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, 2003    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.)

                11108 NE 106th Place, Kirkland, Washington 98033
                    (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 [ ] NO [ X]

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. [___]

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 the last business day of June 30, 2004 was $ 2,110,000.

As of July 9, 2004, there were 3,824,799 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, 2003

<TABLE>
<CAPTION>
                                                                                                               Page
                                                                                                              -----
<S>                                                                                                         <C>

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

PART II

       Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters and Issuer
                Purchases of Equity Securities                                                                     3
       Item 6.  Selected Financial Data                                                                            3
       Item 7.  Management's Discussion and Analysis of Financial Condition and Results of Operations              5
       Item 7A. Quantitative And Qualitative Disclosures About Market Risk                                         10
       Item 8.  Financial Statements And Supplementary Data                                                        10
       Item 9.  Changes In and Disagreements With Accountants On Accounting and Financial Disclosure               10
       Item 9A. Controls And Procedures                                                                            10

PART III
       Item 10. Directors and Executive Officers of the Registrant                                                 10

       Item 11. Executive Compensation                                                                             15
       Item 12. Security Ownership Of Certain Beneficial Owners And Management And Related Stockholder
                Matters                                                                                            16
       Item 13. Certain Relationships And Related Transactions                                                     17
       Item 14. Principal Accountant Fees and Services                                                             20

PART IV
       Item 15. Exhibits, Financial Statement Schedules And Reports On Form 8-K                                    21


Signatures                                                                                                         22
</TABLE>


<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.

<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.  We intend to  distribute  the  1,222,586  shares of
Western that we hold to the holders of our Series B-3 Preferred Stock.

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.


                                       1
<PAGE>



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  in at 11108  NE  106th  Place,
Kirkland, Washington.

Item 3. Legal Proceedings

Altitude Group,  LLC, Birch Associates,  LLC and D.C.  Capital,  LLC v. American
United Global,  Inc.  (Supreme  Court,  New York State,  New York County).  This
action was commenced in April 2004 against AUGI.  Plaintiffs allege, among other
things, that AUGI owes plaintiffs repayment of $700,000 in principal face amount
notes issued in connection with the  acquisition by AUGI of New York Medical,  a
New York  corporation.  Plaintiffs have filed a motion seeking summary  judgment
against  AUGI in  aggregate  amount of  $787,546.  consisting  of the  allegedly
outstanding principal and interest on the notes as well as attorneys' costs, and
AUGI has opposed that motion. No decision on the motion for summary judgment has
been issued by the court yet.

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 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.

Settlement Agreement

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.







                                       2
<PAGE>


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, 2003 and 2002. These quotations
reflect  inter-dealer prices,  without mark-up,  mark-down or commission and may
not represent actual transactions.


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

                                                     High              Low
                                                     ----              ---

Fiscal 2002
-----------
First Quarter                                        $2.25             $1.50
Second Quarter                                       $2.00             $1.00
Third Quarter                                        $2.00             $1.25
Fourth Quarter                                       $1.50             $0.60

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


On July 8, 2004,  there were  approximately  161 holders of record of our common
stock then issued and outstanding.

As of July 8, 2004,  the last sale  price of the  shares of our common  stock as
reported on the Pink Sheets was $ 2.00.

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.

Securities Authorized for Issuance Under Equity Plans
<TABLE>
<CAPTION>

                                                                                            Number of securities
                                Number of securities to be   Weighted-average exercise    remaining available for
                                  issued upon exercise of       price of outstanding       future issuance under
                                    outstanding options               options            equity compensation plans
                                    -------------------               -------            -------------------------
<C>                                     <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  years 1999 and 2000 and the  Consolidated
Balance Sheet Data at July 31, 1999,  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.


                                       3
<PAGE>


<TABLE>
<CAPTION>


                     June 17, 2003      August  1, 2002                     Year ended July 31,
                         through             through          ----------------------------------------------
                   December 31, 2003      June 16, 2003       2002       2001(3)        2000       1999(1,2)
                   -----------------      -------------       ----       -------        ----       ---------

<S>              <C>                <C>                       <C>        <C>          <C>           <C>
      Net sales  $         -        $         -               $  -       $     -      $155,637      $163,650
     Loss from
     continuing
     operations           (4,036)             (698)          (1,217)      (6,400)       (7,030)       (5,054)
       Net Loss           (4,036)             (698)          (1,217)      (6,400)       (7,030)       (3,065)

    Basic and
   Diluted Loss
     Per Share:

      Loss from
     continuing
     operations            (0.56)            (0.35)          (1.50)      (13.02)        (14.71)       (10.75)

       Net loss         $  (0.56)         $  (0.35)        $ (1.50)    $ (13.02)      $ (14.71)     $  (6.52)

</TABLE>
<TABLE>
<CAPTION>
                                     June 17, 2003      August  1, 2002                     Year ended July 31,
                                         through             through          ----------------------------------------------
                                   December 31, 2003      June 16, 2003       2002       2001(3)        2000       1999(1,2)
                                   -----------------      -------------       ----       -------        ----       ---------


<S>                                      <C>                 <C>            <C>          <C>          <C>         <C>
Total assets                             $  584              $  1,424       $3,000       $1,724       $128,549    $142,409

Total liabilities                         4,242                 2,700        3,587        2,909        115,413     121,700

Working capital (deficit)                (3,658)               (1.276)       (587)       (2,137)       (17,579)    (18,751)

Stockholders' (deficiency) equity      $ (3,656)             $ (1,276)      $(587)      $(1,185)        $7,373     $12,797
</TABLE>


(1)  Includes loss from discontinued operations of the Technology Companies

(2)  Includes a gain on sale of the assets of Connectsoft  Communications  Corp.
     of $1,989.

(3)  For 2002 and 2001,  Western has been  accounted for under the equity method
     whereas in 1999 and 2000 Western was included in the consolidated financial
     statements of AUGI.

                                       4


<PAGE>

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

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. We intend to
distribute  the  1,222,586  shares of Western that we hold to the holders of our
Series B-3 Preferred Stock.

Results of Operations

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

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.



                                       5
<PAGE>


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.



Fiscal Year 2002, as compared to Fiscal Year 2001

In fiscal 2002,  our company's  pro-rata  share of Western's loss was limited to
its remaining equity investment in Western of $702,000 while in fiscal 2001, our
share of Western's loss was $2,823,000.

General & administrative expenses in fiscal 2002 were $1,154,000, a net decrease
of $60,000 from the  $1,214,000  recorded in 2001. The net decrease is comprised
primarily  of an increase in executive  bonus of  $300,000;  an increase in rent
expense of $97,500 and $65,000 of costs  relative to the abandoned  registration
of a rights offering in the current year offset by a decrease of $175,000 in bad
debt  expense due to the charge  taken in 2001  against the note  receivable  of
$175,000 from Ego Magazine.Com,  Inc. for which there is no comparable figure in
the  current  year;  a decrease  of  $134,000  in legal  expense;  a decrease of
approximately $165,000 in salaries, benefits and expenses of Intertech employees
pursuant to the sale of  Intertech  in March 2001 and a general net  decrease in
other expenses of approximately $49,000.


Net interest  expense in Fiscal 2002,  excluding the interest  charge for shares
issued in the loan  transaction with the Rubin Family Trust on May 17, 2002, was
$149,000  which is  comprised  of $150,000  accrued on certain  short term debt;
interest  expense of $4,000 on the  $250,000  Note due to the Rubin Family Trust
and interest income of $5,000. This was a decrease of $99,000 from 2001 which is
due  primarily to interest of $112,000  paid by Our company in the first quarter
of  fiscal  2001  relative  to the  shareholder  settlement  payments  offset by
interest income in 2001 of approximately $13,000.

In fiscal 2002,  we had a loss on sales of  marketable  securities  of $837,000.
This loss was comprised primarily of a loss of $242,000 from the sale of 491,000
shares of Magna Labs, Inc. and a loss of $516,000 from the sale of 72,000 shares
of RezConnect  Technologies,  Inc. In addition, there was a loss of $26,000 from
the sale of 15,000 shares of Azurel, Ltd. and a loss of $53,000 from the sale of
7,000 shares of Elephant & Castle Group, Inc. Total net proceeds  generated from
these  sales were  $185,000.  All of these  shares,  except  those of Elephant &
Castle Group,  Inc., were contributed to our company by Mr. Rubin as part of his
payment  to our  company  in  Fiscal  1999  and 2000 in  settlement  of the 1998
shareholder  derivative  action at which  point  they had  significantly  higher
market values.

The loss of $837,000 on sale of marketable securities in Fiscal 2002 compares to
a loss of $1,395,000  in Fiscal 2001 which was primarily  comprised of a loss of
$514,000  from the sale of  1,215,000  shares of Magna Labs,  Inc. and a loss of
$757,000 from the sale of 1,637,000  shares of eGlobe,  Inc. In addition,  there
was a loss of $3,000  from the sale of 500  shares of  RezConnect  Technologies,
Inc.  and a loss of  $121,000  from the sale of 58,000  shares of Graphon  Corp.
Total net proceeds  generated from the sales of marketable  securities in Fiscal
2001 were  $1,275,000.  The shares of eGlobe  were  acquired in June 1999 in the
form of eGlobe  preferred  convertible  shares as part of the sales price of the
assets of  Connectsoft  Communications  Corp.  The trading  prices of eGlobe and
Graphon shares decreased significantly during our required holding period.


                                       6
<PAGE>


Liquidity and Capital Resources

Management assesses liquidity in terms of our company's ability to generate cash
to fund its operating,  investing and financing activities.  Significant factors
affecting the management of liquidity  are: cash flows  generated from operating
activities,  capital  expenditures,   financing  requirements,   investments  in
businesses,  adequacy  of  available  bank  lines of credit  and the  ability to
attract long-term capital with satisfactory terms.

Our  primary  needs for  liquidity  and  capital  resources  are the  funding of
salaries and other  administrative  expenses  related to the  management  of our
company.

During the period of August 1, 2002  through  June 16,  2003 and June 17 through
December  31,  2003,  our  cash,  cash  equivalents  and  marketable  securities
increased by $237,000 and $18,000  respectively.  Cash receipts during these two
periods  consisted of net  proceeds of  $2,875,000  in  September  2002 from the
settlement  of litigation  and net proceeds of  $1,350,000  from the sale of the
Bridge Notes on June 18, 2003. Of these monies, $1,508,000 was used for loans to
NY Medical and $195,000 was used for loans to other companies; $250,000 was used
to repay  the May 2002  loan  from the Rubin  Family  Irrevocable  Stock  Trust;
$536,000  was used to pay  accrued  liabilities;  $73,000  was used to  purchase
treasury stock ; approximately $585,000 was used for professional fees and other
expenses  related  to  the  rescinded  acquisition  of  Lifetime  and  NYMI  and
approximately $804,000 was used to fund day to day operations.

Our cash, cash equivalents and marketable  securities of $384,000 as of December
31, 2003 are not sufficient to support current levels of operations for the next
twelve months and it will be necessary for us to seek additional  financing.  In
addition,  we are in  default  on certain  indebtedness  and expect to  continue
non-payment of this indebtedness.

The Company's cash position as of the filing date of this Form 10-K is less than
$50,000;  however,  the  Company is actively  seeking a loan of $250,000  and is
currently in discussions  with a financing  source.  Such loan, if  consummated,
when  combined  with the existing  cash amount,  will be  sufficient to fund the
operating costs and expenses of the Company for approximately 6 months. There is
no assurance  that any loan will be  obtained,  but  management  is confident of
being able to do so.

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).


                                       7
<PAGE>

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
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.






                                       8
<PAGE>

Recent accounting pronouncements

In July 2001, SFAS No. 142, "Goodwill and Other Intangible Asset" was issued. We
adopted the provisions of SFAS 142 on February 1, 2002.

In June 2001, SFAS No. 143,  "Accounting for Asset Retirement  Obligations," was
issued.  SFAS 143 addresses  financial  accounting and reporting for obligations
associated with the retirement of tangible  long-lived assets and the associated
asset  retirement  costs.  It requires that the fair value of a liability for an
asset retirement  obligation be recognized in the period in which it is incurred
if a reasonable estimate of fair value can be made. The company adopted SFAS 143
on  February  1,  2003.  Its  adoption  did not have an impact on our  company's
financial statements.

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.




                                       9
<PAGE>

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
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.

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.

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.

On June 1, 2004, we appointed  Seligson &  Giannattasio,  LLP as our independent
auditors.

On June 16, 2003, we changed our fiscal year to December 31 in  connection  with
the acquisition of NY Medical.

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.

                                       10
<PAGE>

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.


                                       11
<PAGE>


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            61       Chief Financial Officer and Director
C. Dean McLain             49       Executive Vice President and Director
Michael Metter             46       Director
Howard Katz (1)            63       Director


(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.

C. Dean McLain.  Mr. McLain has served as our  Executive  Vice  President  since
March 1, 1993, as a director since March 7, 1994, and President of Western Power
and Equipment Corp.  since June 1, 1993. From 1989 to 1993, Mr. McLain served as
Manager of  Privatization  of Case  Corporation.  From 1985 to 1989,  Mr. McLain
served as General Manager of Lake State  Equipment,  a distributor of John Deere
construction  equipment.  Mr.  McLain  holds  a  B.S.  degree  in  Business  and
Economics,  and a Master's  of  Business  Administration,  from West Texas State
University.  Mr.  McLain  devotes  his full  professional  time to  Western  and
included in such time is time spent on our business.

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.





                                       12
<PAGE>

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.

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 is attached hereto as Exhibit 14.

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.



                                       13
<PAGE>


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.

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.



                                       14
<PAGE>


Item 11. Executive Compensation

The following table  summarizes the  compensation  for services  rendered to our
company  during  fiscal  years  2001,  2002 and 2003 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>       <C>
Robert M. Rubin (1)        2003  $257,000     -      $200,000 (2)         -                 -           -
                           2002  $247,000 $300,000   $200,000             -                 -           -
                           2001  $238,000     -      $200,000             -                 -           -
David M. Barnes            2003  $120,000     -          -                -                 -           -
                           2002  $150,000     -          -                -                 -           -
                           2001  $135,000     -          -                -                 -           -
</TABLE>


(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).

(2)  Mr.  Rubin is also engaged by Western,  pursuant to a consulting  agreement
     that  expires  on  July  31,  2007.  He  receives  $200,000  annually  plus
     reimbursement for his business expenses.







                                       15
<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 the
most recent  practicable  date,  there were 3,824,799 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 the most recent  practicable  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)                     5,157,474                            69.39%
Robert M. Rubin (4)                                             33,680                                 *
David M. Barnes (5)                                            749,500                            18.39%
C. Dean McLain (6)                                             962,000                            23.83%
Michael Metter (7)                                             130,000                             3.38%
Howard Katz (8)                                                 64,000                             1.64%
All officers and directors as a group (5 persons)            7,096,654                            87.96%

</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)  Consists of (i) 1,549,831 shares of our common stock currently owned by the
     Rubin Family  Irrevocable  Stock Trust (the  "Trust"),  and (ii)  3,607,643
     shares of AUGI common stock  issuable to the Trust upon  conversion  of the
     B-3 Preferred.  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)
     presently exercisable options to acquire an additional 33,600 shares of our
     common stock.

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

(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.





                                       16
<PAGE>

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:

     -    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

     -    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.





                                       17
<PAGE>

Under the terms of such Rescission Agreement:

          -    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;

          -    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;

          -    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

          -    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:

          -    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;

          -    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

          -    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.

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.


                                       18
<PAGE>

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

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

          -    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;

          -    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;

          -    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

          -    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 (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
would convert into a maximum of 3,607,643  shares of common stock, but gained no
benefit  therefrom  not shared on a pro rata basis with all other holders of our



                                       19
<PAGE>

common stock as of June 10, 20
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>



                         June 17, 2003 to    August 1, 2002 to   Year ended July 31,
                         December 31, 2003    June 16, 2003        2002             2001
                         -----------------    -------------    ------------  ------------

AUDIT FEES:

<S>                         <C>           <C>                  <C>              <C>
PriceWaterhouseCoopers      $               $                    $  22,000      $ 26,000

Seligson & Giannatassio       10,000              10,000

Eisner, LLP                   10,000              10,000


AUDIT RELATED FEES:

Eisner, LLP                   10,000              10,000

Bagell & Joseph                                    1,000


TAX FEES:

Robert Schulman                                   25,000                          25,000


ALL OTHER FEES:

Bagell & Joseph                                    7,500

Eisner, LLP                    25,000             35,000
                           -----------        -----------         ------------   -----------
Total                    $     55,000      $      98,500        $    22,000    $  51,000
                           ==========         ==========          ============   ===========

</TABLE>








                                       20
<PAGE>






                 AMERICAN UNITED GLOBAL, INC. AND SUBSIDIARIES

                    INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



                                                                           Page
                                                                          Number


    Independent Auditors' Reports......................................... F-2-3
    Consolidated Balance Sheets
    December 31, 2003, June 16, 2003 and July 31, 2002...................... F-4
    Consolidated Statements of Operations for the periods
    June 17, 2003 through December 31, 2003, August 1, 2002
    through June 16, 2003 and the years ended July 31, 2002
    and 2001................................................................ F-5
    Consolidated Statements of Deficit for the periods
    June 17, 2003 through December 31, 2003, August 1, 2002
    through June 16, 2003 and the years ended July 31, 2002
    and 2001...............................................................F-6-7
    Consolidated Statements of Cash Flows for the periods
    June 17, 2003 through December 31, 2003, August 1, 2002
    through June 16, 2003 and the years ended July 31, 2002
    and 2001................................................................ F-8
    Notes to the Consolidated Financial Statements........................F-9-24


                                   F-1
<PAGE>

To The Board of Directors
American United Global, Inc. and Subsidiaries


We have audited the accompanying  consolidated balance sheets of American United
Global,  Inc. and subsidiaries as of June 16, 2003 and December 31, 2003 and the
related consolidated statements of operations,  changes in shareholders' deficit
and cash  flows for the  period  August 1, 2002 to June 16,  2003 and the period
June 17, 2003 to December 31, 2003. These consolidated  financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  consolidated  financial  position  of
American United Global,  Inc. and  subsidiaries as of June 16, 2003 and December
31, 2003 and the consolidated results of their operations and their consolidated
cash  flows for the  period  August 1, 2002 to June 16,  2003 and for the period
June 17, 2003 to December  31, 2003 in  conformity  with  accounting  principles
generally accepted in the United States of America.


The accompanying  consolidated  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, New York
June 24, 2004


                                      F-2
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


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


In our opinion,  the  accompanying  consolidated  balance  sheet and the related
consolidated  statements of  operations  and  comprehensive  income  (loss),  of
shareholders' equity (deficit) and of cash flows present fairly, in all material
respects,  the  financial  position  of American  United  Global,  Inc.  and its
subsidiaries  (the  "Company")  at July  31,  2002,  and the  results  of  their
operations  and their cash flows for the years ended July 31, 2002 and 2001,  in
conformity with accounting principles generally accepted in the United States of
America.  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 audits.  We conducted our audits of these statements in
accordance with the standards of the Public Company  Accounting  Oversight Board
(United States).  These standards  require that we plan and perform the audit to
obtain reasonable  assurance about whether the financial  statements are free of
material  misstatement.  An audit includes examining,  on a test basis, evidence
supporting the amounts and  disclosures in the financial  statements,  assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for the opinion expressed above.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going concern.  The Company has incurred  losses from
operations  and has had a working  capital  deficit for each of the years ending
July  31,  2001 and  2002.  Further,  as  discussed  in Note 1 to the  financial
statements, the Company may require additional funds to continue its operations.
Such  factors  raise  doubt about the  Company's  ability to continue as a going
concern. Management's plans in regards to these matters are discussed in Note 1.
The financial  statements do not reflect any adjustments  that might result from
the outcome of this uncertainty.

PricewaterhouseCoopers LLP


Portland, Oregon
November 8, 2002



                                      F-3
<PAGE>


<TABLE>
<CAPTION>

                  AMERICAN UNITED GLOBAL, INC. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS




                                  ASSETS
                                                                     December 31, 2003        June 16, 2003      July 31, 2002
                                                                     -----------------        -------------      -------------
CURRENT ASSETS:
<S>                                                                  <C>                    <C>                   <C>
Cash and cash equivalents                                            $    379,000           $    353,000          $   105,000
Investment in marketable securities,
     at market value                                                        5,000                  9,000               20,000
Litigation settlement receivable                                            -                       -               2,875,000
Notes receivable from New York Medical, Inc.,
     net of reserve of $1,508,000 and $ -0-                                     0                850,000                 -
Investment in Informedix                                                  100,000                100,000                 -
Note receivable, SpongeTech                                                50,000                 25,000                 -
Note receivable, InforMedix                                                20,000                  -                     -
Note receivable, other                                                     25,000                  -                     -
Prepaid expenses                                                             -                    75,000                 -
Interest receivable                                                         5,000                 12,000                 -
                                                                     ------------           ------------         -------------
TOTAL CURRENT ASSETS                                                      584,000              1,424,000            3,000,000
                                                                     ------------           ------------         -------------
TOTAL ASSETS                                                         $    584,000           $  1,424,000         $  3,000,000
                                                                     ============           ============         ============

LIABILITIES AND SHAREHOLDERS' DEFICIT

CURRENT LIABILITIES:
Short-term borrowings in default, including
accrued interest of $1,060,000, $979,000 and $848,000                   2,560,000           $   2,479,000          $ 2,348,000
Accounts payable                                                           14,000                  16,000               26,000
Accrued liabilities                                                       478,000                 158,000              963,000
Notes payable                                                               7,000                  47,000              250,000
Distribution payable to Series B-3 Preferred shareholders
                                                                          100,000                   -                    -
Bridge notes payable, net of unamortized
                discount of $417,000                                    1,083,000                  -                     -
                                                                     ------------           -------------        -------------
       TOTAL CURRENT LIABILITIES                                        4,242,000               2,700,000            3,587,000
                                                                     ------------           -------------        -------------
      TOTAL LIABILITIES                                                 4,242,000               2,700,000            3,587,000
                                                                     ------------           -------------        -------------
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; 407,094 issued and outstanding                                 4,000                   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; 232,500 shares
 issued and outstanding                                                     2,000                    -                     -
 Common stock, $.01 par value; 40,000,000
 shares authorized; 2,532,699, 1,997,624 and
 1,997,624 shares issued and outstanding                                   25,000                  20,000               20,000
 Additional paid-in capital                                            53,126,000              51,475,000           51,375,000
 Accumulated deficit                                                  (56,661,000)            (52,625,000)         (51,927,000)
 Accumulated unrealized loss, net                                         (74,000)                (70,000)             (59,000)
                                                                     ------------             ------------        -------------
                                                                       (3,578,000)             (1,196,000)            (587,000)
                                                                     ------------             ------------        -------------
  Less cost of treasury shares                                            (80,000)                (80,000)                -
                                                                     ------------            ------------         -------------
     Total shareholders' deficit                                       (3,658,000)             (1,276,000)            (587,000)
                                                                     ------------            ------------         -------------

       TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT                   $    584,000             $ 1,424,000          $ 3,000,000
                                                                     ============            ============          ============

                                    See notes to consolidated financial statements
                                                       F-4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                                   AMERICAN UNITED GLOBAL, INC. AND SUBSIDIARIES

                                       CONSOLIDATED STATEMENTS OF OPERATIONS



                                                     JUNE 17, 2003 TO            AUGUST 1,          YEAR ENDED       YEAR ENDED
                                                     DECEMBER 31,                 2002 TO            JULY 31,         JULY 31,
                                                          2003                  JUNE 16,2003           2002             2001
                                                     ---------------           --------------     -------------    -------------

<S>                                                   <C>                         <C>               <C>              <C>
General and administrative expenses                   $  1,281,000                $871,000         $ 1,154,000      $ 1,214,000

Operating loss                                          (1,281,000)               (871,000)         (1,154,000)      (1,214,000)
                                                        ----------                --------           ----------       ----------

Income from litigation settlement                             -                       -              2,875,000             -
Impairment of Investment in Western Power and
Equipment Corp.                                                                                                      (1,771,000)
Impairment of Investment in Intertech Capital, Inc.           -                       -               (250,000)            -
Interest paid in common stock                                 -                       -             (1,000,000)            -
Interest expense, net                                   (1,247,000)               (107,000)           (149,000)        (248,000)
Loss on sale of marketable securities                         -                       -               (837,000)      (1,395,000)
Other income                                                  -                    280,000                 -            506,000
Reserve for notes due from
  New York Medical, Inc.                                (1,508,000)                   -                    -                -
Equity in loss of unconsolidated subsidiary                   -                       -               (702,000)      (2,823,000)
                                                        ----------                --------           ----------       ----------
Loss before taxes                                       (4,036,000)               (698,000)         (1,217,000)      (6,945,000)
Benefit for income taxes                                      -                       -                    -            545,000
                                                        ----------                --------           ----------       ----------
Net loss                                               $(4,036,000)           $   (698,000)        $(1,217,000)     $(6,400,000)
                                                        ----------                --------          ----------       ----------
Basic and diluted loss per share:

Basic and diluted loss per share                       $      (0.56)          $      (0.35)        $     (1.50)     $    (13.02)
                                                        ----------                --------           ----------       ----------

Weighted average number of shares                        7,182,699               1,997,624             810,124          491,413
                                                         =========               =========             =======          =======

                                    See notes to consolidated financial statements
</TABLE>
                                      F-5
<PAGE>
                                 AMERICAN UNITED GLOBAL, INC. AND SUBSIDIARIES

                                        CONSOLIDATED STATEMENTS OF 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, 2000                     416,263          -           $  4,000       -                 485,735     $     5,000
Net loss                                        -             -               -          -
Additional private placement shares             -             -               -          -                  11,500
Conversion of preferred to common             (8,420)         -               -          -                     337            -
                                            ---------     ---------       ---------  ----------       ------------     ------------
Balance at July 31, 2001                     407,843          -              4,000    $  -                 497,572           5,000
Net loss                                        -             -               -          -                    -               -

Conversion of preferred stock to common
                                               (749)          -                                                52              -
Shares issued in connection with
the loan from the Rubin Family Trust            -             -               -          -              1,500,000            15,000
                                            ---------     ---------       ---------  ----------       ------------     ------------
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                 -           232,500           -           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        232,500       $ 4,000        $2,000         2,532,699      $    25,000
                                            =========     =========       =========  ==========       ============     ============


                                    See notes to consolidated financial statements
</TABLE>

                                      F-6

<PAGE>
<TABLE>
<CAPTION>

                                                                       ACCUMULATED
                                                ADDITIONAL               OTHER                           COST OF      SHAREHOLDER'S
                                                 CONTRIBUTED        COMPREHENSIVE       ACCUMULATED      TREASURY     EQUITY
                                                  CAPITAL               LOSS              DEFICIT         STOCK       (DEFICIT)
                                                  ----------          -----------      ------------   -----------    -------------
<S>                                             <C>                <C>               <C>             <C>              <C>
Balance at July 31, 2000                        $ 50,390,000       $    1,284,000    $ (44,310,000)                   $  7,373,000
Net loss                                                -                    -          (6,400,000)         -           (6,400,000)
Accumulated unrealized loss, net                        -              (2,158,000)            -             -           (2,158,000)
Additional private placement shares                     -                    -                -             -                 -
Conversion of preferred to common                       -                    -                -             -                 -
                                                  ----------             --------      -----------     ----------       ----------
Balance at July 31, 2001                          50,390,000             (874,000)     (50,710,000)          -          (1,185,000)
                                                  ----------             --------      -----------     ----------       ----------

Net loss                                                                                (1,217,000)          -          (1,217,000)
Accumulated unrealized loss, net                                          815,000                            -             815,000
Shares issued in connection with the
Loan from the Rubin Family Trust                     985,000                                  -              -           1,000,000
                                                  ----------             --------      -----------      ----------      ----------
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)
                                                  ==========             ========      ===========       =========      ===========

                                 See notes to consolidated financial statements
</TABLE>
                                      F-7
<PAGE>
<TABLE>
<CAPTION>

                                             AMERICAN UNITED GLOBAL, INC. AND SUBSIDIARIES

                                                 CONSOLIDATED STATEMENTS OF CASH FLOWS


<
                                                          JUNE 17, 2003     AUGUST 1, 2002
                                                          TO DECEMBER 31,   TO JUNE 16,      YEAR ENDED JULY    YEAR ENDED JULY
                                                          2003              2003             31, 2002           31, 2001

                                                             --------        ---------           --------        ----------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                       <C>               <C>               <C>               <C>
   Net loss                                               $(4,036,000)      $ (698,000)       $(1,217,000)      $(6,400,000)
   Adjustments to reconcile net loss to net cash used
    by operating activities:
  Beneficial conversion feature                             1,083,000            -                   -                 -
  Equity in loss of affiliate                                    -               -                702,000         2,823,000
  Interest paid in common stock                                  -               -              1,000,000              -
  Legal fees paid in common stock                             175,000            -                   -                 -
  Stock option compensation                                      -             100,000
   Loss on sale of marketable securities                         -                                837,000         1,395,000
   Impairment of investments                                     -                                250,000         1,946,000
  Reserve for NYMI note receivable                          1,508,000             -                  -                 -
Changes in assets and liabilities, net
of  effect of distribution:
 Prepaid expenses and other receivables                        82,000          (87,000)            27,000           240,000
 Litigation settlement receivable                                -           2,875,000         (2,875,000)             -
 Accounts payable                                              (2,000)         (10,000)           (13,000)           53,000
 Accrued liabilities                                          320,000         (806,000)           440,000        (1,271,000)
                                                              -------         --------            -------        ----------
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES
                                                             (870,000)       1,374,000           (849,000)       (1,214,000)
                                                             --------        ---------           --------        ----------


CASH FLOWS FROM INVESTING ACTIVITIES
  Loan to Informedix, Inc.                                    (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.                            (658,000)        (850,000)               -                -
  Purchase of treasury stock                                     -             (80,000)               -                -
  Sales of marketable securities                                 -                                185,000         1,275,000
  Net effect on cash from distribution
    of Western Power shares                                      -                -                  -             (823,000)
                                                             --------        ---------           --------        ----------
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES
                                                             (728,000)      (1,055,000)           185,000           452,000
                                                             --------        ---------           --------        ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of Bridge Notes,                         1,500,000
Net (payments) / borrowings under
term loans                                                    (40,000)          48,000
(Repayment) / borrowing under note payable to Rubin
Family Trust                                                                  (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         1,624,000          (71,000)           250,000            -
                                                             --------        ---------           --------        ----------
Net increase (decrease) in cash
and cash equivalents                                           26,000           248,000          (414,000)         (762,000)
Cash and cash equivalents, beginning                          353,000       $   105,000           519,000         1,281,000
                                                             --------        ---------           --------        ----------
Cash and cash equivalents, ending                         $   379,000       $   353,000        $  105,000        $  519,000
                                                          ===========       ===========        ==========        ==========

                                    See notes to consolidated financial statements
</TABLE>
                                      F-8
<PAGE>


                  AMERICAN UNITED GLOBAL, INC. AND SUBSIDIARIES

                 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 its  corporate  office is in  Kirkland,  Washington.  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 3).

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 will  continue  to report on a
December 31 year end basis subsequent to the Rescission Agreement.


GOING CONCERN

At  December  31,  2003,  the  Company  had  a  working  capital  deficiency  of
$3,658,000,  an accumulated  deficit of $56,661,000,  and had incurred 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 and  marketable  securities of $384,000 at December 31, 2003
are 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.

The  Company's  intention  is to seek an  acquisition  candidate  with a  viable
business  that can be financed and expanded  both by internal  growth and by the
acquisition and consolidation of similar  operations.  There can be no assurance
that the Company will be successful in locating such  acquisition  candidates or
that if such operations are found that a merger or acquisition  agreement can be
negotiated or that financing can be raised to consummate a transaction.


                                      F-9
<PAGE>


                  AMERICAN UNITED GLOBAL, INC. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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.

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.

RECLASSIFICATION

Certain amounts presented in the prior years consolidated  financial  statements
have been  reclassified  to  conform to those used in the ten and one half month
period ended June 16, 2003 and the six and one half month period ended  December
31, 2003. Such  reclassifications had no impact on the results of operations for
those prior years.

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, 2003        June 16, 2003        July 31, 2002

<S>                                 <C>                    <C>                  <C>
 Cost                               $ 79,000               $ 79,000             $ 79,000
 Cumulative unrealized loss           74,000                 70,000               59,000
                                      ------                 ------               ------
                                     $ 5,000               $  9,000             $ 20,000
                                     =======               ========             ========

</TABLE>

                                      F-10
<PAGE>

                  AMERICAN UNITED GLOBAL, INC. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARKETABLE SECURITIES (continued)

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.


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 and December 31, 2003, the Company's uninsured cash balances
totaled approximately $-0-, $250,000 and $279,000 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  plans 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.

The effects of applying SFAS No. 123 in the above pro forma  disclosures are not
indicative  of future  amounts.  Additionally,  future  amounts are likely to be
affected by the number of grants awarded since  additional  awards are generally
expected to be made at varying amounts.

The pro forma net loss and loss per share consists of the following:
<TABLE>
<CAPTION>

                           Period from          Period from
                         June 17, 2003 to   August 1, 2002 to   Year ended July 31,
                         December 31, 2003    June 16, 2003        2002             2001
                         -----------------    -------------   -------------    -------------

<S>                      <C>                   <C>            <C>              <C>
Net loss as reported     $   (4,036,000)       $  (698,000)   $ (1,217,000)    $  (6,400,000)
Effect of stock options        (176,000)          (270,000)       (179,000)         (760,000)
                               --------           --------        --------          --------

Proforma net  loss       $   (4,212,000)        $ (968,000)   $ (1,396,000)    $  (7,160,000)
                         ==============         ==========    ============     =============

Proforma loss per share  $        (0.59)    $        (0.48)   $      (1.72)    $      (14.57)
                         ==============     ==============    ============     =============
</TABLE>
                                      F-11
<PAGE>



                  AMERICAN UNITED GLOBAL, INC. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


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 4,650,000 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.


RECENT ACCOUNTING PRONOUNCEMENTS

FASB  Interpretation No. 45 Guarantor's  Accounting and Disclosure  Requirements
for  Guarantees,  Including  Indirect  Guarantees of  Indebtedness  of Others an
interpretation  of FASB  Statements  No. 5, 57, and 107 and  rescission  of FASB
Interpretation No. 34.

This  Interpretation  elaborates on the disclosures to be made by a guarantor in
its interim and annual financial  statements about its obligations under certain
guarantees that it has issued. It also clarifies that a guarantor is required to
recognize,  at the  inception of a guarantee,  a liability for the fair value of
the obligation undertaken in issuing the guarantee. This Interpretation does not
prescribe  a  specific  approach  for  subsequently  measuring  the  guarantor's
recognized liability over the term of the related guarantee. This Interpretation
also incorporates,  without change, the guidance in FASB  Interpretation No. 34,
Disclosure of Indirect  Guarantees  of  Indebtedness  of Others,  which is being
superseded.

The  initial   recognition   and   initial   measurement   provisions   of  this
Interpretation  are  applicable on a prospective  basis to guarantees  issued or
modified  after  December  31,  2002,  irrespective  of the  guarantor's  fiscal
year-end.  The disclosure  requirements in this Interpretation are effective for
financial  statements  of interim or annual  periods  ending after  December 15,
2002. The interpretive  guidance incorporated without change from Interpretation
34  continues to be required for  financial  statements  for fiscal years ending
after June 15, 1981 the  effective  date of  Interpretation  34. The Company has
made the appropriate disclosures related to guarantees.


                                      F-12
<PAGE>

                 AMERICAN UNITED GLOBAL, INC. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


In April 2002, the Financial Accounting Standards Board (the "FASB") issued SFAS
No.  145,  Rescission  of SFAS Nos. 4, 44 and 64,  amendment  of SFAS No. 13 and
Technical  Corrections  as of April 2002.  This  Statement  rescinds SFAS No. 4,
Reporting Gains and Losses from Extinguishment of Debt, and an amendment to that
Statement,  SFAS No. 64,  Extinguishments  of Debt Made to Satisfy  Sinking-Fund
Requirements.   This  Statement  also  rescinds  SFAS  No.  44,  Accounting  for
Intangible  Assets  of Motor  Carriers.  This  Statement  amends  SFAS  No.  13,
Accounting  for Leases,  to  eliminate  an  inconsistency  between the  required
accounting  for  sale-leaseback  transactions  and the required  accounting  for
certain  lease  modifications  that have  economic  effects  that are similar to
sale-leaseback   transactions.   This   Statement  also  amends  other  existing
authoritative  pronouncements  to make various  technical  corrections,  clarify
meanings or describe their applicability  under changed conditions.  The Company
has reviewed  this  pronouncement  and will  consider its impact if any relevant
transaction(s) occur.


In July 2002, the FASB issued SFAS No.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). This Statement applies to
costs  associated  with an exit  activity  that does not involve an entity newly
acquired in a business  combination or with a disposal  activity covered by SFAS
No. 144,  Accounting for the Impairment or disposal of Long-Lived Assets.  These
costs include,  but are not limited to; termination benefits provided to current
employees  that are  involuntarily  terminated  under  the  terms  of a  benefit
arrangement  that, in substance,  is not an ongoing  benefit  arrangement  or an
individual deferred compensation contract, costs to terminate a contract that is
not a capital lease and costs to consolidate  facilities or relocate  employees.
This Statement does not apply to costs associated with the retirement of a long-
lived  asset  covered  by  SFAS  No.  143,   Accounting  for  Asset   Retirement
Obligations.  The Company does not believe that these  pronouncements  apply but
will continue to review for possible relevancy in the future.


In December  2002,  the FASB issued SFAS No. 148,  "Accounting  for  Stock-Based
Compensation  - Transition  and  Disclosure - An Amendment of FASB Statement No.
123." This Statement provides  alternative methods of transition for a voluntary
change to the fair value based method of  accounting  for  stock-based  employee
compensation  and  requires  prominent  disclosures  in both  annual and interim
financial  statements  about the method of accounting for  stock-based  employee
compensation and the effect of the method used on reported results.  The Company
has elected not to adopt the recognition and measurement  provisions of SFAS No.
123 and continues to account for its  stock-based  employee  compensation  plans
under  APB  Opinion  No.  25 and  related  interpretations,  and  therefore  the
transition  provisions  will not have an  impact  on its  operating  results  or
financial position.




                                      F-13
<PAGE>



                 AMERICAN UNITED GLOBAL, INC. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

In April 2003,  the FASB issued SFAS No. 149,  "Amendment  of  Statement  133 on
Derivative  Instruments  and  Hedging  Activities."  The  Statement  amends  and
clarifies  accounting for derivative  instruments,  including certain derivative
instruments  embedded in other contracts entered into or modified after June 30,
2003.  The guidance  should be applied  prospectively.  The  provisions  of this
Statement that relate to SFAS 133 Implementation Issues that have been effective
for fiscal  quarters  that began prior to June 15, 2003,  should  continue to be
applied in accordance with  respective  effective  dates.  In addition,  certain
provisions  relating to forward purchases or sales of when-issued  securities or
other securities that do not yet exist,  should be applied to existing contracts
as well as new contracts  entered into after June 30, 2003. The adoption of SFAS
No. 149 is not expected to have an impact on the Company's financial statements.


In May  2003,  the  FASB  issued  Statement  of  Accounting  Standards  No.  150
"Accounting  for Certain  Financial  Instruments  with  Characteristics  of both
Liabilities and Equity" (SFAS No. 150).  SFAS No. 150 establishes  standards for
classification and measurement in the statement of financial position of certain
financial  instruments with  characteristics  of both liabilities and equity. It
requires  classification of a financial instrument that is within its scope as a
liability  (or an asset in some  circumstances).  SFAS No. 150 is effective  for
financial instruments entered into or modified after May 31, 2003, and otherwise
is effective at the beginning of the first interim period  beginning  after June
15, 2003. The Company has not yet determined the impact, if any, of the adoption
of SFAS on its financial position or results of operations.

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
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.



                                      F-14
<PAGE>
                 AMERICAN UNITED GLOBAL, INC. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



NOTE 2. - LIFETIME  MERGER,  ACQUISITION  OF NEW YORK MEDICAL,  INC. AND RELATED
OBLIGATIONS AND RESCISSION OF TRANSACTIONS


On June 16, 2003, American United Global, Inc., Merger Sub, and Lifetime entered
into an  Amended  and  Restated  Agreement  and  Plan  of  Merger  (the  "Merger
Agreement"). The Merger Agreement was approved by the board of directors of each
of the Company, Merger Sub and Lifetime on June 13, 2003 and by the stockholders
of Lifetime and Merger Sub on June 13, 2003.

Prior  to  the  Merger,   the  Rubin  Family   Irrevocable   Stock  Trust  owned
approximately  77.6% of the  shares  of the  common  stock of the  Company  (the
"Company Common Stock").

On June 17, 2003, the Company,  through Merger Sub, acquired 100% of the capital
stock of Lifetime.  Pursuant to the Merger Agreement, Merger Sub was merged with
and into Lifetime,  with Lifetime continuing as the surviving corporation of the
Merger and a wholly-owned subsidiary of the Company.

At the time of the  Merger,  Lifetime  was a holding  company  whose  only asset
consisted  of  its  ownership  of 55% of the  outstanding  capital  stock  of NY
Medical,  Inc.,  a New York  corporation  ("NY  Medical"),  acquired by Lifetime
immediately prior to the consummation of the Merger (see below).

In connection with the Merger, the Company issued an aggregate of 467,500 shares
of its newly  authorized  and  designated  B-2 Preferred to the former  Lifetime
stockholders.  Each  share of the B-2  Preferred  was  convertible,  on or after
December 17, 2003 (or earlier upon the occurrence of certain specified  events),
into 20 shares of Company Common Stock,  or an aggregate of 9,350,000  shares of
Company Common Stock if all shares of B-2 Preferred were converted.

In contemplation of the Merger Agreement,  the Company declared a stock dividend
on the  Company  Common  Stock with a record  date of June 10,  2003.  The stock
dividend took the form of the issuance of 232,500 shares of the Company's  newly
authorized  and  designated  Series B-3  Convertible  Preferred  Stock (the "B-3
Preferred")  to the holders of the Company  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 (or earlier upon the occurrence of certain specified  events),
into 20 shares  of  Company  Common  Stock.  The  shares  of B-3  Preferred  are
convertible  at the  option  of the  holder  of such  shares  or  pursuant  to a
resolution  in  favor  thereof  by  the  board  of  directors  of  the  Company.
Accordingly,  an aggregate of 4,650,000  shares of Company Common Stock would be
issued to the Company's record holders of the B-3 Preferred if all shares of B-3
Preferred are converted.  Further, the holders of the B-3 Preferred will receive
a dividend of the 1,222,586 shares of Western Power & Equipment Corp. as well as
a dividend of the 54,000 shares of Informedix, Inc. owned by AUGI.

NY Medical  provides  facilities  and  management  services for various  medical
practices which  specialize in areas of neurology,  orthopedics,  psychiatry and
internal  medicine.  The selling NY Medical  stockholder was Redwood  Investment
Associates, L.P. ("Redwood"), an affiliate of Dr. Jonathan Landow, the President
and Chief Executive Officer of NY Medical.

Under the terms of the NY Medical Stock Purchase  Agreement,  Lifetime issued to
Redwood a $5,500,000 principal amount 6% convertible note (the "Lifetime Note").
In  connection  with the Merger,  the  Company  unconditionally  guaranteed  the
Lifetime Note and also guaranteed payment by NY Medical of a separate $4,662,830
principal  amount  6%  Amended  and  Restated  Senior   Subordinated  Term  Loan
Promissory  Note of NY  Medical,  dated as of June 16, 2003 and payable to Tracy
Landow, as assignee of Dr. Jonathan Landow (the "Landow Note").


                                      F-15
<PAGE>
                 AMERICAN UNITED GLOBAL, INC. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



To the extent that all  obligations  under the Landow Note and the Lifetime Note
were not paid in full out of the  proceeds of the NY Medical  forced  sale,  the
Company was to be liable for any unpaid balance due within six months  following
such sale. The Company however, had the right to demand and receive payment from
NY Medical on any unpaid amount due on the Company's  loans to NY Medical in the
principal aggregate amount of $1,500,000 (see below).

The  Company,  as the parent  company of  Lifetime,  also  entered  into a share
exchange agreement (the "Share Exchange Agreement") to acquire the remaining 45%
of the  outstanding  capital  stock of NY  Medical  from  the New  York  Medical
Employee   Stock   Ownership  Plan  and  Trust  (the  "ESOP")  in  exchange  for
approximately  $4,500,000  stated value of the Company's  Series B-4 convertible
preferred stock.

During 2003, the Company lent to Lifetime (which,  in turn, loaned such funds to
NY Medical)  and NY Medical an aggregate  of  $1,500,000,  which NY Medical used
primarily for working capital  purposes and to reduce NY Medical's  indebtedness
to DVI, its  principal  banker  ("DVI").  The  $1,500,000  of Company loans were
consolidated  and are now evidenced by NY Medical's 6% note to the Company which
was due as to principal and interest on January 2, 2004 and is secured by a lien
and security  interest on all of the assets and properties of NY Medical,  which
lien and  security  interest is  secondary  only to the liens held by DVI or any
substitute senior secured lender.

On June 17,  2003,  the Company  received an  aggregate  of  $1,350,000  (net of
selling  commissions)  in  connection  with the sale of  $1,500,000 in aggregate
principal  amount of 10%  convertible  notes due March 2004 (the "Bridge Notes")
through Vertical Capital Partners, a member of the NASD. Robert DePalo, a former
officer of Lifetime and  affiliate  of a former  Lifetime  stockholder,  is also
affiliated with Vertical Capital Partners.  The principal and interest due under
the Bridge Notes are convertible  into Company Common Stock at any time at $1.00
per share.  In addition,  the  purchasers of the Bridge Notes received five year
warrants to purchase an aggregate of 1,000,000  shares of Company  Common Stock;
provided, that if the principal and interest due under the Bridge Notes were not
paid in full by October 17, 2003, the number of shares issuable upon exercise of
the warrants  would  increase to 1,250,000  shares,  and increase  further to an
aggregate  of  1,500,000  shares in the event that,  for any reason,  the Bridge
Notes were not been paid in full by January  17,  2004.  Payment was not made on
either  date  and  as a  result,  warrants  to  purchase  1,500,000  shares  are
outstanding  and are  exercisable  at $0.75 per share.  The Company  utilized an
aggregate of  approximately  $650,000 of the net  proceeds  from the sale of the
Bridge Notes to increase its  outstanding  loans to Lifetime and NY Medical from
$850,000 to $1,500,000. The Company secured the Bridge Notes by assigning to the
holders its secondary lien and security interest on the assets of NY Medical.


                                      F-16
<PAGE>
                 AMERICAN UNITED GLOBAL, INC. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Following its June 2003 acquisitions of Lifetime and 55% of the capital stock of
NY Medical,  the Company  attempted  to  consummate  a private  placement of its
securities  in order to raise  approximately  $5.7  million to pay $2.0  million
principal  amount of the  Lifetime  Note and retire the Landow  Note in order to
satisfy  both of the  October  17,  2003  "Payment  Events"  under  the  Closing
Agreement with the former  principal owner of NY Medical and its affiliates.  In
October  2003,  Dr.  Landow,  acting on behalf of NY Medical,  Tracy  Landow and
Redwood,  extended  the due date to satisfy the Payment  Events to November  17,
2003,  in  consideration  for the  Company's agreement to extend the due date of
the  $1,500,000  NY Medical Note payable to the Company to January 2, 2005.

Notwithstanding  the  extension,  the  Company  was  unable  to  consummate  the
requisite  financing by the extended  date,  and in November  2003,  Dr.  Landow
declared a Default  Event.  On  December  5, 2003,  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 which  special  meeting,  among  other  things,  was to
consider a possible rescission of the acquisition of 55% of the capital stock of
NY Medical by the Company and the transactions relating thereto.  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.

Under the terms of such Rescission Agreement:

o    the Merger, Lifetime Merger Agreement and all related Merger 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  the  Company  and the ESOP and all
     transactions  relating  thereto were  cancelled  and rescinded and rendered
     null and void, ab initio, for all purposes, including for tax purposes; and
     in order to enable the  Company to repay the $1.5  million of 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
Company board of directors meeting and the Rescission Agreement for a variety of
reasons, including, the alleged failure to properly convene such meeting or have
a valid  quorum of  directors  present.  On December  12,  2003,  counsel for NY
Medical and Redwood commenced a lawsuit against the Company, Lifetime, Robert M.
Rubin, and former Lifetime  affiliates 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 alleged  fraudulent  inducement,  unjust enrichment and breach of
fiduciary  duties and breach of  contract.  The Company and its counsel  believe
that the suit is  totally  without  merit and that the  Company  has a number of
valid defenses and counterclaims against Dr. Landow and NY Medical.

                                      F-17

<PAGE>

                 AMERICAN UNITED GLOBAL, INC. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



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.


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:


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; and

o    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


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.

The  Company's  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.  There was no payment by NYMI on March 30,  2004 nor has
such payment been made through the filing date of this Form 10-K.

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


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

o    the Lifetime  Merger is cancelled and rescinded,  and all shares of Company
     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 the Company for cancellation;

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

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 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.

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

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


                                      F-18
<PAGE>

                  AMERICAN UNITED GLOBAL, INC. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 - RECEIVABLE FROM NYMI


The obligations of NYMI to the Company in respect of the loans and advances made
between February and September 2003,  aggregating  $1,500,000,  are evidenced by
NYMI's 6% note,  originally  payable in full as to  principal  and  interest  on
January  3,  2004  (the  "NYMI  NOTE")  The  maturity  date of the NYMI Note was
extended to March 30,  2004;  however,  the note was not paid on that date.  The
NYMI Note is secured by a lien on the accounts receivable, inventories and other
assets of NYMI,  subordinated  to the liens of DVI and the holders of the Bridge
Notes.  The proceeds of this note,  when and if paid,  are pledged to the Bridge
Note  holders.  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 has 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. 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.


                                      F-19
<PAGE>


                  AMERICAN UNITED GLOBAL, INC. AND SUBSIDIARIES

                 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  interest  income  of  $5,000 is being
recognized over the period of August 5, 2003 through October 15, 2004.

In May 2002 the Company  borrowed  $250,000  from the Rubin  Family  Irrevocable
Stock Trust (the "Trust").  The loan was evidenced by a promissory  note bearing
interest  at the annual rate of 7 1/2 % and was due upon the earlier to occur of
the receipt of funds from any source in excess of  $1,000,000 or April 30, 2007.
In October  2002,  the company  received  $2,875,000  of net  proceeds  from the
settlement   of  certain   litigation   and  repaid  the  loan.   As  additional
consideration  for providing the loan,  the Company issued  1,500,000  shares of
restricted  common  stock  to the  Trust  which  resulted  in the  Trust  owning
approximately  77.6% of the issued  and  outstanding  shares of common  stock of
AUGI. The percentage of common and common  equivalent  shares  outstanding  that
were owned by the trust as at December 31, 2003 was 67.5%.


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 indirectly to NYMI) from $850,000 to $1,500,000 (see Note
2).  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.


                                      F-20
<PAGE>



                  AMERICAN UNITED GLOBAL, INC. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


The value  allocated to the warrants  resulted in a debt  discount of $1,500,000
that is being  recognized  as interest  expense  over the nine month term of the
Bridge  Notes.  The amount  recorded in the period  ended  December 31, 2003 was
$1,083,000.  Additionally, by allocating value to the warrants, the debt holders
received a beneficial  conversion feature in the amount of $813,000 that results
in additional  debt discount that is being  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 the balance of $417,000  will be amortized  during the quarter  ending March
31, 2004.


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  $1,060,000 at December 31, 2003.  Originally  bearing
interest at 8%; the note accrues interest at 10% while in default. The holder of
such indebtedness has not sought to collect the amounts due;  however,  were the
Company  required to pay such  certain  indebtedness  it would be  necessary  to
secure additional financing.


NOTE 6 - 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.



                                      F-21
<PAGE>



                  AMERICAN UNITED GLOBAL, INC. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


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  $10,200,000  at December  31, 2003 and  approximately  8,875,000,
$8,640,000  and  $8,225,000  at June 16, 2003,  July 31, 2002 and July 31, 2001,
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
$30,000,000  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>


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

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



NOTE 8 - 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 is  being  paid in 12  equal  monthly  installments  of
approximately $6,700. At December 31, 2003 the remaining balance due was $6,700.


NOTE 9 - STOCK OPTION PLANS

On October 3, 2000, the Board of Directors  cancelled the 2000 Plan and approved
the 2001 Stock Option Plan.  All 216,000  options  previously  granted under the
2000 Plan were  cancelled and replaced by the same number of options in the 2001
Plan.  AUGI also  granted  4,000  options to a each of two special  consultants,
2,000  additional  options to a law firm, 400 options to a financial  consultant
and 20,000 to a management  employee. A total of 122,000 of the 2001 grants were
subsequently cancelled.



                                      F-22
<PAGE>

                  AMERICAN UNITED GLOBAL, INC. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


Option grants during the period August 1, 2002 through June 16, 2003

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.

Option grants during the period June 17, 2003 through December 31, 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 vested on the grant date, with the remaining  options vesting at the rate
of 50,000 shares on each of 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.

    Summary Information

    The following table includes option information for AUGI's plan:

                                                WEIGHTED
                                    NUMBER      AVERAGED
                                     OF         EXERCISE
      STOCK OPTION ACTIVITY         SHARES       PRICE
      ---------------------        -------      --------
        July 31, 2000              225,000        $19.00
        Options granted            246,000          7.00
        Options exercised            -               -
        Options canceled          (338,000)         7.50
                                -----------      --------
        July 31, 2001              133,000         18.25
        Options granted             10,000          1.25
        Options exercised            -
        Options canceled            (3,000)       132.23
                                -----------      -------
        July 31, 2002              140,000         14.04
                                -----------      -------
        Options granted            550,000           .70
        Options exercised             -
        Options canceled           (46,000)         7.50
                                -----------      -------
        June 16, 2003              644,000          1.12

        Options granted          3,800,000          1.46
        Options exercised             -
        Options canceled *       3,250,000          1.60
                                ----------       -------
       December 31, 2003         1,194,000         $1.26
                                ----------       -------

* Canceled pursuant to the Rescission Agreement (See Note 2)

The following table  summarizes  stock options  outstanding for AUGI at December
31, 2003:

          Total          Total
         Option       Exercisable
         Shares         Shares            Exercise Price
         ------        --------           --------------
        500,000         500,000              $0.62
        360,000          97,500              $1.25
         50,000          50,000              $1.50
        200,000          50,000              $1.70
         84,000          84,000              $6.875
       --------        --------
      1,194,000         781,500
      =========         =======


                                      F-23
<PAGE>

                  AMERICAN UNITED GLOBAL, INC. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10 - 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  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 and AUGI has opposed that motion.  No
decision on the motion for summary judgment has been issued by the court yet.

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.

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 on 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.





NOTE 11 - 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 4,650,000 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.



NOTE 12 - SUBSEQUENT EVENT

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 will result in a charge
to operations in the quarter ended June 30, 2004.


                                      F-24
<PAGE>





PART IV

Item 15. Exhibits, Financial Statement Schedules And Reports On Form 8-K.

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

         (1) See page F-1 for an index of consolidated financial statements.

         (3) Exhibits:

          14   Code of Ethics *

          21   Subsidiaries of the Company*

          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. *

*Filed herewith

(b) Reports on Form 8-K:

During the quarter ended December 31, 2003, the Registrant filed Reports on Form
8-K as follows:




On October  30,  2003,  the  Registrant  filed a Report on Form 8-K under Item 5
regarding the execution of a Standstill Agreement relative to the Payment Events
due date pursuant to the NYMI Merger  Agreements.  2. On November 13, 2003,  the
Registrant  filed a Report on Form 8-K, as amended on Form 8-K/A on November 14,
2003, relative to a further extension of the Payment Events due date pursuant to
the NYMI Merger Agreements.

On November 18, 2003, the Registrant  filed a Report on Form 8-K to report under
Item 5 that if the Registrant  sells NYMI, it will seek other  opportunities  to
acquire  businesses that are in the medical  industry similar to that engaged in
by NYMI and that Registrant is in preliminary  discussions  with other potential
acquisition candidates and investment bankers to assist our company in financing
any such potential acquisitions.


(c) Exhibits:

See paragraph (a)(3) above for a listing of items filed as exhibits to this Form
10-K as required by Item 601 of Regulation S-K.



                                       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                 July 16, 2004
                     -------------------
                     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          July 16, 2004
-------------------
Robert M. Rubin


/s/ David M. Barnes        Chief Financial Officer and Director    July 16, 2004
-------------------
David M. Barnes



/s/ C. Dean McLain         Executive Vice President and Director   July 16, 2004
-------------------
C. Dean McLain



                           Director                                July 16, 2004
------------------
Howard Katz


/s/ Michael Metter         Director                                July 16, 2004
------------------
Michael Metter