May 14 , 2004

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

FORM SB-2

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
(Pre-Effective Amendment No. 1)

EPIXTAR CORP.
(Name of small business issuer in its charter)

FL 7385 65-0722193
-- ---- ----------

(State or jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)

11900 Biscayne Boulevard, Miami, Florida 33181 (305) 503-8600
(Address and telephone number of principal executive offices)

David Srour
Chief Executive Officer
11900 Biscayne Boulevard,
Miami, Florida 33181
(305) 503-8600

(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------
Copies to:

Michael D. DiGiovanna, Esquire
212 Carnegie Center
Suite 206
Princeton, New Jersey 08540
(609) 919 6364

Approximate date of proposed sale to the public ___________________

If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box [X].

If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box. [ ]

CALCULATION OF REGISTRATION FEE

Tile of each Proposed Proposed
class of securities Amount to maximum offering Maximum aggregate Amount of
to be registered be registered price per unit offering price registration fee
---------------- ------------- -------------- -------------- ----------------

Common Stock
par value $.0001 $1,197,989 $4.65 $5,570,649(1) $450.67(1)

Common Stock
par value $.0001 1,213,352 (2) $ $591.24

Total 2,411,341

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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) based upon the average of the bid and asked
prices of the common stock on the OTC Bulletin Board on June 26, 2003.
(2) Represents additional shares to be registered subsequent to the
original SB-2 filed by the Company subsequent to June 30, 2003 based on
the average of the $4.14 price of the Company's common stock on the
OTC bulletin board on May 10,, 2004.
(3) The foregoing securities registered include any additional shares
issued to prevent dilution resulting from stock splits, stock dividends
or other transactions pursuant to Rule 416 under the Securities Act of
1933.

The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.

PROSPECTUS

2,411,341 Shares of Common Stock

EPIXTAR CORP

Securityholders of Epixtar Corp. named under the caption "Selling
Securityholders" may offer and sell up to 2,411,341 shares of our common stock.
All of the shares offered will be issued in the future pursuant to warrants and
convertible preferred stock presently outstanding. We will not receive any of
the proceeds from the sale of shares by the selling stockholders.

Our common stock is quoted on the OTC Bulletin Board under the symbol EPXR. On
May,10, 2004, the price of the Common Stock was $ per share.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

Our common stock being offered by this prospectus involves a high degree of
risk. You should read the "Risk Factors" section beginning on page 6 before you
decide to purchase any common stock.

The date of this Prospectus is

The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell securities, and we are not soliciting offers to buy these securities, in
any state where the offer or sale is not permitted.

TABLE OF CONTENTS

Page
----
Prospectus Summary.....................................................
Risk Factors...........................................................
Forward Looking Information............................................
Use of Proceeds........................................................
Capitalization.........................................................
Market Information.....................................................
Management Discussion and Analysis of Financial Condition and
Results of Operations.........................................
Our Business...........................................................
Property...............................................................
Legal Proceedings......................................................
Directors, Executive Officers..........................................
Security Ownership.....................................................
Certain Relationships and Related Transactions.........................
Plan of Distribution...................................................
Selling Securityholders................................................
Description of Securities..............................................
Legal Matters..........................................................
Experts................................................................
Available Information..................................................
Financial Statements................................................... F-

You should rely only on the information contained in this document. We have not
authorized anyone to provide you with information that is different. This
document may only be used where it is legal to sell these securities. The
information in this document may only be accurate on the date of this document.

Prospectus summary

This summary highlights certain information contained elsewhere in this
prospectus. You should read the following summary together with the more
detailed information regarding Epixtar Corp. and its financial statements and
the related notes appearing elsewhere in this prospectus.

Epixtar Corp.

Since June 2001 we have been primarily engaged through subsidiaries in marketing
internet provider services to small businesses through telemarketing. Until 2004
we had utilized independent telemarketers for our ISP billing, although we had
trained personnel of these telemarketers and the telemarketers use scripts and
procedures developed by us. The telemarketers we utilized have been located in
the Philippines, the Caribbean, India and the United States. We are in the
process of broadening our business to that of providing marketing and other
services to third parties using our own call centers. We are presently operating
one contact center and developing a second in property we lease. We intend to
use our contact centers for our new business as well as our existing ISP
businesses. In the near future we intend to concentrate our efforts on growing
our new businesses. The rate at which we expand this business depends upon our
ability to raise or obtain funds.

Our ISP business is subject to customer complaints and ensuing regulatory
investigations and proceedings relating to our telemarketing activities. We were
subject to a Federal Trade Commission injunction which for a period of time
prevented us from billing and marketing our ISP services. In addition, we are
subject to two preliminary injunctions restricting our activities in two states
and four states have served us with investigative subpoenae. We believe we will
prevail with regard to actions brought to make such injunctions permanent and
the investigations will not result in any substantial actions against us. We
have developed stringent standards to avoid regulatory actions and the current
customer complaints reflect only a small percentage of our customers.

Epixtar Corp. is also referred to in this prospectus as "Epixtar," "we," "us,"
or "our." These references shall include us and our subsidiaries unless
otherwise indicated by the context.

Our principal place of business is located at 11900 Biscayne Boulevard, Miami,
Florida 33181. Our general telephone number is (305) 503-8600.

THE OFFERING

Our Securities

Securities Offered by
the Selling Securityholders Shares of Common Stock: 2,411,341

Outstanding before the Offering. Common Stock: 10,962,663
Preferred Stock: 22,010

Outstanding after the Offering Common Stock 13,166,904
Preferred Stock - none

Plan of distribution The offering includes the sale of
common stock issued or issuable upon
conversion of shares of our Series A
Preferred Stock and our 7%
convertible Securities Notes and or
the exercise of warrants owned by
holders of these securities. The
offering also includes the sale of
shares issued to satisfy
indebtedness owed to third parties
and shares issuable upon exercise of
warrants granted persons providing
services to us. Sales of all of
these shares may be made by selling
securityholders in the open market
or in privately negotiated
transactions.

Use of proceeds We will not receive any proceeds
from the sale of shares owned by the
selling securityholders but may
receive proceeds upon exercise of
the warrants which will be utilized
for working capital.

- --------------------------------------------------------------------------------
(1) Includes 2,204,241 shares of Common Stock not presently outstanding but
issuable upon conversion of preferred stock or conversion of notes and
exercise of warrants held by the Selling Security holders.The amount
also includes 190,000 shares reserved for issuance upon conversion of
accrued dividends and interest,. Depending upon the time of conversion
a portion of these shares may not be issued.
(2) Exclusive of shares subject to convertible securities, options, and
warrants including shares offered by the selling security holders. (3)
Assumes conversion of all convertible securities and exercise of all
warrants owned by selling securityholders..

Selected Financial Data

The following selected financial data is qualified by reference to, and should
be read in conjunction with, "Management's Discussion and Analysis of Financial
Condition and Results of Operations" included elsewhere in this Prospectus. The
financial information set forth below is audited with respect to the annual
periods ended December 31, 2003 and December 31, 2002. The financial information
for the year ended December 31, 2002 are derived from restated financial
statements. See note 3 to the 2002 year-end audited Financial Statements.

FISCAL YEAR ENDED DECEMBER 31

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

Statement of Operations Data:
- ----------------------------
Revenues .............................................. 37,121,277 26,250,851

Costs of goods sold ................................... 17,442,248 17,781,967

Operating expenses: ................................... 14,869,142 10,223,529
Selling, general and Administrative Depreciation ..... 214,299 98,557

Net Income (Loss) from operations ..................... 4,595,588 (1,853,202)

Interest and other income ............................. (216,428) (10,048,402)

Net Income (Loss) ..................................... 4,379,160 (11,944,922)

Selected Balance Sheet Data:
- ----------------------------

Cash and cash equivalents ............................. 1,758,907 722,674

Working capital ....................................... 2,954,188 (3,638,292)

Total assets .......................................... 12,982,794 8,583,145

Total liabilities .....................................

RISK FACTORS

You should carefully consider the following risk factors and all other
information contained in this prospectus before investing in our common stock.
We believe this section addresses all material risks specific to us. Investing
in our common stock involves a high degree of risk. Any of the following risks
could adversely affect our business, financial condition and results of
operations and could result in a complete loss of your investment.

A proceeding instituted by the Federal Trade Commission has adversely impacted
our business and financial position.

On October 30, 2003, the Federal Trade Commission or FTC instituted an action in
federal district court against us and certain of our subsidiaries. The action
sought to enjoin alleged failure by certain of our ISP subsidiaries to comply
with regulations relating to the conversion of a trial customer to a paying
customer. We market our ISP services by offering a trial period followed by pay
periods. In connection with the action the FTC obtained an ex parte temporary
restraining order, a freeze on our assets, and the appointment of a temporary
receiver. This ex-parte order prevented us from marketing and billing our ISP
services and deprived us of substantial assets. We therefore experienced
significant business disruption, incurred substantial expenses and experienced a
reduction of our working capital. While we believed we complied with the law and
the proceeding was unwarranted, on November 21, 2003, we entered into a
stipulated preliminary injunction, without any admission or finding of
wrongdoing. As a result, we were able to resume business subject to procedures
set forth in the stipulation (substantially all of which we had already
followed) and the oversight of a monitor. The appointment of the receiver was
terminated and replaced by a monitor and the asset freeze was lifted except that
a portion of our assets were held in escrow against future customer refunds. It
is impossible, at this time, to determine the full impact of this action but the
order has resulted in a reduction of our revenue and income in the fourth
quarter of 2003 and first quarter of 2004. The reduction of revenues and asset
freeze and escrow (even though a majority of the funds were released) in turn
resulted in working capital issues. This caused us to initiate cost cutting
measures and delayed the timetable for implementing our new business direction.
We are presently negotiating the terms of a final permanent injunction. We
cannot predict the terms of the final order or when the terms will be finalized.
We recently obtained financing which alleviated our working capital situation
and enabled us to proceed with the timely development of contact centers in the
Philippines.

We have experienced losses from operations in prior years and may have losses in
the future.

We had no operations prior to November 2000 and have had losses in each year of
our existence prior to 2003 including a loss of $11,944,922 for the year ended
December 31, 2002. Although we had net income of $4,379,160 in 2003, there is no
assurance that we will continue to operate profitably in the future.

Our new business direction may result in losses or reduction of income in the
immediate future.

We have decided to broaden our business operations by offering direct marketing
services and other services for third parties and to develop, acquire and
operate offshore call center facilities for this new business, as well as our
existing business. Since this is a new operation, we face all the risks that new
ventures encounter, including significant start-up expenses, obtaining and
performing contracts, hiring and retaining qualified personnel establishing a
reputation in the industry and acquiring, developing and managing contact
centers. Moreover as we transition to our new business we will devote fewer
resources to our continuing ISP business. This will result in a reduction in
revenue from our ISP business which may not be immediately replaced by revenues
from our new business. There is no assurance we will be able to enter into
substantial arrangements with clients for our new business or that we can
develop call centers on terms favorable to us or at all. Moreover, even if we
enter into any such arrangements or succeed in the development or acquisitions
of call center assets, there is no assurance that such arrangements with clients
or any development or acquisitions will be profitable. Moreover the transition
to our new business may result in loss of ISP revenues which we may not be able
to replace timely if at all.

We will require additional capital for our new business model and our existing
operations and the failure to obtain additional capital may result in our
inability to implement our new business plan on a timely basis or at all.

Our new business plan requires additional personnel, the acquisition and
construction of contact centers for telemarketing and other operations, as well
as the purchase of additional equipment. We do not have sufficient capital to
fully implement our plans in accordance with our time table and, do not
anticipate obtaining sufficient resources from our existing operation, to meet
this time table, especially as a result of the liquidity problems resulting from
our recent FTC proceeding. Therefore, we must seek additional financing for this
purpose. In addition, after the FTC proceeding we may need additional operating
capital for our present operations. We may not obtain any such financing on
terms acceptable to us, if at all. If we do not obtain sufficient financing, we
may not be able to fully and timely implement our new business plan, if at all,
and may have to continue to curtail current operations.

If we do not successfully implement our new business, we must increase our
customer base or face possible future losses and liquidity problems.

While we intend to continue to operate our ISP business we will concentrate our
resources on our new business. As a result, there is significant likelihood that
we may not be able to grow or maintain our ISP business. If we do not
successfully implement our new business, we will be dependent on our existing
ISP business. Due to attrition of customers in our ISP business, we have
constantly sought to retain our existing customer base and to find new customers
through telemarketing efforts and with the introduction of new products. If our
new business is not successful and we do not replace lost ISP customers our
future revenues and income may be reduced.

Our independent auditors expressed a "going concern" opinion with respect to our
2002 consolidated financial statements.

Although our independent auditors have not expressed a going concern opinion
with respect to our 2003 consolidated financial statements, our prior
independent auditors did express such a qualification with respect to our 2002
consolidated financial statements. This going concern qualification may have
adversely affected our ability to obtain capital or credit from third parties.
While our auditors have removed the going concern qualification from our 2003
financial statements their opinion refers to Note 3 to the financial statements
for a description of profitability and liquidity issues. We cannot give
assurance that any possible adverse consequences will not continue as a result
of the removal of such qualification from our 2003 financial statements.

We may be required to write down Goodwill which will result in the recognition
of substantial expenses.

Our assets include $3,360,272 of goodwill. This reflects the unamortized portion
of the difference between the value of the consideration paid to acquire the
minority portion of National Online and the book value of the assets of National
Online at the time of acquisition. Under present accounting rules this asset may
be written down, in whole or in part, if it is unlikely that the full amount of
excess value will be realized. We have not written down any amount of this
goodwill in 2003 but if our ISP revenues continue to decline we may be required
to do so in 2004. Any write down in the future will be treated as an expense and
reduce our income.

Government regulation and customer complaints entail costly compliance that may
lead to regulatory proceedings that may be expensive to defend and may result in
adverse judgments and detrimental publicity.

Our subsidiaries are subject to the oversight of various governmental agencies,
including the Federal Trade Commission and similar state agencies. These
agencies and other federal and state agencies regulate our marketing activities.
We believe we are in material compliance with all these regulations. The most
significant of these regulations relates to free to pay conversion rules
designed to prevent "cramming" or the unauthorized billing of a customer. To
guard against violation of these regulations, we, at substantial expense, have
imposed strict controls on our in house and independent contact center sales
representatives. Nevertheless, proceedings have been commenced against us. We
are subject to a Stipulated Preliminary Injunction entered into in a proceeding
instituted by the Federal Trade Commission to prohibit alleged violations by us
of the free to pay conversion rules. While we denied all liability we entered
into the stipulation to resume business after a temporary restraining order. See
Risk Factor "A proceeding instituted by the Federal Trade Commission has
adversely impacted our business and financial position" for a discussion of the
consequences of this proceeding. During 2003, Missouri and North Carolina sought
a permanent injunction to bar us from violating the cramming rules. In both
states, we voluntarily entered into orders barring us from cramming. We did so
since we do not engage in cramming practices and neither state is a source of
significant revenue. We intend to contest the imposition of a permanent
injunction in these states. We are also subject to investigatory subpoena
inquiries in Florida, Texas, Kansas, and Minnesota and are cooperating fully in
each case. We have not been affected by the federal or state "do not call"
regulations because our ISP subsidiaries only call business telephone numbers
and these types of numbers are not subject to these regulations. We cannot
predict the effect of these rules on our outsourcing business. In the future we
may experience substantial adverse consequences on our ISP operations if we were
found to have materially violated any regulations. In that event we may be fined
a substantial amount, and may be required to cease or modify our business plans
or otherwise limit operations. Moreover, we could also be adversely affected if
we are unable to meet any material future change in regulations.

Our ISP business depends upon third-party vendors for billing and collection of
our accounts receivable.

The customers of our ISP subsidiaries are billed through local exchange carriers
or LECS. Our subsidiaries rely on third party clearing agents or billing houses
for collection of our receivables from the LEC. While we believe there are
potential replacements for our present billing houses, there is no assurance we
will be able to find adequate replacements upon suitable terms. Because LECs
have a monopoly, or near monopoly, on phone service in an area, the loss of a
LEC may not be replaced.

In early 2003, a LEC and billing agent limited or declined any dealings with
certain of our ISP subsidiaries because of the number of complaints received.
SBC, a LEC, refused to deal with us directly. As a result our market of
potential customers was reduced because for the most part we could not solicit
in, the geographic area operated by this LEC. We were able in 2003, however, to
obtain sufficient substitute customers in other areas to maintain revenue
growth. The loss of an additional LEC could have substantial adverse
consequences on our revenues and profitability. In addition our receivables
collected by clearing agents are not segregated, we could lose these funds upon
any bankruptcy of a clearing agent.

Possible future action to reduce foreign outsourcing may have an adverse effect
on our revenues.

Our new business focus is to provide outsourcing services through overseas
contact centers. Recently claims have been made by various governmental
officials and others that the United States is losing jobs to foreign
outsourcing. We can give no assurance that regulations will not be adopted which
may have a negative effect on our business and revenues.

We have been dependent upon third-party vendors to market our ISP business and
we could and have been adversely affected by the actions of these telemarketers.

In connection with our existing business, our ISP subsidiaries have in the past
relied on third party independent telemarketing firms to obtain new customers.
While we are presently utilizing our own contact centers, and intend not to use
independent telemarketers, we can not foreclose the possibility of using third
party telemarketers.

Failures of the independent contact centers performing services for us may have
adverse consequences. The number of new customers obtained could be below
expectations because of the failure of the telemarketers. Telemarketers are
required to adhere to a script and procedures and are subject to review of
recorded customer interactions by internal staff and outside reviewers to insure
compliance with the law. The failure of the telemarketers to do so could lead to
adverse public relations, customer complaints and government sanctions. Indeed,
there have been instances in which these telemarketers have failed to perform
their obligations leading to possible violations of regulations by us. The most
prominent of these violations resulted in 2002 from several Indian call centers
that failed to follow our procedures. This resulted in reduction of payments by
us to the owner of certain centers involved in the failures or the termination
of contracts with these owners.

We are dependent upon a third-party vendor for services related to strategic
planning and Implementation of our new business.

Through our principal stockholder, of which Martin Miller, our Chief Executive
Officer, is a principal owner, we have retained an independent consulting firm
to assist us primarily in establishing a new direction for our business and its
personnel. The consulting firm assists us in identifying international
opportunities, including pinpointing locations for call centers, negotiating
transactions for our new business, implementing our new strategy and general
supervision. If this arrangement were to be diminished or cease, we may not be
able to fully or properly implement our new business direction.

If we do not obtain and retain qualified key personnel, our business and stock
price could suffer.

Our future success depends in large part on obtaining and retaining qualified
key personnel. We especially need to recruit qualified call center personnel for
our new business. Competition for qualified personnel can be intense. In
addition we cannot ensure that our key personnel will devote sufficient time to
our business. Our existing and new operations could be limited if we fail to
obtain and retain qualified personnel.

If our shares are not listed on a stock exchange or Nasdaq, the trading of our
securities may be subject to restriction.

We have applied to have our shares of Common Stock listed on the American Stock
Exchange. If our application is denied, our stock will continue to be traded on
the OTC Bulletin Board. Trading volume of OTC Bulletin Board stocks have been
historically lower and more volatile than stocks traded on an exchange or Nasdaq
Stock Market. In addition we may be subject to rules of the Securities and
Exchange Commission that impose additional requirements on broker-dealers when
selling penny stocks to persons other than established customers and accredited
investors. At the moment we do not believe our securities are subject to these
rules because of the amount of our revenues during the last three years. In
general, an accredited investor is a person with assets in excess of $1,000,000
or annual income exceeding $200,000 individually, or $300,000 together with his
or her spouse. The relevant Securities and Exchange Commission regulations
generally define penny stocks to include any equity security not traded on an
exchange or Nasdaq with a market price (as defined in the regulations) of less
than $5 per share. Under the penny stock regulations, a broker-dealer must make
a special suitability determination as to the purchaser and must have the
purchaser's prior written consent to the transaction. Prior to any transaction
in a penny stock covered by these rules, a broker-dealer must deliver a
disclosure schedule about the penny stock market prepared by the Securities and
Exchange Commission. Broker-dealers must also make disclosure concerning
commissions payable to both the broker-dealer and any registered representative
and provide current quotations for the securities. Finally, broker-dealers are
required to send monthly statements disclosing recent price information for the
penny stock held in an account and information on the limited market in penny
stocks.

If our common stock were to be subject to penny stock rules, these rules may
discourage broker-dealers from effecting transactions in our common stock or
affect their ability to sell our securities. As a result, purchasers and current
holders of our securities could find it more difficult to sell their securities.

If we fail to manage growth effectively, our business could be disrupted which
could harm our operating results.

If we are successful in implementing our new business plan, we may experience
growth in our business. In that event, it will be necessary for us to expand our
workforce and to train, motivate and manage additional employees as the need for
additional personnel arises. Our personnel, systems, procedures and controls may
not be adequate to support our future operations and we may require additional
capital in excess of the amount of capital required for our initial expansion.
Any failure to effectively manage future growth could have a material adverse
effect on our business.

Our business is highly competitive and this competition could adversely affect
our pricing structure.

Many companies offer internet provider services and other products and services
similar to those offered by us. In addition the services offered by our new
business could face substantial competition from existing contact centers and
others providing outsource services. Many of these firms are well established,
have reputations for success and have significantly greater financial,
marketing, distribution, personnel, and other resources than us. There can be no
assurance that competitors will not develop products or services that are
superior to our products and services. Further, there can be no assurance that
we will not experience price competition, and that such competition may not
adversely affect our financial position and results of operations adversely
affect our revenues and profitability.

Foreign operations create risks that could lead to losses.

While substantially all our present sales are made to domestic customers, we
rely on a number of offshore contact centers for both our new business and our
existing ISP business. This reliance on overseas operations will increase as we
further implement our new business strategies and acquire additional foreign
assets. It is therefore anticipated that our business will be increasingly
subject to the risks of doing business abroad. These risks may include possible
limitations on capital repatriation, exchange rate fluctuations, ownership
restrictions and strict foreign regulations on the operations of our
subsidiaries. At this time, the risk from exchange rate fluctuations is
mitigated by the fact that payment for our services is received from other U.S.
firms in U.S. dollars. Losses could also result, however, from potential war,
religious and ethnic violence, or insurrection. We have recently commenced
operations in the Philippines. The Philippines is currently experiencing an
insurrection on one of its islands. Any protracted period of strife could result
in our inability to operate our contact centers, as well as the potential for
damage or destruction to these centers. Any of these events could reduce our
ability to service our clients or operate our existing business which could lead
to a reduction of revenue.

We have a substantial number of shares that may become freely tradable and could
therefore result in a reduced market price.

As of March 26, 2004, we had an aggregate of 10,817,719 shares of our common
stock issued and outstanding, of which 6,767,719 shares are "restricted
securities". These shares may be sold only in compliance with Rule 144 under the
Securities Act of 1933, as amended, or other exemptions from registration
requirements of the Securities Act. Rule 144 provides, in essence, that a person
holding restricted securities for a period of one year after payment therefor
may sell, in brokers' transactions or to market makers, an amount not exceeding
1% of the outstanding class of securities being sold, or the average weekly
reported volume of trading of the class of securities being sold over a
four-week period, whichever is greater, during any three-month period. Persons
who are not our affiliates and who had held their restricted securities for at
least two years are not subject to the volume or transaction limitations.
Substantially all of our presently issued shares will be capable of sale
pursuant to Rule 144 subject to the foregoing limitations. In addition we have a
substantial number of warrants and convertible securities. Over 12,000,000 of
these shares will be included in an amended registration statement to be filed
with the Securities and Exchange Commission. The sale of a significant number of
these shares in the public market may adversely affect prevailing market prices
of our securities.

Our quarterly operating results may fluctuate, so the results of one quarter are
not necessarily indicative of results in the succeeding quarter.

Because our customers can be affected simultaneously by the same economic
factors, our operating results can vary significantly from one quarter to the
next. In addition, the quarterly results of our new business may depend upon a
number of other factors including contracts we are performing in any given
period, the effect of any proceeding against us, the number of ISP customers, or
the capacity of our contact centers. Therefore, you should not expect that our
results for any one quarter can be predictive of our performance in the next
succeeding quarter. Likewise, you should not use the results for any particular
quarter to predict our performance in the similar period in any future year.

We have entered into substantial transactions with our Principal Stockholders.

Trans Voice L.L.C, the owner of over 50% of our common stock, has entered into
an agreement as of April 2003 to obtain a third party to provide strategic
planning supervision, and other services to us primarily for our new business.
Martin Miller, our Chief Executive Officer, is the beneficial owner of fifty
percent of this entity. Amounts paid to Trans Voice are a pass-through and are
meant to reimburse Trans Voice for payments it makes or is obligated to make to
third party vendors under that agreement. We also are a party to an Amended and
Restated Payment Agreement with Trans Voice Investments, Inc. whereby we pay
Trans Voice, L.L.C., as assignee of Trans Voice Investments, Inc., $150,000 per
month and pay Trans Voice Investments, Inc. $1.00 for every customer over
100,000. This agreement was originally entered into in consideration for
services rendered to us by Trans Voice Investments, Inc., the parent company of
Trans Voice L.L.C. This agreement and subsequent modifications were entered into
when Trans Voice L.L.C was not one of our principal shareholders. However, one
of the principal holders was an officer prior to the execution of the original
agreement. While we believe the transaction referred to was fair to us they were
not necessarily negotiated at arms length. Future transactions with principal
stockholder officer or director will need to be approved by the majority of our
independent directors.

Stock ownership of our principal stockholders could delay or prevent stockholder
actions.

Messer. Martin Miller and Stanley Myatt beneficially own over 50% of our
outstanding common stock and may be able to control decisions of our
stockholders. Their ownership may also have the effect of delaying, deferring or
preventing a change in our control and make transactions that could give our
public, minority stockholders the opportunity to realize a premium over the
then-prevailing market price for shares of common stock more difficult or
impossible.

We do not intend to pay dividends on our common stock.

We have never paid or declared any cash dividends on our common stock or other
securities (other than our preferred stock) and intend to retain any future
earnings to finance the development and expansion of our business. We do not
anticipate paying any cash dividends on our common stock in the foreseeable
future. Unless we pay dividends, our stockholders will not be able to receive a
return on their shares unless they sell them.

Our stock price, like that of many small companies, has been and may continue to
be volatile.

We expect that the market price of our common stock will fluctuate as a result
of variations in our quarterly operating results and other factors beyond our
control. These fluctuations may be exaggerated if the trading volume of our
common stock is low.

USE OF PROCEEDS

We will not receive any proceeds from the offering of the selling
securityholder. If any of the warrants are exercised we may receive the exercise
price and will utilize these proceeds for working capital.

CAPITALIZATION

The following table sets forth under the column headed "Actual" our actual
capitalization at December 31, 2003, and the column headed "Adjusted" sets forth
our capitalization adjusted as of that date reflecting the issuance of common
stock upon the exercise of warrants and the conversion of preferred stock and
convertible notes if the entire offering by Selling Securityholders is
completed. This section should be read in conjunction with our financial
statements and related notes appearing elsewhere in this Prospectus.

Actual Adjusted (3)
------ ------------
Preferred Stock, $.001 par value; 10,000,000
authorized of which 250,000 shares designated
as Series A and 23,510 are outstanding as of
December as adjusted. 24 none

Common Stock, $.001 par value; 50,000,000 shares
authorized; 10,742,719 (1) (2) shares issued and
outstandings of December 31, 2003 \
and 12,253,044 as adjusted 10,743

Additional paid-in capital 18,721,296

Accumulated deficit 13,055,075

Total stockholders' equity

Less Preferred Stock liquidated value

Total Common Stock Equity

- ----------
(1) Treats as outstanding shares we were obligated to issue but
nocertificates were issued.

(2) Does not include shares of common stock reserved for issuance upon the
exercise of options and warrants and shares issuable upon conversion of
our outstanding preferred shares and notes.; does not include shares
issued subsequent to January 31 2004
(3) Assumes all preferred shares and notes are converted and all warrants
exercised. Reflects net proceeds of private placement for shares of
preferred and notes converted and the purchase price to be paid upon
exercise of warrant.

MARKET FOR COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS

MARKET INFORMATION.

Our Common Stock is presently quoted, under the symbol "EPXR," on the OTC
Bulletin Board. Prior to January 2003, our symbol was "GAHI". In January 2003,
the symbol was changed as a result of our name change. Set forth below are the
high and low closing bid quotations for our common stock for each quarter of the
last two fiscal years, as reflected on the electronic bulletin board. The
quotations listed below represent prices between dealers and do not include
retail mark-up, markdown or commission, and there can be no assurance that they
represent actual transactions.

Update

Fiscal Year 2003
Quarter High Low
------ ----- -----
1st $4.15 $1.75
2nd $8.85 $2.75
3rd $6.45 $3.55
4th $6.40 $2.75

Fiscal Year 2002
1st $3.50 $0.68
2nd $0.83 $0.29
3rd $0.31 $0.31
4th $1.95 $0.28

SECURITYHOLDERS.

As of March 26, 2004 there were approximately 50 holders of record of our common
stock. Because a substantial portion of our shares are held by a depository
company in nominee name, we believe the number of beneficial owners of the
securities is substantially greater than 50. UPdate

DIVIDENDS

We have not paid any dividends on our common stock. There are no plans to
declare dividends in the immediate future but we may, from time to time, declare
dividends in stock or cash. Our Series A Convertible Preferred Stock provides
for 8% cumulative dividends to be paid annually.

MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

INTRODUCTION

We were organized for the purpose of acquiring other entities or businesses.
Prior to November, 2000, we had attempted to acquire several businesses;
however, none of those proposed acquisitions were completed. In November 2000,
we acquired SavOnCalling.com, Inc. ("SavOn") but have since discontinued the
business of this subsidiary. In March 2001, we acquired National Online ("NOL"),
which developed and marketed internet provider services ("ISP") for small
businesses. The operations of NOL commenced during 2001 (as well as that of
another subsidiary). We continued and expanded the operations of NOL as well as
other ISP subsidiaries operating similar businesses primarily with funds
generated from operations, making considerable expenditures for staffing and
infrastructure.

Substantially all our revenue has been derived from our ISP operations. We now
however have determined to change the direction of business to that of being an
outsourcing company providing telemarketing programs and other services for
third parties using contact center facilities we will develop or acquire. The
effect of this transition on our revenues, income and capital requirements will
be discussed in detail below.

ACCOUNTING ISSUES

Restatement

We have restated our previously issued financial statements for 2002 as follows:

o Acquisition of Savon and a 80% interest in National Online have been
restated to reflect the requirement of staff accounting bulletin No.
48 and record those acquisitions at historical cost. As a result the
financial statements have been restated to remove all goodwill,
goodwill amortization and impairment charges with respect to these
transactions. That portion of the goodwill relating to the
acquisition of a minority interest in NOL remained.

o In 2002 we entered into an agreement to restructure certain debt to a
stockholder. We have determined that the transaction should have been
treated as the issuance of a new note with a loss on debt
extinguishment which includes the value of warrants as of the date of
grant.

o We have recorded the new note resulting from the debt restructuring
at fair value net of a discount.

The foregoing restatement is described in further detail in Note 2 to the
financial statements.

Accounting Policies and Procedures

On an on-going basis, management evaluates its estimates and judgments,
including those related to revenue recognition, allowance for uncollectible
amounts, impairments of intangible assets, recognition of deferred income tax
items and stock based compensation, bad debts and intangible assets. Management
bases its estimates and judgments on historical experience and on various other
factors that are believed to be reasonable under the circumstances, the results
of which form the basis for making judgments about the carrying values of assets
and liabilities that are not readily apparent from other sources. Actual results
may differ from these estimates under different assumptions or conditions.
Management believes the following critical accounting policies, among others,
affect its more significant judgments and estimates used in the preparation of
its consolidated financial statements.

Revenue recognition

Our revenues are derived primarily from fees for providing small businesses with
Internet access, websites and e-mail addresses through reselling dial-up
technology. Customers are billed monthly, following a thirty day free trial, and
the revenue is recorded over the period in which the services are provided.
Deferred revenue represents the unearned, billed revenue at the end of an
accounting period. We contract with external entities for billing and collection
services. Those entities require certain holdbacks and reserves be maintained to
allow for the possibility that amounts will not be collected, refunds will be
made or adjustments to customer accounts will be allowed. These holdbacks and
reserves are included in accounts receivable. We provide an allowance for lack
of collectibility of these amounts approximately equal to fifty percent of the
amounts held or reserved. This allowance is estimated based on historical
experience.

Impairment of intangible assets

In connection with the acquisition of a minority interest in National Online we
recorded goodwill. SFAS No. 142 "Goodwill and Other Intangible Assets" requires
that goodwill no longer be amortized, but rather be evaluated for possible
impairment at least annually. Our policy calls for the assessment of any
potential impairment whenever events or changes in circumstances indicate that
the carrying value may not be recoverable or at least annually. If an evaluation
of undiscounted cash flows indicates impairment, the asset is written down to
its estimated fair value which is based on discounted cash flows. We did not
recognize any impairment charges for goodwill in the years ended December 31,
2003 and 2002.

Deferred income taxes

Through December 31, 2003 we incurred significant net operating losses for
income tax purposes of December 31, 2003 we had net operating loss carry
forwards available of approximately $19 million. As a result of ownership
changes which occurred in June 2002, our operating tax loss carry forwards are
subject to certain limitations.

In addition, tax laws require items to be included in our tax return at
different times than those items are reflected in our financial statements some
of these differences are permanent and some differences reverse over time. These
timing differences, as well as the net operating loss carry forwards, create
deferred tax assets and liabilities. Deferred tax assets generally represent
items that can be used as a tax deduction in our tax return in future years. We
establish valuation allowances for our deferred tax assets when we believe
expected future taxable income to offset those deductions is not likely. Based
on our historical earnings history, we have established a 100% valuation
allowance fot' our net deferred tax assets.

Stock based compensation

Historically we have used stock options and warrants as a method of compensating
employees, contractors and creditors for services provided We account for
options and wanants granted to non employees at fair value. We account for
options granted to employees using the intrinsic value method. The intrinsic
method measures the value of the option as the difference between the exercise
price of the option and our stock price on the date of grant. Usually we do not
recognize any compensation expense in connection with employee options as the
exercise price is generally equal to the stock price on the date of grant. Under
the fair value method we measure the option or warrant at the date of grant
using the Black-Scholes valuation model The model estimates the expected value
of the option or warrant based on a number of assumptions, such as interest
rates, our stoc price, the expected life of the option or warrant and dividend
yield.

POSSIBLE IMPACT OF CERTAIN EVENTS UPON RESULTS OF OPERATIONS AND LIQUIDITY

Recent Federal Trade Commission Proceeding

On October 30, 2003, the Federal Trade Commission instituted an injunction
action in federal district court against us and certain of our subsidiaries. The
action ought to enjoin alleged failures by certain of our ISP subsidiaries to
comply with regulations relating to the conversion of a trial customer to a
paying customer. In connection with the action the Commission obtained an ex
parte temporary restraining order, a freeze on our assets, and the appointment
of a temporary receiver. This ex-parte order prevented us from marketing and
billing our ISP services and deprived us of substantial assets. We therefore
experienced significant business disruption, incurred substantial expenses and
experienced a reduction of our working capital. While we believed we complied
with the law and the proceeding was unwarranted, on November 21, 2003 we entered
into a stipulated preliminary injunction, without any admission or finding of
wrongdoing. As a result, we were able to resume business subject to procedures
set forth in the stipulation (substantially all of which we had already
followed) and the oversight of a monitor. The receiver was terminated and
replaced by a monitor and the asset freeze was lifted except that a portion of
our assets are held in escrow against future customer refunds. Most of this
amount has been returned. In February 2003 we received over $750,000 of the
escrow money and contemplated the lifting of restriction on over $400,000
relating to our foreign subsidiary. It is impossible, at this time, to determine
the full impact of this action. The proceeding has caused a reduction of our
revenue and income in the fourth quarter of 2003 and first quarter of 2004 and
resulted in substantial legal expenses. The asset freeze and escrow resulted in
working capital problems and delayed the timetable for implementing our new
business direction and compelled us to initiate cost cutting measures. We are
presently negotiating the terms of a final permanent injunction. We cannot
predict the terms of the final order or when ithe terms will be finalized.

Other actions taken during 2003

During 2003, (1) we terminated several telemarketing centers for failure to
adhere to our rules to assure compliance with law, (2) a billing house and a
local exchange carrier or LEC terminated their arrangements with us and (3) two
states have issued temporary restraining orders against us. The latter were
limited in scope. As a result of the termination of the call centers our
marketing activities were temporarily reduced, although, prior to the FTC
proceedings they had resumed to former levels. Had we not reduced marketing
activities our revenue growth may have been greater. We believe that none of
these actions affect our ability to generate sales in the immediate future.
Nevertheless losing a LEC , limits the areas we can obtain customers for our ISP
services.

New Business Direction

As part of our efforts to expand and change the direction of our business, we
have hired additional personnel for the management of new operations and to
obtain sales for new services. We also are incurring costs for acquiring and
upgrading contact centers, as well as professional fees and travel in
conjunction with the establishment of these contact centers. We have entered
into and will enter into new real estate and equipment leases for these expanded
operations. We are presently operating one call center in the Philippines. It is
contemplated that the operations of this center will be expanded and an
additional center under development will be opened in the Philippines the second
quarter of 2004 with the hiring of a substantial number of employees. We
estimate that we will have additional expenses for the development of these
contact centers. Our general and administrative expenses should increase
substantially once these operations commence. Moreover as we transition to our
new business we will continue to operate our ISP business. We will devote less
resources to this business. Which may result in a reduction in revenue from the
ISP business which may not be immediately replaced by revenues from our new
business Therefore if we do not have substantial revenues generated by new
contact centers, we may incur losses.

COMPARISON OF FISCAL YEAR 2003 TO FISCAL YEAR 2002

General

Set forth below are comparisons of financial results for the prior two fiscal
years. These comparisons are intended to aid in the discussion that follows.
This discussion and analysis should be read in conjunction with the financial
statements and related notes contained elsewhere in this report.

- ------------------------------------------------------------------------------------------------------------------------
2003 2002 (Restated) Changes % of Changes
- ------------------------------------------------------------------------------------------------------------------------

Item
- ------------------------------------------------------------------------------------------------------------------------
Revenue.............................................. 37,121,277 26,250,851 10,870,426 41.4
- ------------------------------------------------------------------------------------------------------------------------
Cost of Sales........................................ 17,442,248 17,781,967 (339,719) (1.9)
- ------------------------------------------------------------------------------------------------------------------------
Gross Profit......................................... 19,679,029 8,468,884 11,210,145 132.4
- ------------------------------------------------------------------------------------------------------------------------
Expense (exclusive of Depreciation).................. 14,869,142 10,223,529 4,645,613 45.4
- ------------------------------------------------------------------------------------------------------------------------
Depreciation......................................... 214,299 98,557 115,742 117.2
- ------------------------------------------------------------------------------------------------------------------------
Interest Expense..................................... 542,280 497,702 44,578 9.0
- ------------------------------------------------------------------------------------------------------------------------
Loss on extinguishment of Debit obligation........... 9,550,700 (9,550,700) (100.00)
- ------------------------------------------------------------------------------------------------------------------------
Net Income (Loss).................................... 4,379,160 (11,944,922) 16,334,082
- ------------------------------------------------------------------------------------------------------------------------
Cash, Accounts Receivable & Prepaid Expense, etc..... 7,867,041 4,739,186 3,127,855 66.0
- ------------------------------------------------------------------------------------------------------------------------
Property & Equipment (Net of Depreciation)........... 1,263,844 406,971 856,873 210.6
- ------------------------------------------------------------------------------------------------------------------------

Our revenues increased from $26,250,851 in 2002 to $ 37,121,277 in 2003. There
is generally a correlation between the marketing of our ISP services and future
revenues (after the trial period) for customers obtained during the marketing
effort. While our telemarketing efforts for the latter part of 2003 were reduced
(particularly after the FTC proceeding) we nevertheless increased our revenue.
This was because we had significant marketing campaigns in the latter part of
2002 and early 2003. In addition our customer base had grown substantially so
that high level of revenues were retained for a portion of the year even when
our market efforts were diminished. Our revenue grew even though we could we
could not bill our ISP customers for a portion of the year.

Our cost of sales include: (1) the direct costs of acquiring a new customer as
telemarketing and fulfillment costs and (2) the costs of maintaining our
customer base including customer care costs and telecommunication costs for our
internet provider services. The telemarketing and fulfillment costs are one time
charges incurred when a customer signs up and represent the most significant
component of cost of sales. Conversely, the costs of maintaining our customer
base represent a much smaller component of cost of sales. Our costs of sales in
2003 were approximately $340,000 lower than costs for 2002 despite an increase
in revenues. During 2003 we had significant decrease in telemarketing expenses.
This decrease resulted from reduced costs from using lower cost offshore
facilities, a decline in telemarketing efforts due to our emphasis on our new
business directions as well as the effects of the FTC proceedings. The cost of
sales of 2002 also reflects high telemarketing costs resulting from increased
ISP market efforts in the third quarter of 2002.

Our gross profit was of $19,679,029 in 2003 compared to $8,468,884 in 2002. The
increase in gross profit resulted from higher sales accompanied by reductions in
costs.

Total expense (exclusive of depreciation) increased from $10,223,529 in 2002 to
$14,869,142 in 2003. Included in these expenses is an increase of 3,768,718 in
selling, general and administrative expenses. This increase was the result of
the increased professional fees incurred in connection with our defense of the
FTC Proceeding and increased expenses incurred with our new business consisting
of increased salary, travel and professional fees. Fees paid to a related party
increased by approximately $2,730,000. This was in part a result of increased
payments under the payment agreement with these prices because of increased
revenues of the ISP subsidiaries. The increase includes $1,050,0000 for
subcontract services primarily for our new business which was not incurred in
2002.

As a result of the foregoing we had income from operations of $4,595,588 in 2003
compared to a loss of ($1,853,202) in 2002.

In 2002, we had a loss on debt extinguishment of $9,550,700. We also had a
slight increase in interest in 2003 which was more than offset by a gain of
$324,966 on a settlement of debt in connection with the reorganization of Savon.

We did not have any tax expenses in 2003 because of the use of net operating
loss carry forward.

As a result of all of the foregoing, we had income of $4,379,160 for 2003
compared to a loss of $11,944,922 in 2002.

LIQUIDITY

We had working capital of approximately $2,954,188 as of December 31, 2003
compared to a working capital deficit on December 31, 2002 of approximately
$3,600,000. We had negative cash flow from operations in 2003 but had positive
cash flow as a result of financings.

Historical Cause of Prior Liquidity Issues of ISP Business

Our liquidity problems in 2001 and early 2002 have arisen because there was a
gap between collection of revenue and the payment of expenses. This resulted
primarily because of the method of collection through local telephone companies
that receive billing information from third party billing companies. There was a
lag of as much as ninety (90) days between the time services to our customers
are initiated and when we received the related revenue. One additional reason
for this long initial collection cycle was the one month free service provided
to the customer. While a lag existed in receipt of funds and the date services
commence, there was no corresponding lag in our payables, including
telemarketing fees, communications costs and other costs of obtaining and
maintaining these customers. Telemarketing fees were due shortly after a
customer was signed. In addition, the liquidity issue was partly exacerbated by
uncollectible receivables, which . If we had a higher collection rate, we would
have had more cash available. The size of the initial customer base was not
sufficient to overcome the foregoing and therefore we had a substantial negative
cash flow from this operation.

As a result of the impact of the FTC Proceeding and expenses paid in connection
with our new business,we did not have a positive cash flow from operations as of
December 31, 2003. The growth of our customer base, increased revenue as well as
steps we have taken to enhance cash flow substantially reduced the negative cash
flow from our ISP business. Our telemarketing fees were billed monthly and were
due 30 days from date of billing. National Online and other similar subsidiaries
have taken additional steps to increase their cash flow including receipt of
most receivables within sixty (60) days and receipt of advances prior to payment
of receivables from billing companies and factors of a portion of the amount of
the receivable.

Immediate Liquidity Issues

Prior to the FTC Proceeding, we believed we would be able to continue to meet
our obligations arising from our existing business through cash flow from
operations. As a result of the proceeding we were deprived of substantial cash
because of the asset freeze and escrow and incurred substantial expenses and
interruption of revenue and billing. As consequence we were unable to pay all
our then expenses in the normal course. We therefore were compelled to take
several measures including the reduction of personnel, temporary reduction of
executive salaries and postponement of most activity relating to our new
business initiative. Notwithstanding modifications of the temporary restraining
order through the stipulated preliminary injunction, resumption of marketing and
billing, and release of substantial amount of escrow funds, we believe our
operational liquidity problems may continue for a period of time

Even if we did not experience liquidity issues relating to the FTC Proceeding we
would still have issues resulting from the requirements of our new business
direction. Due to the increased capital costs and operating expenses to fulfill
our new business plan in rapid time frame, we require, and will continue to
require for the foreseeable future, cash in excess of that which is generated
from operations. While we have determined to proceed with our plan irrespective
of financing, we will only be able to do so, on an accelerated basis with
additional financing. The foregoing problem was compounded by the FTC which
among other things resulted in delays in pursuing then proposed financing
arrangements for this business. The reduction in revenues from our ISP business
and the escrow and asset freeze reduced cash availability which could have been
used to fund a portion of this initiative. We recently received additional
financing Which we believe satisifies our immediate working capital needs and
provides for the initial development of our Philippine contact centers.

COMPARISON OF CASH FLOW OF 2003 WITH 2002

Our cash and cash equivalent in 2003 were $1,342,186 compared to $722,674 for
2002. This increased arose from financing activities which resulted in positive
cash flow of $2,576,279 compared to $272,983 on December 31, 2002. This increase
arose from our preferred stock financing and convertible note financing
resulting in gross proceeds of $2,351,000 and $500,000 respectively. This was
offset by negative cash flow from investing activities and operating activities.

The negative cash flow from investing activities in 2003 arose primarily from
the purchase of $1,058,814 of equipment and property for our new business.

Our operating activities had negative cash flow of $473,464 compared to positive
cash flow of $679,870 for 2002. The decreased resulted primarily from the
effects of the FTC proceeding, which resulted in significant revenue loss, and
expenditures for our new business.

Capital Transactions

As of October 31, 2001 we entered into a Security Agreement and issued a
promissory note to Brookfield Investment Ltd. in the amount of $2,474,000 to
cover the prior advances made by Brookfield The note was to be increased to
reflect any future advances Which ultimately were never made. The note is
payable by us on demand and the principal amount (exclusive of interest accrued
prior to the date of the note) accrues interest at a rate of 7% per year. The
Security Agreement granted Brookfield a security interest in our accounts
receivable as well as those of all our subsidiaries.

The parties agreed in principle on November 2, 2002, to modify the Brookfield
Agreement and related note obligations to defer demand for payment (except on
non payment defaults) until January 2005. Brookfield also agreed to subordinate
its security interest to financing lenders. We agreed to pay accrued interest on
the note by July 2003 and issued Brookfield a warrant to purchase 4,000,000
shares of our common stock at an exercise price of $.50 per share. In 2003
Brookfield also surrendered its entire security interest so that the note is
presently unsecured.

On April 16, 2003 National Online Services, Inc. entered into a factoring and
security agreement with Thermo Credit, LLC. The stated amount to be factored of
National Online Services, Inc.'s billing through Payment One (one of our billing
companies) is a maximum of $2,000,000 in receivables. At a 50% advance rate we
can receive up to $1,000,000 of which there is an initial discount fee of 1.25%
of the purchased receivable. For receivables uncollected after 30 days there
will be a charge of 0.625% for every 15 day period up to 90 days. Thereafter for
the next two 15 day periods there will be a charge of 0.75%. The balance owed to
the factor at June 30, 2003 was $496,283. One of our billing agents also
advances a portion of the amount billed on a factoring basis.

In a June 2003 private placement, we sold 23,510 shares of our convertible
preferred stock for an aggregate gross consideration of $2,351,000. For each
share sold, the purchasers received five year warrants to purchase fourteen
shares of our common stock of a total of an exercise price of $7.00 per share
(which has since been reduced to $5.11 pursuant to the terms of the Warrant).
The preferred shares are convertible at an initial conversion price of $3.50
which has been reduced to $2.00 for at least one year pursuant to performance
standards. The price is subject to further anitdilution provisions.

In July 2003, we extinguished over $400,000 of indebtedness consisting of
principal and interest of two notes due unaffiliated telemarketing contractors
in exchange for 127,117 shares of our common stock.

In December 2003, we received $500,000 from a small group of primarily
institutional lenders. We issued to the lenders seven percent one year secured
notes convertible into shares of our Common Stock at $4.00 per share. We also
issued to the lenders five year warrants to purchase 62,500 shares of our common
stock at an exercise price of $5.00 per share. Both the notes and warrants are
subject to antidilution provisions, including price dilution. The lenders have
received a security interest but subject to certain conditions it is second to
existing and future security interests. We have the right to compel conversion
or exercise a portion of the notes and warrants depending upon market condition
and other factors.

We have received additional financing of $7,5000,000 of which approximately
$2,000,000 is restricted and not available until the fulfillment of certain
conditions. Of the amount raised $2,5000,000 was obtained in two related private
sofferings through a placement agent. We issued our convertible 8% notes in both
offerings.Notes for $1,0000,000, the Bridge Notes, are due in April 2005.The
balance of these notes were issued on an interim basis in contemplation of
further financing. and are to be payable or converted in May 2004. Warrants were
or are to be issued to the purchasers and the placement agent. A single investor
purchased a three year convertible secured note in the principal amount of
$5,000,000 including amounts due on the restricte amount.This investor also
received warrants. As result of this investment the Bridge notes are secured.

Seasonality

Generally, our operations are not subject to seasonal factors. However, in
December 2002, we reduced our telemarketing activities because we believed
potential customers would be preoccupied with holiday activities. For the same
reason we did not resume our marketing efforts in late 2003 after we entered
into the stipulated preliminary injunction in the FTC proceeding.

BUSINESS

INTRODUCTION

Our History

We were organized as a Florida corporation in June 1994 under the name Pasta
Bella, Inc. In 1997, we changed our name to Global Asset Holdings, Inc. We
adopted our current name, Epixtar Corp., in 2002.

We had no business until November 14, 2000, when we acquired an 80% membership
interest in SavOnCalling.com, LLC. Savon was engaged in the marketing and resale
of domestic and international telecommunications services. It is no longer in
business and in 2003 completed a reorganization under the federal bankruptcy
law.

On March 31, 2001, we acquired all of the outstanding shares of National Online
Services, Inc. At the time, National Online was developing a plan to market
internet provider services to small businesses through telemarketers. National
Online is the developer of the web portal, TrueYellowPages.net. It commenced
operations in the middle of 2001. Since that time, through National Online
Services and other subsidiaries, we have been engaged in marketing internet
provider services for small businesses utilizing independent call centers or
contact centers predominantly located overseas.

Since July 2001, substantially all our revenue has been derived from internet
provider services. We offer these services through several subsidiaries each
providing basic internet services coupled with additional services. We also
derive a small amount of revenue by providing international direct dial services
through pay phones and from other similar products. We have determined to
transition to a new business, this business consisting of providing outsourcing
services to corporate clients from call centers acquired or developed by us.

Structure of Business Entities

We are in the process of restructuring our primary businesses into two main
groups headed by two wholly-owned formed subsidiaries: NOL Group, which is to be
the parent company of our subsidiaries engaged for the most part in our ISP
business (as described more fully below) and Epixtar BPO Services, Inc. which is
the parent company of our subsidiaries engaged or to be engaged in operating
call centers or in providing outsourcing services.Epixtar Communications Corp.
and its subsidiaries derive a small amount of revenues from the sale of
communications products. One of our subsidiaries not owned by Epixtar BPO
Services, Inc. is performing services which may be characterized as new
business.

Set forth below are the names of our principal operating subsidiaries engaged in
revenue producing activity in 2003 with the dates of each entity's original
incorporation in Florida. All of these were engaged in the ISP business.

Corporation Date of Incorporation Business
- ----------- --------------------- --------

National Online Services, Inc. (1)......... February 22, 2001 Internet Provider Services
Liberty Online Services, Inc. (1).......... December 12, 2001 Internet Provider Services
Ameripages, Inc. (1)....................... February 13, 2002 Internet Provider Services
B2B Advantage, Inc. (1).................... October 31, 2002 Internet Provider Services

- ------------
(1) Each of these corporations is now a Delaware corporation.

NEW BUSINESS DIRECTION

We have now determined to place our resources and energies in developing our new
business rather than expanding our ISP business. Through experience gained while
operating our ISP business we believe we have developed a workable model for the
marketing of products and services We have also developed expertise and
effectiveness in various aspects of our business including product development,
sales, fulfillment and support capabilities. During this period we have acquired
extensive telemarketing and contact center experience and developed relations
with overseas contact centers which we believed competed effectively with
domestic call centers. While we did not own contact centers, we in fact trained
the center's personnel, prepared the scripts and monitored the operations for
compliance with United States law and our policies.

Based upon our expertise, we have determined to transition our business to
provide telemarketing and direct response campaigns and other outsourcing
services for third parties. An integral part of our plan is to establish our own
international telemarketing call centers either through development, acquisition
or joint venture. We intend to take advantage of what we believe is a growing
trend for United States companies to outsource marketing and other services
overseas. We believe that ultimately this transition will require substantial
capital investment for the call centers, personnel and other infrastructure.

We have taken the following steps to implement our new business:

o hired additional executives and other personnel for the new operations

o established subsidiary corporations for this operation

o entered into preliminary arrangements to acquire call center assets in
India and have been operating a call center in the Philippines for
which we have entered into a definitive agreement to acquire.

o entered into leases for a twelve story building in the Manila area of
the Philippines to be developed as a contact center.

o acquired capital equipment and negotiated or entered into capital lease
agreements negotiated and entered into agreements for outsourcing
services

Through December 31, 2003 we have expended approximately $1,800,000 on the new
operation and estimate an additional expenditure of approximately $ 800,000 in
the first quarter of 2004.

During the first quarter of 2004 we entered into arrangements to acquire assets
for our Alabang Philippines facility for which we completed in April 2004
obligated to issue 65,034 shares of our common stock having a market value of
approximately $450,000 and paid over $350,000. in cash .

We have decided to delay our entry into the Indian market and emphasize the
advantages of the Philippines as an outsourcing destination. For the immediate
future we will concentrate our efforts in the Philippines and not have any
operation in India. As a result we did not pursue the preliminary arrangements
we had entered into to acquire assets in India.

We currently have approximately 250 contact center seats (of which approximately
100 are in operation) at the facility in Alabang (a Manila suburb) which we have
been operating since September 2003. We have acquired the assets at this
facility. In addition we have entered into leases for and are constructing a
contact center and regional headquarters in Eastwood City, Manila. Upon
completion, our Eastwood City flagship, a 12-story office building known as
Epixtar House, will have approximately 1,750 contact center seats.

Subject to availability of funds and other factors, we contemplate opening and
expanding our new Eastwood Philippines facility and expanding the Alabang
facility during the second and third quarters of 2004. During this period we
intend to open our Eastwood facility with up to 365 seats and hire of up to 400
sales representatives and also anticipate the build out of up to 650 additional
seats at Eastwood during this period. We also plan to expand the Alabang
Philippines facility during this period by operating up to an additional 150
seats and hiring up to 165 sales representatives. We also plan to hire up to an
additional 250 supervisory and staff personnel to support both facilities.
Additional capital equipment by purchase or lease in the Philippines and Miami
will be required for this expansion. We believe we will require approximately
$4,000,000 additional funds for this expansion in this period.

In May 2004, we also signed a letter of intent, subject to final approval, to
lease new office space for a new contact center located in the city of
Dumaguete, Philippines which is in the Visayan Island region of the country. The
developer,will build a three- story structure consisting of approximately 2,600
square meters (about 28,000 sq. ft.) in accordance with our specifications The
future call center site is anticipated to be ready for occupancy within 12
months. The new facility, once completed, will add an additional 400 contact
center seats.. There are currently 1,750 seats under development (with 350
completed thus far) at the Company's regional headquarters in Manila and another
600 (with 250 in operation) in Alabang, south of Manila, thus bringing to 2,750
the number of seats currently in development. Additional locations are also
being considered

For the balance of 2004 we intend to add additional seats and personnel for a
total of 2000 seats at these existing sites. We are also exploring obtaining
other locations for contact centers in the Philippines.

The above description represents our present plans and is subject to change
based upon the availability of financing, construction and/or equipment delivery
delays and other factors. The absence of funds, construction and equipment
delivery delays and other factors that could prevent us from fulfilling all our
plans as well as prolong the timetable.

We anticipate that each contact center will have the capability to operate two
shifts depending on availability of contracts. In addition, each contact center
will employ administration and supervisory staff.

We intend to provide services to third parties at the contact centers. Our
contact centers will have the capability for a variety of outsourcing purposes
in addition to using them to market our own products and services. Our services
which we may offer to that would include such things as designing, implementing
and managing a marketing campaign. Our contact centers would also be available
to handle various other outsourcing services for clients, including data
management, business processing and fulfillment services. We will attempt to
obtain agreements for these services.

Contact Center personnel would also be involved in business processing
outsourcing and fulfillment services, which would be performed during hours of
operation when calling to within the continental United States would not be
feasible. These services include:

o Data Entry

o Business Process Outsourcing
-- Transcription
-- Data Entry
-- Accounting

o Fulfillment Services
-- Provisioning
-- Direct mail
-- Call back
-- Email

In 2003 we entered into an agreement with a national telecommunications company
pursuant to which we became an authorized sales representative to market one of
the client's long distance services. We basically are engaged to handle
soliciting orders and contracts, completing order and registration forms,
transmitting completed contracts, orders and credit information received by us
and assisting the client to resolve customer complaints.

We also were retained by a client pursuant to a master agreement to conduct
follow-up calls to its customers for the purpose of updating its database We
recently entered into a telemarketing arrangement with a distributor of
household and business chemicals. This new arrangement has commenced in April
2004. In addition to these agreements we are negotiating an agreement to perform
market services for a telemarketer under that telemarketers contract with a
telecommunications company. We are also negotiating to provide contact center
services to market a credit card in Asia for a client.

We believe there is an opportunity at this time to implement our plans for a
number of reasons. We believe there is a trend by large corporations to
outsource many functions as transcription, fulfillment and other services listed
above. This is true of the use of telemarketing functions where we believe
internal operations of large companies are utilizing firms that can assume
responsibility for all facets of a telemarketing campaign.

Our offshore operations, particularly in the Philippines, have significant
advantages as follows:

o low cost and educated English-speaking personnel

o existing robust telecommunication infrastructures

o lower operating costs, including lower fixed costs such as more
economical lease payments

o historically lower personnel turnover rates, which in turn, lowers the
cost of training

o government incentives and programs

INTERNET SERVICE PROVIDER BUSINESS

Our internet provider services or ISP services are sold by several subsidiaries,
all of which market similar services including access to the internet through
dial up net works of third parties. Each subsidiary includes a different item of
additional value. For example, one of our subsidiaries, B2B Advantage Online is
an internet service provider that combines that ISP service with portal access
to a third party service which provides extensive accounting and legal
resources, including legal forms.

Our internet service provider subsidiaries market their services exclusively to
small business subscribers, much like America Online(R) markets membership
primarily to residential customers. It is estimated that a substantial number of
small businesses in the United States still do not have an online presence. We
believe our subsidiaries meet the needs of this class of small business by
providing nationwide unlimited Internet access and e-mail service; developing
unique branded and customized Web sites and hosting services; featuring the
business prominently in the online True Yellow Pages directory; registering the
member-business in several major search engines; and, delivering simple online
solutions for several areas of the member's business - all administered as one
service for one monthly fee. The monthly fee covers the internet provider
services, yellow page listing and software and other valued-added services or
products. The fee is billed to the customer's telephone bill and remitted to us
by billing houses. Each of the LECs and billing houses charge us a fee for
billing and collection.

Sales Cycle

We acquire customers for our ISP services by direct contact through
telemarketing. The value of our product or service is described through a sales
script prepared by us that is presented by the agents of the call centers. Until
recently this telemarketing effort was outsourced to independent contact
centers. Recently we began marketing the product through our own contact
centers.

We utilize a form of marketing called "free to pay" conversion. This entails
offering a free trial period for our services. If the customer does not cancel
by the end of the trial period the services will continue and customer will be
billed. This method of marketing is sanctioned by the Direct Marketing
Association and the Federal Trade Commission has published rules governing this
type of marketing.

To qualify for the free-trial offer, the customer provides advance consent for
billing should he or she choose to remain a customer after the free-trial period
ends. The authorization for billing is recorded for compliance with federal
rules and quality control purposes. A charge for the service or product is
submitted to the customer's phone company for billing and collection every month
thereafter on the anniversary of the conclusion of the free-trial period.

We devote significant effort to complying with regulations governing the free to
pay conversion program offered. It is essential that we obtain informed consent
from our customer. We also comply with state and now federal do not call lists,
which prohibit calls to persons on the list. The latter regulation only applies
to residential telephone numbers and not businesses. Since our customers are
businesses we do not believe the do-not-call rules will have a significant
effect on us as long as we make certain we only call businesses.

At the close of each business day, the call center sales data and verification
recordings are uploaded to our server and then reviewed as part of our quality
control, including review for compliance with law.

Upon completion of the quality control process, the sales data files are
processed. We automatically create customer websites in a variety of styles
utilizing the customer provided information. E-mail and dial-up accounts are
established upon acceptance.

A welcome kit is sent by mail. The kit is personalized for each customer and
sent with a CD-Rom providing internet access, instructions for e-mail and
website customization, and complete terms and conditions pertaining to the
customer's obligation to cancel should he or she elect not to continue the
service. We utilize contracted third party fulfillment houses to process the
mailings. The 30-day free trial of the service for each customer begins upon
receipt of their welcome kit.

The billing department processes each customer's charges monthly on the
anniversary date of the completion of his trial period. Charges are processed
through third-party clearinghouses or billing houses that possess the direct
contracts with the local phone companies or LEC's servicing our mutual
customers.

Telemarketers

Until recently we primarily used unrelated third party call centers to market
our services. The telemarketers we utilized were located in the Philippines, the
Caribbean, India and the United States. Our arrangement with the telemarketers
provided for the solicitation of customers in the United States solely with
leads provided by us using our approved sales procedures, including required
script and verification requests. The telemarketer is required to follow quality
assurance procedures which are described under "Regulatory and Compliance
Matters," Presently we utilize our own contact centers in the Philippines which
follow the same procedures as the third party telemarketers.

Some of the independent telemarketers were entitled to a fee when they obtain a
customer even if the customer canceled after the trial period. We can, however,
withhold payments from the telemarketer for customers improperly obtained and
may terminate the arrangement for material breaches of our marketing agreement
and have done so. During 2003, we retained $453,680 of payments. In the course
of review of verification recording files by an independent business process
outsource company based in Manila, Philippines, improprieties were discovered at
three of our call centers located in India. As a consequence, we suspended sales
activities at these centers. After investigation we implemented a series of
measures to prevent future problems. At the same time we suspended marketing of
our One Nation Calling Plan because this product was sold through these centers.

Third-Party Billing Companies

We utilize the services of independent third party billing houses. These
independent clearinghouses perform several significant functions on our behalf.
We submit our billing to one or more billing companies on a weekly basis. These
bills are screened to eliminate customers who are not served with a LEC that
accepts billing or otherwise does not qualify. The bills are then submitted to
the respective LEC, which in turn bills the customer. Collected funds are
typically remitted to us within 60 to 90 days. The billing agent may also have
contact with the customer when questions arise concerning the bill. Some billing
companies offer advance funding arrangements with the availability and extent of
funding differing greatly. These arranagements are generally in the nature of a
facoring arranagement. The billing house purchses the receivable due us giving
us a percentage of the amount. The balance less fees and charges are paid upon
collection. One of these billing companies has terminated their relationship
with us in early 2003. Our subsidiaries currently use three billing houses, ACI
Billing Services, Inc., eBillit, Inc. a.k.a Payment One and Enhanced Services
Billing, Inc.

Retention Campaign

We utilize various methods to retain customers during the free trial period and
continuing into their normal service life. It is far less costly to retain a
customer than to obtain a new one. Customer care representatives charged with
retention have a number of tools available to them, foremost of which is
adjusting the terms of membership to be more favorable to the customers. These
may include a more competitive price, providing a free calling card and/or free
software.

Customer Care

Our customer care has been outsourced to a call center in Manila. We are in the
process of transitioning this operation to the Alabang facility. Customers might
call customer care for a variety of reasons including technical questions about
the Internet access, e-mail configuration or website editing; service questions
such as what is their billing date or end of trial date; questions regarding
phone card usage; premium redemption requests; cancellations; or other issues
regarding the service or billing. We have full time trained customer care
specialists who are subject to continuing formal and informal training.

Each customer care specialist has real time computer access to relevant customer
data including direct access to a customer's website and account configuration
to provide technical assistance, a chronological history of events including
sale, fulfillment, billing and inquiries. Calls arrive at the center either
directly from calling customers or are transferred from the relevant billing
companies whose 800 numbers generally appear on the customers' phone bill.

The customer care specialists are also engaged in our retention policy and are
advised of regulatory issues and compliance matters.

Regulatory and Compliance Matters

We devote significant effort to complying with regulations governing the free to
pay conversion program offered. In order to maintain our ability to serve
customers and collect revenue, we have taken a proactive approach to resolving
regulatory complaints or inquiries. Our Customer Care department has initial
responsibility for inquiries and, if necessary, followed by consideration by our
compliance department. Most often, a resolution is achieved.

Most of the regulatory and compliance issues revolve around allegations of
unauthorized LEC billing arising from violations of the free to pay conversion
rules. State Public Service Commissions, State Attorney General Offices, and the
FTC attempt to prevent "cramming" or the addition of a specific charge or
charges to a customer's local telephone bill without the proper authorization.
We do not approve, or participate in, cramming. Our internal procedures reflect
an absolute prohibition and zero tolerance for cramming. Through our billing
agreements we have agreed to adhere to the highest disclosure standards. Our
compliance policy includes the requirement that the telemarketer, among other
things, uses an approved sales script and follows a prescribed verification
procedure. We record each customer authorization and store the digital file for
retrieval if needed to show compliance with the law.

We believe we have taken extraordinary steps to ensure that we do not violate
regulations relating to cramming. First we seek to avoid all sales in situations
that a prospective customer may not realize a charge will be placed on the
customer's phone bill after the trial period. Whether we are selling direct or
through independent telemarketers, we do so by:

o Making certain that the required script provided by us is adhered to by
spot checks by personnel at the site and by our ability to monitor
calls directly from our headquarters.

o Making certain that the verification process has been adhered to by
reviewing all verification recording by our personnel and by
independent third parties.

o Rejecting any orders where we are not satisfied that our procedures
have been adhered to.

o Reminding the customers by mail prior to the end of the trial period
that the customer has the right to cancel.

Sales not properly authorized are rejected. For sales that are properly
authorized we then take steps to make certain that the customer during the free
trial period is aware that they will be billed at the end of the free period. We
do this by including a warning in our welcome package. This is followed by an
e-mail and a pre-billing notice to the customer with the same information sent
ten days prior to the billing date.

In 2003, inquiries were made based upon alleged violations of state restrictions
on calling residences, popularly known as "do not call" lists. Our target market
for the ISP business has been solely businesses. These "do not call"
restrictions do not apply to business telephone numbers. These complaints mainly
have originated from individuals conducting their businesses at home who had
improperly placed their numbers on these lists. We have procedures in place to
suppress non-business phone numbers.

Despite our substantial compliance efforts we have received numerous complaints
from governmental agencies and the Better Business Bureau. While complaints may
be received informally, we are subject to formal regulatory inquires as well as
formal proceedings in several states. In two states, we have negotiated
settlements, which resulted in total payments for costs of less than $10,000 and
a requested script change. While we believe our script is fully compliant with
all regulations and not misleading we have agreed to the change as part of an
ongoing policy of complying with all regulators, including those of state
consumer protection agencies. See Item 3 Legal Proceedings for information
concerning current material legal procedings ,including the FTC proceeding, and
investigations against us. In addition to these proceedings customer complaints
have resulted in the termination of arrangements with a billing house and a LEC.
We do not believe these terminations have had a substantial impact on current
revenues but future complaints may lead to further terminations. We therefore
have increased our compliance efforts as discussed above.

INTERNET TECHNOLOGY

Our ISP subsidiaries utilize the underlying dial-up network services of Qwest
and UUNet. Customers receive customizable web sites, dial-up Internet access and
up to six e-mail accounts. Our core customer network infrastructure is
maintained in colocation facilities equipped with redundant systems (located in
Florida with backup in Virginia). The web, e-mail, database and authentication
servers are comprised of Microsoft based systems. All management of the systems
of our present business takes place from offices in Florida.

The NOC or network operations center is also the central point of our technology
for our new business. It is the destination of all inbound calls, the
originating point to the domestic phone network for outbound calls and the point
of control for the CTI, or computer telephony integration. The NOC become the
hub for our technology enabling monitoring of activities, calls, and network
quality. The NOC is where the predictive dialer / ACD (automatic call
distribution) technology resides. When we develop multiple centers the NOC will
act as the hub for all global centers, enabling the operation of each center as
part of a global virtual center. Such a virtual center allows for more efficient
capacity management by directing spikes in utilization to any center connected
on the network that has excess capacity. Calls are transmitted to and from the
centers and agents via VOIP (voice over internet protocol) on leased broadband
telecommunications lines to each center.

The agent at each contact center location will be utilizing a personal computer
and either an IP enabled phone, an analog or traditional phone or communicate
directly through the PC enabled as an IP phone, depending upon the specific
technology implemented in each case.

OTHER ACTIVITY

During 2002, we introduced Financial Freedom and One Nation Calling Plan.

Financial Freedom, a product introduced in 2002, was the result of a partnership
between us and the Financial Freedom Foundation, to create a credit awareness
and improvement product billed through bank account debits. We terminated the
program during the fourth quarter of 2002 because of changes made to software
relating to bank account debits.

During 2002, we also introduced a long distance product, the One Nation Calling
Plan, in what we believed was a competitive product targeted at small businesses
for long distance, travel card, and toll-free access. Because of problems with
call centers marketing this product and the need to reallocate expenses, we have
suspended marketing of this product since February 2003, although we still
service a small number of customers We have determined to cease this business
entirely as part of our descicion to withdraw from our communicatios business in
general.

Our subsidiary One World Public Communications Corp. provides international
direct dial service for coin telephones. Revenues from this service have been
minimal. We believe this business has potential but we have devoted our
resources to our other operations. In October 2003, we commenced the marketing
of prepaid phone cards which has not resulted in significant revenue.

EMPLOYEES

As of February 29, 2004, we had 234 employees. Of that number nine employees
were engaged in engineering and computer systems; (10) in marketing and sales;
31 in administration and finance, including our officers, eight in customer
services, and 176 were overseas employees. The number of our employees will be
substantially increased as we open and expand additional contact centers.

COMPETITION

Our internet provider service subsidiaries face competition from other larger
and more established providers such as AOL(R) and Earthlink(TM). The contact
centers we intend to establish will face competition from other established
firms such as e-Telecare, Ambergris, Contact World, and Global Stride. In each
case, many of the competitors are well established, have reputations for success
in the development and sale of services and products and have significantly
greater financial, marketing, distribution, personnel, and other resources than
us. These resources permit these companies to implement extensive advertising
and promotional campaigns, both generally and in response to efforts by
additional competitors to enter into new markets and introduce new services and
products. Competition relating to our new business will consist of pricing and
quality of service.

PROPERTY

Our office facilities consist of approximately 9,770 square feet of office space
in total located in separate suites at 11900 Biscayne Blvd., Miami, Florida,
33181.In 2003 we executed an agreement to enter into a new lease at our present
location replacing existing arrangements, eliminating some existing space and
obtaining larger substitute space. Pursuant to this arrangement we are to lease
a total of approximately 16,800 square feet. The lease is for five years at
annual rentals ranging from approximately $328,000 to approximately $380,000 in
the final year. Because construction of the substitute space was not completed,
the rent until completion has been adjusted to reflect our continued occupancy
of a lesser amount of space.

We have executed a seven year lease with a build-out provision for a facility
consisting of eleven floors to house our Manila Call Center, which is under
development. The facility consists of approximately 94,100 square feet for
operations and another 41,980 square feet for parking space. The rent on this
lease is paid quarterly and commences in July, 2004. With value-added tax and
other taxes, the rent (for parking and office space) is approximately $53,580 in
the first year increasing to $76,840 in the final year. Pursuant to such a lease
with a separate landlord we are leasing an additional floor at this building.
The foregoing amounts are based upon current currency exchange rates.

In connection with the contemplated acquisition of call center assets in
Alabang, Philippines, we anticipate receiving an assignment of a lease for the
facility where the acquired assets are located. The lease to be assigned to us
expires in 2006. The premises consist of two floors for a total of approximately
14,000 square feet. Base rent is presently $ 8,250 monthly which increases in
increments to $ 9,100 in 12 months. We are also obligated to pay value added
taxes and increases in real property taxes and other charges. The foregoing
amounts are based on a currency exchange rate of 56 Philippine Pesos to 1 US
Dollar.

We also lease residences in the Manila area for personnel.

Our technology for both the ISP operations and our new call centers is based in
a network operations center located in a Miami collocation facility where the
equipment of numerous other voice and data carriers are also located. We occupy
a 200 square foot "cage" at 100 North Biscayne Boulevard, Miami Florida pursuant
to a Building Access License Agreement expiring in 2006 at an annual rent of $
48,000.

We may enter into additional leases as we find new locations to acquire or
develop contact centers.

LEGAL PROCEEDINGS

Government Actions

On October 30, 2003 we and our subsidiaries, and an officer, William Rhodes,
were sued and served with an ex parte temporary restraining order, asset freeze,
order permitting expedited discovery, order appointing temporary receiver, and
an order to show cause in an action commenced by the Federal Trade Commission in
the United States District Court for the Southern District of New York. The
order covers each of these entities, as well as their parents, subsidiaries, and
affiliates. The proceeding arises out of alleged failures of our subsidiaries to
comply with regulations relating to the conversion of a trial customer to a
paying customer. We vigorously deny any wrongdoing and believe that our business
practices are in compliance with all applicable laws. As of November 19th, 2003
without any finding of wrongdoing, we agreed in principle to enter into a
preliminary injunction with the Federal Trade Commission. As a result we were
able to resume our ISP business subject to the oversight of a monitor. The asset
freeze was lifted except that a portion of our assets was held in escrow against
customer refunds. An additional amount held by certain subsidiaries was subject
to further resolution, which may result in all, or a portion of such funds being
returned to us. We and the FTC are negotiating further resolution of the
above-described dispute. As a result of the above action, we experienced
substantial business disruption, incurred significant expense and reduction of
our working capital. It is impossible at this time to determine the full impact
of the proceeding. We are presently negotiating the terms of a final permanent
injunction We cannot predict the terms of the final order or when ithe terms
will be finalized.

On January 17, 2003, the Attorney General of Missouri filed an application for a
temporary restraining order and preliminary injunction against certain of our
subsidiaries alleging "cramming." We entered into a negotiated consent to the
entry of the temporary restraining order and preliminary injunction because the
consent action did not hinder the way our subsidiaries conduct their business
and we do not condone cramming in any event. We have filed an answer to the
request for a permanent injunction that vigorously denies any wrongdoing and
that the allegations against us are without any basis in fact and without merit.

On May 22, 2003, the Attorney General of North Carolina filed a complaint
alleging "cramming" against certain of our subsidiaries, as well as a motion for
temporary restraining order and preliminary injunction. As in the case with the
Missouri action and for the same reasons, we entered into a negotiated consent
to the entry of a temporary restraining order and preliminary injunction.

Private Action

On January 30, 2004 Dixon Aviation, Inc. commanded an action in the Circuit
Court of Alabama for Barbour County against us, an officer, NOL, Liberty, a
billing house and a LEC. This litigation was brought as a class action complaint
for declaratory and injunctive relief, alleging that the Defendants engaged in
cramming. We deny all liability and believe we have valid defenses to these
claims (including recorded verifications). A motion has been made to remove the
action to federal court and in addition we will move to dismiss the class action
aspects of the claim. Pursuant to our arrangement with the LEC and billing house
defendent we are obligated to indemnify the LEC and billing company defendants.

Government Investigations

From time to time, we also have received investigative process from various
other states. The Attorney Generals of Florida, Texas, Minnesota and Kansas have
issued process requesting certain information and documentary material
concerning the operations of our ISP subsidiaries. The subsidiaries involved are
responding in the appropriate manner and providing the information and
documentation as required.

In July, 2003, we received a subpoena from the Attorney General of Pennsylvania.
This subpoena requested information and documentation relating to certain
alleged business practices of our subsidiaries relating to "do not call
regulations." We believed our response demonstrated compliance with the rule and
that the matter is considered closed.

Bankruptcy of Subsidiary

In August 2002, our subsidiary, Savon, filed a petition under Chapter 11 under
the United States Bankruptcy code in United States Bankruptcy Court for the
Southern District of Florida. Savon was a defendant in a lawsuit brought by
Global Crossing Bandwidth, Inc., a wholesale telecommunications carrier that had
an agreement to provide service to Savon. Global Crossing alleged $21,000,000
damages for breach of contract in its complaint, filed in the United States
District Court for the Eastern District of Michigan.

SavOn had asserted counterclaims against Global Crossing for breach of the
agreement and tortuous interference with customers. In conjunction with Global
Crossing's pending Chapter 11 proceeding, our counterclaim was stayed. We
therefore could not obtain a judgment against Global Crossing and at the same
time we would incur substantial defense costs. SavOn therefore filed for
protection under the bankruptcy code. In connection with the proceeding, we
advanced $65,000 to SavOn to settle a claim in connection with alleged
distribution of Savon's assets for our benefit. The Plan of Reorganization has
been confirmed by the Bankruptcy Court.

0FFICERS AND DIRECTORS

Set forth below is information concerning our directors and executive officers:

Name Age Position
- ---- --- --------
Martin Miller 64 Chairman of the Board, Director

David Srour 42 President, Chief Executive Officer, Director

Norman DePalantino 52 Chief Operating Officer

Irving Greenman 68 Chief Financial Officer, Director

Gerald Dunne 42 Executive Vice President

Deborah Gambone 52 Vice President, Corporate Counsel and Secretary

Ricardo Sablon 43 Vice President - Chief Technology Officer

Harry Fozzard 37 Vice President-Marketing

Sneharthi Roy 39 Vice President-Call Center Operations

William D. Rhodes 56 President National Online, director and officer
and director of other subsidiaries

David Berman 58 Director

John W. Cooney 68 Director

Kenneth Elan 50 Director

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

Martin Miller has been our Chairman of the Board and Chief Executive Officer
since October 2002. Mr. Miller has also been a private investor for the last
twenty-five years and served on various boards of directors of both public and
private companies. During this period he also acted as a United States manager
of corporate finance for a foreign investment group. He was also our chief
executive officer from 1997 to 2000 when we had no operations.

David Srour has served as our President since June, 2003. He previously served
as our Vice President and Chief Operating Officer from November 2001 through to
June 2003. Prior to joining us, Mr. Srour was Senior Director of Information
Service of Carr America Realty, a former client of his at KPMG Consulting in
McLean, Virginia, where he was a Senior Manager from 2000 to 2001. At KPMG, Mr.
Srour specialized in eCommerce, project management and process improvement
consulting services. Beginning in 1997, he spent four years at Ernst and Young
LLP, providing information systems and process improvement consulting services
including back office and eCommerce implementations for such clients as General
Motors, Lehman Brothers and Simon Property Group. Mr. Srour also has significant
telecommunications experience, including roles as COO of Interactive Telecard
Services, Inc. and SmarTel Communications.

Norman DePalantino was appointed our chief operating officer on April 16 2004.
Previously from March 2001 he was President of ePerformance Consulting a call
Center and Management consulting company that serviced all facets of the direct
response market. From January 2000 to March 2001 he served as vice president of
operations at Priceline.com where he managed the productivity of three
outsourced call centers. Prior to that from March 1998 to January 2000 he was
Vice President for operations and support at Home Shopping Network, an operating
business of IAC/InterActiveCorp where he managed HSN's inbound and outbound
sales services and back office processes for Ticketmaster, Espanol Network, MCI,
First USA Visa, GE Capital as well as HSN's core television, Internet and
catalogue sales initiatives. Mr DePalantino has been engaged in the building of
call center operational infrastructures in Hong Kong, Shanghai and Tokyo. He
retired in 1992 from the U.S. Air Force after 23 years. He was Director of Sales
for Air Force recruiting. Mr. DePalantino has a B.S. in marketing from Regents
College of the University of the State of New York and an M.A. in organizational
management from the University of Phoenix.

Irving Greenman has, since June 2000, served in various executive positions for
us, including our Chief Financial Officer and Chief Executive Officer. From 1998
through 1999, he was Chief Financial Officer for Kaleidoscope Media Group, Inc.
(an entertainment company). Prior to this, he was the Chief Financial Officer
for Medica Media and Healthcare International. Both of which were engaged in the
healthcare industry. Mr. Greenman is a Certified Public Accountant licensed in
New York and in Florida.

William D. Rhodes served as our President from January 2002 through June 2003
and is now President of the group comprised of our ISP subsidiaries. In February
2001, Mr. Rhodes was also the founding President of National Online Services,
Inc. (presently our subsidiary establishing corporate infrastructure for this
new Internet service provider of "B-to-B", he remains the current President of
National Online and has been employed by us since the acquisition of National
Online Services, Inc. in March 2001. Mr. Rhodes performed consulting services
for us from September 2000 until February 2001. Prior to this, from February
1999 through July 2000, Mr. Rhodes served as Chief Operating Officer of Equalnet
Communications Corp. in Houston, Texas with responsibility for all company
operations including customer care, billing, provisioning and networks. From
1996 until 1999, Mr. Rhodes served as President and Chief Operating Officer of
Valu-Line Communications in Longview, Texas. Mr. Rhodes has an MSEE and BSEE
from the University of Missouri at Columbia and has been involved in
state-of-the-art electronics, navigation and communication projects throughout
his career including 20 years with Rockwell International.

Ricardo Sablon is our telephony engineer and vice president and has been
employed by us since 2001. Mr. Sablon was previously vice president and chief
telephony engineer for Equalnet Communications Corp. of Houston, Texas from 1998
to 2000. From 1994 through 2001, Mr. Sablon was the President of Dominator
Technologies, Inc. of Miami, Florida which did telecommunications consulting.
Mr. Sablon was also a founder of FreeCaller Communications, a patented
advertiser-sponsored long distance service. From 1990 to 1993, Mr. Sablon was
the chief executive of Telecaribe Communications, Inc., a company that provided
the first post-embargo commercial direct-dial service to Cuba from the United
States.

Gerald M. Dunne, Jr. has been our Executive Vice President in charge of Sales
and Marketing since 2000. He was formerly the Chairman and Chief Executive
Officer of Group Long Distance Inc., a NASDAQ traded long distance reseller from
1988 through 1999. Mr. Dunne led the company to over 200,000 residential and
small business subscribers before leaving to become Chief Executive of our
subsidiary, One World Public Communications Corp. Mr. Dunne also previously
worked in the Accounting Department of Union Carbide Corporation in Danbury,
Connecticut.

Harry Fozzard has been our Chief Marketing Officer since mid-2002 in various
executive positions. He joined us from LeanForward, Inc. of Houston, Texas where
he was Chief Executive Officer from 2001 to 2002. From 2000 to 2001 he was Vice
President of the eBusiness Group of HTE8 of Houston, Texas and from 1998 to
2000, he was an independent consultant for Equalnet Communications Corp.

Sneharthi Roy has been our Vice President of Call Center Operations since July,
2003. From 2001 to 2003, he was employed as head of Call Center Operations for
HCL Information Systems Ltd. of India. From 2000 to 2001 he was General Manager
of Globsyn Technologies Ltd. He was regional manager of Atlas Copco AB Sweden
from 1995 to 2000.

Deborah Gambone has been our general counsel since December 2001 and was elected
Secretary and a Vice President of ours in November 2002. From 2000 to 2001 she
was a contracts manager and corporate counsel for Telecomputing, Inc. of Ft.
Lauderdale, Florida. She also worked as in-house counsel for International
Research Group, Inc. of Boca Raton, Florida from 1999-2000. Prior to this, she
was corporate counsel for Global Mindlink Foundation, a non-profit entity
specializing in funding charitable events for children.

David Berman is a practicing attorney in Miami, Florida and a director since
2002. Since 1983, Mr. Berman has been a partner in Berman & Berman, a
partnership in Miami, Florida specializing in tax law and business planning.
Prior to this he was a member of the firm of Bedzow & Korn of Miami.

Kenneth Elan has been a director since June 2003. He has been a practicing
attorney in New York City for over twenty-five years. He specializes in
litigation concentrating in corporate and commercial litigation.

John W. Cooney has been a Director of ours since July, 2003. Since 2000, Mr.
Cooney has been a Vice President for Lionstone Group, Inc., owner of the Seville
and the Ritz-Carlton Hotels on Miami Beach, DuPont Plaza in Miami, Sheraton
Curacao Resort, Princess Beach Resort Curacao, and Holiday Inn Aruba. From 1997
through 2000, he was President of Westbourne, Inc., an import-export company. He
retired in 1997 from Coopers & Lybrand's Miami office where he served as Senior
Tax Partner. While with Coopers & Lybrand, he served on several committees in
the firm, having responsibility for review of all real estate tax oriented
investments in which the firm was involved. Mr. Cooney provides tax and
financial consulting services specializing in taxation, including foreign
taxation, real estate and partnerships. Mr. Cooney has provided expert witness
testimony in many proceedings involving real estate, condominium conversions and
other related matters.

Executive officers are elected annually by the our Board of Directors to hold
office until the first meeting of our Board of Directors following the next
annual meeting of Shareholders and until their successors are chosen and
qualified.

INFORMATION CONCERNING THE BOARD

The Board of Directors held one meeting during the year ended December 31, 2003.
During that year all other actions were taken through unanimous written
consents.

AUDIT COMMITTEE

Prior to August 14, 2003, the Board of Directors acted as the Audit Committee as
permitted by the rules of the Securities & Exchange Commission. Effective August
14, 2003, however, we established an Audit Committee consisting of three
independent directors. John Cooney is chairman of the audit committee and our
financial expert under the rules of the Securities & Exchange Commission. Mr.
Cooney has over thirty years experience as a partner of a leading public
accounting firm. He does not have nor does any other director member of the
committee, have a prior relationship with us and each is independent under the
rules of the American Stock Exchange.

ETHICS CODE

The Company has adopted a code of ethics applicable to its chief executive
officer and chief financial officer. The code is included as an exhibit filed
with our Annual Report on Form 10 KSB for 2002.

EXECUTIVE COMPENSATION.

The following table sets forth information concerning compensation paid or
accrued by us or any of our subsidiaries for services rendered during the fiscal
year ended December 31, 2003 by all persons who acted as a Chief Executive
Officer and for the four highest paid officers earning in excess of $100,000
during 2003

SUMMARY COMPENSATION TABLE

Annual Compensation Long-Term Compensation Securities Underlying

Bonus
Name and Principal Position Year Salary ($) Awards Options
- --------------------------- ---- ---------- ------ -------

Martin Miller (1)....................... 2003 None -- --
Chief Executive Officer................. 2002 None
2001

David Srour............................. 2003 $222,500 300,000
Chief Operating Officer................. 2002 186,969 50,000
2001 28,000 40,000

Irving Greenman (1)..................... 2003 285,000 200,000
Chief Financial Officer................. 2002 300,000 75,000
2001 200,000 200,000

Gerald Dunne............................ 2003 193,750 300,000
Vice President.......................... 2002 146,315 50,000
2001 50,000

Ricardo Sablon.......................... 2003 176,750 200,000
Vice President.......................... 2002 141,219 25,000
2001 75,414 150,000

- ------------
(1) Mr. Greenman was Chief Executive Officer until October, 2002 when Mr.
Martin Miller assumed that position.

OPTIONS

Set forth below with respect to the Officers named above is further information
concerning options to purchase common stock under our stock option plan.

OPTION GRANTED IN 2003

Number of Percent of total
Securities options/granted
Underlying to employees Exercise or Epiration
Name options granted in fiscal year base price date
- ---- --------------- -------------- ---------- ----

David Srour...................... 300,000 7.7% 3.50 2008

Irving Greenman.................. 200,000 5.1% 3.50 2008

Gerald Dunne..................... 300,000 7.7% 3.50 2008

Ricardo Sablon................... 200,000 5.1% 3.50 2008

All of the options have a term of five years and have the same vesting terms.One
third of the shares subject to the option vest on the first anniversary of grant
with an additional third vesting on the next two anniversary dates.

Options Exercised and Fiscal Year End Options Retained

No options were exercised by any above named officer in 2003. The market price
our common stock on December 31, 2003 was above the exercise price of all
outstanding options and consequently all these options were in the money.

Set forth below is certain information relating to options retained by the above
named officers at December 31, 2003:

Number of securities underlying Value of unexercised in-the-money
unexercised options at year end options at year end

Name Vested Not Vested Vested Not Vested
- ---- ------ ---------- ------ ----------

David Srour............................ 26,667 313,333 $ 60,000 $705,000

Irving Greenman........................ 133,333 266,667 300,000 600,000

Gerald Dunne........................... 33,333 313,667 75,000 705,750

Ricardo Sablon......................... 100,000 250,000 225,000 562,500

Director Compensation

Other than the payment of $500 per meeting to outside directors, we have no
compensation arrangements with our directors., In July 2002, we granted a stock
option to David Berman pursuant to our Stock Option Plan to purchase 100,000
shares of our common stock at forty-two cents ($0.42) per share. In 2003, we
issued options to purchase 50,000 shares to each of John Cooney and Kenneth Elan
at exercise prices of $4.50 and $3.50 respectively. All of the foregoing options
described in this paragraph are substantially similar to the options granted
executive officers described above.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

SECURITY OWNERSHIP

The following table sets forth certain information regarding beneficial
ownership of the common stock as of, March 30, 2004 by, each stockholder known
by us to be the beneficial owner of more than 5% of the outstanding common
stock,

o each director of ours,
o each named officer,
o and all directors and executive officers as a group.

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

Name and Address of Number of Shares Approximate
Beneficial Owner Beneficially Owned Percentage
- ----------------------- ------------------ -----------

Martin Miller (1)(2)........................................ 2,873,921 26.6%
Stanley Myatt (1)........................................... 2,778,000 25.7%
Sheldon Goldstein........................................... 900,000 8.3%
David Srour (3)............................................. 93,334 0.9%
Irving Greenman (3)......................................... 166,666 1.5%
David Berman (3)............................................ 18,333 0.2%
Ricardo Sablon (3).......................................... 133,333 1.2%
Gerald Dunne (3)............................................ 100,000 0.9%
John Cooney (3)............................................. none
Kenneth Elan (3)............................................ none
Directors & Officers as a group(1)(3)....................... 3,560,587 30.9%

- ------------
(1) Including shares, registered in the name of Trans Voice LLC. Each of
Messrs. Miller and Myatt is deemed to beneficially own this percentage
of shares of common stock owned by Trans Voice by virtue of their or
their affiliate's 50% ownership of Trans Voice Investments Inc. which
owns 98% of Trans Voice LLC.

(2) Includes 95,921 shares owned by Mr. Miller and his spouse. It does not
include 122,500 shares owned by his spouse which Mr. Miller denies any
beneficial ownership.

(3) Represents shares underlying options exercisable within 60 days. In
addition to these options additional shares are subject to options not
exercisable within 60 days as follows:

Irving Greenman.......................... 233,334
David Berman............................. 66,667
Kenneth Elan............................. 50,000
David Srour.............................. 246,666
John Cooney.............................. 50,000
Ricardo Sablon........................... 216,667
Gerald Dunne............................. 250,000
All officers and directors as a group.... 2,046,667

(4) Brookfield owns of record 770,000 shares and warrants to purchase
3,750,000 shares of our Common Stock. We have been advised by
Brookfield that all of our securities held by it are held as nominee
for unrelated third parties none of whom own a significant portion of
our securities.

Equity Compensation Plan Information

Set forth below is information relating to shares subject to options under
compensation plans, including shares subject to options granted,for both plans
approved and not approved by stockholders, the weighted average exercise price
of these options and the number of shares which may be subject to options to be
granted in the future.

Securities
Securities issueable Weighted- remaining
Plan Category upon exercise average available
- ------------- -------------------- --------- ----------

Equity compensation plans
approved by security holders.............. 4,000,000 $3.36 None
Equity compensation plans not
approved by security holders.............. 709,667* $3.50* 1,290,333
Total....................................... 4,709,667 $3.38 1,290,000

- ----------
* In November 2003 the board of directors approved an amendment to an
existing stock option plan increasing the number of shares subject to
the plan from 4,000,000 shares to 6,000,000 shares. The amendment will
be presented for stockholder approval at the next stockholders meeting.
The shares are part of the increased number of shares subject to the
plan.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On November 14, 2000 we acquired the entire interest of Trans Voice Investment
Ltd in SavOn, a Florida limited liability company. Trans Voice Investment,
Ltd.'s which ultimately was an 80% interest in Savon. The consideration for
Trans Voice Investment Ltd's entire interest in SavOn was 2,000,000 shares of
our common stock. The original agreement provided for the issuance of additional
shares if during the six month period between January 1, 2001 to June 30, 2002
the accumulated net after tax income of SavOn was greater than $1,200,000. Then
for each $1.00 of any such excess of net after tax income of Trans Voice
Investments Ltd. was to receive additional shares having a market value of
$10.00 per share. Due to the cancellation of the SavOn's agreement with Global
Crossing, SavOn discontinued its telecommunications business. Trans Voice Ltd.
claimed that it was deprived of its right to additional shares as Savon would
have no earnings. In lieu of all claims of Trans Voice Investment, Ltd. against
us, we paid an additional $225,000 that was treated as part of the purchase
price.

On March 31, 2001, we acquired all the shares of National Online Services in
exchange for 2,000,000 of our shares..At the time Trans Voice Investment Ltd.
Owned 80% of National Online Services, Trans Voice Investment, Ltd. and the
balance was owed by Sheldon Goldstein. Prior to the transaction, Trans Voice
Ltd. also held 2,000,000 shares or thirty three and one third percent of our
stock. As part of the transaction, we agreed to pay additional contingent
consideration to the former shareholders of National Online, if during the
eighteen month period between April 1, 2001 and September 30, 2002, the
accumulated net after tax income of National Online was $1,200,000 or greater.
In that event, we were required to issue a number of our additional shares equal
to any excess divided by ten. During 2001 the former owners of National Online
claimed that we failed to commence National Online's operations timely and
adequately fund it. As of November 30, 2001, the shareholders and we agreed to
eliminate the contingent right and settle all claims in consideration for an
additional 2,500,000 shares of our common stock . The market price of our common
stock was $-------- and the consideration was valued at $-----------------.

In April 2001 National Online Services, Inc. entered into an oral agreement to
pay TransVoice Investments, Inc. $4.00 per customer (per month). On October 1,
2001, the agreement was modified because the parties agreed that the payments
would become excessive and burdensome. Trans Voice Inc. is unaffiliated with
Trans Voice Ltd. Pursuant to the Payment Agreement National Online and other
subsidiaries are obligated to pay Trans Voice Inc $150,000 per month as long as
National Online and affiliates operates their ISP programs. In addition, Trans
Voice Investments, Inc. is to receive $1.00 for each additional customer in
excess of 100,000 customers in any given month. National Online is also
obligated to provide office space and services to Trans Voice Investments, Inc.
The agreement constitutes consideration for services including services as a
finder provided in connection with the organization of National Online. Messrs.
Stanley Myatt and Martin Miller, or their affiliates, are sole stockholders of
Trans Voice Investments, Inc. This corporation, together with Messrs. Miller and
Myatt, individually own the entire interest of Trans Voice L.L.C. which has been
our principal shareholder since June 2002. Mr. Miller is our Chairman of the
board..

We have determined to outsource many aspects of the development of our new
business plan. We have entered into an agreement with Trans Voice LLC, our
principal stockholder, to find, contract with, pay and supervise an entity to
assist in the development of our new business, including assisting us in:

o Managing existing vendor relationships for sales campaigns and growth
to meet and liven up new business needs.

o Managing site selection, lease negotiations, design and build-out, of
Epixtar's offshore call centers.

o Negotiating incentive and financial assistance packages with government
ministries and agencies on behalf of Epixtar.

o Identifying commercial opportunities for Epixtar to sell new services
and developing new products for Epixtar to market.

o Identifying and negotiating merger and acquisition situations for
Epixtar.

The arrangement requires Trans Voice to pay the third party and for us to
reimburse Trans Voice for these payments. Trans Voice receives no separate
consideration for this arrangement and any payment it receives is merely
reimbursement of amounts paid or to be paid to the subcontractor.

In the third quarter of 2002, we repaid loans aggregating $175,000 to Trans
Voice Inc. and Stanley Myatt. The loans bore interest at seven percent per
annum.

Based upon agreements in principle reached on November 20, 2002, we entered into
an agreement on December 6, 2002 relating to the note to Brookfield Investments
Ltd. The note is in the amount of approximately $2,454,000 and due on demand. We
obtained an agreement to defer demand for payment for over two years, and for
Brookfield to subordinate its security interest in our and our subsidiaries'
accounts receivable to certain types of lenders. We agreed to issue 3,000,000
shares of the our restricted common stock and agreed to repay accrued interest
by July 2003. We retained the right to prepay the loan without any penalty at
any time. The stock was never issued pending negotiations that began in December
2002. After these negotiations, the agreement was amended ab initio to provide
for issuance of warrants to Brookfield to purchase 4,000,000 shares of our
common stock at an exercise price of $.50 per share in lieu of issuing the
3,000,000 shares to Brookfield. The warrants are exercisable during the period
from May 31, 2003 until May 31, 2006. . Subsequent to March 2003 Brookfield
voluntarily agreed to surrender its security interest.

From time to time during 2003, Messrs. Myatt and Miller or their affiliates have
advance

Description of Securities

General

The following description of our capital stock does not purport to be complete
and is subject to and qualified in its entirety by our certificate of
incorporation and bylaws, which are included as exhibits to the registration
statement of which this prospectus forms a part, and by the applicable
provisions of Florida law.

We are authorized to issue up to 50,000,000 shares of common stock, $.001 par
value per share, of which shares were issued and outstanding as of 2004. Our
certificate of incorporation authorizes 10,000,000 shares of "blank check"
preferred stock, of which we authorized the issuance of 250, 000 Series A
preferred Stock of which 23,510 shares are outstanding.

Common Stock

Subject to the rights of holders of preferred stock, holders of shares of our
common stock are entitled to share equally on a per share basis in such
dividends as may be declared by our Board of Directors out of funds legally
available therefore. There are presently no plans to pay dividends with respect
to the shares of our common stock. Upon our liquidation, dissolution or winding
up, after payment of creditors and the holders of any of our senior securities,
including preferred stock, if any, our assets will be divided pro rata on a per
share basis among the holders of the shares of our common stock. The common
stock is not subject to any liability for further assessments. There are no
conversions or redemption privileges nor any sinking fund provisions with
respect to the common stock and the common stock is not subject to call. The
holders of common stock do not have any pre-emptive or other subscription
rights.

Holders of shares of common stock are entitled to cast one vote for each share
held at all stockholders' meetings for all purposes, including the election of
directors. The common stock does not have cumulative voting rights.

Preferred Stock

Our Board of Directors has the authority, without further action by the holders
of the outstanding common stock, to issue shares of preferred stock from time to
time in one or more classes or series, to fix the number of shares constituting
any class or series and the stated value thereof, if different from the par
value, and to fix the terms of any such series or class, including dividend
rights, dividend rates, conversion or exchange rights, voting rights, rights and
terms of redemption (including sinking fund provisions), the redemption price
and the liquidation preference of such class or series.

Series A Preferred Stock

In conjunction with the June 2003 financing, our board of directors a new
created Series A Convertible Preferred Stock, with 250,000 of this series
authorized. These shares have the following terms.

o Conversion: Each share of Series A Preferred Stock will be convertible,
at the option of the holder, at any time after the date of issuance
into a number of shares of Common Stock determined by dividing $100 by
the Series A Conversion Price (initially $3.50).

o Conversion Price Adjustment

o Performance Adjustment: The conversion price may be adjusted based upon
our performance in 2003 and 2004 as set forth below:

ADJUSTED
CONVERSION
YEAR NET INCOME PRICE
---- ---------- -----
2003 less than $5,000,000 $2.00

$5,000,000 - $7,500,000 $3.00

2004 less than $10,000,000 $2.00

$10,000,000-$12,500,000 $3.00

The adjusted price, if any, will not be greater than 5% below market value at
the time of the adjustment, but may not be below $2.00.

o Anti-dilution Protection: With some exceptions including shares issued
pursuant to a merger or acquisition, or a lease line or line of credit,
if the Company issues or sells stock below the then current conversion
price, then the conversion price shall be reduced to the price of the
sale or issuance. The conversion price of the Preferred Stock will also
be subject to adjustment to reflect stock dividends and stock splits.

o Automatic Conversion: The Series A Preferred will be automatically
converted into Common Stock upon the earlier to occur of: (1) the
closing of a public offering of our common stock at ten dollars or more
per share with gross proceeds of $50,000,000 or (2) the vote of the
holders of a majority of the Series A Preferred voting separately as a
single class.

o Dividend Rights: Holders of Series A Preferred shall be entitled to
receive cumulative dividends at an annual rate of $8.00 per share from
legally available funds. A pro-rata portion of unpaid or undirected
dividends will be taken into account upon conversion or redemption

o Liquidation Preference: In the event of any involuntary or voluntary
liquidation, dissolution, or winding up of us, the holders of Series A
Preferred shall be entitled to receive, prior and in preference to any
distribution to the holders of Common Stock, a liquidation payment in
an amount equal to two times the Series A Price per share plus any
unpaid dividends.

o Voting Rights: Subject to any additional voting rights provided by
law), the Series A Preferred vote on an as-converted basis together
with the Common Stock on all matters presented to stockholders.

o Protective Provisions: We are required to obtain approval of Series A
Preferred holders for actions which could have an adverse effect on the
Series A Preferred including any actions resulting in:

o any change in the rights, preferences or privileges of the
Series A Preferred advisor.

o a change of control.

o a change in any business other than the business engaged in by
the Company at the time of Closing.

o Board Representation: The holders of the Series A Stock are entitled to
one seat on our board, or at the option of the shareholders observer
rights to the board. All related attendance expenses will be paid by
us.

The Preferred shareholders have not designed a person to act as direction or
obsenever.

o Redemption Right: We have the right to repurchase the total aggregate
amount outstanding of Series A Preferred on each anniversary date of
the closing of this financing at a price equal to $200 per share
subject to the right of the holder to exercise before repurchase.

Convertible Notes

Decembert 2003

On December 9, 2003, we issued $ 500,000 principal amount of our 7% secured
convertible notes The Notes are convertible at a conversion price of $4.00 , now
$2.50 as a resutt of our failure to achieve performance standards. The
conversion price is subject to dilution including price dilution.In addition the
notes automatically convert upon certain public offerings. . In addition, one
(1) time based on the performance of its common stock, we may require the
conversion of a portion of the notes

BridgeNotes- Interim Notes. In April and May of 2004 we issued $2,500,000 of
convertible notes. Of these notes $ 1,000,000 principal amount is designated as
Bridge Notes. These notes are convertible at $2.88 per share subject to price
dilution and mature in April 2005. The Interim notes were issued in
contemplation of additional financing and will be paid or converted at the time
of additional financing at a price to be determined. If the additional financing
does not occur these notes will be exchangeable for Bridge notes. The Bridge
notes are to be secured.

The notes are subject to standard affirmative coventants and negative
covenants,) limitations on (i) the incurrence of debt and contingent
obligations, (ii) the pledge or other encumbrance of any of the Company's assets
(iii) investments unrelated to the Company's business, except in the Ordinary
Course of Business, (iv) affiliated transactions, (v) dividends and
distributions and repurchases in respect of capital stock, (vi asset sales,
except (vii) management and employee options (not to exceed options to purchase
250,000 shares of Common Stock) and (viii) material changes in accounting
practices unless recommended by the Company's independent auditorsN

Warrants

Brookfield Warrants

We have issued warrants to Brookfield Investments Ltd. to purchase 4,000,000
shares of our common stock at fifty cent per share. The warrant expires in
200_8_. The exercise price is adjusted based upon stock splits, reverse splits
and similar occurrences.

Investment Banking Warrants

In April 2003, we issued warrants to purchase 130,000 shares of our Company
stock to Sands Brothers & Co., Ltd. ("Sands Brothers") with whom we had entered
into an investment banking arrangement. These warrants expire in October 2008
and are excusable at $3.39 per share. These warrants were distributed to the
designees of Sands Brothers.

Private Placement Warrants

In June 2003, we issued warrants to purchase 329,140 shares of our common stock
pursuant to our private placement. These warrants expire in June 2008 and are
exercisable at $7.00 per share. The registration rights agreement we entered
into with these purchasers provided for a reduction of the warrant exercise
price if we did not have an effective registration statement covering the sale
of the shares upon exercise of the warrants within 90 days of the grant of the
warrants. As a result, the exercise price of the warrants has been reduced to
$5.10per share. The exercise price of these warrants is also adjusted upon stock
splits, reverse splits, reclassification and sales of stock below the exercise
price.

We also issued Incidental Warrants

In July 2003, we issued five-year warrants to purchase _27,728______ shares of
our common stock.at an exercise price of $5.00 per share.We have granted 100,000
five-year warrants to an investment adviser in consideration for services to be
rendered to us .The Warrants are exerciseable at a price of $ 6.00 per share.

Noteholder Warrants

In connection with the our 7% convertible dbenture advance we issued to the
noteholders five year warrants to purchase 62,500 shares of our common stock at
an exercise price of $5. The price is subject to dilution including price
dilution. In addition the exercise price is reduced if we fail to file a
registration covering the shares subject to the warrant . .

All of these warrants other than the warrants owned by Brookfield provide for
cashless exercise. This means upon exercise the holder does not pay cash for the
exercise price. In lieu of cash, the holder surrenders a sufficient number of
unexercised warrants equal to the number of shares of common stock having a then
market value equal to the aggregate exercise price of the shares purchased.

Transfer agent

The transfer agent for our common stock is Interwest Transfer Company, Inc. of
1981 East 4800 South Street, Salt Lake City, Utah 84117. Their telephone number
is (801)-272-7294

Disclosure of Commission Position on Indemnification for Securities Act
Liabilities

Our bylaws provide that we will indemnify our officers and directors
for costs and expenses incurred in connection with the defense of
actions, suits, or proceedings against them on account of their being
or having been directors or officers of, absent a finding of misconduct
in the performance of their duties.

Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to our directors, officers and controlling
persons pursuant to the above described provisions, or otherwise, we
have has been advised that in the opinion of the Securities and
Exchange Commission their indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore,
unenforceable.

In the event that a claim for indemnification against these liabilities (other
than the payment by us of expenses incurred or paid by any director, officer or
controlling person of the small business issuer in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, issuer will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of the
issue.

Anti takeover Provision of Florida Law

Section 607.0902 of the Florida Business Corporation Act prohibits the voting of
shares in a publicly-held Florida corporation that are acquired in a "control
share acquisition" unless the holders of a majority of the corporation's voting
shares (exclusive of shares held by officers of the corporation, inside
directors or the acquiring party) approve the granting of voting rights as to
the shares acquired in the control share acquisition or unless the acquisition
is approved by the corporation's board of directors, unless the corporation's
articles of incorporation or bylaws specifically state that this section does
not apply. A "control share acquisition" is defined as an acquisition that
immediately thereafter entitles the acquiring party to vote in the election of
directors within each of the following ranges of voting power: (i) one-fifth or
more, but less than one-third of such voting power: (ii) one-third or more, but
less than a majority of such voting power; and, (iii) more than a majority of
such voting power. Our bylaws do not negate this provision of the Florida law.

Shares Eligible for Future Resale

As of October 10, 2003, we had an aggregate of ---------------------------
shares of our common stock issued and outstanding, of which ,------shares are
"restricted securities," which may be sold only in compliance with Rule 144
under the Securities Act of 1933, as amended or other exemptions from
registration requirements of this act. Rule 144 provides, in essence, that a
person holding restricted securities for a period of one year after payment
therefore may sell, in brokers' transactions or to market makers, an amount not
exceeding 1% of the outstanding class of securities being sold, or the average
weekly reported volume of trading of the class of securities being sold over a
four-week period, whichever is greater, during any three-month period. (Persons
who are not our affiliates and who had held their restricted securities for at
least two years are not subject to the volume or transaction limitations.)
Substantially all of our presently issued shares of common stock will be capable
of sale pursuant to Rule 144 subject to the foregoing limitation. The sale of a
significant number of these shares in the public market may adversely affect
prevailing market prices of our securities.

SELLING SECURITIESHOLDERS

Set forth below is a description of the transactions pursuant to which
securities were issued to the selling stockholders.

Sands Partners Warrants

In connection with the execution of an investment, advisory agreement
between us and Sands Brothers & Co. Ltd. we issued five year warrants to produce
130,000 shares of our common stock to Sands Brothers. These warrants are
exerciseable at$3.39 at per share. These warrants were later distributed to
persons associated with Sands Brothers. The Investment advisor agreement has
terminated. We had no relationship with Sands Brothers prior to this
transaction.

Included in the number of shares of the selling stockholders are shares issuable
(or in one case issued upon conversion of preferred stock and exercise of
warrants in our Preferred Stock provide placation. In a June 2003, we sold
23,510 shares of our convertible preferred stock for an aggregate gross
consideration of $2,351,000. For each share sold, the purchasers received five
year warrants to purchase fourteen shares of our common stock or a total of
329,140 atan exercise price of $7.00 per share (which has since been reduced to
$5.10 pursuant to the terms of the Warrant). The preferred shares are
convertible at an initial conversion price of $3.50 which has been reduced to
$2.00 for at least one year pursuant to performance standards. The conversion
price and exercise price is subject to anitdilution provisions.

In connection with the preferred stock, private placement we issued five year
warrants to provide a total of 64,243 shares of our common stock at an exercise
price of $5.00 per share to persons who assisted us, including Sands Brothers.

We issued 127,117 shares of our common stock in satisfaction of over an
aggregate of $400,000 of indebtedness consisting of principal and interest of
two notes due K&L International Enterprises, Inc. and Caribe Telesales
Consultants unaffiliated telemarketing contractors. These contractors provided
services to us prior to this

We issuesd 100,000 five year warrants () to acquire our shares of our common
stock at $5.00 per share to Maxim Group LLC upon signing of a advisory agreement
we also issued five year warrants to Alpine Capital Partners to acquire 27,728
shares of our Common stock at 5.00 per share.

Included in the offering are 276,000 shares of common stock subject to
convertible holders of convertible notes and warrants issued in connection with
a $. In December 2003, we received $500,000 from a small group of primarily
institutional lenders who seven percent one year secured notes convertible into
shares of our Common Stock at $4.00 per share. We also issued to the lenders
five year warrants to purchase 62,500 shares of our common stock at an exercise
price of $5.00 per share. Both the notes and warrants are subject to ant
dilution provisions, including price dilution.

The above assumes all of the shares being offered will be sold. Because the
selling stockholders may sell all, some or none of the shares that it holds, the
actual number of shares that will be sold by the selling stockholders upon or
prior to termination of this offering may vary. The selling stockholders may
have sold, transferred or otherwise disposed of all or a portion of their shares
since the date on which they provided the information regarding their common
stock in transactions exempt from the registration requirements of the
Securities Act. Additional information concerning the selling stockholders may
be set forth from time to time in prospectus supplements to this prospectus

The following table contains information concerning the beneficial ownership of
our common stock by the selling stockholders as adjusted for sales by each
selling stockholder.

Identity of Shares
Stockholder or Group Offered
- -------------------- -------

Name

Michael R. Hamblett(1) 13,440
Wolverine Trading, LLC(1) 64,000
Truk Opportunity Fund, LLC(1) 12,800
Abingdon Investments, LLC(1) 66,700

SDS Merchant Fund, LP(1) 320,000
Daniel A. Gooze(1) 128,000

Otape Investments LLC(1) 192,000
WEC Partners(1) 64,000
James Ricchiardi(1) 66,700
Cristopher Fiore(1) 64,000
CD Investment Partners(1) 101,033
Steven B. Rosner(1) 224,000
Judith Barclay(1) 64,000
Wayne Saker(1) 64,000
MSS Children's Trust(2)
SSS Children's Trust(2)
Howard Sterling(2)
Edmund Bellock
Bruce Silver(2)
Sands Brothers(3) 30,657
Alpine Capital(4) 61,314
K&L International Enterprises 32,036
Caribe Telesales Consultants, Inc. 95,081
MAMIM Partners, LLC(6) 100,000
Generation Capital Associates(6) 210,000
The Hart Investigation Corp.(7) 26,250
Howard Commander(7) 26,250

- ----------
(1) Shares issued or issuable in connection with securities acquired in our
preferred stock private placement. These include shares of preferred
stock or warrants. Except in the case of 80,033 shares issued upon
conversion the foregoing does not reflect additional shares, which may
be excused for actual dividends.
(2) Shares issuable upon exercise of the advisory warrants originally
issued to Sands Brothers. Each person had a relationship as employee,
consultant or affiliate of Sands Brothers at the time they acquired
these warrants. Sands Brothers as a broken dealer.
(3) These shares are subject to warrants for services in our private
placement.
(4) These shares are subject to warrants for services in connection with
our Preferred Stock private
placement and for future services.
(5) Shares acquired in satisfaction for telemarketing fees payable to these
holders.
(6) Shares subject to warrants issued in connection with an investment
advisory agreement. This seller is acting as a placement agent in a
offering and share does not include warrants which may be issued
pursuant to a placement agreement.
(7) Shares issued upon conversion if our 7% convertible second notes and
related warrants.

Plan of Distribution

Sale of the shares may be made from time to time by the selling stockholders, or
subject to applicable law, by pledgees, donees, distributees, transferees or
other successors in interest. These sales may be made:

o on the over-the-counter market

o on foreign securities exchange

o in privately negotiated transactions or otherwise

o in a combination of transactions at prices

o at terms then prevailing

o at prices related to the then current market price

o at privately negotiated prices

Without limiting the generality of the foregoing, the shares may be sold in one
or more of the following types of transactions.

o A block trade in which the broker-dealer so engaged will attempt to
sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction purchases by a broker
or dealer as principal and resale by such broker or dealer for its
account pursuant to this Prospectus;

o an exchange distribution in accordance with the rules of such exchange;

o ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and

o face-to-face transactions between sellers and purchasers without a
broker dealer. In effecting sales, brokers or dealers engaged by the
selling stockholders may arrange for other brokers or dealers to
participate in the resales.

Brokers, dealers or agents may receive compensation in the form of commissions,
discounts or concessions from the selling stockholders in amounts to be
negotiated in connection with the sale. These brokers or dealers and any other
participating brokers or dealers may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales and any such
commission, discount or concession may be deemed to be underwriting discounts or
commissions under the Securities Act.

Information as to whether underwriters who may be selected by the selling
stockholders, or any other broker-dealer, is acting as principal or agent for
the selling stockholders, the compensation to be received by underwriters who
may be selected by the selling stockholders, or any broker-dealer, acting as
principal or agent for the selling stockholders and the compensation to be
received by other broker-dealers, in the event the compensation of such other
broker-dealers is in excess of usual and customary commissions, will, to the
extent required, be set forth in a supplement to this prospectus. Any dealer or
broker participating in any distribution of the Shares may be required to
deliver a copy of this prospectus, including a prospectus supplement, if any, to
any person who purchasers any of the Shares from or through such dealer or
broker.

We have advised the selling stockholders that during if at any time they may be
engaged in a distribution of the shares they are required to comply with
Regulation M promulgated under the Exchange Act. The selling shareholders have
acknowledged such advice by separate agreement and agree therein to comply with
such regulation. In general, Regulation M precludes the selling stockholders,
any affiliated purchasers and any broker-dealer or other person who participates
in such distribution from bidding for or purchasing or attempting to induce any
person to bid for or purchase any security which is the subject of the
distribution until the entire distribution is complete. A "distribution" is
defined in the rules as an offering of securities that is distinguished from
ordinary trading activities and depends on the "magnitude of the offering and
the presence of special selling efforts and selling methods". Regulation M also
prohibits any bids or purchases made in order to stabilize the price of a
security in connection with the distribution of that security.

We have agreed to indemnify the selling securityholder against certain
liabilities, including liabilities under the Securities Act of 1933, or to
contribute to payments to which such securityholder may be required to make in
respect thereof.

Legal Matters

The validity of the common stock offered hereby will be passed upon for Epixtar
Corp. by Michael D DiGiovanna Esq. 212 Carnegie Center, Suite 206, Princeton New
Jersey 08540.

Experts

Our financial statements included in this prospectus and elsewhere in the
registration statement, to the extent and for the periods indicated in their
reports, have been audited by Liebman Goldberg & Drogin LLP independent
certified public accountants, whose reports thereon appear elsewhere herein and
in the registration statement.

Available Information

We have filed with the Commission, Washington, D.C. 20549, a Registration
Statement on Form SB-2 under the Securities Act with respect to our common stock
offered hereby. This prospectus does not contain all of the information set
forth in the registration statement and the exhibits and schedules to the
registration statement. For further information with respect to us and our
common stock offered hereby, reference is made to the Registration Statement and
the exhibits and schedules filed as a part of the Registration Statement.
Statements contained in this prospectus concerning the contents of any contract
or any other document are not necessarily complete; reference is made in each
instance to copy of such contract or any other document filed as an exhibit to
the registration statement. Each such statement is qualified in all respects by
such reference to such exhibit. We are subject to the informational requirements
of the Securities Exchange Act of 1934, as amended and in accordance therewith
file annual, quarterly and special reports, proxy statements and other
information with the SEC. The registration statement, including exhibits and
schedules thereto, may be inspected without charge at the Commission's principal
office in Washington D.C., and copies of all or any part thereof may be obtained
from the Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549, after payment of fees prescribed by the Commission. The
Commission also maintains a World Wide Web site that provides online access to
reports, proxy and information statements and other information regarding
registrants that file electronically with the address http://www.sec.gov

================================================================================

EPIXTAR CORP. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2003 AND 2002

================================================================================

EPIXTAR CORP. AND SUBSIDIARIES

INDEX TO FINANCIAL STATEMENTS

PAGE
----

REPORTS OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS F-1 - F-2

CONSOLIDATED FINANCIAL STATEMENTS

Balance Sheets F-3

Statements of Operations F-4

Statements of Stockholders' Equity (Deficiency) F-5

Statements of Cash Flows F-6

Notes to Financial Statements F-7 - F-33

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

The Board of Directors
Epixtar Corp. and Subsidiaries
Miami, Florida

We have audited the accompanying consolidated balance sheet of Epixtar Corp. and
Subsidiaries as of December 31, 2003, and the related consolidated statements of
operations, stockholders' equity (deficiency), and cash flows for the year then
ended. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audit.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Epixtar
Corp. and Subsidiaries as of December 31, 2003, and the consolidated results of
their operations and their cash flows for the year then ended, in conformity
with accounting principles generally accepted in the United States.

As more fully described in Note 3, the Company is subject to certain
profitability and liquidity issues. Management's plans with respect to those
issues are also presented in Note 3.

RACHLIN COHEN & HOLTZ LLP

Miami, Florida
March 17, 2004

F-1

The Board of Directors
Epixtar Corp. and Subsidiaries
Formerly Global Asset Holdings, Incorporated and Subsidiaries
Miami, Florida

We have audited the accompanying consolidated balance sheets of Epixtar Corp.
and Subsidiaries formerly Global Asset Holdings, Incorporated and Subsidiaries
as of December 31, 2002, and the related consolidated statements of operations,
stockholders' equity, and cash flows for the year then ended. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Epixtar Corp. and
Subsidiaries as of December 31, 2002, and the consolidated results of their
operations and their cash flows for the year then ended, in conformity with
accounting principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has suffered recurring losses from operations
and has a negative working capital, which raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans regarding
those matters are partially discussed in the Notes to financial statements.

The accompanying financial statements for the year ended December 31, 2002 have
been restated as discussed in Note 2.

/s/ Liebman Goldberg & Drogin, LLP
Garden City, New York

March 11, 2003, except for Note 2 as to which
the date is April 5, 2004

F-2

EPIXTAR CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2003

2003 2002
---- ----
ASSETS (Restated)

Current Assets:
Cash and cash equivalents (includes amounts held in escrow
of $855,502 in 2003) $ 1,342,186 $ 722,674
Restricted cash 416,721 -
Accounts receivable, net 5,609,675 3,802,326
Prepaid expenses and other current assets 227,203 59,940
Deferred billing costs 271,256 154,246
------------ ------------
Total current assets 7,867,041 4,739,186
------------ ------------

Property and Equipment, Net 1,263,844 406,971
------------ ------------

Other Assets:
Goodwill 3,360,272 3,360,272
Deposits and other 491,637 76,716
------------ ------------
Total other assets 3,851,909 3,436,988
------------ ------------

Total assets $ 12,982,794 $ 8,583,145
============ ============

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current Liabilities:
Debt, current portion $ 121,513 $ 483,786
Accounts payable 3,009,932 3,211,934
Accounts payable subject to compromise - 385,401
Accrued interest 175,185 274,988
Accrued expenses and taxes 146,566 1,123,676
Deferred revenue 1,459,657 2,897,693
------------ ------------
Total current liabilities 4,912,853 8,377,478
------------ ------------

Long-Term Liabilities:
Note payable - stockholder 2,369,350 2,264,700
Debt, net of current portion 23,603 88,451
Common stock to be issued 279,000 -
------------ ------------
Total long-term liabilities 2,671,953 2,353,151
------------ ------------

Commitments and Contingencies - -

Stockholders' Equity (Deficiency):
Convertible preferred stock, $.001 par value;
10,000,000 shares authorized; 23,510 shares issued and
outstanding in 2003 (liquidation preference $4,702,000) 24 -
Common stock, $.001 par value, 50,000,000 shares
authorized; 10,643,734 and 10,503,000 shares issued
and outstanding 10,644 10,503
Additional paid-in capital 18,442,395 13,391,873
Accumulated deficit (13,055,075) (15,549,860)
------------ ------------
Total stockholders' equity (deficiency) 5,397,988 (2,147,484)
------------ ------------
Total liabilities and stockholders' equity (deficiency) $ 12,982,794 $ 8,583,145
============ ============

See notes to consolidated financial statements.

F-3

EPIXTAR CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 2003 AND 2002

2003 2002
---- ----
(Restated)

Revenues $ 37,121,277 $ 26,250,851
Cost of Sales 17,442,248 17,781,967
------------ ------------
Gross Profit 19,679,029 8,468,884
------------ ------------

Expenses:
Selling, general and administrative 9,797,541 6,028,823
Consulting fees and reimbursements - related party 3,537,618 2,111,438
Provision for doubtful accounts 1,533,983 2,083,268
Depreciation 214,299 98,557
------------ ------------
15,083,441 10,322,086

Income (Loss) from Operations 4,595,588 (1,853,202)
------------ ------------

Other Income (Expense):
Interest expense (542,280) (497,702)
Gain on settlement of debts 324,966 -
Other income 886 -
Loss on debt extinguishment - (9,550,700)
------------ ------------
(216,428) (10,048,402)

Income (Loss) from Continuing Operations 4,379,160 (11,901,604)
Loss from Discontinued Operations - (43,318)
------------ ------------

Income (Loss) Before Income Taxes 4,379,160 (11,944,922)

Provision for Income Taxes - -
------------ ------------

Net Income (Loss) $ 4,379,160 $(11,944,922)
============ ============

Net Income (Loss) Per Common Share:
Basic:
Continuing operations $ 0.22 $ (1.13)
Discontinued operations - -
------------ ------------
Net income (loss) $ 0.22 $ (1.13)
============ ============

Diluted:
Continuing operations $ 0.16 $ (1.13)
Discontinued operations - -
------------ ------------
Net income (loss) $ 0.16 $ (1.13)
============ ============

See notes to consolidated financial statements.

F-4

EPIXTAR CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)

Preferred Stock Common Stock
-------------------- ----------------------
Shares Amount Shares Amount
------ ------ ------ ------

Balance, January 1, 2002 (Restated) - $ - 10,503,000 $ 10,503

Year Ended December 31, 2002 (Restated):
Warrants issued in connection with debt
extinguishment - - - -
Net loss - - - -
------------ ------------ ------------ ------------

Balance, December 31, 2002 (Restated) - - 10,503,000 10,503

Year Ended December 31, 2003:
Issuance of common stock for services - - 13,617 14
Issuance of common stock in settlement of
liabilities - - 127,117 127
Issuance of preferred stock, net of offering costs 23,510 24 - -
Beneficial conversion feature of convertible debt - - - -
Warrants issued with convertible debt - - - -
Beneficial conversion feature of preferred stock - - - -
Net income - - - -
------------ ------------ ------------ ------------

Balance, December 31, 2003 23,510 $ 24 10,643,734 $ 10,644
============ ============ ============ ============

Additional
Paid-in Accumulated
Capital Deficit Total
------------ ------------ ----------

Balance, January 1, 2002 (Restated) $ 3,631,873 $ (3,594,938) $ 47,438

Year Ended December 31, 2002 (Restated):
Warrants issued in connection with debt
extinguishment 9,760,000 - 9,760,000
Net loss - (11,954,922) (11,954,922)
------------ ------------ ------------

Balance, December 31, 2002 (Restated) 13,391,873 (15,549,860) (2,147,484)

Year Ended December 31, 2003:
Issuance of common stock for services 84,986 - 85,000
Issuance of common stock in settlement of
liabilities 444,785 - 444,912
Issuance of preferred stock, net of offering costs 2,136,376 - 2,136,400
Beneficial conversion feature of convertible debt 326,619 - 326,619
Warrants issued with convertible debt 173,381 - 173,381
Beneficial conversion feature of preferred stock 1,884,375 (1,884,375) -
Net income - 4,379,160 4,379,160
------------ ------------ ------------

Balance, December 31, 2003 $ 18,442,395 $(13,055,075) $ 5,397,988
============ ============ ============

See notes to consolidated financial statements.

F-5

EPIXTAR CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2003 AND 2002

2003 2002
---- ----
(Restated)

Cash Flows from Operating Activities:
Net income (loss) $ 4,379,160 $(11,954,922)
Adjustments to reconcile net income (loss) to net cash and
cash equivalents provided by (used in) operating activities:
Depreciation and amortization 219,209 140,224
Provision for bad debt 1,533,983 2,083,268
Loss on debt extinguishment - 9,550,700
Stock-based compensation 260,000 -
Interest paid with issuance of stock 40,446 -
Amortization of beneficial conversion feature of convertible debenture 27,218 -
Amortization of discount on convertible debenture 14,448 -
Amortization of discount on stockholder loan 104,650 -
Changes in assets and liabilities:
Increase in accounts receivable (3,281,101) (5,154,083)
Increase in prepaid expenses and other (158,740) (58,274)
Increase in deferred billing costs (117,010) (118,746)
Increase in deposits (366,611) (42,720)
Increase (decrease) in accounts payable and accrued expenses (1,304,679) 3,306,330
Increase (decrease) in accounts payable - subject to compromise (385,401) 385,401
Increase (decrease) in deferred revenues (1,438,036) 2,542,692
------------ ------------
Net cash and cash equivalents (used in) provided by operating activities (472,464) 679,870
------------ ------------

Cash Flows from Investing Activities:
Cash paid for acquisition of Phoneboy, net of cash acquired (8,768) -
Acquisition of property and equipment (1,058,814) (304,062)
Cash restricted by governmental agency (416,721) -
------------ ------------
Net cash and cash equivalents used in investing activities (1,484,303) (304,062)
------------ ------------

Cash Flows from Financing Activities:
Proceeds from issuance of preferred stock 2,136,400 -
Proceeds from issuance of convertible debenture and warrants 500,000 -
Proceeds from notes payable - 624,282
Repayment of capital lease obligations (74,121) (351,299)
Proceeds from exercise of stock options 14,000 -
------------ ------------
Net cash and cash equivalents provided by financing activities 2,576,279 272,983
------------ ------------

Net Increase in Cash and Cash Equivalents 619,512 648,791

Cash and Cash Equivalents, Beginning 722,674 73,883
------------ ------------

Cash and Cash Equivalents, Ending $ 1,342,186 $ 722,674
============ ============

Supplemental Disclosures:
Cash paid for interest $ 355,518 $ 497,702
============ ============

See notes to consolidated financial statements.

F-6

EPIXTAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2003 AND 2002

NOTE 1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Epixtar Corp. (the "Company") was incorporated in Florida in June 1994.
The Company, previously known as Global Asset Holdings ("Global"),
changed its name on November 25, 2002. The Company was originally known
as Pasta Bella, Inc. and changed to Global in 1997. The Company was
originally formed to acquire other entities or businesses.

On November 14, 2000, the Company acquired an 80% interest in
SavOnCalling.com, LLC ("Savon") held by Transvoice Investment, Ltd.
("Transvoice"). Transvoice's original interest of 51% ownership in
Savon increased to 80% on November 14, 2000, pursuant to an acquisition
agreement dated May 1, 2000 between Transvoice and Teltran
International, Inc. ("Teltran"). Savon was engaged in the marketing and
resale of domestic and international telecommunications services.
During the year 2001, Savon discontinued its business operations. On
August 28, 2002, Savon filed for reorganization under Chapter 11 of the
federal bankruptcy code. Teltran held a minority interest of 20% in
Savon, until its remaining interest was transferred to the Company as
part of the bankruptcy settlement during 2003.

On March 31, 2001, the Company acquired all of the outstanding shares
of National Online Services, Inc. ("NOL"). Transvoice and a non-related
party owned 80% and 20% of the outstanding shares respectively. NOL was
incorporated in February 2001 as a provider of subscription based
"yellow pages" internet directory services. In July 2003, NOL was
merged into a newly formed subsidiary incorporated in Delaware under
the same name and continued to provide the same services.

On June 1, 2001, the Company formed a wholly owned subsidiary,
incorporated in Florida; One World Public Communications, Corp. ("One
world"). One World was formed to provide low-rate pay phone service for
international calls. In September 2003, the Company formed a new wholly
owned subsidiary of the same name, incorporated in Delaware. In January
2004, the Florida Corporation was merged into the surviving Delaware
corporation of the same name and purpose.

In December 2001, the Company formed two additional subsidiaries;
Merchant Internet Services Corp. ("Merchant") and Liberty On-Line
Services, Inc. ("Liberty"), formerly Bell America Communications, Corp.
Merchant was formed to provide customer care service to customers of
NOL. Merchant changed its name to Epixtar Account Services, Inc.
("EAS") in June 2003. Liberty was formed to offer small business
solutions such as internet access, web-site design and hosting, and
telecommunication services to customers obtained by using direct
customer contact ("telemarketing"). In July 2003, EAS and Liberty were
merged into two newly formed subsidiaries incorporated in Delaware
under the same names and continue to provide the same services and
perform the same functions.

F-7

EPIXTAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

NOTE 1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

Additionally, during 2002, the Company formed seven additional wholly
owned subsidiaries incorporated in Florida. These subsidiaries provide
various internet, telecommunication, and telemarketing services as well
as internal management functions. In July 2003, these subsidiaries,
were merged into newly formed subsidiaries incorporated in Delaware
under the same names and continue to provide the same services and
perform the same functions.

In August 2002, the Company formed a wholly owned subsidiary,
incorporated in Florida, Epixtar Prepaid Communications Corp.
("Prepaid") for the purpose of selling prepaid telephone services. In
August 2003, Prepaid was merged into a newly formed subsidiary
incorporated in Delaware under the same name and continues to provide
the same services and perform the same functions.

In October 2003, Prepaid acquired the assets and certain liabilities of
Phoneboy Prepaid, Inc., a Florida Corporation, for $10,000 cash and
15,652 restricted shares of the common stock of the Company valued at
$90,000. Phoneboy Prepaid, Inc. sold prepaid phonecards through retail
outlets throughout the United States. The purchase price was allocated
to the fair value of the net assets acquired with the excess of $34,330
assigned to identifiable intangibles (non-compete agreement). The
operations of Prepaid are included in the accompanying consolidated
financial statements from the date of acquisition. On an unaudited pro
forma basis, the Company does not consider the effects of the
acquisition of Phoneboy Prepaid, inc. to be significant.

In February 2003, the Company formed a wholly owned subsidiary,
incorporated in Florida, Epixtar Marketing Services Corp. ("Marketing")
for the purpose of providing marketing services for its in-house call
centers. In August 2003, Marketing was merged into a newly formed
subsidiary incorporated in Delaware under the same name and continues
to provide the same services and perform the same functions.

In June 2003, the Company formed a wholly owned subsidiary, Epixtar
Group, Inc. ("Group"). Group was formed to own the Company's four
wholly owned internet service providers and EAS. In August 2003, Group
was merged into a newly formed subsidiary incorporated in Delaware
under the same name and continues to provide the same services and
perform the same functions. In January 2004, Group changed its name to
NOL Group, Inc.

On July 24, 2003, the Company formed a wholly owned subsidiary, Epixtar
Philippines IT-Enabled Services Corporation, incorporated in the
Philippines. The Company was formed to engage in the business of
operating call centers for the purpose of fielding and managing
incoming calls related to customer services, and making and managing
outgoing calls for sales, customer service, direct response, back
office support, and other similar functions (see Note 19).

In 2003, the Company operated primarily in one segment - business
solutions which are internet based. In 2004, the Company intends to
begin material operations in a second segment - call center outsourcing
services.

F-8

EPIXTAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

NOTE 1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

Principles of Consolidation

The consolidated financial statements include the accounts of
Epixtar Corp. (formerly Global Asset Holdings, Inc.), and its
wholly-owned subsidiaries; SavOnCalling.com, LLC; NOL Group, Inc.;
National Online Services, Inc.; One World Public Communications,
Corp.; Epixtar Account Services Corp. (formerly Merchant Internet
Services, Inc.); Liberty On-Line Services, Inc.; Ameripages, Inc.
(formerly Amerilinc, Inc.); Epixtar Communications Corp.; Epixtar
Financial Corp.; Epixtar Management Corp.; Epixtar Solutions,
Corp.; Epixtar Prepaid Communications Corporation, Inc.; Epixtar
Philippines IT-Enabled Services Corporation; Epixtar Marketing
Services Corp.; Epixtar BPO Services Corporation; Epixtar
International Contact Center Ltd.; Epixtar Information Technology,
Private, Ltd.; Epixtar Direct Response, Corp.; Epixtar Direct Sales
Corp.; and B2B Advantage, Inc. (formerly SBA Online, Inc.). All
significant intercompany accounts and transactions have been
eliminated.

Revenue Recognition

National Online Services, Inc., Liberty On-line Services, Inc., B2B
Advantage, Inc., and Ameripages, Inc. are providers of subscription
based "yellow pages" internet directory services. The Company,
through these subsidiaries, provides small businesses with internet
access, websites, and e-mail addresses through the resale of
dial-up technology. Customers are obtained utilizing outside
professional telemarketing call centers and in-house telemarketers.
Each sale is evidenced by a recorded acceptance, which is reviewed
by a third party quality control provider before the company
processes an order. Each customer is entitled to a free thirty-day
trial period, during which the customer can cancel the service at
no charge. The customers are billed monthly, a predetermined fixed
amount, for one month in advance. Revenue is recognized during the
period in which services are provided and revenue is deferred for
the portion of the advance billings that is attributed to the
following accounting period. The amount of deferred revenue is
determined by multiplying the advance billing amounts by the
percentage of days during the preceding thirty-day service period
that occur during the subsequent accounting period. All billing and
collecting is done by third party billing services. Collections are
remitted on a weekly or monthly basis for billings that occurred
approximately sixty to ninety days prior.

One World Public Communications Corp. provides low rate long
distance international pay phone service. Its revenues in 2003 and
2002 have been minimal. The pay phone operators are billed monthly,
based upon actual usage at each pay phone. When a call is
initiated, revenues are earned. Revenue is based upon contracts
with the pay phone operator at stated rates.

Revenues derived from the operations of Phoneboy Prepaid, Inc.,
which was acquired in October 2003, were immaterial to total
consolidated revenues.

F-9

EPIXTAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

NOTE 1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

Use of Estimates

The preparation of the consolidated financial statements in
conformity with accounting principles generally accepted in the
United States requires management to make estimates and assumptions
that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those
estimates.

Property and Equipment

Property and equipment are recorded at cost. Depreciation is
computed principally using the straight-line method for financial
reporting purposes and using accelerated methods for income tax
purposes. Estimated useful lives for financial reporting purposes
range from five to seven years. Expenditures which significantly
increase value or extend useful asset lives are capitalized.

Cash and Cash Equivalents

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

Advertising Expense

The cost of advertising is expensed as incurred. The Company
incurred $70,686 and $4,744 in advertising costs during 2003 and
2002, respectively.

Fair Value of Financial Instruments

Statement of Financial Accounting Standards ("SFAS") No. 107,
"Disclosures About Fair Value of Financial Instruments", requires
disclosure of the fair value information, whether or not recognized
in the balance sheet, where it is practicable to estimate that
value. The amounts reported for cash, accounts receivable, prepaid
expenses, loans payable, accounts payable and accrued expenses
approximate their fair value because of their short maturities. The
amount of the note payable - stockholder has been presented at its
estimated fair value (see Note 9).

Concentration of Credit Risk

Financial instruments that potentially subject the Company to
significant concentrations of credit risk consist primarily of cash
and cash equivalents and accounts receivable. The Company's
investment policy is to invest in low risk, highly liquid
investments. At various times during the year, the Company had cash
balances in excess of federally insured limits. The Company
maintains its cash balances with high quality financial
institutions, which management believes reduces such risk.

F-10

EPIXTAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

NOTE 1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

Concentration of Credit Risk (Continued)

The Company utilizes the services of outside third-party billing
houses. Since the Company's receivables collected by clearing
agents are not segregated, there is a concentration risk and
possible loss upon the bankruptcy or defalcation of any clearing
agent. There is no substantial dependency on any billing house as
they are utilized for better cash flow management and compliance
issues.

Historically, the Company has depended on third-party vendors for
its telemarketing and fulfillment operations. Substantially, all of
the Company's telemarketing vendors operated their facilities
outside the United States. As of December 31, 2003, no third-party
telemarketers were being utilized and the Company plans to perform
these functions internally for the foreseeable future.

Stock-Based Compensation

The Company has elected to follow Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees" (APB No.
25), and related interpretations, in accounting for its employee
and board of director stock options rather than the alternative
fair value accounting allowed by SFAS No. 123, "Accounting for
Stock-Based Compensation". APB No. 25 provides that the
compensation expense relative to the Company's employee stock
options is measured based on the intrinsic value of the stock
option.

SFAS No. 123 requires companies that continue to follow APB No. 25
to provide a pro-forma disclosure of the impact of applying the
fair value method of SFAS No. 123. The Company follows SFAS No. 123
in accounting for stock options issued to non-employees (see Note
18).

Earnings (Loss) Per Share

The Company has adopted SFAS Statement No. 128, "Earnings per
Share". The statement establishes standards for computing and
presenting earnings per share (EPS). It requires dual presentation
of basic and diluted EPS on the face of the income statement. There
is no presentation of diluted loss per share in 2002 as the effect
of common stock options, warrants and convertible debt amounts were
antidilutive. Note 18 discusses the computation of earnings (loss)
per common share. Notes 6 discusses the issuance of warrants issued
as consideration for debt restructuring, compensation for
consulting services, in connection with the issuance of preferred
stock, and in relation to the issuance of convertible debt. Note 11
discusses options issued through the Company's incentive stock
option plan.

F-11

EPIXTAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

NOTE 1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

Goodwill

Goodwill represents the excess acquisition cost over the fair value
of the tangible and identified intangible net assets of the NOL
acquisition in 2001. Goodwill was being amortized over an estimated
useful life of five years. In accordance with SFAS No. 142
"Goodwill and Other Intangible Assets", the Company no longer
amortizes goodwill, but reviews goodwill for impairment.

SFAS No. 142 requires the Company to compare the fair value of
goodwill to the carrying amount and determine if impairment
occurred. Impairment occurs when the fair value of the goodwill is
lower than the carrying value. For the year ended December 31,
2002, fair value was determined by an outside valuation based on
discounted cash flows, market multiples or appraisal value as
appropriate. For the year ended December 31, 2003, the Company
determined the fair value by applying the valuation methods
utilized for the year ended December 31, 2002. For the years ended
December 31, 2003 and 2002, there was no impairment.

Intangible Assets

The Company's intangible assets consist of a non-competition
agreement entered into as part of the acquisition of Phoneboy
Prepaid, Inc. (see above). The non-competition agreement is stated
on the basis of cost and is amortized on a straight-line basis over
two years (see Note 7). There were no intangibles with indefinite
lives as of December 31, 2003 or 2002. Intangible assets are
included in "Deposits and Other" in the accompanying consolidated
financial statements.

Income Taxes

The Company accounts for income taxes under SFAS No. 109,
"Accounting for Income Taxes". SFAS No. 109 requires an asset and
liability approach for financial reporting for income taxes. Under
SFAS No. 109, deferred taxes are provided for temporary differences
between the carrying values of assets and liabilities for financial
reporting and tax purposes at the enacted rates at which these
differences are expected to reverse.

Discontinued Operations

In March 2001, the Company discontinued the operations of Savon. In
2002, Savon had no operations, sales or other significant
transactions.

F-12

EPIXTAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

NOTE 1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

Business Segments

SFAS No. 131, "Disclosures About Segments of an Enterprise and
Related Information", establishes standards for the way that public
companies report information about operating segments in annual
financial statements and requires reporting of selected information
about operating segments in interim financial statements regarding
products and services, geographic areas, and major customers. SFAS
No. 131 defines operating segments as components of a company about
which separate financial information is available that is evaluated
regularly by the chief operating decision maker in deciding how to
allocate resources and in assessing performance. The acquisition of
Phoneboy Prepaid, Inc. (see above) does not meet the criteria of a
reportable segment under SFAS 131 and, therefore, the Company has
determined that it operates in only one segment.

Recent Accounting Pronouncements

In 2002, the Company adopted the disclosure provisions of SFAS No.
148, "Accounting for Stock-Based Compensation - Transition and
Disclosure (an amendment to FASB Statement No. 123)." SFAS No. 148
amends the disclosure requirements of SFAS No. 123 to require
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.

In January 2003, the FASB issued FASB Interpretation No. 46,
"Consolidation of Variable Interest Entities, an Interpretation of
Accounting Research Bulletin No. 51." In December 2003, the FASB
issued FIN No. 46R, which clarified certain issues identified in
FIN 46. FIN 46R requires an entity to consolidate a variable
interest entity if it is designated as the primary beneficiary of
that entity even if the entity does not have a majority of voting
interests. A variable interest entity is generally defined as an
entity where its equity is unable to finance its activities or
where the owners of the entity lack the risk and rewards of
ownership. The provisions of this statement apply at inception for
any entity created after January 31, 2003. For an entity created
before February 1, 2003, the provisions of this interpretation must
be applied at the beginning of the first interim or annual period
beginning after March 1, 2004. The Company does not have any
interest in variable interest entities and therefore the adoption
of this standard is not expected to have an impact on the Company's
financial position and results of operations.

In April 2003, the Financial Accounting Standards Board ("FASB")
issued SFAS No. 149, "Amendment of Statement 133 on Derivative
Instruments and Hedging Activities." SFAS No. 149 amends and
clarifies the accounting for derivative instruments, including
certain derivative instruments embedded in other contracts, and for
hedging activities under SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 149 is generally
effective for contracts entered into or modified after June 30,
2003 and for hedging relationships designated after June 30, 2003.
The adoption of SFAS No. 149 did not have any impact on the
Company's financial position, results of operations or cash flows.

F-13

EPIXTAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

NOTE 1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recent Accounting Pronouncements (Continued)

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of Both Liabilities and
Equity." SFAS No. 150 requires that certain financial instruments,
which under previous guidance were recorded as equity, be recorded
as liabilities. The financial instruments affected include
mandatorily redeemable stock, certain financial instruments that
require or may require the issuer to buy back some of its shares in
exchange for cash or other assets, and certain obligations that can
be settled with shares of stock. The Company adopted SFAS No. 150
on June 1, 2003. The adoption of this statement did not have any
effect on the Company's financial position, results of operations
or cash flows.

In November 2002, the Financial Accounting Standards Board issued
Interpretation No. 45, "Guarantor's Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others," an interpretation of SFAS No. 5, 57, and
107 and rescission of SFAS Interpretation No. 34. This statement
addresses the disclosures to be made by a guarantor in its interim
and annual financial statements about its obligations under
guarantees. This interpretation also clarifies the requirements
related to the recognition of a liability by a guarantor at the
inception of a guarantee for the obligations the guarantor has
undertaken in issuing that guarantee. The adoption of this
statement did not have a significant impact on the Company's
financial position or results of operations.

NOTE 2. RESTATEMENT OF PRIOR CONSOLIDATED FINANCIAL STATEMENTS

The prior consolidated financial statements of the Company have been
restated as a result of management re-evaluating the accounting
treatment of three previously recorded transactions. Those transactions
are as follows:

Savon LLC Acquisition

In November 2000, the Company exchanged 2,000,000 shares of Company
common stock for 80% of the outstanding member interests of Savon
LLC. Transvoice Investments Ltd., the seller, received 33% of the
outstanding common stock of the Company through this acquisition.
Pursuant to SEC Staff Accounting Bulletin No. 48, this acquisition
should have been recorded at historical cost of Savon because of
the significance of the ownership interest that the Transvoice
stockholder interests had following this acquisition. However, the
Company recorded the transaction at the fair value of the Company
common stock exchanged for the interest and, as a result, goodwill
was recorded in connection with this acquisition which should not
have been recorded. The Company has restated the prior consolidated
financial statements to record this acquisition at historical cost
of Savon at the date of purchase and, consequently, removed all
goodwill, goodwill amortization and impairment charges previously
recorded relating to this transaction.

F-14

EPIXTAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

NOTE 2. RESTATEMENT OF PRIOR CONSOLIDATED FINANCIAL STATEMENTS (Continued)

National On Line Acquisition

On March 31, 2001, the Company acquired 100% of the outstanding
equity interests of National On Line, in a transaction involving
two payments, for a total of 4,500,000 shares of Company common
stock. Due to the fact that Transvoice Investments Ltd. owned 80%
of National On Line prior to the acquisition and 56% of the
outstanding Company common stock following the acquisition, the
purchase of the 80% interest should have been recorded at
historical cost of National On Line, pursuant to the guidelines of
SEC Staff Accounting Bulletin No. 48. Rather than record the 20%
interest at fair value and the 80% interest at historical cost, the
Company recorded the entire acquisition at the fair value of the
4,500,000 shares of Company common stock exchanged. As a result,
goodwill was recorded in connection with the purchase of the 80%
which should not have been recorded. The Company has restated the
prior consolidated financial statements to reflect the acquisition
of the 80% interest at historical cost of National On Line at the
date of purchase and, consequently, removed the goodwill and
goodwill amortization related thereto.

Loss on Extinguishment of Debt

On October 31, 2001, the Company entered into a loan agreement to
borrow up to $5,000,000 from a then unrelated entity. The note
provided for interest at 7%, was collateralized by accounts
receivable and was due on demand. In August and September 2002, the
creditor became a stockholder of the Company when the entity
acquired a total of 770,000 common shares. In November 2002, the
Company entered into an agreement, which was executed on December
6, 2002 and amended on March 3, 2003, whereby the creditor released
the collateral and agreed not to demand payment before January 2005
in exchange for certain consideration. That consideration consisted
of warrants to purchase 4,000,000 shares of Company common stock at
an exercise price of $.50 per share for a term of three years
beginning in May 2003. Pursuant to EITF 96-19, management has
determined that the transaction should have been treated as an
extinguishment of the original instrument and an execution of a new
note at December 6, 2002. The fair value of the warrants,
determined on the grant date (March 3, 2003), should have been
treated as a component of the calculation of the loss associated
with that extinguishment and should have been recognized in the
statement of operations in December 2002. In addition, the new note
should have been recorded at fair value on the date that it was
entered into (December 6, 2002).

In 2002, the Company recorded the fair value of the warrants at the
date the agreement was negotiated (November 2002) as deferred
financing costs and began amortizing those costs over the new life
of the loan (two years). The 2002 consolidated financial statements
have been restated to reflect the loss on debt extinguishment in
2002, measured by the fair value of the warrants on the date of
grant, reduced by the discount on the note required to reflect that
note at fair value at the date it was executed. The discount is
being amortized over the life of the new note, approximately two
years. The fair value of both the warrants and the note payable was
determined by appraisal.

F-15

EPIXTAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

NOTE 2. RESTATEMENT OF PRIOR CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Summary

As a result of the transactions described above, the previously
reported net loss for the year ended December 31, 2002 has
increased by approximately $9,509,000 to approximately $11,955,000.
Net loss per share as previously reported ($.23) was restated to a
net loss per share of $(1.13). In addition, stockholders' equity as
of December 31, 2002 of approximately $12,043,000 as previously
reported was reduced to a stockholders' deficiency of approximately
$2,147,000.

The restated balance sheet as of December 31, 2002 is as follows:

As Previously
Reported Adjustments Restated
-------- ----------- --------
ASSETS

Debt restructuring costs - current portion $ 500,000 $ (500,000) $ -
Other current assets 4,739,186 4,739,186
Property and equipment, net 406,971 - 406,971
Debt restructuring costs - non-current portion 458,333 (458,333) -
Goodwill 16,801,359 (13,441,087) 3,360,272
Other Assets 76,716 - 76,716
------------ ------------ ------------
Total assets $ 22,982,565 $(14,399,420) $ 8,583,145
============ ============ ============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities $ 8,377,478 - $ 8,377,478
Long-Term Debt:
Capital lease obligation 88,451 - 88,451
Note payable 2,474,000 (209,300) 2,264,700
------------ ------------ ------------
Total long-term debt 2,562,451 (209,300) 2,353,151
Stockholders' Equity (Deficiency):
Common stock 10,503 - 10,503
Additional paid-in capital 31,757,997 (18,366,124) 13,391,873
Accumulated deficit (19,725,864) 4,176,004 (15,549,860)
------------ ------------ ------------
Total stockholders' equity (deficiency) 12,042,636 (14,190,120) (2,147,484)
------------ ------------ ------------
Total liabilities and stockholders'
equity (deficiency) $ 22,982,565 $(14,399,420) $ 8,583,145
============ ============ ============

F-16

EPIXTAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

NOTE 2. RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Summary (Continued)

The restated statement of operations for the year ended December
31, 2002 is as follows:

As Previously
Reported Adjustments Restated
-------- ----------- --------

Revenues $ 26,250,851 $ - $ 26,250,851
Cost of sales 17,781,967 - 17,781,967
------------ ------------ ------------
Gross profit 8,468,884 8,468,884
Selling, general and administrative 10,332,086 - 10,332,086
------------ ------------ ------------
Loss from operations (1,863,202) - (1,863,202)
------------ ------------ ------------
Other (Expense):
Interest expense (539,369) 41,667 (497,702)
Loss on debt extinguishment - (9,550,700) (9,550,700)
------------ ------------ ------------
Loss from continuing operations (2,402,571) (9,509,033) (11,911,604)
Loss from discontinued operations (43,318) - (43,318)
------------ ------------ ------------
Net Loss $ (2,445,889) $ (9,509,033) $(11,954,922)
============ ============ ============
Net Loss Per Common Share
Basic and Diluted:
Continuing operations $ (0.23) $ (0.91) $ (1.13)
Discontinued operations (0.00) (0.00) (0.00)
------------ ------------ ------------
Net loss $ (0.23) $ (0.91) $ (1.13)
============ ============ ============
Weighted Average Number of Common
Shares Outstanding 10,503,000 - 10,503,000
============ ============ ============

NOTE 3. PROFITABILITY AND LIQUIDITY

At December 31, 2003, the Company reflected an accumulated deficit of
approximately $13,000,000 as a result of net losses in each year of
operation except 2003. In the first quarter of 2003 the Company began
to report profitable operations. However, cash flows from operations
for the year ended December 31, 2003 were negative. The Company
continues to experience certain liquidity issues.

In October 2003, the Federal Trade Commission ("FTC") served a
complaint in which the FTC alleged that the Company and certain
subsidiaries were misleading potential customers of the internet
service business. Specifically, the FTC alleged that the Company was
signing customers for a free thirty day trial period without
appropriate consent and was failing to inform those customers that
unless the service was cancelled before the end of the thirty day trial
period the customer would be billed for the service in future periods.
At the same time it served the complaint, the Court issued a temporary
restraining order, asset freeze, order permitting expedited discovery,
order appointing a temporary receiver and an order to show cause in an
action commenced by the FTC. In November 2003, without any finding of
wrongdoing, the Company agreed in principle to enter into a preliminary
injunction with the FTC. As a result, the Company

F-17

EPIXTAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

NOTE 3. PROFITABILITY AND LIQUIDITY (Continued)

was allowed to resume business and the asset freeze was lifted. As part
of the agreement, the Company was required to establish an escrow
account for the payment of future customer refunds and other amounts
subject to future resolution of the dispute with the FTC, into which
approximately $1,702,000 was deposited. As of December 31, 2003, the
amount held in escrow was approximately $856,000. During 2003, the
Company paid $75,000 in fees and fines and received released funds of
approximately $772,000 from the escrow funds. In addition, the Company
can not utilize approximately $417,000 of cash held in Philippine and
U.S. bank accounts until they receive approval by the FTC. As a result,
this cash is reflected as restricted in the accompanying balance sheet.
The action by the FTC, and the Company's resulting defense against such
action, caused the Company to experience business interruption and
incur substantial costs. Commencing on October 30, 2003, the Company
was unable to market its internet product and has not yet returned to
marketing at a level equivalent to that before the injunction. All of
this has had a significant negative impact on the financial position
and results of operations of the Company which has not yet been fully
measured. Also, although the Company believes that it is operating
within the current laws and regulations, there can be no assurance that
there will be no further action by the FTC or any other governmental
agency in the future.

In part as a result of the actions of the FTC, the Company decided to
expedite the implementation of a business plan previously developed,
which involves moving into an additional business segment. The Company
intends to sell outsourcing services to customers through call centers
which the Company will own and/or operate. This business plan calls for
the Company to acquire or establish call center operations in foreign
countries. This business expansion will require substantial working
capital commitments on the part of the Company.

In addition, the Company currently operates an internet based business
which could be subject to technological obsolescence in the future.
While the Company intends to continue to operate the internet provider
service business, the Company also intends to expend significant
resources developing the previously described call center operations.
As a result, there may not be sufficient resources available to allow
the internet provider service business to maintain or increase its
customer base.

In order to maintain profitability, the Company needs to be able to
retain customers in the internet provider service segment as well as
develop customers in the call center segment. Management believes that
the steps it is taking to implement the new business plan will allow
the Company to maintain profitability. These steps include:

o hire additional management personnel with call center
experience
o enter into preliminary agreements to acquire call center
assets in the Philippines
o enter into a lease in Manila for space to be developed as a
call center
o enter into agreements for outsourcing services
o prepare a private placement offering for debt or equity
funding
o renegotiate the maturity date of debt instrument (see Note 9)

Although management believes that the actions currently being taken
provide the opportunity for the Company to maintain profitability and
liquidity, there can be no assurances that management's plans will be
achieved.

F-18

EPIXTAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

NOTE 4. ACCOUNTS RECEIVABLE

2003 2002
---- ----
(Restated)

Accounts receivable - gross $3,424,963 $2,018,256
Holdbacks and reserves 5,733,290 4,285,564
Unbilled receivables 114,834 420,763
---------- ----------
9,273,087 6,724,583
Allowance for doubtful accounts (2,178,035) (2,132,371)
Estimated settlement liabilities (1,485,377) (789,886)
---------- ----------
Accounts receivable - net $5,609,675 $3,802,326
========== ==========

The Company's accounts receivable include the determined collectible
portion of receivables based upon reconciliation with the outside
billing services and local exchange carriers (LEC). Additionally, as is
common business practice in the telecommunications industry, the
billing services remit collections reduced by a "holdback or reserve".
The holdback or reserve represents anticipated uncollectible billings,
disputed billings or adjustments to a customer's account and are
included in accounts receivable net of an allowance for collectibility.
While holdbacks and reserves are expected to be collected, the Company
has established an allowance of approximately fifty percent of such
amounts as of December 31, 2003 and 2002. The Company writes off
accounts considered uncollectible against the allowance upon
notification from the billing companies that amounts are uncollectible.
Additionally, based upon notification from the billing companies, the
Company recorded $1,485,377 and $789,886 at December 31, 2003 and 2002,
respectively, in anticipated adjustments due the billing companies as
future settlements. Unbilled receivables represents amounts billed
subsequently for services provided in the current period. The Company's
accounts receivables serve as collateral for certain debt of the
Company (see Note 8).

Factoring Agreements

In April 2003, a subsidiary of the Company entered into a factoring
and security agreement with a non-related party. Under the terms of
the agreement, a maximum of $2,000,000 of accounts receivable can
be factored at a 50% advance rate for an initial discount fee of
1.25% of the purchased receivable. For accounts receivables
uncollected after 30 days, the Company is charged an additional
0.625% for every 15 day period up to 90 days. Thereafter, for the
next two 15-day periods, the company is charged an additional
0.75%. Accounts receivable are also factored through a billing
company under similar terms with a maximum advance of $500,000. The
total amount of factored accounts receivable was $1,100,752 as of
December 31, 2003. Factoring charges during 2003 amounted to
$311,346. Accounts receivable are presented net of factored
amounts.

Deferred Revenue

The Company's customers are billed on a thirty day cycle. Deferred
revenue represents the pro-rata portion of billings to customers
that have not been earned. Customers are billed monthly for one
month in advance. The amount of deferred revenue is determined by
multiplying the advance billing amounts by the percentage of days
during the preceding thirty-day service period that occur during
the subsequent accounting period.

F-19

EPIXTAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

NOTE 5. DEFERRED BILLING COSTS

The Company's billing costs consist of transaction charges from its
third party billing companies and LEC's. Billing costs are deducted by
the billing companies in advance by reducing amounts collected on the
Company's behalf before remitting the net amount. Since the Company
bills its customers one month in advance, a portion of the billing
costs deducted from remittances from the billing companies relate to
transaction charges for revenues that are deferred (see Note 11). The
amount of deferred billing costs is determined by multiplying the
advance billing amounts by the percentage of days during the preceding
thirty-day service period that occur during the subsequent accounting
period.

NOTE 6. PROPERTY AND EQUIPMENT

Estimated
Useful Lives 2003 2002
------------ ---- ----

Equipment 5-7 years $1,012,682 $353,284
Software 3 Years 200,000 -
Furniture and fixtures 7 years 241,193 141,434
Leasehold improvements 5 years 129,583 17,628
---------- --------
1,583,458 512,346
Less: accumulated depreciation and amortization (319,613) (105,375)
---------- --------
$1,263,844 $406,971
========== ========

Depreciation expense was $214,299 and $98,557 for the years ended
December 31, 2003 and 2002, respectively.

NOTE 7. INTANGIBLE ASSETS

Balance of non-competition agreement at December 31, 2003:

Gross $39,237
Accumulated amortization 4,907
--------
Net balance $34,330
========

The Company had no amortizable intangible assets at December 31, 2002.
Amortization expense for intangible assets was $4,907 for the year
ended December 31, 2003.

Estimated amortization expense for the succeeding years ending December
31 is as follows:

2004 $19,619
2005 14,711

F-20

EPIXTAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

NOTE 8. DEBT

2003 2002
---- ----

In July 2002, National Online Services, Inc. issued notes to two
telemarketing vendors in the amounts of $302,532 and $101,934.
The notes were payable in one year, bearing interest at 10% per
annum and were given in settlement of outstanding accounts payable
balances. The notes were satisfied with the issuance of stock in 2003. $ - $404,466

In October 2003, the Company acquired the assets and certain liabilities
of Phone Prepaid, Inc., which included a revolving line of credit in the
amount of $10,000 bearing annual interest at 3.25% above prime. The
prime rate was 4.00% on December 31, 2003. The line of credit expires in
December 2005.
9,800 -

In December 2003, the Company issued a convertible debenture in the
amount of $500,000 to unrelated parties. The debenture accrues interest
at 7% annually and matures in December 2004. The outstanding principal
and interest on the debenture is convertible at any time into shares of
the Company's common stock. On the date of the issuance of the
convertible debenture, Company's common stock had a closing price per
share on the Over-the Counter Bulletin Board of $5.15. Based on the
terms of the conversion associated with the debenture, there was an
intrinsic value associated with the beneficial conversion feature
estimated at $326,619, which was recorded as deferred interest and
presented as a discount on the convertible debenture, net of
amortization to be taken over the one-year term of the debenture. Also,
as part of the convertible debenture, the company issued detachable
warrants to purchase 62,500 shares of the Company's common stock for
$5.00 per share exercisable at any time over a five year period from the
date of issuance. Using the Black-Scholes model the Company estimated
the fair value of the warrants and allocated $173,381 of the proceeds
from the debenture to the warrants which was recorded as deferred
interest and presented as a discount on the convertible debenture, net
of amortization to be taken over the one-year term of the debenture. The
note is collateralized by the Company's accounts receivables.

41,666 -

The Company leases certain equipment under capitalized leases with
monthly payments ranging from $3,627 to $6,913 and interest ranging from
7% to 14% annually. The leases expire in years ranging from 2004 to
2006. Minimum future lease payments total $96,512, consisting of $80,087
in 2004, $11,252 in 2005, and $4,952 in 2006. $2,862 of the minimum
future lease payments
represents interest. 93,650 167,771
-------- --------
145,116 572,237
Less current portion 121,513 483,786
-------- --------
$ 23,603 $ 88,451
======== ========

F-21

EPIXTAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

NOTE 8. DEBT (Continued)

Annual maturities of long-term debt are as follows:

For the years ending December 31,

2004 $579,847
2005 17,828
2006 5,775
---------
Total payments due 603,450
Less unamortized discount (458,334)
---------
$145,116
=========

NOTE 9. NOTE PAYABLE - STOCKHOLDER

On October 31, 2001, the Company entered into a loan agreement to
borrow up to $5,000,000 from a then unrelated entity. In August 2002,
the creditor became a stockholder of the Company. The note provided for
interest at 7%, was collateralized by accounts receivable and was due
on demand. In November 2002, the Company entered into an agreement,
which was executed on December 6, 2002 and amended on March 3, 2003,
whereby the creditor released the collateral and agreed not to demand
payment before January 2005 in exchange for certain consideration. That
consideration consisted of warrants to purchase 4,000,000 shares of
Company common stock at an exercise price of $.50 per share for a term
of three years beginning in May 2003. Pursuant to EITF 96-19,
management accounted for this transaction as an extinguishment of the
original instrument and an execution of a new note at December 6, 2002.
The fair value of the warrants was recorded as a component of the
calculation of the loss associated with that extinguishment. The new
note was recorded at fair value on the date that it was entered into
(December 6, 2002). The resulting discount on the note is being
amortized over the life of the new note, approximately two years. The
fair value of both the warrants and the note payable was determined by
appraisal.

As part of the agreement, the creditor also agreed to release its
security interest in the Company's accounts receivable to the extent
required to secure additional debt financing. Except for the demand
deferral and the release of the security interest, all other terms of
the note stayed in effect. The outstanding principal balance was
$2,369,350 and $2,264,700 as of December 31, 2003 and 2002,
respectively. Interest of $255,334 was paid in July 2003.

F-22

EPIXTAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

NOTE 10. ACCOUNTS PAYABLE - SUBJECT TO COMPROMISE

As discussed in Note 1, 2 and 17, the Company's subsidiary, Savon,
filed for bankruptcy protection under Chapter 11. At the time of
filing, Savon had $385,401 in liabilities of which $351,263 was due to
its telecommunications carrier and related to a lawsuit initiated by
the carrier. Pre-petition liabilities are required to be segregated
from post-petition liabilities. Upon completion of a plan of
reorganization as part of Chapter 11 or change in bankruptcy status,
liabilities subject to compromise are adjusted. During 2003, a
bankruptcy settlement was reached, resulting in a forgiveness of the
liabilities amounting to $324,966.

NOTE 11. NON-CASH INVESTING AND FINANCING ACTIVITIES

During 2003, the Company issued warrants to purchase 329,140 shares of
common stock at an exercise price of $7.87 per share, exercisable over
five years, relating to the issuance of preferred stock (see Note 13).
Based upon the Black-Scholes option price calculation, the value of
each warrant was $6.63 and the transaction was valued at $2,183,157,
which was accounted for as offering costs, resulting in offsetting
charges to additional paid-in capital.

In August 2003, the Company entered into a consulting agreement,
providing for the issuance of 50,000 shares of common stock as
compensation for services valued at $175,000 as specified in the
agreement. The total amount was charged to expense during 2003. As of
December 31, 2003, these shares have not been issued and as a result,
are included in common stock to be issued in the accompanying balance
sheet.

In September 2003, the Company issued 127,117 shares of common stock in
settlement of debt and accrued interest totaling $404,506 and $40,406,
respectively. The shares were valued based upon the outstanding amounts
related to the loan and were accounted for as a reduction in debt and a
charge to accrued interest.

In October 2003, the Company issued 13,617 shares of common stock as
compensation for consulting services valued at $85,000. The shares were
valued based upon the value of services provided as provided for in the
agreement. The total amount was charged to expense during 2003.

In October 2003, the Company issued 15,652 shares of common stock as
consideration valued at $90,000 related to the acquisition of the net
assets of Phoneboy Prepaid, Inc. (see Note 1). The shares were valued
based upon the terms of the purchase agreement and recorded in
accordance with the allocation of the purchase price to the assets and
certain liabilities as specified in the purchase agreement with the
excess of the total purchase price over the net assets purchased
allocated to the non-compete agreement included in the purchase
agreement. The non-compete agreement is included in "Deposits and
other" in the "Other assets" section of the balance sheet. As of
December 31, 2003, these shares have not been issued and as a result,
are included in common stock to be issued in the accompanying balance
sheet.

F-23

EPIXTAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

NOTE 11. NON-CASH INVESTING AND FINANCING ACTIVITIES (Continued)

In December 2003, the Company issued convertible debt, convertible into
shares of the Company's common stock at a conversion rate as defined.
Purchasers of the convertible debt also received warrants to purchase
62,500 shares of the Company's common stock at an exercise price of
$5.00 per share, exercisable over five years. The accounting treatment
of the beneficial conversion feature and the detachable warrants
resulted in $495,834 of discounts against the debt, net of amortization
of $41,666, which was charged to interest expense in 2003 (see Note 8).

NOTE 12. INCOME TAXES

The components of the Company's provision (benefit) for income taxes,
for the fiscal years ended 2003 and 2002 are as follows:

2003 2002
---- ----
(Restated)

Current:
Federal $ - $ -
State - -
------------- -------------
- -
------------- -------------
Deferred:
Federal - -
State - -
------------- -------------
- -
------------- -------------
$ - $ -
============= =============

A reconciliation of income tax computed at the statutory federal rate
to income tax expense (benefit) is as follows:

2003 2002
---- ----
(Restated)

Tax provision at the statutory rate of 35% $1,532,600 $(4,184,223)
State income taxes, net of federal income tax 175,730 (443,194)
Change in valuation allowance (1,752,797) 4,638,135
Permanent items 44,467 11,093
Other - (21,811)
------------- -----------
$ - $ -
============= ===========

F-24

EPIXTAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

NOTE 12. INCOME TAXES (Continued)

The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at
December 31, 2003, and 2002 are presented below.

2003 2002
---- ----
(Restated)

Deferred tax assets:
Net operating loss carryforward $ 1,548,735 $ 1,418,369
Deferred financings costs 1,783,307 3,566,613
Allowance for doubtful accounts 847,256 829,492
----------- -----------
Total gross deferred tax assets 4,179,298 5,814,474
Less valuation allowance (4,061,678) (5,814,474)
----------- -----------
Total net deferred tax assets 117,620 -

Deferred tax liabilities:
Depreciation on fixed assets (117,620) -
----------- -----------

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

Because of the historical earnings history of the Company, the net
deferred tax assets have been fully offset by a 100% valuation
allowance. The valuation allowance for the net deferred tax assets was
approximately $4.1 million and $5.8 million as of December 31, 2003 and
2002, respectively.

In assessing the realizability of deferred tax assets, management
considers whether it is more likely than not that some portion or all
of the deferred tax assets will not be realized. The ultimate
realization of deferred tax assets is dependent upon the generation of
future taxable income during the periods in which those temporary
differences become deductible. Management considers the scheduled
reversal of deferred tax liabilities, projected future taxable income
and tax planning strategies in making this assessment.

At December 31, 2003 and 2002, the Company had net operating loss
carryforwards available for US tax purposes of approximately $3.9
million and $3.6 million respectively. These carryforwards expire
through 2023.

Under Section 382 of the Internal Revenue Code of 1986, as amended (the
"Code"), the utilization of net operating loss carryforwards is limited
under the change in stock ownership rules of the Code. As a result of
ownership changes, which occurred in June 2002, the Company's operating
tax loss carryforwards are subject to these limitations. Future
ownership changes could also further limit the utilization of any net
operating loss carryforwards as of that date.

F-25

EPIXTAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

NOTE 13 CONVERTIBLE PREFERRED STOCK

During 2003, the Company issued 23,510 shares of Series A Convertible
Preferred Stock and warrants to 16 investors for aggregate
consideration of $2,351,000. Each share of Preferred Stock has a par
value of $.001 and is convertible into shares of the Company's common
stock at an initial conversion price of $3.50. However, the terms of
the sale stated that, should the Company's net income for the year
ended December 31, 2003 not exceed $5,000,000, the conversion price
would be adjusted to $2.00 per share. Accordingly, the conversion price
in effect as of December 31, 2003 was $2.00 per share. Additionally,
the conversion price will be adjusted based upon the company's net
income in 2004 to $2.00 if the net income is less than $10,000,000,
$3.00 if net income is between $10,000,000 and $12,500,001, and $3.50
if net income exceeds $12,500,000. The shares are to be automatically
converted, at the then effective conversion price, in the event of an
offering in which the Company's common shares are listed on the New
York or American Stock Exchange or quoted on NASDAQ, or any combination
thereof; the minimum gross proceeds from such offering is at least
$50,000,000; and the offering price of such offering is at least $10.00
per share. The shares are also subject to automatic conversion at the
election of the holders of a majority of the preferred shares. The
conversion price is also subject to anti-dilution adjustments as set
forth in the purchase agreement.

Based on the terms of the conversion associated with the preferred
stock, there was an intrinsic value associated with the beneficial
conversion feature estimated at $1,884,375, which was recorded as a
dividend and therefore as a reduction of retained earnings.
Additionally, each purchaser of the Preferred stock received, for each
share of preferred stock purchased, one warrant to purchase 14 shares
of the company's common shares at an exercise price of $7.87 per share
over a five year period. Using the Black-Scholes model the Company
estimated the fair value of the warrants to be $1,749,845.

The Company engaged certain consultants in connection with the offering
of the preferred stock. The consultants were compensated with $214,000
in cash and the issuance of warrants to purchase 284,471 shares of the
Company's common shares at exercise prices ranging from $3.41 to $5.00
per share for a period of five years.

In the event of liquidation, the holders of the preferred shares are
entitled in preference over holders of common shares to be paid first
out of the assets of the corporation available for distribution to
holders of the Company's capital stock of all classes, an amount equal
to two (2) times the original purchase price paid for the preferred
stock, or $4,702,000.

The holders of the preferred stock are also entitled to receive
equally, share for share, as and when declared by the Board of
Directors of the Company, cumulative dividends at an annual rate of 8%
of the original issue price. Such dividends, if declared, are payable
annually on each anniversary date of original issuance. Cumulative
dividends earned as of December 31, 2003 were $188,080. No dividends
can be declared or paid to holders of common shares unless all
cumulative dividends are paid to preferred stockholders.

F-26

EPIXTAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

NOTE 13. CONVERTIBLE PREFERRED STOCK (Continued)

After one year from the date of issuance of the preferred stock, the
Company may, at its discretion, repurchase all, but not less than all,
of the preferred stock issued for a price of $200 per share plus 8%
cumulative dividends.

NOTE 14. COMMON STOCK WARRANTS

A summary of warrants issued and outstanding in connection with
convertible debentures and equity transactions as discussed above is
presented below. Upon exercise, warrants are convertible into an equal
number of the Company's common stock. The warrants are exercisable
immediately.

Weighted-
Average
2003 Exercise Price
---- --------------

Outstanding at beginning of year - -
Granted 4,713,611 $ 1.36
Exercised - -
Forfeited - -
---------
Outstanding at end of year 4,713,611 1.36
=========
Warrants exercisable at year-end 4,713,611 1.36
=========

The following table summarizes information for warrants outstanding at
December 31, 2003:

Warrants Outstanding
----------------------------------------------------
Weighted-
Range of Number Average Weighted-
Exercise Outstanding Remaining Average
Prices at 12/31/03 in months Exercise Price
------ ----------- --------- --------------

.50 4,000,000 29 $ .50
3.41 - 5.00 284,471 55 4.27
5.01 - 6.00 100,000 57 6.00
6.01 - 7.87 329,140 54 8.00

NOTE 15. RELATED PARTY TRANSACTIONS

The Company has entered into two agreements with Transvoice Investment,
Inc. ("Transvoice"), the managing member of Transvoice Investment LLC,
the Company's majority stockholder. The Chairman of the Board of the
Company is one of two stockholders of Transvoice.

F-27

EPIXTAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

NOTE 15. RELATED PARTY TRANSACTIONS (Continued)

In October 2001, the Company entered into an agreement with Transvoice,
whereby Transvoice had provided certain services related to the
development of the Company's internet service provider business. Under
the terms of the agreement, the Company is to pay Transvoice $150,000
per month plus $1.00 for each customer in excess of 100,000 customers
computed monthly, until such time that the Company is no longer
generating revenues from its internet service provider business. The
Company incurred expenses of $2,637,618 and $2,111,438 during 2003 and
2002, respectively, for services under this agreement.

In April 2003, the Company entered into an agreement with Transvoice,
whereby Transvoice provides consulting services related to the
development of marketing and telemarketing aspects of the Company.
Transvoice is not compensated for its services but is reimbursed for
payments made to subcontractors performing services related to the
agreement. The Company incurred expenses under this agreement in the
amount of $1,050,000 during the year ended December 31, 2003.

NOTE 16. STOCK OPTION PLAN

Options granted under the 2001 incentive stock option plan are
exercisable at the market price at the date of grant and, subject to
termination of employment, expire five years from the date of grant,
are not transferable other than on death, and vest in three equal
annual installments commencing one year from the date of grant.

A summary of the Company's stock option plan as of December 31, 2003
and 2002 is presented below:

2003 2002
---------------------------- -----------------------------
Weighted Weighted
Average Average
Exercise Exercise
Shares Price Shares Price
------ ----- ------ -----

Outstanding at the beginning
of the year 1,030,000 $2.50 1,050,000 $2.50
Granted at fair value 3,895,000 3.88 - -
Forfeited (182,000) 4.17 20,000 2.50
Exercised (33,333) .42 -
--------- ---------
-
Outstanding at the end of the year 4,709,667 $3.45 1,030,000 $2.50
========= =========

Options exercisable at the end
of the year 611,328 338,997
======== =======

Weighted average fair value of
options granted $3.01 $2.46

F-28

EPIXTAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

NOTE 16. STOCK OPTION PLAN (Continued)

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

Options Outstanding Options Exercisable
---------------------------------------------- -------------------------------
Weighted-
Range of Number Average Weighted- Number Weighted-
Exercise Outstanding Remaining Average Exercisable Average
Prices at 12/31/03 in years Exercise Price at 12/31/03 Exercise Price
------ ----------- -------- -------------- ----------- --------------

0.00 - 0.42 66,667 2.83 .42 -
2.50 - 3.50 4,118,000 2.12 3.25 611,328 2.50
4.50 - 5.00 525,000 2.60 4.80 - -

NOTE 17. COMMITMENTS, CONTINGENCIES AND OTHER MATTERS

Savon

During 2001, the Company's subsidiary (Savon) and the minority
interest owner of Savon were named as defendants in a lawsuit
instituted by Savon's wholesale telecommunications carrier. The
lawsuit alleged breach of contract as well as other related
theories and damages. Subsequent to the initiation of the lawsuit,
the plaintiff filed Chapter 11 under the federal bankruptcy code.
Savon had filed what it believed to be valid counterclaims, which
were stayed when the plaintiff filed Chapter 11. In August 2002,
Savon filed Chapter 11 to stay the plaintiff's possible judgment as
well as continuing legal fees it was incurring. During 2003, claims
subject to the lawsuit were settled as a result of the bankruptcy
reorganization, resulting in payment of $65,000 by the Company.

State Proceedings and Inquiries

As previously discussed, the Company uses telemarketing services to
obtain customers. During the normal course of business, the Company
has received inquiries or complaints from regulatory agencies.
Despite its attempts to minimize complaints, certain states have
issued fines or temporary restraining orders. While the ultimate
outcome of these matters cannot be ascertained, the Company
believes that there will not be a material adverse effect on the
Company's financial position, results of operations or cash flows.

Federal Trade Commission

During 2003, the Company was the subject of a proceeding by the
Federal Trade Commission ("FTC"). The FTC complaint brought in the
United States District Court for the Southern District of Florida
alleged that the Company was misleading potential customers of
their internet service businesses through the use of third party
telemarketers. Specifically, the FTC alleged that the Company was
signing up customers for free thirty day trial periods without
appropriate consent and failing to inform these customers that
unless the service is cancelled before the end of the thirty day
trial period, the customers would be billed through their local

F-29

EPIXTAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

NOTE 17. COMMITMENTS, CONTINGENCIES AND OTHER MATTERS(Continued)

Federal Trade Commission

phone companies. As part of the proceeding, the Company was subject
to a temporary restraining order, asset freeze, order permitting
expedited discovery, order appointing temporary receiver, and order
to show cause as part of the proceeding. In November 2003, without
any finding of wrongdoing, the Company entered into a preliminary
injunction with the FTC. As a result, the Company was allowed to
resume its business and the asset freeze was partially lifted. As
part of the agreement, the Company was required to establish an
escrow account for the payment of future customer refunds and
amounts subject to further resolution of the dispute with the FTC
into which $1,701,684 of collections were deposited. As of December
31, 2003, the total amount held in escrow was $ 855,502 and the
total amount of cash still restricted totaled $416,721. During
2003, $771,182 was returned to the Company and $75,000 was charged
to the Company as fees and fines.

Leases

The Company and its subsidiaries lease office space in Miami,
Florida under operating leases ending on September 30, 2006. Rent
expense related to these leases amounted to $232,850 and $218,273
for the years ended December 31, 2003 and 2002, respectively.

During 2003, a subsidiary of the Company leased corporate
residences and approximately 32,000 square feet of office space in
the Philippines under operating leases expiring in years ranging
from 2004 to 2013. Rent expense related these rentals amounted to
$63,235 for the year ended December 31, 2003.

Annual rental commitments for the years ending December 31 are as
follows:

2004 $434,000
2005 429,000
2006 446,000
2007 464,000
2008 255,000
Thereafter 378,000
----------
$2,406,000
==========

Investor Claim

In 2004, the Company received notification from an investor in the
preferred stock private placement of a claim to rescind that
investment. Upon advice of legal counsel, the Company believes the
claim is without basis. The amount of the investment is $150,000.

F-30

EPIXTAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

NOTE 18. EARNINGS (LOSS) PER COMMON SHARE

The following table sets for the reconciliation of the numerator and
denominator of the basic and diluted EPS computations:

2003 2002
---- ----
(Restated)

Numerator:
Net income (loss) $ 4,378,859 $(11,944,922)
Preferred stock dividends (2,072,455) -
------------ ------------

Numerator for basic income (loss) per share -
income (loss) available to common stockholders 2,306,404 (11,944,922)

Effect of dilutive securities:
Interest on convertible debt 43,670 -
------------ ------------

Numerator for diluted income (loss) per share -
income available to common stockholders
after assumed conversions $ 2,350,074 $(11,944,922)
============ ============

Denominator:
Denominator for basic income (loss) per
share - weighted average shares 10,554,450 10,503,000

Effect of dilutive securities:
Stock options 2,829,304 -
Warrants 901,983 -
Convertible debt 167,918 -
------------ ------------

Dilutive potential common shares:
Denominator for diluted income (loss) per
share - adjusted weighted-average shares
shares and assumed conversions 14,453,655 10,503,000
============ ============

Basic income (loss) per share $ 0.22 $ (1.13)
============ ============
Diluted income (loss) per share $ 0.16 $ (1.13)
============ ============

F-31

EPIXTAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

NOTE 18. EARNINGS (LOSS) PER COMMON SHARE (Continued)

Pro forma information regarding net income and earnings per share is
required by SFAS No. 123, "Accounting for Stock-Based Compensation,"
and has been determined as if the Company had accounted for its stock
options under the fair value method of that Statement. The fair value
for these options was estimated at the grant date using a Black-Scholes
option pricing model with the following weighted average assumptions
for 2003 and 2002, respectively: risk-free interest rates of 3.04% and
4.08%, dividend yields of 0% and 0%, volatility factors of the expected
market price of the Company's common stock of 214% and 209%; and a
weighted average expected life of the options of 5 years.

The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options, which have no vesting
restrictions and are fully transferable. In addition, option valuation
models require the input of highly subjective assumptions including the
expected stock price volatility. Because the Company's employee stock
options have characteristics significantly different from those of
traded options, and because changes in the subjective input assumptions
can materially affect the fair value estimate, in management's opinion,
the existing models do not necessarily provide a reliable single
measure of the fair value of its employee stock options. For purposes
of pro forma disclosures, the estimated fair value of the options is
amortized to expense over the options' vesting period.

No stock-based employee compensation cost is reflected in net income
(loss), as all options granted under those plans had an exercise price
equal to the market value of the underlying common stock on the date of
the grant. The following table illustrates the effect on net income
(loss) and income (loss) per share if the Company had applied the fair
value recognition provisions of FASB Statement No. 123, Accounting for
Stock-Based Compensation, to stock-based employee compensation.

2003 2002
---- ----
(Restated)

Net income (loss) $4,379,160 $(11,944,922)
Deduct: total stock-based compensation expense
determined under fair value based method for all awards,
net of related tax effects (2,512,383) (894,600)
---------- ------------

Pro forma net income (loss) $1,866,322 $(12,839,522)
========== ============

Loss per share:
Basic:
As reported $0.22 $(1.13)
===== =======
Pro forma $0.18 $(1.22)
===== =======
Diluted:
As reported $0.16 $(1.13)
===== =======
Pro forma $0.13 $(1.22)
===== =======

F-32

EPIXTAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

NOTE 19. -PHILIPPINE OPERATIONS

In the fourth quarter of 2003, the Company began operating for its
benefit the activities of a call center located in the Philippines. In
accordance with the terms of an Asset Purchase Agreement (the
"Agreement") dated March 2, 2004, a subsidiary of the Company, Epixtar
Philippines IT-Enabled Services Corporation (EPISC), agreed to acquire
certain assets and assume certain liabilities of I-Call Global Services
Corporation (I-Call). The Agreement provides for a purchase price of
approximately $821,000 payable $55,000 upon execution of the Agreement;
$150,000 at closing subject to certain conditions as defined in the
Agreement, plus a certain number of shares of the Epixtar Corp. as
defined in the Agreement; and a total of $196,000 at various times up
to sixty days after closing date.

The acquisition of I-Call is not considered by the Company to be a
significant acquisition.

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Additional risks and uncertainties not presently known or that are currently
deemed immaterial may also impair our business operations. The risks and
uncertainties described in this document and other risks and uncertainties which
we may face in the future will have a greater impact on those who purchase our
common stock from the Selling securityholder. These purchasers will purchase our
common stock at the market price or at a privately negotiated price and will run
the risk of losing their entire investment.

Until ___________________, 2003, all dealers that effect transactions in these
securities, whether or not participating in this offering, may be required to
deliver a prospectus. This is in addition to the dealers' obligation to deliver
a prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.

EPIXTAR CORP.

shares of common stock

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

PROSPECTUS

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PART II -- INFORMATION NOT REQUIRED IN PROSPECTUS

Indemnification of Directors and Officers.

No statute, charter provisions, by-laws, contract or other arrangements that
insures or indemnifies a controlling person, director or officer of the issuer
affects his or her liability in that capacity.

Other Expenses of Issuance and Distribution.

Registration Fees:
Transfer Agent Fees:
Printing Costs:
Legal Fees:
Accounting Fees:
Sales Commissions/Finders' Fees:

Recent Sales of Unregistered Securities.

In April, 2003, we issued 130,000 warrants to purchase shares of our common
stock to Sands Brothers pursuant to an investment advisory agreement. This
issuance was exempt from the registration requirements of the Securities Act
pursuant to Section 4(2) thereof.

In April 2003, we issued 13,617 shares of common stock to vendors and their
designees pursuant to an agreement with them. This issuance was exempt from the
registration requirements of the Securities Act pursuant to Section 4(2)
thereof.

In June 2003, pursuant to private placement, we issued 23,510 shares of our
preferred stock and warrants to purchase shares of our common stock. The
preferred stock is convertible into shares of our common stock at a present
conversion price presently of $2.00. We also issued a warrant to these investors
to purchase our common stock. We also issued warrants to purchase 64,243 of our
shares to persons who assisted in the offering. The issuance of these securities
was exempt from the registration requirements of the Securities Act pursuant to
Section 4(2) thereof

In July 2003, we issued 127,117 shares of our common stock to satisfy promissory
notes owed to two entities which produced telemarketing services in the past. In
an unrelated transaction we issued warrants to purchase shares to an advisor.
The shares were issued for investment to entities which had substantial
knowledge of our operations. Therefore the issuance of these shares is exempt
from the registration requirements of the Securities Act of 1933 pursuant to
Section 4(2).

In July 2003, we issued 27,726 shares to an investment advisor. We believe this
issuance was exempt from the registration requirements of the Securities Act
pursuant to Section 4(2) thereof.

In September 2003, we issued warrants to purchase 100,000 shares of our common
stock to an investment advisor. This issuance was exempt from the registration
requirements of the Securities Act pursuant to Section 4(2) thereof.

In October 2003, we issued 50,000 shares of our common stock in connection with
an agreement to retain an investment advisor. In the same month we issued 15,652
shares of common stock in connection with the acquisition of assets Both of
these issuances were exempt from the registration requirements of the Securities
Act pursuant to Section 4(2) thereof.

In December, 2003, we issued $500,00 principal amounts of notes convertible into
125,000 shares of our common in a private placement. In addition, these lenders
received warrants to purchase 62,500 shares of our common stock. These issuances
were exempt from the registration requirements of the Securities Act pursuant

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Exhibits.

Location or
Exhibit No. Description of Document Incorporation by Reference
----------- ----------------------- --------------------------

2.1 Exchange Agreement for the Exhibit 10.23 to the Company's Form
Purchase of Part of 8-K filed with the Commission on
SavOnCalling.com, LLC between 11/27/2000.
Global Asset Holdings, Inc. and
Transvoice Investments, Ltd.
Dated November 14, 2000.

2.2 Exchange Agreement by and Exhibit 2.2 to the Company's Form
between Transvoice Investments 10-KSB filed with the Commisson on
Ltd., Sheldon Goldstein & Global 4/15/2002
Asset Holdings, Inc. for
National Online Services, Inc.
Dated March 31, 2001

3.1(a) Certificate of Incorporation Exhibit 3.1(a) to the Company's Form
10-SB filed with the Commission on
11/26/99

3.1(b) Amendments to Certificate of Exhibit 3.1(b) to the Company's Form
Incorporation 10-SB filed with the Commission on
11/26/99

3.1(c) Amendment to Certificate of Exhibit 3.1(c) to the Company's
Incorporation 10-KSB filed with the Commission on
11/xx/02

3.1(d) Amendment to Cert. of Attached hereto
Incorporation dated June 11, 2003

3.2 By-laws Exhibit 3.2 to the Company's Form
10-SB filed with the Commission on
11/26/99

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Location or
Exhibit No. Description of Document Incorporation by Reference
----------- ----------------------- --------------------------

4.1 2001 Stock Option Plan Exhibit 4.1 to the Company's Form
10-KSB filed with the Commission on
4/15/2002

4.2.1 Warrants issued to Brookfield Exhibit 4.2 to the Company's Form
Investments Ltd. Form 10-KSB filed with the
Commission on 4/11/2003

4.3 Securities Purchase Agreement Attached hereto
Dated as of June 11, 2003

4.4 Warrant Issued in connection Attached hereto
with June 11, 2003 Private
Placement

4.5 Registration Rights Agreement Attached hereto
dated as of June 11, 2003

10.1 Agreement and Release by and Exhibit 10.1 to the Company's Form
among Transvoice Investments 10-KSB filed with the Commission on
Ltd., Sheldon Goldstein and 4/15/2002
Global Asset Holdings, Inc.
dated as of November 30, 2001

10.2 Brookfield Security Agreement Exhibit 10.2 to the Company's Form
dated as of October 31, 2001 10-KSB filed with the Commission on
4/15/2002

10.2.1 Letter of Brookfield Exhibit 10.2.1 to the Company's Form
10-KSB filed with the Commission on
4/11/03

10.3 Payment Agreement entered into Exhibit 10.3 to the Company's Form
as of October 31, 2001 between 10-KSB filed with the Commission on
National Online Services, Inc. 4/15/2002
and Trans Voice Investments, Inc.

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Location or
Exhibit No. Description of Document Incorporation by Reference
----------- ----------------------- --------------------------

10.3.1 Amendment to Restated Payment Exhibit 10.3.1 to the Company's Form
Agreement 10-KSB filed with the Commission on
4/11/2003

10.4 Code of Ethics Exhibit 10.4 to the Company's 10-KSB
filed with the Commission on 4/11/03

23.1 Consent of Independent Certified Attached hereto
Public Accountant

Undertakings.

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration
statement:

(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in the
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement; and

(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.

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(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.

The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing
of the registrant's annual report pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d)
of the Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to the
initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act of
1933, as amended, may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions referenced in Item 15 of
this registration statement or otherwise, the registrant has been advised that
in the opinion of the Securities and Exchange Commission this indemnification is
against public policy as expressed in the Securities Act of 1933, as amended,
and is, therefore, unenforceable. In the event that a claim for indemnification
against these liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer, or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by a
director, officer, or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether the indemnification by it is against public
policy as expressed in the Securities Act of 1933, as amended, and will be
governed by the final adjudication of this issue.

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SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, in the City of Miami,
State of Florida on May 14, 2004.

EPIXTAR CORP.

By: /s/ David Srour
--------------------------------
David Srour Director, CEO

In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities and
on the dates stated:

/s/ Irving Greenman May 14, 2004
- ------------------------------
Irving Greenman
Director, CFO,
Principal Accounting Officer

/s/ William D. Rhodes May 14, 2004
- ------------------------------
William D. Rhodes
Director, President

/s/ David Srour May 14, 2004
- ------------------------------
David Srour
Director

/s/ Kenneth Elan May 14, 2004
- ------------------------------
Kenneth Elan
Director

/s/ David Berman May 14, 2004
- ------------------------------
David Berman
Director

/s/ Martin Miller May 14, 2004
- ------------------------------
Martin Miller

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We have had no prior relationship with the selling stockholders except as set
forth below:

o Sand Brothers provided services pursuant to a now terminated advisory
agreement pursuant to which it had received warrants. These warrants
were designated designess of Sand Bros who were affiliates of Sand
Bros. or provided services to Sand Bros. An additional number of
warrants were granted to Sands Bros in connection with the preferred
stock private placement.
o Alpine Capital provided services to letter agreement of June 2003 and
in connection with the 2003 preferred stock private placement
o Caribie and K.L provided telemarketing services to us and received a
noto in the amount of fees owed to their firms. In July 2003 their
notes were converted into equity.
o Amorthy is providing advisory services to the Company
o MAXIM Group also entered into an advisory agreement and received
100,000 warrants for their services.

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