UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                  Form 10-KSB/A


(Mark One)

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

For the fiscal year ended September 30, 2004

[_]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
     OF 1934

For the transition period from ______________ to________________


Commission file number: 033-09472-D



                          E'PRIME AEROSPACE CORPORATION
--------------------------------------------------------------------------------
                 (Name of small business issuer in its charter)


              Colorado                                         59-2802081
----------------------------------------                ------------------------
(State or other jurisdiction of                         (I.R.S. Employer
   incorporation or organization)                         Identification No.)


           2500 S. Washington
      Ave. Unit 34, Titusville, FL                                32780
----------------------------------------                ------------------------
(Address of principal executive offices)                        (Zip Code)


Issuer's telephone number: (321) 269 - 0900



Securities registered under Section 12(b) of the Exchange Act: None


Securities registered under Section 12(g) of the Exchange Act: Common Stock - No
Par Value



<PAGE>



Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days.   Yes [X] No [_]


Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the  best  of  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by reference in Part III of this Form  10-KSB/A or any
amendment to this Form 10-KSB/A. [X]


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


The issuer had zero ($0.00) revenues for its most recent fiscal year.


The  aggregate   market  value  of  the   registrant's   voting  stock  held  by
non-affiliates  of the registrant as of September 30, 2004 (based on the average
of the high and low bid quotations on that date) was $7,848,850.


As of September 30, 2004, the registrant has outstanding  826,195,392  shares of
common stock and 12,471,800 "B" Stock Purchase Warrants.



                       DOCUMENTS INCORPORATED BY REFERENCE

Form 8K filed  8/25/06 to report the  change of  control  of voting  stock,  the
resignation  of  Directors  and election of a new  Chairman  and  Directors  and
Officers is  incorporated  by reference  into Part III of this Annual  Report on
Form 10 KSB/A.


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





<PAGE>



                 E'PRIME AEROSPACE CORPORATION AND SUBSIDIARIES
                          (A Development Stage Company)

                     Index to Annual Report on Form 10KSB/A


                                                                           Page

Part I

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

Part II

    Item  5 - Market for the Registrant's Common Equity and Related
              Stockholder Matters                                              5
    Item  6 - Management's Discussion and Analysis of Financial                6
              Condition and Results of Operations                              6
    Item  7 - Financial Statements and Supplementary Data                      6
    Item  8 - Changes in and Disagreements with Accountants on
              Accounting and Financial Disclosure                              6
    Item 8A - Controls and Procedures                                          7
    Item 8B - Other Information.                                               7

Part III

    Item  9 -  Directors and Executive Officers                                7
    Item 10 - Executive Compensation                                           9
    Item 11 - Security Ownership of Certain Beneficial Owners
              and Management                                                   9
    Item 12 - Certain Relationships and Related Transactions                   9

Part IV

    Item 13 - Exhibits and Reports on Form 8-K                                10
    Item 14 - Principal Accountant Fees and Services                          10

Signatures                                                                    11

Index to Financial Statements                                                F-1








<PAGE>



                                     PART I



Item 1. Description of Business.

     E'Prime  Aerospace  Corporation and Subsidiaries  (EPAC or the Company) was
established  in  February,  1987,  to  capitalize  on the  worldwide  demand for
commercial satellite launching services.

     In October,  1987, an agreement was signed with the United States Air Force
(USAF) which provided EPAC the use of technology based on the Peacekeeper  solid
fuel missile system.  As a result of this agreement,  EPAC began the development
of the Eagle Series of launch  vehicles.  Eagle  launch  vehicles are based on a
modular design of solid  propellant  booster stages and a  bi-propellant  liquid
upper stage.

     In early  1990,  the  Peacekeeper  first  stage  motor was  included in the
Strategic Arms Reduction Treaty (START) which was signed by both the governments
of the United States and the former Soviet Union.  Accordingly,  pursuant to the
execution  of this  treaty,  the Company was  severely  restricted  in producing
EPAC's  first stage  motor.  For nine  years,  EPAC's  development  concentrated
towards the  preservation  of the technology  developed  during the  Peacekeeper
program.

     In 1998,  using  Peacekeeper  baseline  technology,  EPAC's improved design
changes,  and  development  of its ESM-9 first stage motor in a 100%  commercial
environment, eliminated the ESM-9 from the START Treaty.

     EPAC is marketing a range of launch vehicles with payload capabilities from
small  communications  satellites up to large multipurpose  satellites of 20,000
pounds  into a  geosynchronous  earth  orbit.  Light to medium  lift single core
vehicles  will be launched  from a launch tube which propels the rocket some 200
feet into the air before the first stage is ignited.  This "cold launch"  method
increases  the payload  capability  by  approximately  10% and  prevents  costly
refurbishment  to the launch  facility.  Flight  hardware  for the Eagle  Series
launch  vehicles  will be  produced  by many of the  same  companies  that  were
responsible for the manufacture and supply of materials for the Peacekeeper.  By
utilizing the  experience of these  suppliers,  the track record of  reliability
experienced  during  the  Peacekeeper  missile  system  program  will be carried
forward into a commercial application.

     EPAC has succeeded in evolving the technology of the Peacekeeper  ICBM into
a commercial launch vehicle.  Based on developments  completed through November,
2003,  EPAC is now  proceeding  with  finance and contract  negotiations.  While
substantial  additional  capital is needed for the  construction  of  commercial
launch   facilities,   management  is  confident  in  achieving  this  financial
objective.  Although EPAC has met its vehicle  objective,  a time-frame  for the
Company to establish profitable operations cannot be determined at this time.

     Over the past several  years,  other  companies  have  developed a range of
launch vehicles  corresponding to the demand for commercial launch services. The
Company  currently  considers  its  principal   competitors  to  be  Arianespace
(Ariane),   Lockheed  Martin  (Atlas,  LLV),  Boeing  (Delta),  Orbital  Science
(Taurus), China (Longmarch) and several Russian programs.

     As of  September  30,  2004 the  company  had 2 full time  employees  and 3
consultants.




                                       4
<PAGE>



Item 2. Description of Property.

     The company leases its corporate office of approximately  3,000 square feet
in  Titusville,  FL and occupies  approximately  12,000 square feet of warehouse
space in Memphis, TN.

     Substantially  all of the development of the Company's launch technology as
well as management of overall operations is based in the corporate offices.  The
space in Memphis is used primarily to warehouse EPAC launch hardware and support
equipment  and will  provide  support  during  testing of the  Company's  launch
vehicle.

     During the year ended  September 30, 1993,  the Company  purchased  certain
launch and support equipment from an agency of the United States government.  As
a result of this  purchase,  a  substantial  amount of  additional  and  related
equipment was  transferred  to EPAC.  These  acquisitions  represent  savings of
millions  of dollars of  non-recurring  start-up  costs.  Most of the  equipment
received,  which is located at various facilities in the United States, consists
of the following:

Missile system hardware

     Support equipment  including  computer  hardware,  electronic  consoles and
launch  vehicle   transportation  and  handling  equipment  Specialized  tooling
associated with missile system hardware

     Most of the  equipment  acquired was primarily  associated  with the United
States'  government  Peacekeeper  missile  system.  EPAC  has  incorporated  the
Peacekeeper  technology  into the research and development of its launch systems
as more fully discussed in Item 1 of this filing.


Item 3. Legal Proceedings.

     The Company has been  subject to legal  proceedings  and claims  which have
arisen in the ordinary  course of business.  While these claims have not and are
not expected to have a material effect on the financial position of the Company,
several of the claims  from  vendors  have  resulted in  judgements  against the
company. As of September 30, 2004 these judgements total $148,081.


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

     None



                                     PART II


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

     The Company's common stock is traded on the over-the-counter market. Market
makers and other dealers  provided bid and ask quotations of the Company's stock
and listed such  quotations  in the  National  Quotation  Bureau,  Inc.'s  "Pink
Sheets".



                                       5
<PAGE>



     The table below  presents the range of high and low bid  quotations  of the
Company's securities. The quotations represent prices between dealers and do not
include retail markup,  markdown,  or commissions;  hence, they do not represent
actual transactions.

                              Quarter Ended
           -------------------------------------------------------
           March 31      June 30       September 30    December 31
         ------------   ------------   ------------   ------------
   Year   High   Low     High   Low     High   Low     High   Low
   ----   -----  -----  -----  -----   -----  -----   -----  -----
   2003   .0220  .0190  .0300  .0220   .0180  .0150   .0130  .0110
   2004   .0120  .0110  .0150  .0150   .0095  .0095

     The number of  shareholders  of the Company's  common stock as of September
30, 2004 was 2,797.



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

Liquidity and capital resources

     As  indicated  herein,  the Company has expended  substantial  funds in the
development  of its  business  over the past several  years.  Sources of capital
during this time have included stock sales and advances from shareholders. As of
September 30, 2004, the Company has a working capital deficit of $7,676,072.

     In order to complete its development and reach full operational  capability
and, in order to satisfy existing  liabilities,  the Company will need to obtain
substantial additional capital.  Management is currently engaged in negotiations
to  secure  the  necessary  funds  to  complete  implementation  of  its  launch
technology,  repay  existing  liabilities  and fund  facility  construction.  In
addition,  the Company is concluding the  development of its marketing  strategy
(www.eprimeaerospace.com) and establishing a launching schedule.

Results of Operations

     Since  its  inception,  the  Company  has  been in the  development  stage.
Accordingly,  the Company has not generated any revenues from operations and has
not projected  significant revenues until its development stage is completed and
financing can be obtained for its  operations.  Through the year ended September
30,  2004,  the Company  has  incurred an  accumulated  deficit of  $21,472,910.
Expenditures related to salaries and wages have been incurred principally in the
development of the Company's launch technology systems.


Item 7.    Financial Statements.

     The  Financial  Statements  are  filed as page F-1 at the end of this  Form
10-KSB


Item 8.  Changes  In  and  Disagreements  With  Accountants  on  Accounting  and
         Financial Disclosure.

     None



                                       6
<PAGE>



Item 8A.   Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

     Our management,  with the participation of our Chief Executive Officer, our
CEO, and Chief Financial  Officer,  our CFO,  evaluated the effectiveness of our
disclosure controls and procedures as defined by Items 307 of Regulation S-B (17
CFR 228.307) and 308 of Regulation S-B (17 CFR 228.308) under the Securities and
Exchange Act as of September 30, 2004. Based on its evaluation,  our CEO and CFO
concluded that, as of September 30, 2004, our disclosure controls and procedures
were (1)  designed to ensure that  material  information  relating to us is made
known to our CEO and CFO by others within the Company,  particularly  during the
period in which this report was being prepared and (2)  effective,  in that they
provide reasonable  assurance that information required to be disclosed by us in
reports  that we  file or  submit  under  the  Securities  and  Exchange  Act is
recorded, processed, summarized, and reported with in the time periods specified
in the Securities and Exchange Commission's rules and forms.

     On August 21, 2006, Doug Oldham was appointed Chairman, President and Chief
Executive  Officer  of  E'Prime  Aerospace  Corporation  while  Jean  Oldham was
appointed  as Director and interim  Secretary.  Effective  August 21, 2006,  Bob
Davis, then-Chairman , Chief Executive Officer and President, while remaining as
a  Director,resigned  as Chairman,  CEO and  President,  Betty Davis resigned as
Director,  Secretary and Treasurer and Richard Elrod resigned as Director.  As a
result,  our new Board of  Directors  appointed  Leslie  Shealey as Acting Chief
Financial  Officer and principal  accounting  officer for purposes of evaluating
our disclosure controls and procedures,  as described above, and for signing the
Section 302 and 906  certifications  included  with this  Annual  Report on Form
10-KSB/A.

Changes in Internal Controls

     No change in our internal controls over financial  reporting (as defined in
Items 307 of Regulation  S-B (17 CFR 228.307) and 308 of Regulation  S-B (17 CFR
228.308)  under the  Securities  and Exchange  Act)  occurred  during the period
covered by this report that  materially  affected,  or is  reasonably  likely to
materially affect, our internal controls over financial reporting.


Item 8B. Other Information.

     None



                                    PART III

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

     The directors and executive officers of the Company and certain information
regarding them are as follows :

         Name                  Age           Office
         ------------------    ---    ---------------------------------
         B. G. Davis            71    President and Director
         Betty S. Davis         64    Secretary, Treasurer and Director
         Richard L. Elrod       69    Director



                                       7
<PAGE>



     Mr. B. G. Davis, President and Director of the company since its inception,
has 37 years  research,  development,  design,  test and  operations  experience
including 25 years in  aerospace.  From 1970 through 1987 he was President of E'
Prime Labs (1), a small private product  development  firm that developed simple
devices,  complete  chemical and biochemical  processes,  and complete plans for
energy conversion and recovery. He has some twenty granted or pending patents.

     While employed by Boeing Aerospace Corporation, he was a member of the test
team  on  the  Minuteman  missile,  with  responsibilities  for  conducting  and
supervising assembly, checkout and launch operations. He also had responsibility
to  coordinate   interface   problems   between  research  and  development  and
operational systems.

     He was  with  the  Lunar  Orbiter  program  from  1965-1967,  inception  to
completion. Duties included design, build-up, assembly, test and installation of
all  ground  tracking  and   reconstruction   equipment   located  at  Goldstone
(California),  Woomera (Australia), Madrid (Spain), and Cape Canaveral Air Force
Station (Florida).

     On the Saturn program,  he was design  engineering  manager from 1967-1972,
responsible for systems specifications and configurations on all Saturn V ground
support  systems.  He performed  the design  liaison for all booster first state
engineering  hangs from the factory at Michoud  (New  Orleans) to Kennedy  Space
Center. Mr. Davis retired from Boeing Aerospace Corporation in 1972.

     Mr. Davis spends one hundred percent of his time with the Company.

     E'Prime Labs,  although  owned by Mr. B. G. Davis,  is unrelated to E'Prime
Aerospace Corporation. No asset transfers were made between the two entities and
no  contracts  exist  between the two or are  contemplated.  Mr.  Davis does not
dedicate any of his time currently to the operation of E'Prime Labs.

     Betty Scott Davis is Secretary,  Treasurer  and Director of the Company,  a
position she has held since its inception.  From 1962 to 1963, Mrs. Davis served
in contract  administration for Boeing Aerospace Corporation.  From 1963 through
1967 she was  employed  as  Technical  Editor  and  Engineering  Aid with  Brown
Engineering, a private aerospace engineering firm from Huntsville,  Alabama, and
from  1973  through  1977  she  served  as  administrative  manager  for  Watson
Engineering  and  Construction   Company,   a  small  private   engineering  and
construction firm located in Cocoa,  Florida.  From 1977 through 1987 she served
as  controller  and  director  with  E'  Prime  Labs,  a small  private  product
development  laboratory in  Titusville,  Florida.  Mrs. Davis spends one hundred
percent of her time with the Company. Betty Davis is the wife of B. G. Davis.

     Richard L. Elrod has been a Director  with EPAC since  August 1, 1991.  Mr.
Elrod worked with IBM  Corporation  for 26 years in a number of  administrative,
marketing  and  management  positions  of which  his last 8 years  were with the
personal  computer  division.  He served as Vice  President/Director  with Texas
American   Group,   Inc.  and  Halter  Venture   Corporation  and  one  year  as
President/Director  with Halter Venture before his resignation  when the company
was sold.








                                       8
<PAGE>


Item 10. Executive Compensation.

                                                              Other
  Name                       Year    Salary $   Bonus $    Compensation
  ----------------------    ------   --------   -------    ------------
  Salary Paid
  -----------
  B. G. Davis                2004           0         0               0
    President                2003           0         0               0
                             2002           0         0               0

  Betty Davis                2004           0         0               0
    Secretary, Treasurer     2003           0         0               0
                             2002           0         0               0

  Salary Accrued
  --------------
  B. G. Davis                2004     300,000         0               0
    President                2003     300,000         0               0
                             2002     300,000         0               0

  Betty Davis                2004     250,000         0               0
    Secretary, Treasurer     2003     250,000         0               0
                             2002     250,000         0               0


Item 11.  Security  Ownership of Certain  Beneficial  Owners and  Management and
          Related Stockholder Matters.

     The  following  table sets forth  information  regarding  ownership  of the
Company's common stock as of September 30, 2004: (i) each person who is known by
the Company to own  beneficially  more than five percent  (5%) of the  Company's
common stock; (ii) each of the Company's  directors;  and (iii) by all directors
and officers of the Company as a group.

                           Amount and Nature of
Name and Address of        Beneficial Owners         Percent of
 Beneficial Owner               (Shares)                Class
------------------------   --------------------      ----------
B. G. Davis                     476,800,000             57.71 %
President, Director
Titusville, Fl 32782

Richard Elrod                       950,000              0.12 %
Director
Houston, TX 77269

All Directors and Officers
As a Group                      477,750,000             57.83 %
                           ================          ==========


Item 12. Certain Relationships and Related Transactions.

     During the five year period ended  September  30, 2004,  the  president and
principal  stockholder and certain  employees have made advances to the Company.
The  advances are  non-interest  bearing and were made  principally  for working
capital  purposes.  These advances are included in due to related parties in the
accompanying consolidated balance sheet.



                                       9
<PAGE>



     Also included in due to related  parties were unpaid salaries and wages net
of advances  made to directors  (officers  and  principal  stockholders)  of the
Company.


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

(a)  Exhibits included herein:

10.1      Stock Purchase  Agreement,  between B. G. DAVIS, and E'PRIME AEROSPACE
          CORPORATION, dated July 25, 2006.
10.2      Promissory   Note   between  B.  G.  DAVIS,   and  E'PRIME   AEROSPACE
          CORPORATION, dated July 25, 2006.
10.3      Stock Pledge  Agreement  between OLDHAM GROUP,  INC., and B. G. DAVIS,
          dated July 25, 2006.
10.4      GUARANTY between OLDHAM GROUP, INC., B. G. DAVIS, and JAMES D. OLDHAM,
          IIIdated July 25, 2006.
31.1      Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
31.2      Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
32.1      Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
32.2      Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
99.1      Annual  Meeting of the  Directors  of E'Prime  Aerospace  Corporation,
          dated July 25, 2006.

(b)  Reports on Form 8-K:

     No report on form 8-K was filed during the year ended September 30, 2004.
-----------
*    Incorporated  by reference to the  Exhibits to the  Company's  Registration
     Statement No. 33-9472-D, on Form S-18.


Item 14. Principal Accountant Fees and Services.

     The  Company  paid or accrued the  following  fees in each of the prior two
fiscal years to its principal accountant,  Kempisty & Company,  Certified Public
Accountants, PC, New York, New York.

                                                2004             2003
                                              -------          -------
Audit and Statement Preparation Fees          $12,500          $12,500
Tax Preparation Fees                          $  0.00          $  0.00
                                              -------          -------
Total                                         $12,500          $12,500

     The Company has no formal  audit  committee.  However,  the entire Board of
Directors (the "Board") is the Company's defacto audit committee. In discharging
its oversight  responsibility  as to the audit process,  the Board obtained from
the independent auditors a formal written statement describing all relationships
between  the  auditors  and  the  Company  that  might  bear  on  the  auditors'
independence  as  required  by  Independence  Standards  Board  Standard  No. 1,
"Independence  Discussions with Audit  Committees." The Board discussed with the
auditors any  relationships  that may impact their objectivity and independence,
including fees for non-audit services,  and satisfied itself as to the auditors'




                                       10
<PAGE>



independence.  The Board also discussed with management,  the internal  auditors
and the independent  auditors the quality and adequacy of the Company's internal
controls.  The Board reviewed with the  independent  auditors  their  management
letter on internal controls.

     The Board discussed and reviewed with the independent  auditors all matters
required to be discussed by auditing standards  generally accepted in the United
States of America,  including those described in Statement on Auditing Standards
No. 61, as amended,  "Communication  with Audit Committees".  The Board reviewed
the audited  consolidated  financial statements of the Company as of and for the
year ended September 30, 2003,  with  management and the  independent  auditors.
Management has the responsibility for the preparation of the Company's financial
statements  and  the  independent  auditors  have  the  responsibility  for  the
examination  of  those  statements.  Based  on the  above-mentioned  review  and
discussions with the independent auditors and management, the Board of Directors
approved the Company's audited consolidated financial statements and recommended
that they be included  in its Annual  Report on Form 10 KSB/A for the year ended
September 30, 2004, for filing with the Securities and Exchange Commission.  The
Board also  approved the  appointment  of Kempisty & Company,  Certified  Public
Accountants, PC as independent auditors to conduct the 2003 and 2004 audits.

     The Company's principal  accountant,  Kempisty & Company,  Certified Public
Accountants,  PC did not  engage  any  other  persons  or firms  other  than the
principal accountant's full-time, permanent employees.




                                   SIGNATURES

     In accordance  with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                   E'Prime Aerospace Corporation (Registrant)


         By: /s/ James D Oldham III
             ------------------------------------------
                  James D Oldham III
                  Chief Executive Officer and President

       Date: December 12, 2006


     In  accordance  with the Exchange Act, this report has been signed below by
the following  persons on behalf of the  registrant and in the capacities and on
the dates indicated.


         By: /s/ James D Oldham III
             ------------------------------------------
                 James D Oldham III
                 Chief Executive Officer and President

       Date: December 12, 2006


         By: /s/ Leslie Shealey
             ------------------------------------------
                 Leslie Shealey
                 Chief Financial Officer

       Date: December 12, 2006



                                       11
<PAGE>








                 E' PRIME AEROSPACE CORPORATION AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)

                                  CONSOLIDATED
                              FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2003














                                F-1 through F-20
<PAGE>



                 E' PRIME AEROSPACE CORPORATION AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)



     INDEX



                                                                           PAGE

REPORT OF INDEPENDENT AUDITOR                                               F-3


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                     F-4

CONSOLIDATED BALANCE SHEETS                                                 F-5

CONSOLIDATED STATEMENTS OF OPERATIONS                                       F-6

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY                  F-7

CONSOLIDATED STATEMENTS OF CASH FLOWS                                      F-11

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                 F-13
















<PAGE>




             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



Board of Directors
E' Prime Aerospace Corporation and Subsidiaries
(A Development Stage Company)

We  have  audited  the  accompanying  consolidated  balance  sheet  of E'  Prime
Aerospace  Corporation  and  Subsidiaries  (A  Development  Stage Company) as of
September  30,  2004  and the  related  statements  of  operations,  changes  in
stockholders'  (deficit)  and cash  flows  for each of the years in the two year
period  ended   September  30,  2004.   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.  The  cumulative
statements  of  operations,  cash  flows,  and changes in  stockholders'  equity
(deficit)  for the period  February 20, 1986  (inception)  to September 30, 2002
which were audited by other  auditors  whose reports have been  furnished to us,
and our  opinion,  insofar as it relates to the amounts  included for the period
February  20, 1986  (inception)  to  September  30, 2002 is based  solely on the
reports of the other auditors.

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

In our opinion,  and based on the reports of other  auditors,  the  consolidated
financial statements referred to above present fairly, in all material respects,
the financial  position of E' Prime Aerospace  Corporation  and  Subsidiaries (A
Development  Stage  Company)  at  September  30,  2004 and the  results  of its'
operations  and  cash  flows  for  each of the two  years  in the  period  ended
September 30, 2004 and for the period February 20, 1986 (inception) to September
30, 2004 in conformity  with  accounting  principles  generally  accepted in the
United States of America.

The accompanying  financial statements have been prepared assuming that E' Prime
Aerospace  Corporation  and  Subsidiaries  (A  Development  Stage  Company) will
continue as a going concern.  As more fully described in Note 1, the Company has
incurred  operating  losses since inception and requires  additional  capital to
continue  operations.   These  conditions  raise  substantial  doubt  about  the
Company's ability to continue as a going concern.  Management's  plans regarding
these matters are  described in Note 1. The financial  statements do not include
any adjustments that might result from the outcome of this uncertainty.

/s/ Kempisty & Company CPAs, P.C.

Kempisty & Company
Certified Public Accountants PC
New York, New York
September 14, 2005



                                       F-3
<PAGE>


<TABLE>
<CAPTION>
                 E' PRIME AEROSPACE CORPORATION AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                           CONSOLIDATED BALANCE SHEETS
                               SEPTEMBER 30, 2004




<S>                                  <C>                                        <C>
        ASSETS

   Property and equipment, net (Note 6)                                         $             233,654
                                                                                ---------------------

             Total Assets                                                       $             233,654
                                                                                =====================

                 LIABILITIES AND STOCKHOLDERS' DEFICIT
   Current Liabilities:
        Notes payable (Note 4)                                                  $             232,000
        Accounts payable                                                                          687
        Judgement payable                                                                     148,081
        Accrued salaries and payroll taxes                                                  1,982,083
        Accrued interest                                                                      349,478
        Accrued rent                                                                          213,000
        Accrued officers' salaries                                                          4,019,080
        Due to related parties                                                                965,317
                                                                                ---------------------
             Total Current Liabilities                                                      7,909,726

   Commitments and contingencies (Note 7)

   Stockholders' Deficit
   Common stock, no par value, 900,000,000 shares authorized
    826,195,392 shares at September 30, 2004 and 825,995,392
    shares at September 30, 2003 issued and outstanding (Note 5)                           12,017,911
   Additional paid-in capital                                                                 212,000
   Deficit accumulated during the development stage                                       (19,905,983)
                                                                                ---------------------
             Total Stockholders' Deficit                                        $          (7,676,072)
                                                                                ---------------------
             Total Liabilities and Stockholders' Deficit                        $             233,654
                                                                                =====================
</TABLE>


   The accompanying notes are an integral part of these financial statements.



                                       F-4
<PAGE>



<TABLE>
<CAPTION>
                 E' PRIME AEROSPACE CORPORATION AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENTS OF OPERATIONS


                                                                                                Cummulative for
                                                          For the Year Ended                    the period from
                                                            September 30,                      February 20, 1986
                                              -------------------------------------------       (Inception) to
                                                       2004                   2003            September 30, 2004
                                              --------------------  ---------------------    -------------------
                                                     (Restated)                                    (Restated)
<S>                                           <C>                   <C>                      <C>
Service revenues                              $                  -  $                   -    $             5,000
                                              --------------------  ---------------------    -------------------
Total revenues                                                   -                      -                  5,000

  Expenses
    Officers Salaries                                      550,000                550,000              5,770,186
   Depreciation                                              1,052                  2,124                199,807
    Interest expense                                        34,896                 34,807              1,850,475
    General and administrative                             114,615                261,949             11,385,777
    Write off of receivable from affiliate                       -                      -              1,495,523
    Debt forgiveness                                             -               (790,785)              (790,785)
                                              --------------------   --------------------    -------------------
  Total expenses                                           700,563                 58,095             19,910,983
                                              --------------------   --------------------    -------------------

      Net loss                                $           (700,563)  $            (58,095)   $       (19,905,983)
                                              ====================   ====================    ===================

  Basic earnings per share
    Net loss per common share                 $              (0.00)  $              (0.00)
                                              ====================   ====================

    Weighted average shares outstanding                826,169,639            821,777,344
                                              ====================   ====================
</TABLE>


   The accompanying notes are an integral part of these financial statements.


                                       F-5
<PAGE>


<TABLE>
<CAPTION>
                 E' PRIME AEROSPACE CORPORATION AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)

       CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

   FOR THE PERIOD FEBRUARY 20, 1986 (DATE OF INCEPTION) TO SEPTEMBER 30, 2004


                                                                                              Deficit
                                                                                            Accumulated
                                             Common Stock                 Additional        During the            Total
                                     -------------------------------        Paid-in          Development       Stockholders'
                                      Shares           Amount               Capital             Stage        Equity (Deficit)
                                     --------------  ---------------    ---------------   ---------------   ----------------
<S>                                  <C>             <C>                <C>               <C>               <C>

Balances at  February 20, 1986       $            -  $             -    $             -   $             -   $              -
Sale of common stock                     17,700,000           14,500                  -                 -             14,500
Net loss                                          -                -                  -            (3,196)            (3,196)
                                     --------------  ---------------    ---------------   ---------------   ----------------
Balances at  September 30, 1986          17,700,000           14,500                  -            (3,196)            11,304

Shares issued for reverse
  acquisition                           496,800,000              667                  -                 -                667
Recapitalization adjustment                       -          (15,632)                 -            15,624                 (8)
Sale of common stock                     12,500,000          250,000                  -                 -            250,000
Cost of public offering                           -          (47,732)                 -                 -            (47,732)
Net loss                                          -                -                  -          (606,700)          (606,700)
                                     --------------  ---------------    ---------------   ---------------   ----------------
Balances at  September 30, 1987         527,000,000          201,803                  -          (594,272)          (392,469)

Sale of common stock                        916,000           83,730                  -                 -             83,730
Shares issued for services                  625,000           12,500                  -                 -
                                                                                                                      12,500
Shares issued for letter of credit        2,750,000          550,000                  -                 -            550,000
Shares issued for conversion
  of notes                                2,667,000           80,000                  -                 -             80,000
Net loss                                          -                -                  -        (2,453,390)        (2,453,390)
                                     --------------  ---------------    ---------------   ---------------   ----------------
Balances at  September 30, 1988         533,958,000          928,033                  -        (3,047,662)        (2,119,629)

Sale of common stock                        600,000           30,000                  -                 -             30,000

Shares issued for warrants
  exercised                               5,613,620          340,765                  -                 -            340,765
Shares issued for services               16,722,668          257,350                  -                 -            257,350
Shares issued for interest expense        1,975,347          395,070                  -                 -            395,070
Contribution of capital                           -                -            145,000                 -            145,000
Net loss                                          -                -                  -        (2,217,971)        (2,217,971)
                                     --------------  ---------------    ---------------   ---------------   ----------------
Balances at  September 30, 1989         558,869,635        1,951,218            145,000        (5,265,633)        (3,169,415)
</TABLE>

                                  (Continued)

                                       F-6
<PAGE>


<TABLE>
<CAPTION>
                 E' PRIME AEROSPACE CORPORATION AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)

       CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

   FOR THE PERIOD FEBRUARY 20, 1986 (DATE OF INCEPTION) TO SEPTEMBER 30, 2004


                                                                                              Deficit
                                                                                            Accumulated
                                             Common Stock                 Additional        During the            Total
                                     -------------------------------        Paid-in          Development       Stockholders'
                                      Shares           Amount               Capital             Stage        Equity (Deficit)
                                     --------------  ---------------    ---------------   ---------------   ----------------
<S>                                  <C>             <C>                <C>               <C>               <C>

Balances at  September 30, 1989         558,869,635  $     1,951,218    $       145,000   $   (5,265,633)   $     (3,169,415)
Shares issued for services                1,670,320           16,703                  -                 -             16,703
Shares issued for loan fee               60,000,000          600,000                  -                 -            600,000
Contribution of capital                           -               -              67,000                 -             67,000
Net loss                                          -               -                   -        (1,653,373)        (1,653,373)
                                     --------------  ---------------    ---------------   ---------------   ----------------
Balances at  September 30, 1990         620,539,955        2,567,921            212,000        (6,919,006)        (4,139,085)

Sale of common stock                      1,200,000           12,000                  -                 -             12,000
Net loss                                          -                -                  -          (583,416)          (583,416)
                                     --------------  ---------------    ---------------   ---------------   ----------------
Balances at  September 30, 1991         621,739,955        2,579,921            212,000        (7,502,422)        (4,710,501)

Sale of common stock                      1,340,000           23,650                  -                 -             23,650
Shares issued for services                  488,500            7,235                  -                 -              7,235
Net loss                                          -               -                   -          (581,794)          (581,794)
                                     --------------  ---------------    ---------------   ---------------   ----------------
Balances at  September 30, 1992         623,568,455        2,610,806            212,000        (8,084,216)        (5,261,410)

Sale of common stock                      9,454,036          675,859                  -                 -            675,859
Shares issued for services                  745,866           33,552                  -                 -             33,552
Shares issued for interest expense          600,000           35,000                  -                 -             35,000
Shares issued for settlement of
  litigation                                750,000           75,000                  -                 -             75,000
Shares issued for loan fee               15,000,000          150,000                  -                 -            150,000
Net loss                                          -               -                   -          (796,478)          (796,478)
                                     --------------  ---------------    ---------------   ---------------   ----------------
Balances at  September 30, 1993         650,118,357        3,580,217            212,000        (8,880,694)        (5,088,477)
</TABLE>

                                  (Continued)

                                       F-7

<PAGE>


<TABLE>
<CAPTION>
                 E' PRIME AEROSPACE CORPORATION AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)

       CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

   FOR THE PERIOD FEBRUARY 20, 1986 (DATE OF INCEPTION) TO SEPTEMBER 30, 2004


                                                                                              Deficit
                                                                                            Accumulated
                                             Common Stock                 Additional        During the            Total
                                     -------------------------------        Paid-in          Development       Stockholders'
                                      Shares           Amount               Capital             Stage        Equity (Deficit)
                                     --------------  ---------------    ---------------   ---------------   ----------------
<S>                                  <C>             <C>                <C>               <C>               <C>

Balances at  September 30, 1993         650,118,357  $    3,580,217     $       212,000   $    (8,880,694)  $     (5,088,477)
Sale of common stock                     17,397,412       1,359,342                   -                 -          1,359,342
Shares issued for services                5,044,964         482,323                   -                 -            482,323
Shares issued for loan fee                  100,000          10,000                   -                 -             10,000
Net loss                                          -               -                   -        (1,488,390)        (1,488,390)
                                     --------------  --------------     ---------------   ---------------   ----------------
Balances at  September 30, 1994         672,660,733       5,431,882             212,000       (10,369,084)        (4,725,202)

Sale of common stock                      1,867,918         141,100                   -                 -            141,100
Shares issued for services                1,499,980         149,998                   -                 -            149,998
Shares issued for financing fee           2,100,000         208,000                   -                 -            208,000
Net loss                                          -               -                   -          (595,164)         (595,164)
                                     --------------  --------------     ---------------   ---------------   ----------------
Balances at  September 30, 1995         678,128,631       5,930,980             212,000       (10,964,248)        (4,821,268)

Sale of common stock                      1,000,000          27,154                   -                 -             27,154
Shares issued for services                1,789,537          77,477                   -                 -             77,477
Shares issued for debt repayment          6,550,000         127,200                   -                 -            127,200
Net loss                                         -                -                   -          (802,181)          (802,181)
                                     --------------  --------------     ---------------   ---------------   ----------------
Balances at  September 30, 1996         687,468,168       6,162,811             212,000       (11,766,429)        (5,391,618)

Shares issued for services                5,536,976         350,717                   -                 -            350,717
Shares issued for debt repayment            326,010          13,040                   -                 -             13,040
Net loss                                         -                -                   -          (901,002)          (901,002)
                                     --------------  --------------     ---------------   ---------------   ----------------
Balances at  September 30, 1997         693,331,154       6,526,568             212,000       (12,667,431)        (5,928,863)
</TABLE>

                                  (Continued)

                                       F-8

<PAGE>


<TABLE>
<CAPTION>
                 E' PRIME AEROSPACE CORPORATION AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)

       CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

   FOR THE PERIOD FEBRUARY 20, 1986 (DATE OF INCEPTION) TO SEPTEMBER 30, 2004


                                                                                              Deficit
                                                                                            Accumulated
                                             Common Stock                 Additional        During the            Total
                                     -------------------------------        Paid-in          Development       Stockholders'
                                      Shares           Amount               Capital             Stage        Equity (Deficit)
                                     --------------  ---------------    ---------------   ---------------   ----------------
<S>                                  <C>             <C>                <C>               <C>               <C>
Balances at  September 30, 1997         693,331,154  $     6,526,568    $       212,000   $   (12,667,431)  $     (5,928,863)
Shares issued for services                4,957,440          102,585                  -                 -            102,585
Shares issued for debt repayment          4,133,334           78,600                  -                 -             78,600
Net loss                                          -                -                  -          (898,814)          (898,814)
                                     --------------  ---------------    ---------------   ---------------   ----------------
Balances at  September 30, 1998         702,421,928        6,707,753            212,000       (13,566,245)        (6,646,492)

Shares issued for services                3,176,209          128,608                  -                 -            128,608
Shares issued for debt repayment         43,598,103          806,804                  -                 -            806,804
Net loss                                          -                -                  -        (1,454,072)        (1,454,072)
                                     --------------  ---------------    ---------------   ---------------   ----------------
Balances at  September 30, 1999         749,196,240        7,643,165            212,000       (15,020,317)        (7,165,152)

Shares issued for services               11,273,007        1,510,855                  -                 -          1,510,855

Shares issued for settlement of
 litigation                              11,000,000        1,040,023                  -                 -          1,040,023
Shares issued for debt repayment         10,000,000          100,000                  -                 -            100,000
Net loss                                          -                -                  -        (2,579,591)        (2,579,591)
                                     --------------  ---------------    ---------------   ---------------   ----------------
Balances at  September 30, 2000         781,469,247       10,294,043            212,000       (17,599,908)        (7,093,865)

Shares issued for services                2,582,727          107,740                  -                 -            107,740
Net loss                                          -                -                  -          (887,239)          (887,239)
                                     --------------  ---------------    ---------------   ---------------   ----------------
Balances at  September 30, 2001         784,051,974       10,401,783            212,000       (18,487,147)        (7,873,364)

Shares issued for services                2,176,919           51,255                  -                 -             51,255
Sale of common stock                      2,025,268           51,758                  -                 -             51,758
Net loss                                          -                -                  -          (660,178)          (660,178)
                                     --------------  ---------------    ---------------   ---------------   ----------------
Balances at  September 30, 2002         788,254,161       10,504,796            212,000       (19,147,325)        (8,430,529)
</TABLE>

                                  (Continued)



                                      F-9
<PAGE>


<TABLE>
<CAPTION>
                 E' PRIME AEROSPACE CORPORATION AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)

       CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

   FOR THE PERIOD FEBRUARY 20, 1986 (DATE OF INCEPTION) TO SEPTEMBER 30, 2004


                                                                                              Deficit
                                                                                            Accumulated
                                             Common Stock                 Additional        During the            Total
                                     -------------------------------        Paid-in          Development       Stockholders'
                                      Shares           Amount               Capital             Stage        Equity (Deficit)
                                     --------------  ---------------    ---------------   ---------------   ----------------
<S>                                  <C>             <C>                <C>               <C>               <C>

Balances at  September 30, 2002        788,254,161   $    10,504,796    $       212,000   $   (19,147,325)  $     (8,430,529)

Common stock issued for
  settlement of debt                    33,985,075         1,426,922                  -                 -          1,426,922

Common stock issued for
  services                                 826,917            18,245                  -                 -             18,245
Sale of common stock                     2,929,239            65,548                  -                 -             65,548
Net loss                                         -                 -                  -           (58,095)           (58,095)
                                     -------------   ---------------   ----------------   ---------------   ----------------
Balances at  September 30, 2003        825,995,392   $    12,015,511   $       212,000    $   (19,205,420)  $     (6,977,909)

Common stock issued for
  services                                 200,000             2,400                 -                  -              2,400
Net loss                                         -                 -                 -           (700,563)          (700,563)
                                     -------------   ---------------   ---------------   ----------------   ----------------
Balances at  September 30, 2004        826,195,392   $    12,017,911   $       212,000   $    (19,905,983)  $     (7,676,072)
                                     =============   ===============   ===============   ================   ================
</TABLE>





                [Balance of this page intentionally left blank.]














   The accompanying notes are an integral part of these financial statements.

                                      F-10
<PAGE>




<TABLE>
<CAPTION>
                 E' PRIME AEROSPACE CORPORATION AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                                                            Cummulative
                                                                                                        for the period from
                                                                 For the Year Ended September 30,       February 20, 1986
                                                           ---------------------------------------       (Inception) to
                                                                2004                 2003               September 30, 2004
                                                           ------------------   ------------------    ----------------------
                                                             (Restated)                                     (Restated)
<S>                                                        <C>                  <C>                   <C>

Operating Activities
   Net loss                                                $         (700,563)  $          (58,095)   $         (19,905,983)
   Adjustments to reconcile net loss to net cash
      (used) by operating activities:

   Depreciation and amortization                                        1,052                2,124                   199,807
   Loss on disposition of vehicles and equipment                            -                    -                    32,683
   Loss on sale of asset held for sale                                      -                    -                    14,000
   Write-off of amount due from affiliate                                   -                    -                    39,021
   Write-off of Accrued expenses                                            -                    -                  (711,333)
   Debt forgiveness                                                         -             (790,785)                 (825,785)
   Shares issued for services rendered                                  2,400               18,245                 3,309,543
   Shares issued for interest and finance fee                               -                    -                 2,028,070
   Shares issued for settlement of litigation                               -                    -                 1,115,023
   Changes in operating assets and liabilities:
   Prepaid expenses                                                         -                2,400                         -
   Accrued consulting fees                                                  -                    -                   123,866
   Due to related parties                                                   -                    -                 3,813,470
   Accrued salaries-officers                                          550,000              550,682                 1,100,682
   Accounts payable                                                   (19,810)              (5,375)                  368,140
   Accrued salaries, wages and payroll taxes                            8,719              (31,767)                2,078,030
   Judgements payable                                                   5,460                5,454                    10,914
   Accrued interest payable                                            34,896               34,807                 1,321,138
   Accrued expenses                                                         -                    -                   783,332
   Accrued rent                                                        36,000              177,000                   213,000
                                                           ------------------   ------------------    ----------------------
   Net cash (used) by operating activities                            (81,846)             (95,310)               (4,892,382)

Investing Activities
   Equipment acquisitions                                                   -                    -                  (493,908)
   Proceeds from disposition of vehicles                                    -                    -                    30,307
   Proceeds from sale of asset held for sale                                -                    -                    46,000
   Increase in asset held for sale                                          -                    -                   (60,000)
   Advances to affiliate                                                    -                    -                   (39,021)
   Organization costs                                                       -                    -                    (2,544)
                                                           ------------------   ------------------    ----------------------
   Net cash (used) by investing activities                                  -                    -                  (519,166)

Financing Activities
   Proceeds from issuance of notes payable                                  -                    -                 2,156,683
   Advances from shareholders and others                                81,846              29,620                 1,237,110
   Repayment of notes payable                                               -                    -                (1,206,954)
   Proceeds from issuance of common stock                                   -               65,548                 3,012,709
   Additional paid-in capital                                               -                    -                   212,000
                                                           ------------------   ------------------    ----------------------
   Net cash provided by financing activities                           81,846               95,168                 5,411,548
                                                           ------------------   ------------------    ----------------------
   (Decrease) in cash                                                       -                 (142)                        -
   Cash at beginning of period                                              -                  142                         -
                                                           ------------------   ------------------    ----------------------
   Cash at end of period                                   $                -   $                -    $                    -
                                                           ==================   ==================    ======================
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                      F-11
<PAGE>


<TABLE>
<CAPTION>
                 E' PRIME AEROSPACE CORPORATION AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)

                CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

                                                                      For the Year Ended
                                                                         September 30,
                                                               -------------------------------
                                                                  2004             2003
                                                               --------------   --------------
<S>                                                            <C>              <C>
Supplemental Disclosures of Cash Flow Information

Cash paid during year for:

   Interest                                                    $            -   $            -
                                                               ==============   ==============
   Income taxes                                                $            -   $            -
                                                               ==============   ==============
</TABLE>


<TABLE>
<CAPTION>
                                                                                                          Cummulative
                                                                       For the Year Ended             for the period from
                                                                           September 30,               February 20, 1986
                                                       Number         ---------------------------       (Inception) to
                                                      Of Shares           2004           2003         September 30, 2004
                                                   --------------     ------------   ------------    --------------------
<S>                                                <C>                <C>            <C>             <C>

Common stock issued for services                          200,000     $      2,400
Common stock issued for services                          826,917                    $     18,245
Common stock issued for services                       57,884,952                                    $          3,135,212
Repayment of debt                                      33,985,075                                    $          1,426,922
Repayment of debt                                      56,234,539                                    $          1,765,406
Conversion of notes                                     2,667,000                                    $             80,000
Settlement of litigation                               11,750,000                                    $          1,115,023
Exercise of warrants                                    5,613,620                                    $            341,365
Payments to officers                                   42,630,081                                    $            912,160
Payment of interest and finance charges                82,525,347                                    $          1,850,475
Common stock merger issued for reverse
  acquisition                                         526,933,000                                    $            201,136
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                      F-12
<PAGE>



                 E' PRIME AEROSPACE CORPORATION AND SUBSIDIARIES

                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2004


Note 1-ORGANIZATION AND OPERATIONS

E'Prime Aerospace  Corporation (the Company or EPAC) has been in the development
stage since its  incorporation  in Florida on February 20, 1986.  The Company is
engaged in seeking to provide a reliable and comprehensive payload and satellite
launching service to industry and government, both domestic and foreign.

On October 12, 1987, the Company was acquired by E'Prime  Aerospace  Corporation
(Colorado),   formerly  known  as  Bangor  Investments,   Inc.,  in  a  business
combination  accounted  for  as  a  reverse  acquisition.  Technically,  E'Prime
Aerospace Corporation  (Colorado) (E'Prime - Colorado) issued 496,800,000 of its
share  for the  Company.  Prior  to the  combination,  E'Prime  -  Colorado  had
30,200,000 shares  outstanding of which 17,700,000 shares had been issued to its
organizer  for  $14,500  and  12,500,000  shares  had  been  issued  in a public
offering. The proceeds of the public offering, net of cost of the offering, were
$202,267.  During the period,  E'Prime - Colorado was in existence  prior to the
reverse  acquisition,  its only  activity  was to raise  equity  capital for the
purpose of  acquiring  other  entities and it had incurred a deficit of $15,631.
Thus, at the date of the reverse acquisition,  E'Prime - Colorado had net assets
of $201,136. For accounting purposes, the reverse acquisition is reflected as if
the  Company  issued its stock  (30,200,000  shares) for net assets of E'Prime -
Colorado.  The net assets of E'Prime  were not adjusted in  connection  with the
reverse acquisition since they were monetary in nature and principally consisted
of a loan to the Company.

On July 1, 1992, the Company formed E'Prime Aerospace  Corporation of Delaware a
non-operating subsidiary.

Going Concern

The Company's financial statements have been presented on the basis that it is a
going concern, which contemplates the realization of assets and the satisfaction
of  liabilities  in the normal  course of  business.  The Company  has  suffered
recurring  losses from  operations,  has incurred  significant  acquisition  and
operating debt,  which is in default,  and has a net capital  deficiency,  which
raises substatial doubt about its ability to continue as a going concern.

Management intends to seek equity and/or debt financing in the form of a private
placement  or a public  offering  to provide  additional  equity  capital.  Such
additional financing may not be available to the Company, when and if needed, or
on acceptable terms if at all.

The ability of the Company to continue as a going  concern is  dependent  on the
success of these actions,  The consolidated  financial statements do not include
any adjustments  that might be necessary if the company is unable to continue as
a going concern.


                                      F-13
<PAGE>



                 E' PRIME AEROSPACE CORPORATION AND SUBSIDIARIES

                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2004


Note 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated  financials  include the accounts of the Company and its wholly
owned subsidiaries.  All significant intercompany transactions and balances have
been eliminated in consolidation.

Depreciation

Depreciation of property and equipment is computed by the  straight-line  method
over the estimated useful lives of the assets.  The Company for 2004 has charged
$1,052 and $2,124 for 2003 and thereafter has ceased depreciating its equipment.
This launching  equipment is being held in storage and will be depreciated  over
its estimated useful life when put into use.

Income Taxes

The Company uses the asset and liability  method of accounting for income taxes.
Under the asset and liability  method,  deferred tax assets and  liabilities are
recognized for the future tax consequences  attributable to differences  between
the financial statements carrying amounts of existing assets and liabilities and
their  respective tax bases.  Deferred tax assets and  liabilities  are measured
using  enacted  tax rates  expected  to apply to taxable  income in the years in
which those temporary  differences are expected to be recovered or settled.  The
effect  on  deferred  tax  assets  and  liabilities  of a change in tax rates is
recognized  in income in the  period  that  includes  the  enactment  date.  The
deferred tax assets  resulting  principally  from operating losses have not been
recognized.

Loss Per Share

Basic and diluted net loss per common shares has been calculated  based upon the
weighted average number of common shares  outstanding.  The B warrants described
in  Note  5  have  been   excluded  from  the   computation   because  they  are
anti-dilutive.

Use of Estimates

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


                                      F-14
<PAGE>



                 E' PRIME AEROSPACE CORPORATION AND SUBSIDIARIES

                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2004


Note 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Common Stock issued for Services or Payment of Debt

Common  stock  issued for  services  or in payment  of debt is  recorded  at the
estimated value of the stock at the dates of issuance based upon reported market
prices or the value of the services..

Recent Accounting Pronouncements

The adoption of recent accounting  pronouncements by the Company did not have an
impact on its  consolidated  results of operations,  financial  position or cash
flows.


Note 3- RELATED PARTY TRANSACTIONS

The president and principal stockholder and certain employees have made advances
to the Company.  The advances are non-interest bearing and were made principally
for working  capital  purposes.  These  advances  are included in due to related
parties in the accompanying consolidated balance sheet.

Included in accrued  officers  salaries were unpaid  salaries and wages,  net of
advances made to directors, officers and principal stockholders of the Company.

During  the year ended  September  30,  2004 the  amount due to related  parties
increased  by $81,645 for a total of $965,317.  The increase was from  operating
expenses paid by an officer/stockholder.


Note 4- NOTES PAYABLE

Notes payable at September 30, 2004 and 2003 consist of:

Note payable at 15% interest, collateralized by fixed assets   $      142,500
Note payable at 15% interest, collateralized by fixed assets           52,500
Other notes payable at 15% interest                                    37,000
                                                               --------------
     Total Notes Payable                                       $      232,000

All notes  payable are in default and are  classified  as current  assets on the
balance sheet.


                                      F-15
<PAGE>



                 E' PRIME AEROSPACE CORPORATION AND SUBSIDIARIES

                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2004


Note 5- COMMON STOCK

The Company issued 200,000 shares of common stock during fiscal 2004 and 826,917
shares  during  fiscal  2003,  valued at $2,400 and $18,245,  respectively,  for
consulting services rendered during such years.

As of September  30, 2004,  the Company had  outstanding  Series B warrants that
entitle the holder to purchase  one share of common  stock at $0.20 per share on
or at any time  before  December  31,  2004.  On  December  6, 2004 the Board of
Directors extended the B warrant expiration date to December 31, 2005.

The Company has the right to redeem the Series B warrants  upon 30 days  written
notice, at $0.0002 per warrant, during the respective periods which the warrants
are exercisable. As of September 30, 2004, there were 12,471,800 shares reserved
for warrant exercise.


Note 6- PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

                                                   September 30,
                                               2004           2003
                                           -------------    -------------
  Launch and support equipment             $     233,654    $     233,654
  Furniture and fixtures                          57,432           57,432
  Computer equipment                              34,014           34,014
                                           -------------    -------------
                                                 325,100          325,100
         Less: Accumulated depreciation          (91,446)         (90,394)
                                           -------------    -------------
                                           $     233,654    $     234,706

The Company has purchased certain launching and support equipment from an agency
of the  U.S.  Government  for  $233,654.  Most  of the  equipment  acquired  was
associated with the U.S. Government's discontinued  "Peacekeeper" missile system
and is located at various facilities in the United States.

Since the equipment is presently not being  utilized,  the Company has not begun
recording  depreciation  on  these  assets.  Additionally,   this  equipment  is
collateral for two outstanding notes payable (See Note 4).





                                      F-16
<PAGE>



                 E' PRIME AEROSPACE CORPORATION AND SUBSIDIARIES

                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2004


Note 7- COMMITMENTS AND CONTINGENCIES

The Company maintains its principal offices in Titusville,  Florida.  Currently,
the office space is leased on a month to month basis.

Additionally,  the Company stores  equipment in a warehouse in Memphis,  TN at a
cost of $3,000 per month,  since  October,  1998. No rent has been paid to date.
The rent payable per the rental agreement at September 30, 2004 is $213,000.

Total  rental  expense  was $48,102  for the year ended  September  30, 2004 and
$191,295 for the year ended September 30, 2003.


Note 8- INCOME TAXES

Due to the  Company's net loss,  there was no provision  for income  taxes.  The
Company  has net  operating  loss carry  forwards  for income  tax  purposes  of
approximately  $9,500,000 at September 30, 2004.  These carry forward losses are
available to offset future taxable income,  if any, and expired  starting in the
year 2002.  The  Company's  utilization  of this carry  forward  against  future
taxable  income may become  subject to an annual  limitation due to a cumulative
change in ownership of the Company of more than 50 percent.

The components of the Company's tax provision were as follows:

                                                     September 30,
                                              ------------------------------
                                                   2004            2003
                                              --------------   -------------
Current income tax (benefit) expense          $      280,000   $     282,000
Deferred income tax expense (benefit)               (280,000)       (282,000)
                                              --------------   -------------
                                              $            -   $           -
                                              ==============   =============




                                      F-17
<PAGE>



                 E' PRIME AEROSPACE CORPORATION AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2004


Note 9- INCOME TAXES (continued)

The reconciliation of the income tax computed at the U.S. Federal statutory rate
to income tax expense for the periods ended September 30, 2003 and 2002:

                                                     September 30,
                                              ------------------------------
                                                   2004            2003
                                              --------------   -------------
Tax expense (benefit) at Federal rate (34%)            34.0%           34.0%
State and local income tax,
  net of Federal benefit                                6.0%            6.0%
Change in valuation allowance                         -40.0%          -40.0%
                                              --------------   -------------
  Net income tax (benefit) allowance                       -               -
                                              ==============   =============

Deferred income taxes reflect the net income tax effect of temporary differences
between  the  carrying  amounts  of the  assets and  liabilities  for  financial
reporting  purposes and amounts used for income taxes.  The  Company's  deferred
income tax assets and liabilities consist of the following:

                                                     September 30,
                                              ------------------------------
                                                   2004            2003
                                              --------------   -------------
Deferred tax asset:
Net operating loss carry forward              $    3,800,000   $   3,700,000
Valuation allowance                               (3,800,000)     (3,700,000)
                                              --------------   -------------
  Net deferred tax assets                     $            -   $           -
                                              ==============   =============

The Company has  recognized  no income tax benefit for the losses  generated for
the periods through September 30, 2004.

SFAS No. 109  requires  that a  valuation  allowance  be  provided if it is more
likely  than not that some  portion or all of a  deferred  tax asset will not be
realized. The Company's ability to realize the benefit of its deferred tax asset
will depend on the generation of future taxable income.  Because the Company has
yet to recognize  significant revenue from the sale of its products, it believes
that the full valuation  allowance should be provided.  The valuation  allowance
decreased  approximately  $100,000  in fiscal 2004 and  increased  approximately
$500,000 in fiscal 2003.





                                      F-18