                                   December 31,     December 31,      June 16,
                                                                      2004            2003              2003
                                                                   ------------    ------------    ------------
<S>                                                                <C>             <C>             <C>
CURRENT ASSETS:
   Cash and cash equivalents                                       $      8,000    $    379,000    $    353,000
   Investment in marketable securities,
        at market value                                                      --           5,000           9,000
   Notes receivable from New York Medical, Inc.,
    net of reserve of $1,508,000, $1,508,000 and $ -0-                        0               0         850,000
   Investment in Informedix                                              40,000         100,000         100,000
   Investment in, SpongeTech                                             50,000          50,000          25,000
   Note receivable, InforMedix                                               --          20,000              --
   Note receivable, Scantek                                              25,000          25,000              --
   Prepaid expenses                                                          --              --          75,000
   Interest receivable                                                    5,000           5,000          12,000
                                                                   ------------    ------------    ------------
   TOTAL CURRENT ASSETS                                                 128,000         584,000       1,424,000
                                                                   ------------    ------------    ------------
   TOTAL ASSETS                                                    $    128,000    $    584,000    $  1,424,000
                                                                   ============    ============    ============

LIABILITIES AND SHAREHOLDERS' DEFICIT

CURRENT LIABILITIES:
 Short-term borrowings in default, including
    accrued interest of $1,210,000, $1,060,000
    and $979,000, respectively                                        2,710,000       2,560,000    $  2,479,000
   Accounts payable                                                      14,000          14,000          16,000
   Accrued liabilities                                                  663,000         397,000         438,000
  Note payable - Rubin Family Trust net of discount
   of $218,000                                                              -0-
  Notes payable                                                              --           7,000          47,000
Distribution payable to Series B-3 Preferred shareholders                40,000         100,000              --
Interest payable on Bridge Notes                                        389,000          81,000              --
                                                                   ------------    ------------    ------------
Bridge Notes payable, net of unamortized
      discount of $ -0- and $417,000 respectively                     1,500,000       1,083,000              --
                                                                   ------------    ------------    ------------
       TOTAL CURRENT LIABILITIES                                      5,316,000       4,242,000       2,980,000
                                                                   ------------    ------------    ------------
      TOTAL LIABILITIES                                               5,316,000       4,242,000       2.980,000
                                                                   ------------    ------------    ------------
Commitments and contingencies

SHAREHOLDERS' DEFICIT:
   Preferred stock, 12.5% cumulative, $1.00 per share
     liquidation value, $.01 par value; 1,200,000
 shares authorized; none issued and outstanding                              --              --               --
 Series B-1 preferred stock, each 25 shares convertible into 1
 common share, $3.50 per share
 liquidation value, $.01 par value; 1,000,000 shares
 authorized; 255,094, 407,094 and 407,094 issued and
outstanding respectively                                                  3,000           4,000           4,000
  Series B-3 preferred stock, each share
     convertible into 20 common shares, $20.00 per
share liquidation value, $.01 par value, 232,500 shares
authorized; 48,505 and 232,436                                            1,000           2,000              --
         shares issued and outstanding
Common stock, $.01 par value; 40,000,000
 shares authorized; 8,487,399, 2,532,699 and 1,997,624 shares
issued and outstanding respectively                                      85,000          25,000          20,000
   Additional paid-in capital                                        53,760,000      53,126,000      51,475,000
   Accumulated deficit                                              (58,957,000)    (56,661,000)    (52,625,000)
Accumulated unrealized loss, net                                             --         (74,000)        (70,000)
                                                                   ------------    ------------    ------------

                                                                     (5,108,000)     (3,578,000)     (1,196,000)
                                                                   ------------    ------------    ------------
  Less cost of treasury shares                                          (80,000)        (80,000)        (80,000)
                                                                   ------------    ------------    ------------

     Total shareholders' deficit                                     (5,188,000)     (3,658,000)     (1,276,000)
                                                                   ------------    ------------    ------------

   TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT                     $    128,000    $    584,000    $  1,424,000
                                                                   ============    ============    ============
</TABLE>


                                      F-2
<PAGE>

                  AMERICAN UNITED GLOBAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                              AUGUST 1, 2002    YEAR ENDED
                                                 YEAR ENDED   JUNE 17, 2003 TO   TO JUNE 16,      JULY 31,
                                          DECEMBER 31, 2004  DECEMBER 31, 2003        2003          2002
<S>                                              <C>            <C>            <C>            <C>
General and administrative expenses              $ 1,265,000    $ 1,281,000    $   871,000    $ 1,154,000
                                                 -----------    -----------    -----------    -----------
Operating loss                                    (1,265,000)    (1,281,000)      (871,000)    (1,154,000)

Income from litigation settlement                                                               2,875,000

Impairment of Investment in Intertech
  Capital, Inc.                                                                                  (250,000)
Interest paid in common stock                        (87,000)                                  (1,000,000)
Interest expense, net                               (869,000)    (1,247,000)      (107,000)      (149,000)

Loss on sale of marketable securities                (75,000)                                    (837,000)
Other income                                                                       280,000
Reserve for notes due from
  New York Medical, Inc.                                         (1,508,000)

Equity in loss of unconsolidated subsidiary                                                      (702,000)

Loss before taxes                                 (2,296,000)    (4,036,000)      (698,000)    (1,217,000)

Net loss                                         $(2,296,000)   $(4,036,000)   $  (698,000)   $(1,217,000)
                                                 -----------    -----------    -----------    -----------

Basic and diluted loss per share:
Basic and diluted loss per share                 $     (0.28)   $     (0.56)   $     (0.35)   $     (1.50)

Weighted average number of shares                  8,090,745      7,181,419      1,997,624        810,124
                                                 ===========    ===========    ===========    ===========
</TABLE>


                                      F-3
<PAGE>

                  AMERICAN UNITED GLOBAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                          YEAR ENDED        JUNE 17, 2003 TO   AUGUST 1, 2002
                                                          DECEMBER 31,      DECEMBER 31, 2003  TO JUNE 16,      YEAR ENDED JULY
                                                          2004                                 2003             31, 2002
                                                          -----------       -----------        ----------       -----------
<S>                                                       <C>               <C>                <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss from continuing operations                    $(2,296,000)      $(4,036,000)       $ (698,000)      $(1,217,000)
                                                          ===========       ===========        ==========       ===========
   Adjustments to reconcile net loss to net cash used
   by operating activities:
   Beneficial conversion feature                              417,000         1,083,000
   Equity in loss of affiliate                                                                                      702,000
  Interest paid in common stock                                87,000                                             1,000,000
  Stock award compensation                                    476,000           435,000
  Stock option compensation                                                                       100,000
   Loss on sale of marketable securities                       77,000                                               837,000
   Impairment of investments                                                                                        250,000
  Reserve for NYMI note receivable                                            1,508,000
 Prepaid expenses and other receivables                        20,000            22,000           (87,000)           27,000
 Litigation settlement receivable                                                               2,875,000        (2,875,000)
 Accounts payable                                                                (2,000)          (10,000)          (13,000)
 Accrued liabilities                                          626,000           225,000          (526,000)          440,000

NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES          (571,000)         (870,000)        1,374,000          (849,000)

CASH FLOWS FROM INVESTING ACTIVITIES
  (Loan to) Repayment from Informedix, Inc.                    20,000           (20,000)         (100,000)
  Loan to Scantek Medical, Inc.                                                 (25,000)
  Loans to Spongetech, Inc.                                                                       (25,000)
                                                                            (25,000)
  Loans to New York Medical, Inc.                                                                (850,000)
                                                                            (658,000)
  Purchase of treasury stock                                                                      (80,000)
  Sales of marketable securities                                2,000                                               185,000
  Net effect on cash from distribution
    of Western Power shares

NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES             2,000         (728,000)        (1,055,000)          185,000
                                                          -----------       -----------        ----------       -----------

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of Bridge Notes,                                           1,500,000
  Net (payments) / borrowings under
    term loans                                                                 (40,000)            47,000
(Repayment) / borrowing under note payable to Rubin
Family Trust                                                  218,000                            (250,000)          250,000
 Increase in short term borrowings                                               81,000           131,000
 Start up costs of Lifetime                                                      83,000
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
                                                              218,000         1,624,000           (72,000)          250,000
                                                          -----------       -----------        ----------       -----------
Net increase (decrease) in cash
 and cash equivalents                                        (371,000)           26,000            247,000         (414,000)
Cash and cash equivalents, beginning                          379,000           353,000        $   105,000          519,000
                                                          -----------       -----------        ----------       -----------
Cash and cash equivalents, ending                         $     8,000       $   379,000            353,000       $  105,000
                                                          -----------       -----------        ----------       -----------
</TABLE>

The Company did not make any payments for income taxes or interest during the
year ended December 31, 2004.


                                      F-4
<PAGE>

                          AMERICAN UNITED GLOBAL, INC.
                 CONSOLIDATED STATEMENT OF SHAREHOLDERS' DEFICIT

<TABLE>
<CAPTION>
                                                              PREFERRED STOCK                                    COMMON STOCK
                                                              ---------------                                    ------------
                                                                                                          Number of
                                                  Number of shares                  Amount                shares         Amount
                                                 --------------------------     --------------------      -----------   ---------
                                                 B-1         B-2 and B-3        B-1      B-2 and B-3
                                                 ---         --------------     ---      -----------
<S>                                            <C>             <C>          <C>           <C>          <C>            <C>
Balance at July 31, 2002                        407,094                      $  4,000    $                1,997,624    $    20,000

Net loss

    Balance at June 16, 2003                    407,094                      $  4,000                     1,997,624     $    20,000
Net loss
Issuance of B-2 preferred stock                                467,500                       5,000
Issuance of B-3 preferred stock                                232,436                       2,000
Cancellation of B-2 preferred stock                           (467,500)                     (5,000)
                                                              ---------                     -------
Issuance of common shares in payment of
legal fees                                                                                                535,075            5,000
                                                                                                          -------            -----

Balance at December 31, 2003                    407,094        232,436       $ 4,000        $2,000      2,532,699      $    25,000
                                               --------        -------       -------        ------      ---------      -----------
Net loss
Issuance of common stock to officers                                                                    1,270,000           13,000
Conversion of B-3 preferred stock                             (183,931)                     (1,000)     3,678,620           37,000
Conversion of B-1 preferred stock              (152,000)                      (1,000)                       6,080             -
                                               ---------                     --------
Shares issued for services rendered                                                                     1,000,000           10,000
                                                                                                        ---------      -----------

Balance at December 31, 2004                    255,094         48,505       $ 3,000       $ 1,000      8,487,399      $    85,000
                                               --------      ---------       -------     ---------      ---------      -----------
</TABLE>

<TABLE>
<CAPTION>
                                                                    ACCUMULATED
                                                  ADDITIONAL            OTHER                            COST OF       SHAREHOLDERS'
                                                  CONTRIBUTED       COMPREHENSIVE       ACCUMULATED      TREASURY         (DEFICIT)
                                                  CAPITAL           INCOME (LOSS)       (DEFICIT)          STOCK           EQUITY
<S>                                               <C>                  <C>            <C>                <C>              <C>
Balance at July 31, 2002                          $ 51,375,000         (59,000)       $ (51,927,000)                   $   (587,000)
Net loss                                                                                   (698,000)
                                                                                                                           (698,000)
Accumulated unrealized loss                                            (11,000)
                                                                                                                            (11,000)
Purchase of Treasury Shares                                                                                (80,000)         (80,000)
                                                                                                          ---------
Stock option compensation                              100,000                                                               100,000
                                                                                                                             -------
Balance at June 16, 2003                            51,475,000         (70,000)         (52,625,000)       (80,000)      (1,276,000)

Net loss                                                                                 (4,036,000)                     (4,036,000)
                                                                                         -----------
Accumulated unrealized loss                                             (4,000)
                                                                        -------
                                                                                                                             (4,000)
Issuance of B-2 preferred stock                         (5,000)                                                                   -
Issuance of B-3 preferred stock                         (2,000)                                                                   -
Cancellation of B-2 preferred stock                      5,000                                                                    -
Issuance of common shares in payment of legal
fees                                                   170,000                                                              175,000
Bridge Notes - Beneficial conversion feature         1,500,000                                                            1,500,000
Start up costs of Lifetime                              83,000                                                               83,000
Distribution of Informedix shares to B-3
preferred shareholders                                (100,000)                                                            (100,000)
                                                  ------------

Balance at December 31, 2003                      $ 53,126,000          (74,000)      $ (56,661,000)       (80,000)   $  (3,658,000)
                                                  ------------          --------      --------------      ---------    -------------
Net loss                                                                                 (2,296,000)                     (2,296,000)
                                                                                      --------------                   -------------
Issuance of common stock to officers                   463,000                                                              476,000
Conversion of B-3 preferred stock                      (37,000)                                                              (1,000)
Rubin Family Trust Note - Beneficial
 conversion feature                                    218,000
Conversion of B-1 Preferred Stock                                                                                            (1,000)
Shares issued for services rendered                    (10,000)                                                                   -
Sale of marketable securities                                             74,000                                             14,000
                                                                                                                       -------------

Balance at December 31, 2004                      $ 53,760,000             -          $ (58,957,000)       (80,000)    $ (5,188,000)
                                                 -------------                        --------------      ---------    -------------
</TABLE>

                                      F-5
<PAGE>

                          AMERICAN UNITED GLOBAL, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION, BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL
         INFORMATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION

American United Global, Inc. (the "Company" or "AUGI"), is incorporated in
Delaware and has offices in New York. AUGI has had operating subsidiaries in
prior years and is currently a non-operating public shell corporation.

On June 16, 2003, AUGI, Lifetime Acquisition Corp., a newly formed wholly owned
subsidiary of AUGI ("Merger Sub") and Lifetime Healthcare Services, Inc.
("Lifetime") entered into an amended and restated agreement and plan of merger
(the "Merger Agreement"). AUGI consummated the acquisition of Lifetime through
the merger of Merger Sub with and into Lifetime, effective as of June 17, 2003
(the "Lifetime Merger"). Lifetime was a holding company whose only assets
consisted of a note receivable from New York Medical, Inc. ("NYMI") and its
ownership of 55% of the capital stock of NYMI acquired by Lifetime immediately
prior to the consummation of the Merger.

For accounting purposes, the transaction between AUGI and Lifetime was
considered, in substance, a capital transaction rather than a business
combination. The exchange was accounted for as a reverse acquisition since the
former shareholders of Lifetime would have owned a majority of the outstanding
common stock of AUGI upon conversion of the preferred shares they received in
the merger. However, on December 8, 2003 certain members of the Board of
Directors of AUGI, Lifetime, NYMI and Redwood Investment Associates, LLP
("Redwood", the previous majority owner of NYMI) executed a Rescission Agreement
effective as of December 9, 2003. The remaining members of the Board of
Directors executed the Rescission Agreement on March 8, 2004, effective December
9, 2003 (see Note 2).

As a result of the merger with Lifetime, AUGI changed its year end of July 31,
to December 31, the year end of Lifetime, and has continued to report on a
December 31 year end basis subsequent to the Rescission Agreement.

PRINCIPLES OF CONSOLIDATION

The consolidated financial information included in this report has been prepared
in conformity with the accounting principles generally accepted in the United
States of America and has been prepared on the basis that the Company will
continue as a going concern, which contemplates the realization of assets and
the satisfaction of liabilities and commitments in the normal course of
business. The consolidated financial statements include the accounts of the
Company and its subsidiaries. All significant intercompany balances and
transactions have been eliminated in consolidation.

GOING CONCERN

At December 31, 2004, the Company had a working capital deficiency of
$5,188,000, an accumulated deficit of $58,957,000, and had incurred a loss of
$2,296,000 for the year ended December 31, 2004, a loss of $4,036,000 for the
period of June 17, 2003 through December 31, 2003 and a loss of $698,000 for the
period of August 1, 2002 through June 16, 2003. In addition, the Company's cash
of $8,000 at December 31, 2003 is not sufficient to fund operations for the next
twelve months. Such recurring losses and working capital deficiency raise doubt
about the Company's ability to continue as a going concern. The Company's
financial statements do not include any adjustments relating to the
recoverability and reclassification of recorded asset amounts or to amounts and
classification of liabilities that may be necessary should the Company be unable
to continue as a going concern.


                                      F-6
<PAGE>

                          AMERICAN UNITED GLOBAL, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


USE OF ESTIMATES

The preparation of the financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make certain estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Although these
estimates are based on the knowledge of current events and actions the Company
may undertake in the future, they may ultimately differ from actual results. The
Company uses estimates, among others, to determine whether any impairment is to
be recognized.

CASH AND CASH EQUIVALENTS

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

MARKETABLE SECURITIES

The Company accounts for marketable securities in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 115 "Accounting for Certain
Investments in Debt, and Equity Securities". Under this standard, certain
investments in debt and equity securities are reported at fair value. The
Company's marketable securities, which consist of common shares of other public
companies, are being reported as securities available for sale. The unrealized
loss on these securities is reflected as a separate component of shareholders'
deficit and any changes in their value are included in comprehensive loss. The
value of these securities are as follows:

<TABLE>
<CAPTION>
                           December 31, 2004     December 31, 2003     June 16, 2003     July 31, 2002
                           -----------------     -----------------     -------------     -------------
<S>                               <C>                 <C>               <C>                   <C>
Cost                             -0-                  $79,000           $ 79,000              79,000
Cumulative unrealized loss       -0-                   74,000             70,000              59,000
                                ----                  -------           --------              ------
                                 -0-                  $ 5,000           $  9,000              20,000
                                ====                  =======           ========              ======
</TABLE>

Cost used in the computation of realized gains and losses is determined using
the first-in-first-out cost method. During fiscal 2001 and 2002, the Company
sold $1,275,000 and $185,000 of marketable securities respectively and realized
losses of $1,395,000 and $837,000 respectively. There were no sales of
marketable securities during the periods ended June 16, 2003 and December 31,
2003.

During the year ended December 31, 2004, the Company sold $2,000 of marketable
securities and realized a loss of $77,000.


                                      F-7

<PAGE>

FAIR VALUE OF FINANCIAL INSTRUMENTS

Cash balances and the carrying amount of the accrued expenses approximate their
fair value based on the nature of those items.

Estimated fair values of financial instruments are determined using available
market information. In evaluating the fair value information, considerable
judgment is required to interpret the market data used to develop the estimates.
The use of different market assumptions and/or different valuation techniques
may have a material effect on the estimated fair value amounts. Accordingly, the
estimates of fair value presented herein may not be indicative of the amounts
that could be realized in a current market exchange.

INCOME TAXES

The Company's deferred income taxes arise primarily from the differences in the
recording of net operating losses, allowances for bad debts, inventory reserves
and depreciation expense for financial reporting and income tax purposes. Income
taxes are reported under the liability method pursuant to SFAS No. 109
"Accounting for Income Taxes". A valuation allowance is provided when the
likelihood of realization of deferred tax assets is not assured.

IMPAIRMENT OF INVESTMENTS

AUGI reviews estimates of the value of its investments each reporting period and
records an impairment loss to the extent that management believes that there has
been an impairment to the carrying value.

PER SHARE DATA

Basic and diluted loss per share is based on the weighted average number of
common shares outstanding and common shares issuable upon conversion of the
Series B-3 convertible preferred stock which was issued as a dividend to all
common shareholders effective as of June 17, 2003. The common shares issuable
upon conversion of the Series B-3 preferred stock are included based on the
preferred shareholders ability to share in distributions of earnings available
to common shareholders, if any, without conversion.


                                      F-8
<PAGE>

CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Company to concentrations of
credit risk consist principally of notes receivable. The Company maintains all
of its cash balances in two financial institutions. The balances are each
insured by the Federal Deposit Insurance Corporation up to $100,000. At July 31,
2002, June 16, 2003, December 31, 2003 and December 31, 2004, the Company's
uninsured cash balances totaled approximately $-0-, $250,000, $279,000 and $-0-
respectively.

STOCK BASED COMPENSATION

In October 1995, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards (SFAS) No. 123, "Accounting for
Stock-Based Compensation". The Company currently accounts for its stock-based
compensation using the accounting prescribed by Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees". As the Company is
not required to adopt the fair value based recognition provisions prescribed
under SFAS No. 123, it has elected only to comply with the disclosure
requirements set forth in the statement which includes disclosing pro forma net
income (loss) and earnings (loss) per share as if the fair value based method of
accounting had been applied.

The fair value of each option grant was estimated on the date of the grant using
the Black-Scholes option-pricing model with the following weighted average
assumptions for the periods ended December 31, 2003, June 16, 2003 and the years
ended July 31, 2002 and 2001, respectively: expected volatility of 146% and
187%, 182% and 154%, respectively; risk free interest rate of 3.00%, 3.00% and
3.58% and 4.50%, respectively; and expected lives of 5 years.

If compensation cost for AUGI's stock option plans had been determined based on
the fair value at the date of the grant for awards in accordance with the
provisions of SFAS No. 123, AUGI's net loss per share would have changed to the
pro forma amounts indicated below:

<TABLE>
<CAPTION>
                                                    Period from          Period from
                                Year ended      June 17, 2003 to        August 1, 2002      Year ended
                           December 31, 2004    December 31, 2003     to June 16, 2003     July 31, 2002
                           -----------------    -----------------     ----------------     -------------
<S>                           <C>                  <C>                  <C>                 <C>
Net loss as reported          $ (2,209,000)        $(4,036,000)         $  (698,000)        $ (1,217,000)
Stock option compensation
  included in net loss                  --                  --              100,000                   --
Total stock-based employee
  compensation expense
  determined under the
  fair value method               (176,000)           (176,000)            (270,000)            (179,000)
                              ------------         -----------          -----------          -----------
     Pro forma net loss       $ (2,365,000)        $(4,212,000)         $  (968,000)         $(1,396,000)
                              ============         ===========          ===========          ===========

Net loss per share:

Basic and diluted loss
  per share as reported       $      (0.28)        $     (0.58)         $     (0.35)         $     (1.50)
Pro forma basic and diluted
  loss per share              $      (0.29)        $     (0.60)         $     (0.48)         $     (1.72)

     Weighted average number
       of shares                 8,090,745           7,181,419            1,997,624              810,124
                              ============         ===========          ===========          ===========
</TABLE>

No stock options were granted during the fiscal year ended December 31, 2004.


                                      F-9
<PAGE>

Recent accounting pronouncements

In June 2002, the Financial Accounting Standards Board (FASB) issued SFASNo.
146, "Accounting for Costs Associated with Exit or Disposal Activities." This
statement addresses financial accounting and reporting for costs associated with
exit or disposal activities and nullifies Emerging Issues Task Force (EITF)
Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits
and Other Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring)." The company adopted SFAS 146, effective February 1, 2003. The
adoption of SFAS 146 did not have a material impact on our company's financial
statements. The company has continued to account for employee-related
post-employment benefit costs, including severance payments, under the
provisions of SFAS No. 112, "Employer's Accounting for Post-Employment
Benefits."

In November 2002, FASB Interpretation No. 45, "Guarantor's Accounting and
Disclosure Requirements for Guarantees, Including Indirect Guarantees and
Indebtedness of Others," was issued. This interpretation requires the initial
recognition and initial measurement, on a prospective basis only, of guarantees
issued or modified after December 31, 2002. Additionally, certain disclosure
requirements were effective for financial statements ending after December 15,
2002. The adoption of this interpretation did not have an impact on our
company's financial statements.

In January 2003, FASB Interpretation No. 46 (FIN 46), "Consolidation of Variable
Interest Entities," (VIE's) was issued, and in December 2003, a revision to FIN
46 was issued. FIN 46 requires identification of our company's participation in
VIE's, which are defined as entities with a level of invested equity that is not
sufficient to fund future activities to permit them to operate on a stand-alone
basis, or whose equity holders lack certain characteristics of a controlling
financial interest. For entities identified as VIE's, FIN 46 sets forth a model
to evaluate potential consolidation based on an assessment of which party to a
VIE, if any, bears a majority of the risk of the VIE's expected losses, or
stands to gain from a majority of the VIE's expected returns. FIN 46 also sets
forth certain disclosures regarding interests in VIE's that are deemed
significant, even if consolidation is not required. This interpretation is
effective for all VIE's created after January 31, 2003. The adoption of this
interpretation did not have an impact on our company's financial statements.

In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities." SFAS 149 clarifies under what
circumstances a contract with an initial net investment meets the
characteristics of a derivative, amends the definition of an underlying
contract, and clarifies when a derivative contains a financing component in
order to increase the comparability of accounting practices under SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." The statement is
effective for contracts entered into or modified after June 30, 2003, and for
hedging relationships designated after June 30, 2003. The adoption of SFAS 149
did not have an impact on our company's financial statements.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." This statement
establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and equity. It
requires that an issuer classify a financial instrument that is within its scope
as a liability (or an asset in some circumstances). Many of those instruments
were previously classified as equity. The statement is effective for financial
instruments entered into or modified after May 31, 2003. The company adopted
this standard on June 1, 2003. Its adoption did not have an impact on our
company's financial statements.

In May 2003, the consensus on EITF Issue No. 01-08, "Determining Whether an
Arrangement Contains a Lease," was issued. The guidance in the consensus applies
to the purchase or sale of goods and services under various types of contracts,
including outsourcing arrangements. Based on the criteria in the consensus, both
parties to an arrangement are required to determine whether the arrangement
includes a lease within the scope of SFAS No. 13, "Accounting for Leases." The
new requirement applies prospectively to new or modified arrangements for
reporting periods beginning after May 28, 2003. Accordingly, as of August 1,
2003, the company accounted for new or modified arrangements based on this
guidance. Adoption of this standard did not have an impact on our company's
financial statements.

In December 2003, the FASB issued SFAS No. 132 (Revised 2003), "Employers'
Disclosures about Pensions and Other Post-retirement Benefits," which enhanced
the disclosure about pension plans and other post-retirement benefit plans, but
did not change the measurement or recognition principles for those plans. The


                                      F-10
<PAGE>

statement requires additional disclosures about the assets, obligations, cash
flows, and net periodic benefit cost of defined benefit pension plans and other
defined benefit post-retirement plans. Its adoption did not have an impact on
our company's financial statements.

In December 2003, the Financial Accounting Standards Board ("FASB") issued
Interpretation No. 46 ("FIN 46"), "Consolidation of Variable Interest Entities
which was originally issued in January 2003. FIN 46 or revised provides guidance
on the consolidation of certain entities when control exists through other
entities created after January 31, 2003. The Company does not hold a variable
interest in any enterprise. Accordingly, the Company does not expect the
provisions of FIN 46 to have a material effect on future interim or annual
financial statements.

On December 18, 2003 the SEC issued Staff Accounting Bulletin No. 104, Revenue
Recognition ("SAB 104"), which supersedes SAB 101, Revenue Recognition in
Financial Statements. SAB 104's primary purpose is to rescind accounting
guidance contained in SAB 101 related to multiple element revenue arrangements,
which was superseded as a result of the issuance of EITF 00-21, Accounting for
Revenue Arrangements with Multiple Deliverables. The adoption of SAB 104 did not
have a material impact the Company's financial position or results of
operations.

In December 2004, the FASB issued SFAS No. 123 (revised 2004), Share-Based
Payment, which is an amendment to SFAS No. 123, Accounting for Stock-Based
Compensation and supersedes APB Opinion No. 25, Accounting for Stock Issued to
Employees. This new standard eliminates the ability to account for share-based
compensation transactions using Accounting Principles Board (APB) No. 25,
Accounting for Stock Issued to Employees (APB 25) and requires such transactions
to be accounted for using a fair-valued-based method, with the resulting cost
recognized in the Company's financial statements. This new standard is effective
for annual periods beginning after June 15, 2005. The Company has not awarded or
granted any share-based compensation to date and, therefore, the adoption of
this standard is not expected to have any effect on the Company's financial
position or results of operations until such time as share-based compensation is
granted.

In December 2004, the FASB issued SFAS No. 153, Exchange of Non-monetary Assets.
SFAS No. 153 amends APB Opinion No. 29, Accounting for Non-monetary
Transactions, to eliminate the exception for non-monetary exchanges of similar
productive assets. The Company will be required to apply this statement to
non-monetary exchanges after December 31, 2005. The adoption of this standard is
not expected to have a material effect on the Company's financial position or
results of operations.


NOTE 2 - ACQUISITION AND SUBSEQUENT RECSISSION AB INITIO OF LIFETIME
         HEALTHCARE SERVICES AND NEW YORK MEDICAL, INC.

      On June 17, 2003, the Company and its newly formed wholly-owned
subsidiary, a Delaware corporation ("Merger Sub"), consummated the transactions
contemplated by the Amended and Restated Agreement and Plan of Merger (the
"Merger Agreement") entered into with Lifetime Healthcare Services, Inc.
("Lifetime"), a Delaware corporation. Pursuant to the Merger Agreement, Merger
Sub was merged with and into Lifetime (the "Merger"), with Lifetime continuing
as the surviving entity and wholly-owned subsidiary of the Company. The Merger
Agreement was effective as of June 17, 2003. Lifetime was a holding company
whose only assets consisted of the ownership of 55% of the capital stock of NYMI
which had been acquired by Lifetime immediately prior to the Merger pursuant to
the terms of the NYMI Stock Purchase Agreement. The Merger Agreement was
rendered null and void pursuant to the Rescission Agreement (see below).

      In consideration for the acquisition of Lifetime, the Company issued
467,500 shares of its Series B-2 Convertible Preferred Stock (the "B-2
Preferred"), and each share of B-2 Preferred was convertible into twenty (20)
shares of the Company's Common Stock. The B-2 Preferred paid no dividend and
voted on an "as converted" basis with the Company Common Stock. Such issuance
became null and void pursuant to the Rescission Agreement effective December 9,
2003 (see below).

      In connection with the Merger, the Company also agreed to issue 232,500
shares of its Series B-3 Convertible Preferred Stock (the "B-3 Preferred") to
the holders of record of its outstanding shares of Common Stock as of June 10,
2003. The B-3 Preferred are convertible on a 20-for-1 basis, into an aggregate
of 4,650,000 shares of Common Stock. The B-3 Preferred pays no dividend and
votes on an "as converted" basis, with the Company Common Stock.


                                      F-11
<PAGE>

                          AMERICAN UNITED GLOBAL, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

      On December 8, 2003, a telephonic meeting of the board was convened. As a
result of such board meeting, minutes were prepared and executed by Messrs.
Landow, Fause and Good, and on December 9, 2003, a rescission agreement among
the Company, Lifetime Acquisition Corp., Lifetime, NY Medical, Redwood and the
ESOP, dated as of December 9, 2003 (the "Rescission Agreement") was entered into
and delivered to counsel to the Company and Messrs. Rubin and McLain.

      Mr. Rubin initially objected to the December 8, 2003 Board meeting but on
March 8, 2004, corporate counsel to the Company advised counsel to NY Medical,
Redwood and its affiliates that each of the Company and Messrs. Rubin and
McLain, as members of the board of directors of the Company had reconsidered
their position and that they agree with NY Medical, Redwood, Dr. Landow, Tracy
Landow and the ESOP that:

      effective as of December 9, 2003, the Merger, Lifetime Merger Agreement
      and all related Merger Documents are null and void, ab initio, for all
      purposes, including, without limitation, for tax purposes;

      effective as of December 9, 2003, the NY Medical Stock Purchase Agreement,
      the acquisition of capital stock of NY Medical and all transactions
      contemplated thereby are null and void, ab initio, for all purposes,
      including, without limitation, for tax purposes; and

      effective as of December 9, 2003, the Share Exchange Agreement between the
      Company and the ESOP and all transactions contemplated thereby are null
      and void, ab initio, for all purposes, including, without limitation, for
      tax purposes; and

      all principal amount of and accrued interest on the NY Medical Note is, in
      fact, due and payable on March 30, 2004, and NY Medical shall have the
      right to communicate directly with the holders of the Bridge Notes for the
      purpose of, among other things, negotiating an alternative mechanism for
      the payment of the Bridge Notes.

      As a result of the consummation of the transactions pursuant to the
      Rescission Agreement:

      55% of the capital stock of NY Medical was returned to the previous
shareholder and the proposed Share Exchange with the ESOP was cancelled;

      the Lifetime Merger was cancelled and rescinded, and all shares of Company
      Series B-2 Preferred Stock issued to the former stockholders of Lifetime
      were rendered null and void, without any further value or rights, and
      returned to the treasury of the Company for cancellation;

      all stock options issued to Dr. Landow, Joseph Ciavarella, directors
      designated by Dr. Landow and other employees of NY Medical were cancelled;
      and

      effective as of December 9, 2003 each of Dr. Landow, Stuart Fause and John
      Good were deemed to have resigned as members of the board of directors of
      the Company or otherwise removed as a member of such board of directors by
      The Rubin Family Irrevocable Stock Trust, as the principal stockholder of
      the Company.

      the Company cancelled options to purchase an aggregate of approximately
      3,250,000 shares of Company Common Stock;


                                      F-12
<PAGE>

                          AMERICAN UNITED GLOBAL, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

      the Company cancelled the 467,500 shares of B-2 Preferred Stock
      convertible into an aggregate of 9,350,000 shares of Company Common Stock
      which were issued to the former stockholders of Lifetime; and the
      $5,500,000 Landow Note was cancelled.

NOTE 3 - RECEIVABLE FROM NYMI

      The obligations of NYMI to the Company in respect of the loans and
advances made between February and June 2003, aggregating $1,500,000, are
evidenced by NYMI's 6% note which was payable in full as to principal and
interest on January 31, 2004. The NYMI Note is secured by a lien on the accounts
receivable, inventories and other assets of NYMI, subordinated to the liens of
DVI, NYMI's asset based lender, and the holders of the Bridge Notes. Such note
was not paid on January 31, 2004, nor has it been paid as of the filing date of
this Form 10-K. An additional $8,000 is owed by NYMI to the Company and is
unsecured.

As a result of the financial condition of NYMI and the priority lien of DVI, the
Company recorded a 100% reserve against the amount due for principal and accrued
interest from NYMI as at December 31, 2003.

NOTE 4 - OTHER LOANS AND ADVANCES

      On September 4, 2002 the Company loaned $100,000 to InforMedix, Inc.
("InforMedix") pursuant to the terms of a 12% convertible secured promissory
note. The note was originally due on April 24, 2003 or earlier under certain
acceleration provisions and was automatically convertible into 50,000 common
shares of InforMedix should InforMedix or any affiliate merge into a public
entity or otherwise become publicly traded. On April 24, 2003, the Company
agreed to an extension of the maturity date to July 24, 2003. On May 8, 2003,
Informedix merged with a public entity whose name was changed to Informedix
Holdings, Inc. and 54,000 shares of their common stock were issued to AUGI
pursuant to the automatic conversion feature of the loan and all accrued
interest. Such shares will be distributed as a dividend to the holders of the
Preferred B-3 stock with a record date of June 10, 2003. On July 25, 2003, the
Company loaned $20,000 to Informedix pursuant to the terms of a 12% promissory
note originally due January 31, 2004 which due date was extended to April 2,
2004 and the note was paid in full on that date.

      On January 13, 2003, the Company provided a working capital loan of
$25,000 to Spongetech Delivery Systems, Inc. ("Spongetech") pursuant to the
terms of an 8% promissory note originally due May 15, 2003 which was
subsequently extended to July 31, 2004. The Company loaned an additional $25,000
to Spongetech on July 7, 2003 under the same terms and conditions. The Company
also received 250,000 shares of Spongetech common stock as additional
consideration for the loans and maturity date extensions. Spongetech is a
distributor of reusable specialty sponges for commercial and everyday use.
Michael Metter, a director of the company, is a director and executive officer
of Spongetech. Spongetech is in default on the payments that were due on July
31, 2004 and is unable to repay any amount at this time. In November 2004, the
Company agreed to convert all principle and interest due under the Notes into
466,667 shares of Spongetech common stock. Spongetech is actively seeking
financing in order to continue in business.


                                      F-13
<PAGE>

                          AMERICAN UNITED GLOBAL, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

      On August 5, 2003, the Company loaned $25,000 to ScanTek Medical, Inc.
("ScanTek") pursuant to the terms of a 12% promissory note which is due October
15, 2004. As consideration to AUGI for providing the loan, ScanTek added
interest of $5,000 to the note and both parties agreed that any further interest
would only be due, at the 12% rate, if there is a breach of the default and
repayment provisions of the note. The note was not paid on October 15, 2004 nor
on the extended due date of December 31, 2004. Currently, ScanTek is seeking
financing to continue its business and has stated that it will pay the amount
due should it be successful in closing on a working capital funding arrangement.
Should ScanTek not be able to raise further capital by June 15, 2005, the
Company will provide a full reserve against such receivable.

NOTE 5  -  BRIDGE NOTES PAYABLE AND OTHER SHORT TERM BORROWINGS

      On June 17, 2003, the Company received aggregate net proceeds of
$1,350,000 from the sale of $1,500,000 principal amount of 10% convertible notes
due in March 2004. The Bridge Notes are convertible into common stock of the
Company at any time at the rate of $1.00 of Notes for one share of common stock
and are secured by a second lien on all of the assets of NYMI. In addition, the
purchasers of the Bridge Notes received five year warrants to purchase an
aggregate of 1,000,000 shares of common stock of the Company at $0.75 per share;
provided, that if the Bridge Notes were not prepaid in full by October 17, 2003,
the number of shares issuable upon exercise of the warrants would increase to
1,250,000 shares and would increase further to 1,500,000 shares in the event
that, for any reason, the Bridge Notes were not paid in full by January 17,
2004. Payment was not made by October 17, 2003, nor by January 17, 2004 and as a
result, the number of shares issuable upon exercise of the warrants has
increased to 1,500,000 shares. The Company utilized an aggregate of $650,000 of
the net proceeds from the sale of the Bridge Notes to increase its outstanding
loans to Lifetime and NYMI from $850,000 to $1,500,000. The Bridge Notes were
due and payable on March 30, 2004; however, no payments have been made as of the
date of filing this report and the debt continues to be in default. Certain of
the Bridge Note holders have obtained a judgment in the full amount of their
respective principal and accrued interest due. All such amounts are included in
the total amount of principal and accrued interest payable reflected in the
financial statements.

      The value allocated to the warrants resulted in a debt discount of
$1,500,000 that has been recognized as interest expense over the nine month term
of the Bridge Notes ended March 30, 2004. Additionally, by allocating value to
the warrants, the debt holders received a beneficial conversion feature of
$813,000 in additional debt discount which has been recognized as interest
expense over the nine month term of the bridge notes. However, the maximum
amount of additional interest from amortization of the debt discount and the
beneficial conversion feature is capped at the $1,500,000 principal amount of
the borrowing and had all been expensed as of March 31, 2004.

      In April 2004, certain bridge investors commenced an action against our
company in the Supreme Court of the State of New York, County of New York,
alleging, among other things, that we owe plaintiffs repayment of $700,000 in
principal face amount notes issued in connection with our intended acquisition
of New York Medical, a New York corporation (Altitude Group, LLC, Birch
Associates, LLC and D.C. Capital, LLC v. American United Global, Inc., Index No.
600936/04). Plaintiffs filed a motion seeking summary judgment against us in
aggregate amount of $787,546, consisting of the allegedly outstanding principal
and interest on the notes as well as attorneys' costs, and we opposed that
motion. On September 24, 2004, judgment was rendered in favor of these three
investors in the amount of $840,695.79. We are currently attempting to settle
this matter with the plaintiffs on an amicable basis.

      The Company is in default on an uncollateralized note payable due to an
unrelated third party in the principal amount of $1,500,000 plus accrued
interest of approximately $1,210,000 at December 31, 2004. Originally bearing
interest at 8%; the note accrues interest at 10% while in default. Management of
the Company is of the opinion that the creditor will not pursue collection;
however, were the Company required to pay such certain indebtedness it would be
necessary to secure additional financing.


                                      F-14
<PAGE>

                          AMERICAN UNITED GLOBAL, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 - LOAN PAYABLE - RUBIN FAMILY TRUST

During September through December 2004 the Company borrowed $218,000 from the
Rubin Family Trust (the "Trust") for working capital requirements. The loan is
evidenced by a Note payable which bears interest at an annual rate of 8% and
matures on December 31, 2006. The Trust will also receive 218,000 shares of
Company common stock as additional interest. These shares were valued at $0.40
per share for accounting purposes and a charge of $87,000 was recorded.

Through March 31, 2005, the Trust advanced an additional $76,000 under the same
terms and conditions.

The aforementioned loans are convertible at any time into Company common stock
at 50% of the fair market value on the date of such conversion.

As of December 31, 2004 this beneficial conversion feature of $218,000 has been
recorded as discount and will be amortized as interest expense through December
31, 2006.

NOTE 7 - INCOME TAXES

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amount of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes using the enacted tax
rates in effect in the years in which the differences are expected to reverse.
Deferred tax assets are comprised primarily from net operating losses and total
approximately $11,000,000 at December 31, 2004, $10,200,000 at December 31, 2003
and approximately 8,875,000 and $8,640,000 at June 16, 2003 and July 31, 2002
respectively. Because of the questionable ability of the Company to utilize
these deferred tax assets, the Company has established a 100% valuation
allowance for these assets.

The Company files a consolidated income tax return with its wholly-owned
subsidiaries and has net operating loss carryforwards of approximately
$32,000,000 for federal and state purposes, which expire through 2023. The
utilization of this operating loss carryforward may be limited based upon
changes in ownership as defined in the Internal Revenue Code. A reconciliation
of the difference between the expected income tax rate using the statutory
federal tax rate and the Company's effective rate is as follows:

<TABLE>
<CAPTION>
                             Year
                             Ended             Period from        Period from
                           December 31,     June 17, 2003 to    August 1, 2002      Year ended July 31,
                              2004         December 31, 2003   to June 16, 2003      2002        2001
                           ------------    -----------------   ----------------    --------   ---------
<S>                        <C>             <C>                 <C>         <C>         <C>
U.S. Federal income tax
   statutory rate              (34)%              (34)%               (34)%          (34)%       (34)%
Valuation allowance             34%                34%                 34%            34%         34%
                              ----                ----                ----           ----        ----

Effective tax rate             -0-                 -0-                 -0-            -0-         -0-
                              ====                ====                ====           ----        ====
</TABLE>

NOTE 8 - CONTINGENT OBLIGATIONS

      The Company remains contingently liable for certain capital lease
obligations assumed by eGlobe, Inc. ("eGlobe") as part of the Connectsoft
Communications Corp. asset sale which was consummated in June 1999. The lessor
filed for bankruptcy in 2000 and the leases were acquired by another leasing
organization which subsequently also filed for bankruptcy in 2001. In addition,
eGlobe filed for bankruptcy in 2001. The Company has been unable to obtain any
further information about the parties but believes that in the normal course of
the proceedings that another company most likely acquired the assets and related
leases and that a mutually acceptable financial arrangement was reached to
accomplish such a transfer. To date, the Company has not been contacted and has
not been notified of any delinquency in payments due under these leases. The
original leases were entered into during early to mid 1997 each of which was for
a five-year term. Extensions of an additional 20 months were negotiated with the
original lessor in 1998 and 1999 moving the ending date to approximately mid
2004. The balance due under the leases in June 1999 upon transfer and sale to
eGlobe was approximately $2,800,000 including accrued interest and the monthly
payments were approximately $55,000. The balance that is currently due under the
leases is unknown and there would most likely have been negotiated reductions of
amounts due during the proceedings.

NOTE 9 - CONCENTRATION OF CREDIT RISK

The Company maintains cash balances at two financial institutions. These
balances are insured for up to $100,000 per account by the Federal Deposit
Insurance Corporation. The cash balances at December 31, 2004 were not in excess
of the insurance limit and the Company, therefore, was not exposed to any risk.

NOTE 10 - PURCHASE OF TREASURY STOCK

      In connection with the resignation of Seymour Kessler (Kessler) from the
Board of Directors in January 2003, the Company agreed to repurchase common
shares of the Company that he and certain affiliates had acquired in a private
placement in 2000. The purchase price of $80,000 was equal to the amount paid by
Kessler and his affiliates and was paid in 12 equal monthly installments through
January 2004.

NOTE 11 - STOCK OPTION GRANTS UNDER THE 2001 STOCK OPTION PLAN

On March 31, 2003, the Company granted five-year stock options to four directors
to purchase a total of 450,000 shares of common stock and also granted five-year
options to the senior partner at its primary law firm to purchase 50,000 shares
of common stock. All such options are exercisable at a price of $0.62 per share,
the fair market value on the date of grant, and vested upon grant. On June 13,
2003 the Company granted five-year options to purchase 50,000 shares of common
stock at $1.50 per share, the fair market value on the date of grant, to another
partner in the law firm all of which vested upon grant. The intrinsic value of
options granted to the two law firm partners was charged to earnings as a
non-cash compensation charge in the amount of $100,000 in the period from August
1, 2002 to June 16, 2003.

On August 8, 2003, five year options to acquire 200,000 shares of common stock
were granted to Dean McLain, a director and executive officer of the Company at
the closing market price on that date of $1.70, of which options for 50,000
shares each vested on the grant date, with the remaining options vesting at the
rate of 50,000 shares each on the three successive grant anniversary dates
through 2006. On September 17, 2003 a five-year option to purchase 350,000
common shares was granted to an officer of the Company at the closing market
price of $1.25 of which 87,500 shares vested on the date of grant with the
remaining options vesting at the rate of 87,500 shares on each of the next three
grant anniversary dates. There were no stock options granted during the fiscal
year ended December 31, 2004.

                                      F-15
<PAGE>

                          AMERICAN UNITED GLOBAL, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


NOTE 12 - ISSUANCE OF COMMON SHARES

      In May 2004, the Company's board of directors approved a stock award of
750,000 shares to Dean McLain ("McLain"), a stock award of 500,000 shares to
David Barnes ("Barnes") and a stock award of 20,000 shares to Michael Metter
("Metter"). The shares were issued for services performed and to be performed by
McLain, Barnes and Metter on behalf of the Company and an expense of $476,000
was charged to operations during the quarter ended June 30, 2004.

      In September and December of 2004, the Company issued an aggregate of
1,000,000 shares to Vertex Capital Corp. in connection with the entry into the
Share Exchange Agreement with Southern Gas Company, a limited liability company
incorporated under the laws of the Russian Federation and certain of its equity
owners. The Share Exchange Agreement was subsequently terminated as of March 15,
2005. The Company intends to cancel the 1,000,000 shares issued to Vertex, but
such cancellation has not yet occurred, nor can there be any assurance that AUGI
will be successful in its attempts to cancel these shares.

NOTE 13 - LITIGATION

Altitude Group, LLC, Birch Associates, LLC and D.C. Capital, LLC v. American
United Global, Inc. (Supreme Court, New York State, New York County). AUGI was
served in April 2004 with this suit alleging, among other things, that AUGI owes
plaintiffs repayment of $700,000 in principal face amount of Bridge Notes issued
in connection with the acquisition by AUGI of New York Medical, a New York
corporation. Plaintiffs have commenced the suit by way of a New York procedure
known as summary judgment in lieu of complaint, claiming an aggregate amount
owed of $787,000, consisting of the allegedly outstanding principal and interest
on the notes as well as attorneys' costs.

New York Medical, Inc. and Redwood Investment Associates, L.P. v. American
United Global, Inc., et al. (Supreme Court, New York State, New York County). In
this suit, filed on December 12, 2003, plaintiffs seek a declaration that a
series of transactions by which AUGI allegedly acquired Lifetime Healthcare
Services, Inc. ("Lifetime") and Lifetime acquired an interest in New York
Medical, Inc. from Redwood Investment Associates, L.L.P. (collectively
"Transactions") were properly rescinded or, alternatively, that because the
Transactions were allegedly induced by fraudulent conduct of AUGI, and others,
that the Transactions should be judicially rescinded. In addition to the
requests for equitable relief, plaintiffs also seek monetary damages in excess
of $5 million and exemplary damages in the amount of $15 million.

Currently, the suit has not proceeded past the filing and service of the
Complaint. AUGI has obtained an open-ended extension of time in which to answer
and/or move with regard to the Complaint. The parties are attempting to resolve
the matter amicably. However, in the event litigation proceeds, it will be
aggressively defended.

NOTE 14 - SUBSEQUENT EVENT

On March 15, 2005, the Exchange Agreement dated September, 2004 by and between
Southern Gas Holdings LLC, a Delaware limited liability company; American United
Global, Inc., a Delaware corporation ("AUGI"); Southern Gas Company LLC, a
limited liability company incorporated under the laws of the Russian Federation;
and the Southern Gas Group Equity Owners was definitively terminated. Under the
terms of the Exchange Agreement, the Southern Gas Group Equity Owners were to
contribute and exchange the Southern Gas Group Equity (as defined in the
Exchange Agreement) to the capital of Southern Gas Holdings, LLC, solely in
exchange for the Exchange Shares (as defined in the Exchange Agreement). Because
the conditions precedent to Closing set forth in Section 4.2 of the Exchange
Agreement were not satisfied or waived on or before the Closing Date, December
31, 2004, and the Closing Date was not extended by the mutual written agreement
of the Parties, the Exchange Agreement, including all rights and obligations of
the parties thereunder, has terminated and is of no further force and effect.
While the parties to the Exchange Agreement attempted to reach a negotiated
resolution of the matters precluding the fulfillment of the closing conditions,
AUGI abandoned such discussions on March 15, 2005, having concluded that no
resolution could be reached.


                                      F-16