As filed with the Securities and Exchange Commission on January 18, 2005 
                                                      Registration No. 000-50776

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

                      SECURITIES AND EXCHANGE COMMISSION  
                            Washington, D.C. 20549 

                                   FORM SB-2 

                            REGISTRATION STATEMENT 
                                     under 
                          THE SECURITIES ACT OF 1933 

                        AMERICAN CAPITAL HOLDINGS, INC. 
            (Exact name of registrant as specified in its charter) 
 
 
 
Florida                               6311                      65-0895564
---------------               -------------------          -----------------
(State or other                (Primary Standard           (I.R.S. Employer
 Jurisdiction of            Industrial Classification        Identification
 incorporation or                  Code Number)                      Number)
 organization)
 
 
 
                                                        Richard C. Turner
100 Village Square Crossing, Suite 202                   4200 Oak Street
    Palm Beach Gardens, FL 33410                  Palm Beach Gardens, FL 33418
          (561) 207-6395                                 (561) 207-6395
---------------------------------------      -----------------------------------
(Address, including zip code, and           (Name, address, including zip code,
telephone number, including area code,         and, telephone number, including
of registrant's principal                      area code, of agent for service)
executive offices)
 


                                  copy to: 

                         Gerald W. Gritter, Esq.
                         Redgrave & Rosenthal LLP
                        120 E. Palmetto Park Road
                                 Suite 450
                           Boca Raton, FL  33432
                              (561) 347-1700



Approximate date of commencement of proposed sale to the public: as soon as 
practicable after the effective date of this Registration Statement. 
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, 
please check the following box. [ ] 


CALCULATION OF REGISTRATION FEE

  Title of                                             Proposed
 Each Class                           Proposed         Maximum
of Securities         Amount           Maximum         Aggregate    Amount of
    to be              to be       Offering Price      Offering    Registration
 Registered         Registered      Per Security       Price           Fee (3)
---------------  ---------------  -----------------  ------------- ------------
Common Stock 
offered hereby      20,000,000         $ 5.00         100,000,000   $ 12,670.00

Common Stock to be 
issued upon exercise
of Warrants offered 
hereby (1)           2,000,000           6.00          12,000,000      1,520.40

Common Stock to be 
issued upon exercise
of outstanding  
Warrants (2)         1,315,000            .01              13,150          1.67

Common Stock to be 
issued upon exercise
of outstanding  
Warrants (2)           216,209           6.00           1,297,254        164.36

Common Stock to be 
issued upon exercise
of Warrants to be 
issued (2)           1,500,000            .01              15,000          1.90

Common Stock to be 
issued pursuant 
to subscriptions 
received             1,450,000           1.00           1,450,000        183.72
                                                                    ------------
   Total Registration Fees                                          $ 14,542.05


(1) No additional consideration is to be received in this offering from issuance
of the Warrants.  In accordance with Rule 457(i), the aggregate offering price 
of the shares represents the additional consideration to be received by the 
Registrant upon exercise of the Warrants.

(2) Represents shares of Common Stock to be issued upon exercise of outstanding 
warrants, plus warrants to be issued to directors of the Company.  In accordance
with Rule 457(g), the aggregate offering price of these shares is calculated 
based on the price at which the warrants may be exercised.

(3) The registration fee was previously paid via electronic transfer.

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. 































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 these securities and it is not soliciting an offer to buy these 
securities in any state where the offer or sale is not permitted. 

PRELIMINARY PROSPECTUS 

                   SUBJECT TO COMPLETION; dated January 18, 2005
 
                                  $100,000,000 

                        AMERICAN CAPITAL HOLDINGS, INC.

                       20,000,000 Shares of Common Stock
                                      and
                         2,000,000 Detachable Warrants
------------------------------------------------------------------------------- 

We are offering up to Twenty Million (20,000,000) shares of our Common Stock at 
a purchase price of Five ($5.00) Dollars per share.  This is our initial public 
offering.  We expect to offer the shares and warrants from time to time as 
capital is required for our business operations.

For every ten (10) shares purchased, the purchaser will also receive one 
detachable warrant.  Each warrant will entitle the holder to purchase one (1) 
share of our Common Stock at a purchase price of Six ($6.00) Dollars per share.
The warrants will expire two (2) years after the date of issuance.

The shares and warrants will be marketed and sold through our officers and 
directors and through registered broker/ dealers.  This offering is not 
contingent upon any minimum number of shares being sold.  All proceeds from 
sales of the shares and warrants will be placed in our general treasury as sales
are made.  Currently, there is no public trading market for the shares and 
warrants, or of our common stock.  We intend to apply for listing of our Common 
Stock on the American Stock Exchange.

We are also registering the issuance of 1,450,000 shares of our common stock 
which we will be issuing as a result of the conversion of certain convertible 
notes previously made to the Company, as well as 5,031,209 shares of our common 
stock which will be issued if and when certain outstanding warrants are 
exercised, at exercise prices of $.01 and $6.00 per share.

Investing in our Common Stock involves risks that are described in the "Risk 
Factors" section beginning on page * of this prospectus.

Neither the Securities and Exchange Commission nor any state securities 
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a 
criminal offense. 

-------------------------------------------------------------------------------
                       Offering           Sales                 Proceeds to
                       Price              Commissions (1)       the Company (2)
-------------------------------------------------------------------------------
   Maximum Offering    $100,000,000       $ 5,000,000           $ 95,000,000
===============================================================================
(1) We are offering the shares primarily through our officers and directors, who
will receive no commission in connection with their selling efforts. However, we
may sell some of the common stock through one or more licensed broker/dealers, 
to whom we may pay commissions of up to 10%.  The amount of sales commissions 
noted above is an estimate.
                                      1
(2) Before deducting estimated offering expenses of $160,000.

The date of this Prospectus is __________, 2005.

You should rely only on the information contained in this prospectus. We have 
not authorized any other person to provide you with different information. If 
anyone provides you with different or inconsistent information, you should not 
rely on it.  You should assume that the information appearing in this prospectus
is accurate only as of the date on the front cover of this prospectus. Our 
business, financial condition, results of operations and prospects may have 
changed since that date.  We are not making an offer to sell these securities in
any jurisdiction where the offer or sale is not permitted. 

PROSPECTUS SUMMARY 

This summary highlights key aspects of our business and our common stock 
offering that are described more fully elsewhere in this prospectus. This 
summary does not contain all of the information which you should consider before
making an investment decision. You should read this entire prospectus carefully,
including "Risk Factors" and the consolidated financial statements and the notes
to the consolidated financial statements included elsewhere in this prospectus. 
In this prospectus, "we," "us," "our," "ours" and "our company" refer to 
American Capital Holdings, Inc. and, where applicable, our insurance 
subsidiaries, Universe Life Insurance Company and IS Direct Agency, Inc. 
The Company 

American Capital Holdings, Inc., ("ACH") is a holding company which owns five 
(5) proprietary financial products These products are known as Guaranteed 
Principle Insured Convertible Securities ("GPICS(TM)"), Energy Tax Incentive
Preferred Securities ("ETIPS(TM)"), Equipment Tax Incentive Convertible 
Securities ("ETICS(TM)"), Guaranteed Pension Accounting Contract Solutions 
("GPACS(TM)") and Government Pension Accounting Contract Solutions 
("GPACS(TM)").  The GPACS(TM) products are designed to provide solutions for 
unfunded government and private sector pension plan liability.  The GPICS(TM), 
ETIPS(TM) and ETICS(TM) products are investment structures designed to 
facilitate the use of energy and depreciation tax incentives while insuring the 
capital investment through guarantees of principal.  Our Chairman, Barney A. 
Richmond, has applied for a patent for one of these products, known as 
Government Pension Accounting Contract Solutions (GPACS(TM)).  If and when the 
patent is granted, Mr. Richmond will assign the patent to ACH.

The GPACS(TM) and some of our other products use insurance as a part of their 
structures.  The insurance contracts will be written through several licensed 
insurance carriers.  We intend to underwrite insurance policies through three 
subsidiaries, through which we intend to conduct our primary business 
operations.  These subsidiaries are IS Direct Agency, Inc. ("IS Direct"), 
Universe Life Insurance Company ("Universe") and Cosmopolitan .Life Insurance 
Company ("Cosmopolitan").

IS Direct is a wholly-owned subsidiary of ACH, and is a licensed insurance 
agency through which we will sell our products.  IS Direct is currently licensed
in thirty three (33) states. Chris Dillon, president of IS Direct, is authorized
to do business as an individual agent in forty nine (49) states (all but Alaska)
and in the District of Columbia. IS Direct expects to obtain the necessary 
licenses for it to operate in all fifty (50) states.  In addition to placing the
insurance components of our financial products, IS Direct will also sell term 
                                      2
life products, annuities and other traditional insurance products.  We expect 
most of the insurance products sold by IS Direct will be eventually underwritten
by Universe Life, which the Company has a contract to purchase.  However, ACH 
also is planning to use IS Direct to sell additional products of other licensed 
insurance carriers.

The Company has a contract to purchase Universe Life Insurance which is planned 
as another wholly-owned subsidiary of ACH, pending regulatory approval of the 
change in control by the Insurance Commissioner of the State of Idaho.  Universe
is a life, health and annuities insurance carrier, which is currently licensed 
to operate in three (23) states.  Universe will be initiating the application 
process to become licensed in all remaining states, and expects to obtain the 
necessary licenses to operate in all fifty (50) states in the near future.  ACH 
expects Universe to be domiciled in the State of South Carolina, with its 
principal offices in Charleston.  

On October 30, 2004, we entered into an agreement to purchase eighty (80%) 
percent of Cosmopolitan Life Insurance Company.  We expect to close our 
acquisition of Cosmopolitan in March 2005, upon regulatory approval by the 
Arkansas Department of Insurance.  Cosmopolitan Life Insurance Company is a 
stipulated premium insurer chartered in 1931 in the State of Arkansas.   Since 
1998, Cosmopolitan has offered both direct and re-insurance coverage related to 
health and dental care plans, with a specialty in providing stop-loss coverage 
for self-funded employer plans. 

We intend to use some of the financial products of our subsidiaries as 
solutions, addressing the needs of governmental and private sector businesses 
regarding unfunded pension liabilities and other post-employment benefit 
("OPEB") liabilities.  We also plan to sell annuities and other insurance 
products, through our subsidiaries, to both the public and private sectors.  We 
also intend to invest and/or sell our proprietary ETIPS(TM) and ETICS(TM) 
products in the public marketplace. 

Our principal executive offices are located at 100 Village Square Crossing, 
Suite 202, Palm Beach Gardens, FL 33410, and our telephone number is (561) 207-
6395.  The Company's website is www.americancapitalholdings.com as of January
20, 2005.  The Company's fiscal year ends May 31, 2005. 
 

The Offering 


Issuer:                    American Capital Holdings, Inc.

Securities Offered:        20,000,000 shares of our common stock, and
                           2,000,000 warrants with an exercise price of $6.00

Offering Price:            Five ($5.00) Dollars per share of common stock
                           The warrants have an exercise price of Six ($6.00) 
                           Dollars per share.

Offering Period:           The offering will commence on *[to be provided on 
                           amendment] and we expect the offering to continue 
                           from time to time until all 20,000,000 shares are 
                           sold, unless we terminate the offering sooner in 
                           our discretion.
                                      3  
Method of Purchase:        In order to purchase shares and warrants, please 
                           complete and return to us the Subscription 
                           Agreement attached to this Prospectus as 
                           Attachment A, along with payment for your shares.  
                           We will then mail you a written confirmation that 
                           your subscription has been accepted and will 
                           promptly cause to be issued a certificate for your 
                           shares, and your warrants.  If for any reason your 
                           subscription is not accepted, we will return to 
                           you the full purchase price.

Use of Proceeds:           We expect to contribute most of the proceeds directly
                           or indirectly to the capital and surplus of our 
                           insurance subsidiaries, as needed to support 
                           growth and to maintain regulatory compliance.  We 
                           may also use a portion of the proceeds for 
                           additional acquisitions of businesses related, and 
                           complimentary, to that of our existing 
                           subsidiaries.  This offering is not contingent 
                           upon any minimum number of shares being sold.  All 
                           proceeds from sales of the shares will be placed 
                           in our general operating account as sales are 
                           made.
  
Absence of Public Market:  There is currently no public trading market for 
                           our common stock, or for the warrants included in 
                           the offering.  We intend to apply for listing of 
                           our Common Stock on the American Stock Exchange. 



Summary Consolidated Financial Statements
The following summary financial information has been derived from the financial 
statements that are included in this prospectus. 
          
Statement of Operations Data: 
                                                             (unaudited)
                                  Year ended               Six Months ended
                                  May 31,2004             November 30, 2004
        
Net Sales                                   0                           123
Total Operating Expenses              486,526                       503,741
Net Other Expenses                    160,746                        68,081
Net Other Comprehensive Loss          512,997                     1,873,994
Net Loss                            1,164,221                     2,453,772
Net Loss Per Common Share                 .18                           .16 
Weighted Average Shares Outstanding 6,551,685                    15,723,903

Balance Sheet Data:
                                  May 31, 2004             November 30, 2004
                                                             (unaudited)

Total Current Assets                 3,239,008                    3,200,293
Total Assets                        14,455,329                   12,733,716   
Total Liabilities                      931,485                    1,368,644
Total Stockholders' Equity          13,523,844                   11,365,072  
                                      4
RISK FACTORS

The risk factors discussed below could cause our actual results to differ 
materially from those expressed in any forward-looking statements. See "Forward-
Looking Statements." Although we have attempted to list comprehensively these 
important factors, we caution you that other factors may in the future prove to 
be important in affecting our results of operations. New factors emerge from 
time to time and it is not possible for us to predict all of these factors, nor 
can we assess the impact of each such factor on the business or the extent to 
which any factor, or combination of factors, may cause actual results to differ 
materially from those contained in any forward-looking statement. 

The risks described below set forth what we believe to be the most material 
risks associated with the purchase of our common stock. Before you invest in our
common stock, you should carefully consider these risk factors, as well as the 
other information contained in this prospectus. 

Lack of Operating History.  We have not yet begun operations and have not 
yet realized revenues or earnings from operations. We will sustain initial 
operating expenses without corresponding revenues.  This will result in 
our incurring net operating losses until we can realize profits from our 
proposed business operations.

Speculative Nature of the Company's Proposed Operations.  The success of our 
proposed plan of operation will depend primarily on our ability to sell the 
proprietary products we have created.  There can be no assurance that we will be
successful in these efforts.

Dividend Policy.  We have not yet paid any dividends on our Common Stock. 
Payment of dividends will be within the sole discretion of our Board of 
Directors and will depend, among other factors, upon earnings, capital 
requirements and the operating and financial condition of the Company. At the 
present time, our anticipated financial capital requirements are such that we 
intend to continue to follow a policy of retaining earnings in order to finance 
the development of our business.

We Will Face Intense Competition.  We are and will continue to be only one 
participant in the business of selling life insurance backed financial 
solutions.  We will face competition from companies that have greater financial 
resources, broader arrays of products, higher ratings and stronger financial 
performance, which may impair our ability to retain existing customers, attract 
new customers and maintain our profitability and financial strength. We operate 
in a highly competitive industry. Many of our competitors are substantially 
larger and enjoy substantially greater financial resources, broader and more 
diversified product lines and more widespread agency relationships. Our products
can be expected to face competition with products sold by other insurance 
companies, financial intermediaries and other institutions based on a number of 
factors, including premium rates, policy terms and conditions, service provided 
to distribution channels and policyholders, ratings by rating agencies, 
reputation and commission structures.

Conflicts of Interest - General.  Certain conflicts of interest may exist from 
time to time between the Company and its officers and directors.  They have 
other business interests to which they devote their attention, and they will 
continue to do so.  As a result, conflicts of interest may arise that can be 
resolved only through exercise of such judgment as is consistent with the 
                                      5
fiduciary duties of management to the Company.

No Public Market Currently Exists.  Although we intend to apply for listing of 
our Common Stock on the American Stock Exchange, there is currently no public 
market for the Company's common stock.  There can be no assurance, however, that
a market will in fact develop, or that a shareholder ever will be able to sell 
his shares without considerable delay.  If a market should develop, the price 
may be highly volatile.  Factors such as those discussed in this "Risk Factors" 
section may have a significant impact upon the market price of the Company's 
stock.

We may require additional capital to support sustained future growth which may 
not be available when needed or may be available only on unfavorable terms.  Our
long-term strategic capital requirements will depend on many factors including 
the accumulated statutory earnings of our life subsidiaries and the relationship
between the statutory capital and surplus of our life subsidiaries and (i) the 
rate of growth in sales of our products; and (ii) the levels of credit risk 
and/or interest rate risk in our invested assets. To support long-term capital 
requirements, we may need to increase or maintain the statutory capital and 
surplus of our life subsidiaries through additional financings, which could 
include debt, equity, financial reinsurance and/or other surplus relief 
transactions. Such financings, if available at all, may be available only on 
terms that are not favorable to us. In the case of additional equity offerings, 
dilution to our shareholders could result, and/or such securities may have 
rights, preferences and privileges that are senior to those of our common stock.
In the case of debt offerings or placements, the holders of the debt will have 
rights preferences and privileges that are senior to those of our common stock. 
If we cannot maintain adequate capital, we may be required to limit growth, and 
such action could adversely affect our business, financial condition and results
of operations.

Changes in state and federal regulation may affect our profitability.  We are 
subject to regulation under applicable insurance statutes, including insurance 
holding company statutes, in the various states in which our life subsidiaries 
write insurance. Insurance regulation is intended to provide safeguards for 
policyholders rather than to protect shareholders of insurance companies or 
their holding companies. Regulators oversee matters relating to trade practices,
policy forms, claims practices, guaranty funds, types and amounts of 
investments, reserve adequacy, insurer solvency, minimum amounts of capital and 
surplus, transactions with related parties, changes in control and payment of 
dividends.

State insurance regulators and the National Association of Insurance 
Commissioners, or NAIC, continually reexamine existing laws and regulations, and
may impose changes in the future.  Our life subsidiaries are subject to the 
NAIC's risk-based capital requirements which are intended to be used by 
insurance regulators as an early warning tool to identify deteriorating or 
weakly capitalized insurance companies for the purpose of initiating regulatory 
action. Our life subsidiaries also may be required, under solvency or guaranty 
laws of most states in which they do business, to pay assessments up to certain 
prescribed limits to fund policyholder losses or liabilities of insolvent 
insurance companies. In addition, federal legislation and administrative 
policies in several areas, including pension regulation, age and sex 
discrimination, financial services regulation, securities regulation and federal
taxation, can significantly affect the insurance business. As increased scrutiny
has been placed upon the insurance regulatory framework, a number of state 
                                      6
legislatures have considered or enacted legislative proposals that alter, and in
many cases increase, state authority to regulate insurance companies and holding
company systems.  The regulatory framework at the state and federal level 
applicable to our insurance products is continuously evolving. The changing 
regulatory framework could affect the design of such products and our ability to
sell certain products. Any changes in these laws and regulations could 
materially and adversely affect our business, financial condition and results of
operations. 

The Common Stock May Not Be a Suitable Investment for All Investors.  Our common
stock may not be a suitable investment for you, and we advise you to consult 
your investment, tax and other professional financial advisors prior to 
purchasing our stock. No independent rating agency has reviewed our financial 
condition to determine whether the stock is a suitable investment for any 
purchaser.  The stock may not be a suitable investment for you based on your 
ability to withstand a loss of your investment or other aspects of your 
financial situation, including your income, net worth, financial needs, 
investment risk profile, return objectives, investment experience and other 
factors. Prior to purchasing any stock, you should consider your investment 
allocation with respect to the amount of your contemplated investment in our 
stock in relation to your other investment holdings and the diversity of those 
holdings. 

You will incur immediate and substantial dilution in net tangible book value.  
We expect that the initial public offering price of our common stock will be 
substantially higher than the net tangible book value of each outstanding share 
of common stock. If you purchase common stock in this offering, you will suffer 
immediate and substantial dilution. The dilution will be $2.41 per share in the 
net tangible book value of the common stock from the initial public offering 
price. For a more detailed discussion of dilution, see "Dilution" on page *.
 
After the offering, our executive officers, directors, and parties related to 
them, in the aggregate, may have the ability to control matters requiring 
shareholder approval.  Our executive officers, directors and parties related to 
them own a large enough stake in us to have an influence on the matters 
presented to shareholders. As a result, these shareholders may have the ability 
to control matters requiring shareholder approval, including the election and 
removal of directors, the approval of significant corporate transactions, such 
as any merger, consolidation or sale of all or substantially all of our assets, 
and the control of our management and affairs. Accordingly, this concentration 
of ownership may have the effect of delaying, deferring or preventing a change 
in control of us, impede a merger, consolidation, takeover or other business 
combination involving us or discourage a potential acquirer from making a tender
offer or otherwise attempting to obtain control of us, which in turn could have 
an adverse effect on the market price of our common stock.
 
Our management will have broad discretion in allocating proceeds from this 
offering.  The net proceeds to us from this offering, after deducting expenses 
payable by us, are estimated to be approximately $94,840,000. The primary 
purpose of this offering is to increase the capital and surplus of our life 
subsidiaries to support future growth of our business. Our management will 
retain broad discretion as to the allocation of the proceeds of this offering. 
The failure of management to apply these funds effectively could negatively 
impact our business and prospects. See "Use of Proceeds." 

                                     7

FORWARD-LOOKING STATEMENTS 

This prospectus contains certain statements of a forward-looking nature relating
to future events or our future performance. These forward-looking statements are
based on our current expectations, assumptions, estimates and projections about 
us and our industry. When used in this prospectus, the words "expects," 
"believes," "anticipates," "estimates," "intends" and similar expressions are 
intended to identify forward-looking statements. These statements include, but 
are not limited to, statements of our plans, strategies and prospects under the 
captions "Prospectus Summary," "Risk Factors," "Use of Proceeds," and other 
statements contained elsewhere in this prospectus. 
These forward-looking statements are only predictions and are subject to risks 
and uncertainties that could cause actual events or results to differ materially
from those projected. The cautionary statements made in this prospectus should 
be read as being applicable to all related forward-looking statements wherever 
they appear in this prospectus. We assume no obligation to update these forward-
looking statements publicly for any reason. Actual results could differ 
materially from those anticipated in these forward-looking statements. 

USE OF PROCEEDS 

We estimate that our net proceeds from this offering, after expenses, will be 
approximately $94,840,000. We expect to contribute most of the proceeds directly
or indirectly to the capital and surplus of our insurance subsidiaries, as 
needed to support growth and to maintain regulatory compliance.  We may also use
a portion of the proceeds for additional acquisitions of businesses related, and
complimentary, to that of our existing subsidiaries.  This offering is not 
contingent upon any minimum number of common stock or warrants being sold.  As a
result, all proceeds from sales of the common stock will be placed in our 
general operating account as sales are made. 

CAPITALIZATION

The following table sets forth our capitalization, as of November 30, 2004, and 
as adjusted to reflect the sale of all of the common shares and warrants. The 
table below should be read in conjunction with our consolidated financial 
statements, related notes and other financial information included elsewhere in 
this prospectus.
 
                                                 As of November 30, 2004
                                                Actual        As Adjusted
  Liabilities
    Accounts Payable and Accrued Expenses     $      42,585   $     42,585
    Loan Payable to Related Parties                 276,082        276,082
    Current Portion of Notes and Loans Payable    1,049,977      1,049,977
         
       Total Liabilities                      $   1,368,644   $  1,368,644
         
  Shareholder Equity
    Common Stock, $.0001 par value            $       1,732   $      3,732 
    Additional paid-in capital                   14,981,333    114,979,333
    Retained earnings                            (3,617,993)    (3,617,993)
         
      Total Stockholders' Equity              $  11,365,072   $111,365,072 
         
      Total Capitalization                    $  12,733,716   $112,733,716 
                                     8
DILUTION

Purchasers of our common stock in this offering will suffer immediate and 
substantial dilution in net tangible book value per share.  Dilution is the 
amount by which the offering price paid by the purchasers of our common stock to
be sold in this offering exceeds the net tangible book value per share of our 
common stock after the offering. Net tangible book value per share is determined
by subtracting our total liabilities from the total book value of our tangible 
assets and dividing the difference by the number of shares of our common stock 
deemed to be outstanding on the date the book value is determined. 

Our net tangible book value as of November 30, 2004 was approximately 
$1,887,524, or $.11 per share of common stock, including 1,595,000 shares 
subscribed and paid for as of that date, but not yet issued . After giving 
effect to this offering, and after deducting estimated offering expenses, our 
net tangible book value as of November 30, 2004, would have been $96,787,524 
million or $2.59 per share. This represents an immediate increase in net 
tangible book value of $2.48 per share to the existing shareholders and an 
immediate dilution of $2.41 per share to new investors purchasing shares in this
offering. The following table illustrates this per share dilution:
 
   Assumed initial public offering price per share                 $   5.00
   Net tangible book value per share before this offering          $    .11
   Pro forma increase in net tangible book value per share 
      attributable to new investors                                $   2.48   
   Pro forma net tangible book value per share after this offering $   2.59
   Dilution per share to new investors                             $   2.41
           

The following table summarizes, as of November 30, 2004, the differences between
existing shareholders and the new investors with respect to the number of shares
of common stock purchased from us, the total consideration paid and the average 
price per share paid before deducting estimated underwriting discounts, 
commissions and other expenses payable by us. 

                    Existing Shareholders              New Investors

Shares Purchased              17,318,903                   20,000,000

Total Consideration         $ 14,713,065                $ 100,000,000

Average Price Per Share        $     .85                $        5.00 

PLAN OF OPERATION

Overview     

American Capital Holdings, Inc., ("ACH") is a holding company which owns five 
(5) proprietary financial products These products are known as Guaranteed 
Principle Insured Convertible Securities ("GPICS(TM)"), Energy Tax Incentive 
Preferred Securities ("ETIPS(TM)"), Equipment Tax Incentive Convertible 
Securities ("ETICS(TM)), Guaranteed Pension Accounting Contract Solutions 
("GPACS(TM)) and Government Pension Accounting Contract Solutions ("GPACS(TM)").
The GPACS(TM) products are designed to provide solutions for unfunded government
and private sector pension plan liability.  The GPICS(TM), ETIPS(TM) and 

                                     9
ETICS(TM) products are investment structures designed to facilitate the use of
energy and depreciation tax incentives while insuring the capital investment
through guarantees of principal.  Our Chairman, Barney A. Richmond, has applied
for a patent for one of these products, known as Government Pension Accounting
Contract Solutions (GPACS(TM)).  If and when the patent is granted, Mr. Richmond
will assign the patent to ACH.

The GPACS(TM) and some of our other products use insurance as a part of their 
structures.  The insurance contracts will be written through several licensed 
insurance carriers.  We intend to underwrite insurance policies through three 
subsidiaries, through which we intend to conduct our primary business 
operations.  These subsidiaries are IS Direct Agency, Inc. ("IS Direct"), 
Universe Life Insurance Company ("Universe") and Cosmopolitan .Life Insurance 
Company ("Cosmopolitan").

IS Direct is a wholly-owned subsidiary of ACH, and is a licensed insurance 
agency through which we will sell our products.  IS Direct is currently licensed
in thirty three (33) states. Chris Dillon, president of IS Direct, is authorized
to do business as an individual agent in forty nine (49) states (all but Alaska)
and in the District of Columbia. IS Direct expects to obtain the necessary 
licenses for it to operate in all fifty (50) states.  In addition to placing the
insurance components of our financial products, IS Direct will also sell term 
life products, annuities and other traditional insurance products.  We expect 
most of the insurance products sold by IS Direct will be eventually underwritten
by Universe Life, which the Company has a contract to purchase.  However, ACH 
also is planning to use IS Direct to sell additional products of other licensed 
insurance carriers.

The Company has a contract to purchase Universe Life Insurance which is planned 
as another wholly-owned subsidiary of ACH, pending regulatory approval of the 
change in control by the Insurance Commissioner of the State of Idaho.  Universe
is a life, health and annuities insurance carrier, which is currently licensed 
to operate in three (23) states.  Universe will be initiating the application 
process to become licensed in all remaining states, and expects to obtain the 
necessary licenses to operate in all fifty (50) states in the near future.  ACH 
expects Universe to be domiciled in the State of South Carolina, with its 
principal offices in Charleston.  

On October 30, 2004, we entered into an agreement to purchase eighty (80%) 
percent of Cosmopolitan Life Insurance Company.  We expect to close our 
acquisition of Cosmopolitan in March 2005, upon regulatory approval by the 
Arkansas Department of Insurance.  Cosmopolitan Life Insurance Company is a 
stipulated premium insurer chartered in 1931 in the State of Arkansas.   Since 
1998, Cosmopolitan has offered both direct and re-insurance coverage related to 
health and dental care plans, with a specialty in providing stop-loss coverage 
for self-funded employer plans. 

ACH's  principal executive offices are located at 100 Village Square Crossing, 
Suite 202, Palm Beach Gardens, FL 33410, and our telephone number is (561) 207-
6395.  The Company's  fiscal year ends May 31, 2005. 
 
History

The Company was incorporated in the State of Florida on January 25, 1999 as US 
Amateur Sports Company, a wholly owned subsidiary of eCom eCom.com, Inc. 
("eCom") which trades on the OTC/Bulletin Board under the symbol 'ECEC.' On 
                                    10
March 24, 2003, the Company changed its name to USA SportsNet, Inc., and 
recently changed its name to American Capital Holdings, Inc. in connection with 
its spin off by eCom and its acquisition of certain assets of a company formerly
known as American Capital Holdings, Inc. (now known as ACHI, Inc.)  The 
Company's main office is located at 100 Village Square Crossings, Suite 202, 
Palm Beach Gardens, Florida 33410, and the telephone number is (561) 622-4395.

While a wholly owned subsidiary of eCom, the Company developed an e-commerce 
Internet infrastructure. This product provided an affordable, user-friendly 
technological platform and professional resources to facilitate web business 
development.  It also operated an on-line business as a test model, using 
Company developed e-commerce concepts to sell sports products.  

The Company was one of ten wholly owned subsidiaries of eCom, with varying 
business plans.  In recent years, eCom concluded that it did not have the 
financial resources necessary to develop all of its ten business units 
collectively.  eCom decided to spin off its subsidiaries into independent 
companies in the belief that independent companies, each with a distinct 
business, would be better able to obtain necessary funding and develop their 
business plans.  This belief was based in part on eCom's experience with 
potential business partners which sought involvement with only one of eCom's 
subsidiaries, rather than involvement with the multi-faceted eCom. 

On December 1, 2003, the Board of Directors of eCom approved the spin-off of the
Company.  They voted to issue to the shareholders of eCom one share of the 
Company for every one share of eCom owned as of the record date of January 5, 
2004.  Fractional shares will be purchased by the Company. No payment was 
required of the eCom shareholders.

On December 1, 2003, the Board of Directors of eCom approved the spin-off of the
Company.  They voted to issue to the shareholders of eCom one share of the 
Company for every one share of eCom owned as of the record date of January 5, 
2004.  Fractional shares will be purchased by the Company. No payment was 
required of the eCom shareholders.

                                     
After the spin off of the Company was completed, the Company was presented with
an opportunity to acquire certain assets of American Capital Holdings, Inc. (now
known as, and referred to hereafter as ACHI) On January 12, 2004, the Company 
entered into an Asset Purchase Agreement with ACHI whereby the Company agreed to
acquire certain assets of ACHI in return for the issuance of common stock of the
Company in an amount equal to 95% of the total ownership of the Company.  In 
order to accomplish this transaction, the Company effected a 20 to 1 reverse 
stock split, which reduced its outstanding stock to 2,497,756 shares, and agreed
to issue to ACHI 49,955,112 shares.  ACHI agreed to accept the issuance of 
13,561,804 shares at closing, and assigned its right to receive the 13,561,804 
shares to its principle, Barney A. Richmond, now the President of the Company.  
The remaining 36,393,308 shares were reserved for issuance by the Company in 
connection with future acquisitions and financings.  The Company then changed 
its name to American Capital Holdings, Inc., and ACHI changed its name to ACHI, 
Inc.  Of the 36,393,308 shares reserved for future issuance, 2,162,099 shares 
have now been issued to the shareholders of Spaulding Ventures, LLC, in 
replacement of shares of ACHI to be issued to Spaulding in connection with a 
prior acquisition of assets by ACHI from Spaulding. 

The assets acquired from ACHI consist primarily of approximately $10.8 million 
                                     11
of investment interests in ten developing companies (described below), 
approximately $5.3 million of restricted securities, approximately $233,000 of 
marketable securities, approximately $100,000 in cash, and proprietary 
investment programs known as Energy Tax Incentive Preferred Securities 
("ETIPS")and Guaranteed Principal Insured Convertible Securities ("GPICS") which
ACHI had developed and specifically designed to facilitate investment in oil and
gas exploration in the United States, and in developing companies. See the 
American Capital Holdings balance sheet included in the Financial Statements 
section of this report.

On December 30, 2003, prior to the Company's acquisition from ACHI, ACHI entered
into a letter agreement with Spaulding Ventures, LLC, pursuant to which ACHI 
agreed to acquire all of Spaulding's assets in return for 2,093,351 shares of 
ACHI common stock, plus warrants to purchase a total of 209,335 additional 
shares of ACHI common stock at a purchase price of $6.00 per share. As part of
its acquisition from ACHI of the assets ACHI acquired from Spaulding, the 
Company agreed to replace the shares and warrants to be issued by ACHI with 
shares and warrants of the Company.  The Company is registering in this offering
the shares to be issued when the warrants are exercised.

The assets acquired by ACHI from Spaulding, and subsequently acquired by the 
Company from ACHI, consist primarily of equity ownership positions in the 
following ten developing companies:

     Smart Pill Holding Corporation         Brilliant Roadways, Inc.
     @visory, LLC                           eSmokes, Inc.
     Efficien, Inc.                         IS Direct Agency, Inc.
     Solid Imaging, Ltd.                    Century Aerospace Corporation.
     Traffic Engine, Inc.                   Metroflex, Inc.


Business Strategy

We intend to use the financial products of our subsidiaries as solutions, 
addressing the needs of governmental and private sector businesses regarding 
unfunded pension liabilities and other post-employment benefit ("OPEB") 
liabilities.  We also plan to sell annuities and other insurance products, 
through our subsidiaries, to both the public and private sectors.  We also 
intend to invest and/or sell our proprietary ETIPS(TM) and ETICS(TM) products in
the public marketplace. 

Our GPACS(TM) products, which refers to both the Guaranteed Pension Accounting 
Contract Solutions product and the Government Pension Accounting Contract 
Solutions product, relate to a business method of adjusting the balance sheet of
a business or governmental organization, and particularly to a system for 
organizing the unfunded obligations of the organization so that the liability on
the balance sheet becomes offset by an asset.  The product also provides a 
systematic investing capability to enhance the profitability of the organization
and the improved treatment of tax obligations.

GPACS was created in response to the General Accounting Standards Board ("GASB")
Statement 45, which generally requires state and local governmental employers to
account for and report the annual cost of OPEB and the outstanding obligations 
and commitments related to OPEB in essentially the same manner as currently 
required pension obligations. Annual OPEB costs for most employers will be based
on actuarially determined amounts that, if paid on an ongoing basis, generally 
                                     12
would provide sufficient resources to pay benefits as they come due. The 
provisions of Statement 45 do not require governments to fund their OPEB plans. 
An employer may establish its OPEB liability at zero as of the beginning of the 
initial year of implementation. However, the unfunded actuarial liability is 
required to be amortized over future periods. Statement 45 is effective for 
periods beginning after December 15, 2006, 2007, or 2008, depending on the size 
of the government entity based on annual revenues used for GASB 34 
implementation requirements. 

In May of 2004, the GASB issued a corresponding "plan" statement, Statement 43-
Financial Reporting for Postemployement Benefit Plans Other than Pension Plans.
Statement 43 is effective one year prior to Statement 45. This statement 
requires a statement of plan net assets, statement of changes in plan net 
assets, schedule of funding progress, and schedule of employer contributions in 
the stand-alone financial reports of OPEB plans, as well as in the financial 
statements of governments having OPEB trust funds. 

Actuarial services will be required one year earlier if the "plan" Statement 43 
is applicable, unless an alternative measurement method is utilized. However, 
the alternative measurement  method is only an option for plans with a total 
membership of fewer than one hundred. Many OPEB plans are currently paying 
benefits on a pay-as-you-go basis. If a government does not have an acceptable 
trust or equivalent arrangement established, actuarial valuations will not be 
necessary until Statement 45 is effective. Establishing a trust may be an option
for funding OPEB benefits; employers should consider the impact of required 
actuarial services.

Our GPICS(TM), ETIPS(TM) and ETICS(TM) products are each investment structures 
designed to maximize the benefit of energy and equipment tax incentives, in 
order to facilitate investment in energy related and other business enterprises.
An essential feature of these products is a guarantee of the principal invested,
as a result of the structuring of the investment.  

Our plan of operation includes the underwriting of the insurance aspects of our 
products through our subsidiaries.  Pending approvals of our above described 
proposed acquisitions of Universe and Cosmopolitan, we will use third party 
insurance carriers.  However, upon receiving the approvals, which are expected 
in due course, we will retain as much premium and commission money as possible 
within our subsidiaries.

IS Direct currently sells primarily term and whole life insurance products.  
However, upon the completion of our proposed acquisition of Universe, the scope 
of products available for sale by IS Direct is expected to broaden.  Universe is
a life insurance company which we expect to use to underwrite the insurance 
policies required by our GPACS products.

Until 1998, Cosmopolitan was engaged exclusively in providing burial/final 
expense insurance, and was operated as a small stipulated premium carrier in 
association with the funeral home business.  In 1998, Cosmopolitan was acquired 
by Stephen E. Whitwell and Matt Lile, who implemented plans to grow the company.
In 1998 a dental insurance product was file-approved and marketing commenced.  
Cosmopolitan also became involved in providing specific stop-loss coverage for 
self-funded employer plans for which there was a retro-session agreement.  In 
2001, Cosmopolitan introduced a new product, Employers Choice Health Plan, 
referred to as ECHP.  Recently, most of Cosmopolitan's revenues have been 
realized from re-insurance assumed, while its dental product has been a small 
                                     13
but profitable segment for the company.  Cosmopolitan sees great opportunity for
each product to expand and to have great growth potential with the added 
authority by way of either obtaining Certificate of Authority in additional 
jurisdictions or by affiliating with an issuing carrier with authority in other 
jurisdictions to enter into a quota share agreement.


Government Regulation 

Life insurance companies are subject to regulation and supervision by the states
in which they transact business. State insurance laws establish supervisory 
agencies with broad regulatory authority, including the power to: 

         * grant and revoke licenses to transact business 
         * regulate and supervise trade practices and market conduct
         * establish guaranty associations
         * license agents
         * approve policy forms
         * approve premium rates for some lines of business
         * establish reserve requirements
         * prescribe the form and content of required financial statements and 
           reports
         * determine the reasonableness and adequacy of statutory capital and 
           surplus
         * perform financial, market conduct and other examinations
         * define acceptable accounting principles
         * regulate the type and amount of permitted investments
         * limit the amount of dividends and surplus note payments that can be
           paid without obtaining regulatory approval. 

Our life subsidiaries are subject to periodic examinations by state regulatory 
authorities.  The payment of dividends or the distributions, including surplus 
note payments, by our life subsidiaries is subject to regulation by each 
subsidiary's state of domicile's insurance department. In addition, dividends 
and surplus note payments may be made only out of earned surplus, and all 
surplus note payments are subject to prior approval by regulatory authorities.
 
Most states have also enacted regulations on the activities of insurance holding
company systems, including acquisitions, extraordinary dividends, the terms of 
surplus notes, the terms of affiliate transactions and other related matters.

Most states have enacted legislation or adopted administrative regulations 
affecting the acquisition of control of insurance companies as well as 
transactions between insurance companies and persons controlling them. The 
nature and extent of such legislation and regulations currently in effect vary
from state to state. However, most states require administrative approval of the
direct or indirect acquisition of 10% or more of the outstanding voting 
securities of an insurance company incorporated in the state. The acquisition of
10% of such securities is generally deemed to be the acquisition of "control" 
for the purpose of the holding company statutes and requires not only the filing
of detailed information concerning the acquiring parties and the plan of 
acquisition, but also administrative approval prior to the acquisition. In many 
states, the insurance authority may find that "control" in fact does not exist 
in circumstances in which a person owns or controls more than 10% of the voting 
securities. 

                                       14
Federal legislation and administrative policies in several areas, including 
pension regulation, age and sex discrimination, financial services regulation, 
securities regulation and federal taxation can significantly affect the 
insurance business. 

State insurance regulators and the NAIC are continually reexamining existing 
laws and regulations and developing new legislation for the passage by state 
legislatures and new regulations for adoption by insurance authorities. Proposed
laws and regulations or those still under development pertain to insurer 
solvency and market conduct and in recent years have focused on: 
         * insurance company investments
         * risk-based capital ("RBC") guidelines, which consist of regulatory 
           targeted surplus levels based on the  relationship of statutory
           capital and surplus, with prescribed adjustments, to the sum of 
           stated percentages of each element of a specified list of company
           risk exposures
         * the implementation of non-statutory guidelines and the circumstances 
           under which dividends may be paid
         * product approvals
         * agent licensing
         * underwriting practices
         * insurance and annuity sales practices.

 
Properties

The Company does not own any real property.  The Company leases its 
headquarters, consisting of approximately 1.022 square feet of office and 
warehouse space located at 100 Village Square Crossings, Suite 202, Palm Beach 
Gardens, Florida.  The lease is for a term of one year, at a rental of $2,687 
per month including sales tax.


Legal Proceedings 

The Company is not a party to any legal proceedings, except for an Involuntary 
Bankruptcy Petition filed by the Company against eCom, which proceeding is 
pending in the Federal District Court in Broward County, Florida. 


Employees 

The Company currently has seven employees, none of which are full time 
employees, since they all also provide services to affiliated companies.


MANAGEMENT

The following individuals are our executive officers and the members of our 
board of directors.  Each director is elected at our annual meeting of 
shareholders and holds office until the next annual meeting of shareholders, or 
until his or her successor is elected and qualified.  Our by-laws permit the 
board of directors to fill any vacancy and such director may serve until the 
next annual meeting of stockholders or until his or her successor is elected and
qualified.  The board of directors elects officers annually and their terms of 
office are at the discretion of the board.
                                     15
Name                       Age                    Positions Held
----------------------    ----           ------------------------------
Barney A. Richmond          53           Chairman/President/Director

Richard C. Turner           45           Treasurer/Chief Financial 
                                         Officer/Secretary/Director

Mathew Salmon               46           Director

Barry M. Goldwater, Jr.     66           Director

Douglas Sizemore            74           Director

Norman E. Taplin            54           Director

Michael Camilleri           51           Director


Barney A. Richmond has been President and a Director of the Company since its 
acquisition of certain assets from ACHI in January 2004, and was President and a
Director of ACHI prior to that time.  From 1985 to the present, Mr. Richmond has
been an independent advisor and investor in assisting companies, as well as 
individuals, regarding public offerings, mergers, reverse mergers and a variety 
of corporate financing issues.  Mr. Richmond has also been an investor in 
numerous reorganizations and business turnarounds, including many substantial 
bankruptcy reorganizations.  Mr. Richmond has been a member of the Boards of 
Directors of The Richmond Company, Inc., Benny Richmond, Inc., 877 Management 
Corporation, King Technologies, Inc., King Radio Corporation, United States 
Financial Group, Inc., JSV Acquisition Corporation, Chase Capital, Inc, 
Berkshire International, Inc. and Dunhall Pharmaceuticals, Inc.

Richard C. Turner has been Treasurer and Chief Financial Officer of the Company 
since June 2001, and became a Director of the Company in February 2004.  From 
September 1990, until he joined the Company in June 2001, Mr. Turner was 
employed as an accountant by Glenn G. Schanel, CPA, where he was responsible for
corporate and individual tax returns, business write-up services, and business 
consulting services, including computer and database management.  Prior to 1990,
Mr. Turner was Vice President of Finance at First American Bank, Lake Worth, 
Florida, where he was responsible for the bank's financial reporting, budgeting 
and cost accounting.  

Michael Camilleri has been a Director of the Company since November 2004, and 
holds a number of positions within the insurance industry.  He is a principal of
Preferred Insurance Capital Consultants, LLC. Preferred specializes in 
actuarial, litigation support and insurance management consulting services. Mr. 
Camilleri serves as a director and General Counsel of First Commercial Insurance
Company, and as a director and officer of various insurance related affiliates 
of First Commercial.  Mr. Camilleri is also President of Newport Star 
Reinsurance Company, Inc.; a director and Vice President of CEIB Marketing 
Group, LLC; President, Treasurer and Vice President of Spoleto Holdings, LLC; 
and Manager of Power One Real Estate Investments, LLC.  Within the last five 
years, Mr. Camilleri has also served as Secretary of Accident Insurance Company,
Inc., President and CEO of AmTrust Insurance Company, and Senior Vice President 
of Insurance Services Offices, Inc.. From 1996 to 1999, he was President of 
Insurance Data Resources, Inc. (IDR) and IDR Statistical Services, Inc. (IDRSS),
national workers compensation rating organizations. Prior to joining IDR in 
                                     16
1996, Mr. Camilleri was a senior partner and head of the insurance regulatory 
and health practices for Adorno & Zeder, P.A. From 1978 to 1991 he was with the 
National Council on Compensation Insurance, Inc. (NCCI), where he served as 
Senior Vice President and General Counsel. At NCCI, Mr. Camilleri directed the 
Legal, National Affairs, Public Affairs and Residual Markets division. During 
his career with NCCI, he managed countrywide workers compensation assigned risk 
plans and reinsurance pools, established a prototype National Affairs 
Department, managed all internal and external affairs, provided oversight on 
multi state and federal issues including testimony before U.S. Congress, and 
served as Secretary to the Board of Directors. Mr. Camilleri is the author of 
texts and articles on workers compensation and health care and is a frequent 
speaker on workers compensation and health related issues at national 
conferences.

Barry M. Goldwater, Jr., has been a Director of the Company since November 2004.
Mr. Goldwater is President of B2 Solutions, which represents client companies 
before Congress and various branches of the United States Government, as well as
the California and Arizona state legislatures . Prior to joining B2 Solutions, 
Mr. Goldwater served as a General Partner for 13 equipment leasing partnerships.
Mr. Goldwater's background includes 14 years as a United States Congressman and 
8 years as a Series 7 Registered Representative in the securities brokerage 
industry and a member of the New York Stock Exchange. .While in Congress, Mr. 
Goldwater served on committees that had jurisdiction over Energy, Aviation, 
Space, Defense and Public Works. Mr. Goldwater served on the Joint Committee on 
Energy, which responded to the oil crisis on 1974.

Matthew Salmon has been a Director of the Company since January 2004.  Since 
November 2000, Mr. Salmon has been President of Upstream Consulting, a Public 
Affairs consulting company. From November 1994 until November 2000, Mr. Salmon 
served in the United States House of Representatives, representing Arizona's 
First Congressional District.

Douglas Sizemore has been a Director of the Company since November 2004.  Mr. 
Sizemore has been President of Accident Insurance Company, Inc., since 2003, and
has also been a self-employed insurance consultant since 2000.  From 1995 to 
2000, Mr. Sizemore was Commissioner of Insurance for the State of Tennessee. 
Prior to his position as Commissioner of Insurance, Mr. Sizemore was President 
of Johnston City Insurance Agency, Inc., dating back to 1959.

Norman E. Taplin has been a Director of the Company since November 2004.  Mr. 
Taplin is an attorney, concentrating his practice in the areas of regulatory 
insurance, administration law, corporate and commercial law representing 
companies, industries, business matters involving governmental regulation, the 
securing and maintaining of licenses, governmental approvals and other 
regulatory issues, real estate, estate planning and probate. He is also involved
in matters regarding the establishment of new businesses, real estate 
developments, and other transactions which may or may not involve governmental 
regulation. Mr. Taplin has been active in insurance matters since 1975 and has 
represented a variety of insurance companies in the United States, District of 
Columbia and select foreign jurisdictions. He is also a member of NALC, and has 
been appointed to the Hurricane Advisory Board in Georgia.

Our Board of Directors has determined that we have at least one financial 
expert, Richard C. Turner, serving on our audit committee.  Since Mr. Turner is 
an officer of the Company, as well as a director, he is not considered 
independent. 
                                     17
Our by-laws require us to indemnify directors and officers, to the fullest 
extent permitted by law, against liabilities which they may incur under the 
following circumstances: 

     (a)     the officer or director conducted himself or herself in good faith;

     (b)     his or her conduct was in our best interests, or if the conduct was
             not in an official capacity, that the conduct was not opposed to
             our best interests; and

     (c)     in the case of a criminal proceeding, he or she had no reasonable 
             cause to believe that his or her conduct was unlawful.  We may not 
             indemnify our officers or directors in connection with a proceeding
             by or in our right, where the officer or director was adjudged 
             liable to us, or in any other proceeding, where our officer or 
             director are found to have derived an improper personal benefit.

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


EXECUTIVE COMPENSATION

Prior to January 5, 2004, when the Company was spun off from eCom, our executive
officers were paid by eCom.  After the Company was spun off from eCom, Richard 
C. Turner, our Chief Financial Officer, has been paid an annual salary of 
$50,000, plus a minimum annual bonus of $50,000.  No other executive officer 
currently receives compensation from the Company.

Mathew Salmon, one of our directors, has been granted warrants to purchase Five 
Hundred Thousand (500,000) shares of our Common Stock at an exercise price of 
$.01 per share, as compensation for his directorial and consulting services over
the last fifteen (15) months.  Each of our other four (4) independent directors 
have been granted warrants to purchase 250,000 shares each of our Common Stock 
at an exercise price of $.01 per share, as compensation for their directorial 
and consulting services.   The Company plans to add Mr. Ernst Csiszar to its 
Board of Directors and expects this to occur within the next seven (7) days.  
Upon Mr. Csiszar's official acceptance, Mr. Csiszar  will be compensated the 
same warrants to purchase 250,000 shares of our Common Stock @ $.01  per share 
as the other four (4) independent directors.  Additionally, the Company has 
agreed to pay each independent director $7,500 per quarter for their respective 
services. 


CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

There have been no transactions, and there are no proposed transactions, 
between the Company and any of its Directors, executive officers or 
beneficial owners of five (5%) percent or more of the Company's Common 
Stock, or any member of their immediate families, as to which the 
Director, officer, beneficial owner, or family member had a material 
interest. 

                                     18
PRINCIPAL SHAREHOLDERS

As of January 15, 2005, there were a total of 15,723,903 shares of the Company's
stock outstanding, plus 2,250,000 shares of common stock subscribed for, but not
yet issued, pursuant to the conversion of certain convertible notes previously 
issued by the Company.  In addition, the Company has issued warrants to purchase
an additional 1,931,209 shares of common stock, and has committed to issue 
another 4,500,000 warrants to purchase common stock.  The table below shows the 
number of shares of common stock held by (a) each director and executive officer
of the Company, (b) the directors and executive officers of the Company as a 
group, and (c) each person known by us to be the beneficial owner of more than 
5% of the Company's outstanding stock.  All percentages assume the shares 
currently subscribed for are issued and assumes all of the warrants are issued 
and exercised.

                                        Number of          % of Shares
Name and Address                        Shares Owned         Outstanding
-----------------------              -----------------     --------------
Barney A. Richmond, Director & President     7,084,048            29.0%
601 Seafarer Circle
Jupiter, FL 33477

Richard C. Turner, Director &                  230,870              .9%
& Chief Financial Officer
4200 Oak Street
Palm Beach Gardens, FL 33418

Matthew Salmon, Director                       500,000 (1)         1.9%
2700 N. 3rd Street, Suite 2012
Phoenix, AZ  85004

Barry M. Goldwater, Jr., Director              250,000 (1)         1.0%
3104 E. Camelback, Suite 274
Phoenix, AZ  85016
    
Douglas Sizemore, Director                     250,000 (1)         1.0%
707 Rambling Road
Johnson City, TN 37604

Norman E. Taplin, Director                     250,000 (1)         1.0%
1555 Palm Beach Lakes Blvd, Ste 1510
West Palm Beach, FL 33401

Michael Camilleri, Director                    250,000 (1)         1.0%
2101 NW Corporate Blvd. Suite 415
Boca Raton, FL 33431

David W. Pong                                2,000,000 (2)         8.2%
161 San Antonio Way
Sacramenta, CA 95819
                                         -----------------      -------
All Directors & Executive Officers
     as a group (7 persons)                  8,814,918            36.1% 

(1) Represent warrants to purchase common stock which the Company has committed
    to issue.
                                     19
(2) All shares are held by the David W. Pong Revocable Trust.  Includes 380,000 
    shares currently owned, 810,000 shares to be issued pursuant to the  
    conversion of convertible notes held by the Trust, and warrants to purchase
    an additional 810,000 shares.


DESCRIPTION OF SECURITIES

Common Stock.  Our authorized capital stock consists of 300,000,000 shares of 
Common Stock, $.0001 par value per share.  As of November 30, 2004, 15,723,903 
shares of our Common Stock were issued and outstanding, and an additional 
1,595,000 shares had been subscribed to but were not yet issued.  Of these 
shares, only the 2,497,756 shares retained by those who were shareholders prior 
to our acquisition of assets from ACHI are freely tradable.  We currently have 
approximately 5,600 shareholders.  

The holders of our Common Stock are entitled to one vote per each share held and
have the sole right and power to vote on all matters on which a vote of 
stockholders is taken. Voting rights are non-cumulative.  The holders of shares 
of Common Stock are entitled to receive dividends when, as and if declared by 
the Board of Directors out of funds legally available therefore and to share pro
rata in any distribution to stockholders.  Upon liquidation, dissolution, or 
winding up of the Company, the holders of the Common Stock are entitled to 
receive the net assets of the Company in proportion to the respective number of 
shares held by them after payment of liabilities which may be outstanding.

Warrants.     Each warrant will entitle the holder to purchase the number of 
shares of the Company's common stock as shown on the warrant, for a purchase 
price of $6.00 per share.  The warrants may be exercised at any time within two 
years from the date of issuance of the warrant.  

Florida Law Restricting Change in Control.  Florida has enacted legislation that
may deter or frustrate takeovers of Florida corporations.  The Florida Control 
Share Act generally provides that shares acquired in excess of certain specified
thresholds will not possess any voting rights unless such voting rights are 
approved by a majority or a corporation's disinterested shareholders.  The 
Florida Affiliated Transactions Act generally requires supermajority approval by
disinterested shareholders of certain specified transactions between a public 
corporation and holders of more than 10% of outstanding voting shares of that 
corporation (or their affiliates).  Florida law and the Company's Articles of 
Incorporation and Bylaws also authorize the Company to indemnify its directors, 
officers, employees and agents.  In addition, Florida law presently limits the 
personal liability of corporate directors for monetary damages, except where the
directors (i) breach their fiduciary duties and (ii) such breach constitutes or 
includes certain violations of criminal law, a transaction from which the 
directors derived an improper person benefit, certain unlawful distributions or 
certain reckless, wanton or willful acts or misconduct.

Transfer Agent.  The Company's Transfer Agent is Florida Atlantic Stock 
Transfer, 7130 Nob Hill Road, Tamarac, Florida 33321.


PLAN OF DISTRIBUTION 

The common stock will be offered by the Company through its officers and 
directors in states that they are permitted to do so without registration as a 
                                     20
broker-dealer and in reliance upon Rule 3a4-1 under the 1934 Act.  No selling 
commission or other remuneration will be paid directly or indirectly to any 
officer, director or employee of the Company in connection with the sale of the 
stock.  All proceeds from sales of the stock will be placed in the general 
treasury of the Company as sales are made, and this offering is not contingent 
upon any minimum amount of common stock being sold.  The following estimated 
expenses will be paid by the Company.  The selling shareholders will not be 
required to pay any portion of these expenses.

      Securities and Exchange Commission registration fee  $    14,542
      Accounting fees and expenses                              50,000
      Blue Sky fees and expenses                                10,000
      Legal fees and expenses                                   65,000
      Printing expenses                                         15,000
      Miscellaneous                                              5,458
                                                          -------------
          TOTAL                                            $   160,000

Each purchaser of the common stock will be required to complete a Subscription 
Agreement.  The Subscription Agreement indicates the amount of securities being 
purchased by the purchaser along with other required information about the 
purchaser.  The Subscription Agreement must be properly completed and executed 
by the purchaser and returned to our executive offices with cash, check or money
order made payable to American Capital Holdings, Inc.  The investment is not 
effective until accepted by our executive office.

Prior to this offering, there has been no public market for our common stock. We
intend to apply for listing of our Common Stock on the American Stock Exchange. 
In addition to prevailing market conditions, the factors we considered in 
determining the initial public offering price, the price at which the Debentures
may be converted, and the warrant exercise price, are: 

    *     the valuation multiples of publicly-traded companies that we believe 
          are comparable to us 

    *     our financial information

    *     the history of, and the prospects for, our company and the industry in
          which we compete

    *     an assessment of our management, its past and present operations, and 
          the prospects for, and timing of, our future revenues, 

    *     the present state of our development 

    *     the above factors in relation to market values and various valuation 
          measures of other companies engaged in activities similar to ours. 

An active trading market for the shares may not develop. It is also possible 
that after the offering the shares will not trade in the public market at or 
above the initial public offering price.


WHERE YOU CAN FIND MORE INFORMATION

We have filed a registration statement on Form SB-2 under the Securities Act 
                                     21
with the SEC with respect to the common stock offered by this prospectus. This 
prospectus has been filed as part of that registration statement. This 
prospectus does not contain all of the information set forth in the registration
statement because parts of the registration statement are omitted in accordance 
with the rules and regulations of the SEC. The registration statement, including
all exhibits, may be inspected without charge, or copies of these materials may 
be made upon the payment of prescribed fees, at the Securities and Exchange 
Commission's Public Reference Room at 450 Fifth Street, N.W., Room 1024 
Washington, D.C. 20549. You may obtain information on the operation of the 
Public Reference Room by calling the Securities and Exchange Commission at 1-
800-732-0330. In addition, this registration statement, and all exhibits, filed 
with the Securities and Exchange Commission through its Electronic Data 
Gathering, Analysis and Retrieval (EDGAR) system are publicly available through 
the Securities and Exchange Commission's web site located at http//www.sec.gov. 
Following the effective date of the registration statement relating to this 
prospectus, we will continue to be subject to the reporting requirements of the 
Exchange Act and in accordance with these requirements, will file annual, 
quarterly and special reports, and other information with the Securities and 
Exchange Commission.  We also intend to furnish our shareholders and note 
holders with annual reports containing audited financial statements and other 
periodic reports as we think appropriate or as may be required by law.

You may request a copy of these filings, at no cost, by writing to American 
Capital Holdings, Inc., 100 Village Square Crossing, Suite 202, Palm Beach 
Gardens, Florida, 33410, Attention: Corporate Secretary. Telephone requests may 
be directed to the office of the Corporate Secretary of  the Company at (561) 
207-6395. 


LEGAL MATTERS

The validity of the common stock offered by this prospectus will be passed upon 
for us by Redgrave & Rosenthal LLP, 120 E. Palmetto Park Road, Suite 450, Boca 
Raton, FL 33432.  


EXPERTS

Our consolidated financial statements as of May 31, 2004 and 2003, and for the 
years then ended, appearing in this prospectus and registration statement have 
been audited by Wieseneck & Andres, P.A. , independent auditors, as set forth in
their report thereon appearing elsewhere in this prospectus, and are included in
reliance upon this report given on the authority of such firm as experts in 
auditing and accounting.


No dealer, sales representative or any other person has been authorized to give 
any information or to make any representations other than those contained in 
this prospectus and, if given or made, such information or representation must 
not be relied upon as having been authorized by American Capital Holdings, Inc. 
This prospectus does not constitute an offer of any securities other than those 
to which it relates or an offer to sell, or a solicitation of any offer to buy, 
to any person in any jurisdiction where such an offer or solicitation would be 
unlawful. Neither the delivery of this prospectus nor any sale made hereunder 
shall, under any circumstances, create an implication that the information set 
forth herein is correct as of any time subsequent to the date hereof.
                                     22









FINANCIAL STATEMENTS


American Capital Holdings, Inc.                      May 31, 2004



INDEX - PART F/S

                                                             PAGE NO.

ITEM 1             FINANCIAL STATEMENTS

        Independent Auditors' Report . . . . . . . . . . . . .  F-2

        Consolidated Balance Sheet
         May 31, 2004  . . . . . . . . . . . . . . . . . . . .  F-3

        Consolidated Statement of Operations
         For The Twelve Months Ended May 31, 2004  . . . . . .  F-4

        Consolidated Statement of Changes in Shareholders' Equity
         From June 1, 2003 Through May 31, 2004  . . . . . . .  F-5

        Consolidated Statement of Cash Flows
         For The Twelve Months Ended May 31, 2004  . . . . . .  F-6

        Notes to Consolidated Financial Statements . . . . . .  F-8

















                                      
                                      F-1
                                       23





                       Wieseneck, Andres & Company, P.A. 
                         Certified Public Accountants 
                        772 U. S. Highway 1, Suite 100 
                       North Palm Beach, Florida  33408 
                               (561) 626-0400 
 
Thomas B. Andres, C.P.A.*, C.V.A.                     FAX (561) 626-3453 
Paul M. Wieseneck, C.P.A. 
*Regulated by the State of Florida 
 
 
                       Independent Auditors' Report 
 
 
To the Board of Directors and Stockholders 
American Capital Holdings, Inc. 
 
We have audited the accompanying consolidated balance sheet of American Capital 
Holdings, Inc. as of May 31, 2004 and the related consolidated statements 
of operations, changes in shareholders' equity and cash flows for the period 
from June 1, 2003 through May 31, 2004.  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 audits. 
 
We conducted our audits in accordance with standards established by the Public 
Company Accounting Oversight Board (United States). Those standards require
that we Plan and perform the audit to obtain reasonable assurance about whether 
the financial statements are free of material misstatement. An audit includes 
examining, on a test basis, evidence supporting the amounts and disclosures in 
the financial statements. An audit also includes assessing the accounting 
principles used and significant estimates made by management, as well as 
evaluating the overall financial statement presentation. We believe that our 
audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to in the first 
paragraph present fairly, in all material respects, the consolidated financial 
position of American Capital Holdings, Inc. as of May 31, 2004 and the results 
of its consolidated operations and cash flows for the period from June 1, 2003 
through May 31, 2004, in conformity with accounting principles generally 
accepted in the United States of America. 
 
 
 
/s/Wieseneck, Andres & Company, P.A. 

North Palm Beach, Florida
November 10, 2004



                                      F-2
AMERICAN CAPITAL HOLDINGS, INC.
CONSOLIDATED BALANCE SHEET
MAY 31, 2004
  
   ASSETS                         
       Current Assets          
            Cash and Cash Equivalents                  $      22,614
            Notes Receivable                                 138,952
            Loans Receivable Related Parties (net)            27,067
            Prepaid Expenses                                  87,197
            Marketable Securities                          2,963,178
                                                         ------------
                Total Current Assets                       3,239,008
                                                         ------------
            
       Property and Equipment, net                            43,472
                                                         ------------
            
       Other Assets                           
            Intangible Assets, net                         2,960,668
            Goodwill                                       8,209,071
            Security Deposit                                   3,110
                                                         ------------
                Total Other Assets                        11,172,849
                                                         ------------
   TOTAL ASSETS                                        $  14,455,329
                                                         ============
   LIABILITIES & STOCKHOLDERS' EQUITY                      
     Liabilities                                
            Current Liabilities                      
               Accounts Payable                        $      27,806
               Accrued Expenses                               11,021
               Loan Payable Related Party                     57,681
               Current Portion of Notes 
                   and Loans Payable                         834,977
                                                         ------------
               Total Current Liabilities                     931,485
                                                         ------------
        Total Liabilities                                    931,485
                                                         ------------
        Stockholders' Equity                                     
            Common Stock $.0001 par value, 100 million            
             shares authorized, 15,723,903 shares issued            
             and outstanding, 1,300,000 shares unissued        1,702
            Paid-in-Capital                               14,686,363
            Accumulated Deficit                             (651,224)
            Accumulated Comprehensive Loss                  (512,997)
                                                         ------------
     Total Stockholders' Equity                           13,523,844
                                                                    
TOTAL LIABILITIES & STOCHHOLDERS' EQUITY               $  14,455,329
                                                         ============

See accompanying summary of accounting policies and notes to financial 
statements.

                                      F-3
AMERICAN CAPITAL HOLDINGS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS  
FOR THE TWELVE MONTHS ENDED
MAY 31, 2004
                 
         Revenues                              
                 Net Sales                           $          -     
                 Cost of Sales                             (3,952)
                                                      ------------
                     Gross Profit                          (3,952)
           
         Operating Expenses                                      
                 General and Administrative               122,647
                 Bad Debt                                 343,995
                 Sales and Marketing                       13,391
                 Impairment Expense                         6,493
                                                      ------------
               Total Operating Expenses                   486,526
           
                                                      ------------
               Loss from Operations                      (490,478)       
                                                      ------------
         Other Income (Expense)                                  
                 Interest Income                            2,260
                 Interest Expense                         (23,006)
                 Loss on Disposition of Common Stock     (140,000)

                                                      ------------
                     Net Other Expenses                  (160,746)
                                                      ------------
      Net Loss Before Other Comprehensive Losses         (651,224)
                                                      ------------
         Other Comprehensive Income / (Loss)
             Unrealized Holding Loss During Period       (537,604)
             Unrealized Holding Gain During Period         24,607)
                                                      ------------
         Net Other Comprehensive Loss                    (512,997)          
                                                      ------------
     Net Loss                                         $(1,164,221) 
                                                      ============

           
Basic and Diluted           
 Net Loss Per Common Share                            $      (.18)
                                                      ============
           
           
Weighted Average Shares Outstanding                     6,551,685
                                                      ============


See accompanying summary of accounting policies and notes to financial 
statements.



                                      F-4
AMERICAN CAPITAL HOLDINGS, INC.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FROM JUNE 1, 2003 THROUGH MAY 31, 2004

                  Number          Add'l Paid
                    Of    At Par  in Capital  Retained  Accum. other      Total
                  Shares   Value  & Treasury  Earnings  Comprehen-  Stockholder
                  Issued  $.0001    Stock       (Loss)   sive Inc.       Equity
                ---------- ------ ----------- ---------- ---------- -----------
Balance,
 May 31, 2003           5  $   0     $    0    $     0    $     0    $       0

Cancellation of
 Common Stock held
 by eCom eCom          (5)    (0)        (0)         0          0            0 

Issuance of 
 Common Stock to 
 eCom eCom.com Inc. 
 shareholders    2,497,756    250          -          -          -         250

Issuance of
 Common Stock
 for the acquisition
 of ACHI, Inc.
 assets.        13,226,147  1,322  13,176,443        -          -   13,177,765

Issuance of
 Detachable warrants     -      -      10,050        -          -       10,050

Purchase of
 IS Direct Agency NY
 for 800,000,
 subscribed but 
 unissued shares         -     80     999,920        -          -    1,000,000

Conversion of
 $500,000 Debt to
 stock - unissued        -     50     499,950        -          -      500,000

Accumulated other
 comprehensive
 loss, net               -      -          -         -    (512,997)   (512,997)

Net Operating Loss       -      -          -   (651,224)         -    (651,224)
                ---------- ------ ----------- ---------- ---------- -----------
Balance,
  May 31, 2004  15,723,903 $1,702 $14,686,363 $(651,224) $(512,997) $13,523,844
                ========== ====== =========== ========== ========== ===========



See accompanying summary of accounting policies and notes to financial 
statements.


                                      F-5
AMERICAN CAPITAL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE TWELVE MONTHS ENDED MAY 31, 2004


Cash Flows From Operating Activities
    Cash received from customers                            -   
    Cash paid to suppliers of goods            
        and services                               $ (143,268)
    Income Taxes Paid                                       -  
    Interest Paid                                     (13,691)
    Interest Received                                       -  
                                                _______________  
        Net Cash Flows Used in            
         Operating Activities                        (156,959)
                                                _______________  
Cash Flows From Financing Activities            
    Proceeds of Loans from Stockholders               329,997
    Proceeds of Loans from Related Company             57,661
    Collection of Loan From Related Company            25,793
    Loan to Related Company                           (27,067)
    Loan to Related Company                          (343,995)
    Purchase of Common Stock                         (362,816)
    Loan Proceeds Converted to Common Stock           500,000
                                                _______________  
        Net Cash Flows Provided By            
         Financing Activities                         179,573 
                                                _______________  
Net Increase in Cash                                   22,614 
            
Cash and Cash Equivalents at            
 Beginning of Period, June 1, 2003                          0   
                                                _______________  
Cash and Cash Equivalents at            
End of Period, May 31, 2004                       $    22,614 
                                                ===============  
            
            
            
            












See accompanying summary of accounting policies and notes to financial
statements.


                                     F-6

AMERICAN CAPITAL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE TWELVE MONTHS ENDED MAY 31, 2004



Reconciliation of Net Loss to Net Cash Flows Used in Operating Activities
            
            
    Net Loss                                     $ (1,164,221)
    Cash was increased by:            
        Other Comprehensive Income                    512,997 
        Loss on Disposition of Common Stock           140,000
        Valuation Loss                                  6,493 
        Amortization                                        -
        Depreciation                                    3,952 
        Bad Debt adjustment                           343,995 
        Increase in Accounts Payable                   27,806 
        Increase in Accrued Expenses                    1,706 
    Cash was decreased by            
        Increase in Prepaid Expenses                  (26,577) 
        Increase in Security Deposits                  (3,110)
                                                _______________  
        Net Cash Flows Used in            
         Operating Activities                    $   (156,959)
                                                ===============  

            
Supplemental Disclosures
Of Non Cash Investing and
Financing Activities:
------------------------
On February 29, 2004 the Company acquired approximately $137,000 in notes 
receivable, common and preferred stock in various entities valued at $3.1 
million, equipment of $47,000, intangible assets of $6,000, intellectual 
property valued at $3.5 million, various prepaid assets valued at $92,000, 
goodwill of $7.2 million and assumed $1,005,000 in debt for the issuance of 
13,226,147 shares of the Company's common stock.












See accompanying summary of accounting policies and notes to financial 
statements.



                                      F-7

AMERICAN CAPITAL HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
TWELVE MONTHS ENDED MAY 31, 2004

NOTE A - NATURE OF OPERATIONS

American Capital Holdings, Inc. (the "Company") was incorporated in the State 
of Florida on January 27, 1999 as U S Amateur Sports Company, a wholly owned 
subsidiary of eCom eCom.com, Inc.("eCom") which trades on the OTC/Bulletin 
Board under the symbol 'ECEC.' On March 19, 2003, the Company changed its name 
to USA SportsNet Company, and on December 12, 2003 changed its name to American 
Capital Holdings, Inc. in connection with its spin off by eCom and its 
acquisition of certain assets of a company formerly known as American Capital 
Holdings, Inc. (now known as ACHI, Inc.)  The Company's main office is located 
at 100 Village Square Crossing, Suite 202, Palm Beach Gardens, Florida 33410, 
and the telephone number is (561) 207-6395.

IS Direct Agency, Inc. ("ISDA") was incorporated in the State of Florida on May 
20, 2004.  On May 21, 2004 ISDA acquired the assets of IS Direct Agency, Inc., a
New York Corporation.  ISDA provides internet based term life insurance quotes.

While a wholly owned subsidiary of eCom, the Company developed an e-commerce 
Internet infrastructure. This product provided an affordable, user-friendly 
technological platform and professional resources to facilitate web business 
development.  It also operated an on-line business as a test model using 
Company developed e-commerce concepts to sell sports products.  

The Spin-Off.  The Company was one of ten wholly owned subsidiaries of eCom, 
with varying business plans.  In recent years, eCom concluded that it did not 
have the financial resources necessary to develop all of its ten business units 
collectively.  eCom decided to spin off its subsidiaries into independent 
companies in the belief that independent companies, each with a distinct 
business, would be better able to obtain necessary funding and develop their 
business plans.  This belief was based in part on eCom's experience with 
potential business partners which sought involvement with only one of eCom's 
subsidiaries, rather than involvement with the multi-faceted eCom. 

On December 1, 2003, the Board of Directors of eCom approved the spin-off of 
the Company.  They voted to issue to the shareholders of eCom one share of the 
Company for every one share of eCom owned as of the record date of January 5, 
2004.  Fractional shares will be purchased by the Company. No payment was 
required of the eCom shareholders.

Acquisition from American Capital Holdings.  After the spin off of the Company 
was completed, the Company was presented with an opportunity to acquire certain 
assets of American Capital Holdings, Inc. (now known as, and referred to 
hereafter as ACHI).  On January 12, 2004, the Company entered into an Asset 
Purchase Agreement with ACHI whereby the Company acquired certain assets of 
ACHI in return for the issuance of common stock of the Company in an amount 
equal to 84.1% of the total ownership of the Company.  In order to accomplish 
this transaction, the Company effected a 20 to 1 reverse stock split, which 
reduced its outstanding stock to 2,497,756 shares, and agreed to issue to ACHI


See accompanying independent accountants' audit report.
                                      F-8 
AMERICAN CAPITAL HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
TWELVE MONTHS ENDED MAY 31, 2004

NOTE A - NATURE OF OPERATIONS (CONTINUED)

49,955,112 shares.  ACHI agreed to accept the issuance of 13,561,804 shares at 
closing, and assigned its right to receive the 13,561,804 shares to its 
principle, Barney A. Richmond, now the President of the Company.  The remaining 
36,393,308 shares were reserved for issuance by the Company in connection with 
future acquisitions and financings.  The Company then changed its name to 
American Capital Holdings, Inc., and ACHI changed its name to ACHI, Inc.  Of the
36,393,308 shares reserved for future issuance, 2,162,099 shares have now been 
issued to the shareholders of Spaulding Ventures, LLC, in replacement of shares 
of ACHI to be issued to Spaulding in connection with a prior acquisition of 
assets by ACHI from Spaulding. 


NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation, Use of Estimates
The Company maintains its accounts on the accrual basis of accounting. The
preparation of financial statements in conformity with U.S. generally accepted 
accounting principles requires management to make estimates and assumptions 
that affect the reported amounts of assets and liabilities and disclosure of 
contingent assets and liabilities at the date of the financial statements and 
the reported amounts of revenues and expenses during the reporting period. 
Actual results could differ from those estimates.

Revenue Recognition
Revenue and Dividends from investments is recognized at the time the investment 
dividends are declared payable by the underlying investment.  Capital Gains and 
losses are recorded on the date of sale of the investment.

Cash
Cash consists of deposits in banks and other financial institutions having
original maturities of less than ninety days.

Allowance for Doubtful Accounts
It is the policy of management to review the outstanding accounts receivable
at year end, as well as the bad debt write-offs experienced in the past, and
establish an allowance for doubtful accounts for uncollectible amounts.

Depreciation
Property and equipment is recorded at cost and is depreciated over the
estimated useful lives of the related assets. Depreciation is computed using
the straight-line method.




See accompanying independent accountants' audit report.




                                      F-9
AMERICAN CAPITAL HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
TWELVE MONTHS ENDED MAY 31, 2004


NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Amortization
The accounting for a recognized intangible asset acquired after June 30, 2001 
is based on its useful life to the Company.  If an intangible asset has a 
finite life, but the precise length of that life is not known, that intangible 
asset shall be amortized over management's best estimate of its useful life.  
An intangible asset with a indefinite useful life is not amortized.  The useful 
life to an entity is the period over which the asset is expected to contribute 
directly or indirectly to the future cash flows of that entity.

Investments
Investments are stated at the lower of cost and market value.


NOTE C -  NOTES RECEIVABLE

Notes Receivable at May 31, 2004 consist of the following:

   An 8% non-collateralized note that matures in December 2004,
   Interest is payable quarterly.  Included in the balance is
   $11,963 of accrued interest receivable.                        $ 111,963

   A 4% non-collateralized note due on demand.  Included in
   the balance is $1,989 of accrued interest receivable.             26,989
                                                                  ----------
       Total Notes Receivable                                     $ 138,952
                                                                  ==========

Management has made a determination that all of the notes receivable are 
collectable and therefore, has not established an allowance for doubtful 
accounts.


NOTE D - LOANS RECEIVABLE RELATED PARTIES

The three loans receivable from related corporate entities are non-
collateralized, non-interest bearing and are due on demand.

The loans due as of May 31, 2004 are as follows:

    eCom eCom.com Inc.       $  27,067
    Freedom 4 Wireless, Inc.   343,995
     Less bad debts           (343,995)
                              ---------
        Total                $  27,067
                              =========



See accompanying independent accountants' audit report.
                                     F-10
AMERICAN CAPITAL HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
TWELVE MONTHS ENDED MAY 31, 2004


NOTE E - INVESTMENTS

The Company accounts for its investments in common stock using the equity 
method for those investments which the Company does not own a controlling 
interest.  These investments are currently recorded at cost.  The Company's 
share of the investors earnings or losses, if any, are not available at the 
date of these financial statements.  No quoted market price is available for 
these investments.

The Company accounts for investments in common stock for which there is a 
quoted market price as an Available-for-Sale security under Statement of 
Financial Accounting Standards No. 115, Accounting for Certain Investments in 
Debt and Equity Securities.  

On May 31, 2004, investments consisted of the following:

Equity Method of Accounting
Investment Securities at Cost
   @Visory, LLC                          $   112,500
   Brilliant Coatings, Inc.                  250,000
   Century Aerospace Corporation             285,000
   eSmokes, Inc.                             100,000
   Efficien, Inc.                            287,000
   Smartpill Diagnostics, Inc.               770,000
   Metroflex, Inc.                           900,000
                                          -----------
Total Equity Method Securities at Cost     2,704,500

Available-for-Sale method of accounting
  eCom eCom.com Inc.                         258,678
                                          -----------
    Total Available-for-Sale securities      258,678
                                          -----------
Total Investment Securities              $ 2,963,178
                                          ===========

Equity Method Securities:

@Visory, LLC is a limited liability company located in East Aurora NY.  The 
Company owns 250,000 Series A units of @Visory LLC.  The Company's investment 
amounts to 1.2% of the outstanding units of @Visory, LLC.  @Visory, LLC is 
taxed as a partnership, not publicly traded.  As of May 31, 2004 @Visory, 
LLC had investments in the following companies: Appraisal.com; SmartPill 
Diagnostics; Efficien; Liquid Matrix; Saturn Internet Reservations; 
StudentVoice; Synacor; and Yipee, Inc.





See accompanying independent accountants' audit report.
                                     F-11
AMERICAN CAPITAL HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
TWELVE MONTHS ENDED MAY 31, 2004

NOTE E - INVESTMENTS (CONTINUED)

Brilliant Coatings is a Nevada Corporation.  The Company owns 15,000,000 common 
shares of Brilliant Coatings.  The Company's investment amounts to 2.3% of the 
outstanding common shares of Brilliant Coatings Inc.

Century Aerospace is a Delaware Corporation.  The Company owns 57,000 common 
shares of Century Aerospace.  The Company's investment amounts to .7% of the 
outstanding common shares of Century Aerospace

eSmokes, Inc is a Florida Corporation.  The company owns 300,000 common shares 
of eSmokes, Inc.  The Company's investment amounts to 3.3% of the outstanding 
shares of eSmokes, Inc.

Efficien, Inc. is a Delaware Corporation.  The Company owns 500,000 common 
shares of Efficien. The Company's investment amounts to 11.9% of the 
outstanding common shares of Efficien, Inc.  Efficent specializes in the 
development of internet based applications to improve the efficiency of 
hospital supply and material flow through an integrated application service 
provider (ASP) solution.

SmartPill Diagnostics, Inc. is a Delaware Corporation.  The Company owns 
1,194,824 Series A preferred shares of SmartPill Diagnostics, Inc.  The 
Company's investment amounts to 11.60% of the outstanding shares of SmartPill 
Diagnostics, Inc.  SmartPill Diagnostics is a leading developer of SmartPill 
Capsule endoscopy technology.   About the size of a vitamin pill, the SmartPill 
Capsule is a capsule endoscopy device that uses patented technology to measure 
peristaltic pressure, pH and transit time, and determine real-time location; 
factors that aid Gastroenterologists in the diagnosis of such GI motility 
disorders as Gastroparesis and Dyspepsia.  The patient benefits from a more 
accurate diagnosis and a more comfortable, non-invasive, non-surgical approach 
to GI exploratory examinations.


Metroflex, Inc. is a Delaware Corporation.  The Company owns 900,000 common 
shares of Metroflex, Inc.  Metroflex's MetroFlexCard operates as a MasterCard 
debit card. The card enables employers to set up programs through which 
employees can pay for commuter expenses-mass transit and parking expenses on a 
pretax basis.

Available-for-Sale Securities:

eCom eCom.com, Inc. is a Florida Corporation and trades on the OTC/BB:ECEC. The 
company which was the former parent of USA SportsNet Company now American 
Capital Holdings, Inc., owns 1,437,100 common shares of eCom.  The Company's 
investment amounts to 2.9% of the outstanding shares of eCom.  The cost for 
this investment as of May 31, 2004 was $235,071.  On May 31, 2004 the 
market value based on a closing bid price of 0.16 per share was $258,678.  The 
difference in cost versus market value is recorded as Accumulated Other 
Comprehensive Income of $23,607.

See accompanying independent accountants' audit report.
                                     F-12
AMERICAN CAPITAL HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
TWELVE MONTHS ENDED MAY 31, 2004


NOTE F - PROPERTY AND EQUIPMENT

Equipment consisting of various Cisco routers, switches, cables, and dual speed 
hubs were acquired from a company owned by a majority stockholder of American 
Capital Holdings, Inc.  The equipment is being used to support a hosting 
operations center.  Depreciation expense of $3,952 has been recorded as of May 
31, 2004.


NOTE G - PREPAID EXPENSES

Prepaid expenses consist principally of amounts paid for auditing work for the 
Company, along with marketing and research material to be used for investor 
relations.  


NOTE H - INTANGIBLE ASSETS


On February 29, 2004, the Company received intellectual property rights when it 
acquired 53,910,922 common shares of Air Media Now, Inc. from a related 
company.  The fair value of the publicly traded shares at date of receipt was
$3,469,622.  The Intellectual property rights were not amortized at February 
29, 2004.  Management reviews intangible assets for impairment annually.
Intangible assets with a finite useful life acquired after June 30, 2001 are 
amortized over their useful lives to the company.  Intangible assets acquired
after June 30, 2001 having a infinite useful life are recovered at their fair
value and are not amortized.  Management reviews all intangible assets for 
impairment annually.  Market value of the Air Media Now property decreased
between February 29, 2004 and May 31, 2004.  This decrease has been recorded
has been recorded as a decrease in paid in capital of $536,604.


NOTE I - OTHER ASSETS

Other assets consist primarily of security deposits on the lease of office
facilities.


NOTE J - Loan Payable Related Party

A non-interest bearing, non-collateralized loan payable to a related company in 
the amount of $57,681 is due on demand.







See accompanying independent accountants' audit report.
                                     F-13
AMERICAN CAPITAL HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
TWELVE MONTHS ENDED MAY 31, 2004


NOTE K - PROMISSORY NOTES

Promissory Notes as of May 31, 2004 consisted of:
                                                        May 31, 2004 
                                                      ---------------  
Four interest bearing, non-collateralized
loans.  The loans have various maturities 
throughout 2004.                                         $ 494,950 
                                                         ---------- 
     Total Notes Payable                                   494,950 
     Less Current Portion                                 (494,950)
                                                         ----------
     Net Long-term Debt                                  $       0 
                                                         ==========
The short-term notes payable mature as follows:
     May 31, 2004                                        $ 494,950
                                                         ==========
Two non-interest bearing, non-collateralized loans
     due on demand                                       $ 340,027 
                                                         ==========

The notes and loans can be converted to shares of the Company's $.0001 par value
common stock at the option of the holder.  The notes pay interest at 10% per 
annum.  Interest is paid quarterly.  The loan can be converted at 80% of the 
average closing price of Company's common stock for the preceding five (5) 
consecutive trading days with a floor of $1.  The holder of a $500,000 10% note 
payable with accrued interest of $9,315 agreed on May 7, 2004 to convert their 
debt to common shares.  By Agreement, the shares of common stock at conversion 
will not be issued until the effective date of the Company's filings with the 
United States Securities & Exchange Commission.

NOTE L - WARRANTS

The Company has issued 1,005,000 (505,000 + 500,000) detachable warrants for 
each dollar of debt as described in Note K above.  Management has determined 
that the value of the detachable warrants to be $.01 on the date of issuance and
have charged paid in capital $10,050 during the period.  Each warrant entitles 
the holder to purchase one (1) share of common stock at $.01.  The Company also 
issued 400,000 warrants to one of the former owners of IS Direct Agency for 
providing his insurance licensing in all fifty states.  The warrants can be 
exercised for $.01 each.  An additional 216,209 warrants were issued in 
connection with the Spaulding acquisition, one warrant for every ten shares 
owned.  Each unit of Spaulding entitled the owner to one warrant with an 
exercise price of $6.00 each.
 




See accompanying independent accountants' audit report.

                                     F-14
AMERICAN CAPITAL HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
TWELVE MONTHS ENDED MAY 31, 2004


NOTE L - WARRANTS (CONTINUED)

The following is a summary of warrants through May 31, 2004:
 
       Outstanding warrants at the beginning of the year           0
       Warrants issued                                     1,621,209
       Warrants expired                                            0
       Warrants exercised                                          0
                                                         ------------
       Warrants outstanding at May 31, 2004                1,621,209

The warrants expire as follows:

       Expiration Date                  Number of Warrants
       --------------------             ------------------
       September 30, 2004                       75,000
       January 31, 2005                        130,000
       August 15, 2005                         300,000
       December 15, 2005                       500,000
       December 31, 2005                       216,209
       Warrants expiring beyond 2005           400,000
                                          -------------
                                             1,621,209
                                          =============


NOTE M - COMMITMENTS AND CONTINGENCIES

The Company leases approximately 1200 feet office facilities in Palm Beach 
Gardens, Florida under an operating lease of $3,297 per month which expires on 
January 31, 2005.  ISDA leases approximately 200 square feet of office 
facilities in Buffalo, NY under a month to month agreement of $425.00 per month.
Future minimum lease payments including sales tax as of May 31, 2004 are:
Fiscal Years ending:

            May 31, 2005                        26,373
                                               -------
            Total Minimum Lease Payments      $ 26,373

Rent expense for the Twelve month period ending May 31, 2004 was $8,579.


NOTE N - INCOME TAXES

No provision for federal and state income taxes has been recorded
because the Company has incurred net operating losses since inception.  The
Company's net operating loss carry-forward as of May 31, 2004 totals
approximately $495,000.  These carry-forwards, which will be available to
offset future taxable income, and expire beginning in May 31, 2024.

See accompanying independent accountants' audit report.
                                     F-15
AMERICAN CAPITAL HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
TWELVE MONTHS ENDED MAY 31, 2004


NOTE N - INCOME TAXES (CONTINUED)

The Company does not believe that the realization of the related net
deferred tax asset meets the criteria required by generally accepted
accounting principles and, accordingly, the deferred income tax asset arising
from such loss carry forward has been fully reserved.

The Company accounts for income taxes in accordance with FASB Statement No. 
109, Accounting for Income Taxes (FASB 109). Under FASB 109, income taxes are 
provided for the tax effects of transactions reported in the financial 
statements and consist of taxes currently due plus deferred taxes related to 
certain income and expenses recognized in different periods for financial and 
income tax reporting purposes. Deferred tax assets and liabilities represent 
the future tax return consequences of those differences, which will either be 
taxable or deductible when the assets and liabilities are recovered or settled.

Deferred taxes also are recognized for operating losses and tax credits that 
are available to offset future taxable income and income taxes, respectively.  
A valuation allowance is provided if it is more likely than not that some or 
all of the deferred tax assets will not be realized. 


NOTE O - STOCKHOLDERS' EQUITY
 
To facilitate the purchase of the assets of ACHI, the Company recorded a one 
for twenty reverse split on the Effective Date of the currently outstanding 
common stock, while maintaining the conversion and exercise prices of the 
Senior Notes, the Secured Notes, the Subordinated Notes and the related
warrants.  All prior period share and per-share amounts have been restated to 
account for the reverse split.  Any fractional shares remaining after the 
reverse split will be paid out in cash to the shareholder on the Effective 
Date.

Warrants were granted to Promissory Noteholders with detachable warrants.  
Management has determined that the fair value of each warrant is $0.01.

The computation of diluted loss per share before extraordinary item for the year
ended May 31, 2004 does not include shares from potentially dilutive securities 
as the assumption of conversion or exercise of these would have an antidilutive 
effect on loss per share before extraordinary items.  In accordance with 
generally accepted accounting principles, diluted loss per share from 
extraordinary item is calculated using the same number of potential common 
shares as used in the computation of loss per share before extraordinary 
items.

NOTE P - DEFERRED TAX ASSET

Deferred income taxes are provided for temporary differences between the
financial reporting and income tax basis of the Company's assets and

See accompanying independent accountants' audit report.
                                     F-16
AMERICAN CAPITAL HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
TWELVE MONTHS ENDED MAY 31, 2004

liabilities.  Temporary differences, net operating loss carry forwards
and valuation allowances comprising the net deferred taxes on the balance
sheets is as follows:

                                                      May 31, 2004
                                                     --------------
         Loss carry forward for tax purposes          $    495,075
                                                     ==============
         Deferred tax asset (34%)                          168,326
         Valuation allowance                              (168,326)
                                                     --------------
         Net deferred tax asset                                  -
                                                     ==============

No provision for federal and state income taxes has been recorded because the
Company has incurred net operating losses since inception. The Company's net
operating loss carry-forward as of May 31, 2004 was approximately
$495,000. These carry-forwards, which will be available to offset future
taxable income, will expire through the year 2024.

The Company does not believe that the realization of the related net deferred
tax asset meets the criteria required by generally accepted accounting
principles and, accordingly, the deferred income tax asset arising from such
loss carry forward has been fully reserved.


NOTE Q - RELATED PARTY TRANSACTIONS

The Company has accounts receivables due from two related company entities.  
eCom eCom.com, Inc. owes $27,067 for services paid to the Company's transfer 
agent and accountant.  Freedom 4 Wireless, Inc. owes the Company $343,995 for 
working capital and inventory purchased by ACHI, subsequently purchased by the 
Company on February 29, 2004.  These related party transactions totaled
$371,062 on May 31, 2004.


NOTE R - RECENT ACCOUNTING PRONOUNCEMENTS

The FASB issued SFAS No. 143, Accounting for Asset Retirement Obligations with 
an effective date for financial statements issued for fiscal years beginning 
after June 15, 2002.  The statement addresses financial accounting and 
reporting for obligations related with the retirement of tangible long-lived 
assets and the costs associated with asset retirement.  The statement requires
the recognition of retirement obligations which will, therefore, generally 
increase liabilities; retirement costs will be added to the carrying value of 
long-lived assets, therefore, assets will be increased; and depreciation and 
accretion expense will be higher in the later years of an assets life than in 
earlier years.  The Company adopted SFAS No. 143 at January 1, 2002.  The 
adoption of SFAS No. 143 had no impact on the Company's operating results or 
financial positions.

See accompanying independent accountants' audit report.
                                     F-17
AMERICAN CAPITAL HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
TWELVE MONTHS ENDED MAY 31, 2004


NOTE R - RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)

The FASB also issued SFAS No. 144, Accounting for the Impairment or Disposal
of Long-Lived Assets and is effective for financial statements issued for
fiscal years beginning January 1, 2002.  This statement addresses financial
accounting and reporting for the impairment or the disposal of long-lived
asset.  An impairment loss is recognized if the carrying amount of a long-
lived group exceeds the sum of the undiscounted cash flow expected to result
from the use and eventual disposition of the asset group.  Long-lived assets
should be tested at least annually or whenever changes in circumstances
indicate that its carrying amount may not be recoverable.  This statement
does not apply to goodwill and intangible assets that are not amortized.  The
Company adapted SFAS No. 144 in the first quarter of 2002. The adoption of SFAS 
No. 144 had no impact on the Company's operating results or financial position.

In April 2002, the FASB issued SFAS No. 145, "Rescission of the FASB Statements
No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical 
Corrections"("SFAS No. 145"). SFAS No. 145 eliminates the requirement to 
classify gains and losses from the extinguishment of indebtedness as 
extraordinary, requires certain lease modifications to be treated the same as a
sale-leaseback transaction, and makes other non-substantive technical 
corrections to existing pronouncements. SFAS No. 145 is effective for fiscal 
years beginning after May 15, 2002. SFAS No. 145 was adopted on June 1, 2003 
and did not have a material effect on the Company's financial position or 
results of operations.

The FASB issued SFAS No. 150, "Accounting for Certain Financial Instruments 
with Characteristics of both Liabilities and Equity" and is effective for 
financial instruments entered into after May 31, 2003.  This Statement 
establishes standards for how an issuer classifies and measures in its 
statement of financial position certain financial instruments with 
characteristics of both liabilities and equity.  It requires that an issuer 
classify a financial instrument that is within its scope as a liability because
that financial instrument embodies an obligation of the issuer.  The Company 
has adopted SFAS No. 150 and the adoption has had no impact on the Company's 
operating results or financial position.

Goodwill and intangible assets acquired prior to July 1, 2001 will continue to 
be amortized and tested for impairment in accordance with pre- SFAS No. 142 
requirements until adoption of SFAS No. 142. Under the provision of SFAS 
No.142, intangible assets with definite useful lives will be amortized to their
estimated residual values over those estimated useful lives in proportion to 
the economic benefits consumed. Such intangible assets remain subject to the 
impairment provisions of SFAS No. 121. Intangible assets with indefinite useful
lives will be tested for impairment annually in lieu of being amortized. The 
impact of adopting SFAS Nos. 141 and 142 will not cause a material change in
the Company's consolidated financial statements as of the date of this report. 


See accompanying independent accountants' audit report.
                               F-18
End of May 31, 2004 Financials





American Capital Holdings, Inc.                      November 30, 2004




INDEX - PART F/S


                                                             PAGE NO.

ITEM 1             FINANCIAL STATEMENTS

        Independent Accountants' Report  . . . . . . . . . . . . . .  F-20

        Consolidated Balance Sheets
         November 30 2004 and May 31, 2004   . . . . . . . . . . . .  F-21

        Consolidated Statement of Operations
         Six Months Ended November 30, 2004 and November 30, 2003. .  F-22

        Consolidated Statement of Operations
         Three Months Ended November 30, 2004 and November 30, 2003.  F-23

        Consolidated Statement of Changes in Shareholders' Equity
         from June 1, 2003 Through November 30, 2004 . ..  . . . . .  F-24

        Consolidated Statement of Cash Flows
         for the Three Months Ended November 30, 2004 and 2003 . . .  F-25

        Notes to Consolidated Financial Statements . . . . . . . . .  F-27



















        

                                     F-19
                       Wieseneck, Andres & Company, P.A. 
                         Certified Public Accountants 
                        772 U. S. Highway 1, Suite 100 
                       North Palm Beach, Florida  33408 
                               (561) 626-0400 
 
Thomas B. Andres, C.P.A.*, C.V.A.                     FAX (561) 626-3453 
Paul M. Wieseneck, C.P.A. 
*Regulated by the State of Florida 
 
 
                       Independent Accountants' Report 
 
 
To the Board of Directors and Stockholders 
American Capital Holdings, Inc. 
Palm Beach Gardens, Florida
 
We have reviewed the accompanying consolidated balance sheet of American Capital
Holdings, Inc. as of November 30, 2004 and May 31, 2004, and the related 
consolidated statements of operations, for the three-month periods and the six-
month periods ended November 30, 2004 and 2003, the consolidated statement of 
changes in stockholders' equity from June 1, 2003 through November 30, 2004, and
the consolidated statement of cash flows for the six-month periods ended 
November 30, 2004 and 2003, in accordance with Statements on Standards for 
Accounting and Review Services issued by the American Institute of Certified 
Public Accountants.  All information included in these financial statements is 
the representation of the management of American Capital Holdings, Inc.

A review consists principally of inquiries of Company personnel and analytical 
procedures applied to financial data.  It is substantially less in scope than an
audit in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken 
as a whole.  Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should 
be made to the accompanying financial statements in order for them to be in 
conformity with accounting principles generally accepted in the United States of
America.

 
 
/s/Wieseneck, Andres & Company, P.A. 


North Palm Beach 
January 7, 2005









                                    F-20

AMERICAN CAPITAL HOLDINGS, INC.
CONSOLIDATED BALANCE SHEET
                                             NOVEMBER 30, 2004   MAY 31, 2004
ASSETS                         
    Current Assets          
         Cash and Cash Equivalents              $      33,618  $      22,614
         Notes Receivable                             155,353        138,952
         Loans Receivable Related Parties (net)       380,447         27,067
         Prepaid Expenses                             103,749         87,197
         Marketable Securities                      2,277,126      2,963,178
         Other Current Assets                         250,000              -
                                                  ------------   ------------
             Total Current Assets                   3,200,293      3,239,008
                                                  ------------   ------------
            
    Property and Equipment, net                        52,765         43,472
                                                  ------------   ------------
    Other Assets                           
         Intangible Assets, net                     1,268,477      2,960,668
         Goodwill                                   8,209,071      8,209,071
         Security Deposit                               3,110          3,110
                                                  ------------   ------------
             Total Other Assets                     9,480,658     11,172,849
                                                  ------------   ------------
TOTAL ASSETS                                    $  12,733,716  $  14,455,329
                                                  ============   ============
LIABILITIES & STOCKHOLDERS' EQUITY                      
  Liabilities                                
         Current Liabilities                      
            Accounts Payable                    $      20,640  $      27,806
            Accrued Expenses                           21,945         11,021
            Loan Payable Related Parties              276,082         57,681
            Current Portion of Notes 
                and Loans Payable                   1,049,977        834,977
                                                  ------------   ------------
            Total Current Liabilities               1,368,644        931,485
                                                  ------------   ------------
     Total Liabilities                              1,368,644        931,485
                                                  ------------   ------------
     Stockholders' Equity                                     
         Common Stock $.0001 par value, 100 million
          shares authorized, 15,723,903 shares issued
          and outstanding, 1,595,000 unissued           1,732          1,702
         Paid-in-Capital                           14,981,333     14,686,363
         Accumulated Deficit                       (1,231,002)      (651,224)
         Accumulated Comprehensive Loss            (2,386,991)      (512,997)
                                                  ------------   ------------
  Total Stockholders' Equity                       11,365,072     13,523,844
                                                  ------------   ------------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY         $ 12,733,716  $  14,455,329
                                                  ============   ============


See accompanying summary of accounting policies, notes to financial
statements and independent accountants' review report.
                                   F-21

AMERICAN CAPITAL HOLDINGS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS  
FOR THE SIX MONTHS ENDED
NOVEMBER 30, 2004 AND 2003

                                           NOVEMBER 30, 2004  NOVEMBER 30, 2003
  
       Revenues                              
               Net Sales                       $        123      $          -
               Cost of Sales                         (8,079)                -
                                                ------------      ------------

                   Gross Profit                      (7,956)                -
                                                ------------      ------------
    
       Operating Expenses                                      
               General and Administrative           488,385                 -
               Sales and Marketing                   15,357                 -
               Amortization                               -                 -
                                                ------------      ------------
             Total Operating Expenses               503,741                 -
           
                                                ------------      ------------
             Loss from Operations                  (511,698)                -
                                                ------------      ------------
       Other Income (Expense)                                  
               Interest Income                        4,943                 -
               Interest Expense                     (24,659)                -
               Loss on Disposition
                  of Marketable Securities          (48,364)                -
                                                ------------      ------------
                   Net Other Expenses               (68,081)                -
                                                ------------      ------------
    Net Loss Before Other Comprehensive Losses     (579,778)                -

       Other Comprehensive Income / (Loss)
           Unrealized Holding Loss During Period (1,873,994)                -
                                                ------------      ------------
       Total Comprehensive Loss                  (1,873,994)                -
                                                ------------      ------------
    Net Loss                                   $ (2,453,772)     $          0
                                                ============      ============

           
Basic and Diluted           
 Net Loss Per Common Share                             (.16)                -
                                                ============      ============
           
           
Weighted Average Shares Outstanding              15,723,903                 5
                                                ============      ============


See accompanying summary of accounting policies, notes to financial
statements and independent accountants' review report.
                                   F-22

AMERICAN CAPITAL HOLDINGS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS  
FOR THE THREE MONTHS ENDED
NOVEMBER 30, 2004 AND 2003

                                           NOVEMBER 30, 2004  NOVEMBER 30, 2003
  
       Revenues                              
               Net Sales                       $         57      $          -
               Cost of Sales                         (4,069)                -
                                                ------------      ------------

                   Gross Profit                      (4,012)                -
                                                ------------      ------------
       Operating Expenses                                      
               General and Administrative           243,224                 -
               Sales and Marketing                    1,806                 -
               Amortization                               -                 -
                                                ------------      ------------
             Total Operating Expenses               245,029                 -
           
                                                ------------      ------------
             Loss from Operations                  (249,041)                -
                                                ------------      ------------
       Other Income (Expense)                                  
               Interest Income                        2,479                 -
               Interest Expense                     (12,054)                -
               Loss on Disposition
                  of Marketable Securities          (55,000)                -
                                                ------------      ------------
                   Net Other Expenses               (64,575)                -
                                                ------------      ------------
    Net Loss Before Other Comprehensive Losses     (313,617)                -

       Other Comprehensive Income / (Loss)
           Unrealized Holding Loss During Period   (757,674)                -
                                                ------------      ------------
       Total Comprehensive Loss                    (757,674)                -
                                                ------------      ------------
    Net Loss                                   $ (1,071,290)     $          0
                                                ============      ============

           
Basic and Diluted           
 Net Loss Per Common Share                             (.07)                -
                                                ============      ============
           
           
Weighted Average Shares Outstanding              15,723,903                 5
                                                ============      ============



See accompanying summary of accounting policies, notes to financial
statements and independent accountants' review report.
                                   F-23
AMERICAN CAPITAL HOLDINGS, INC.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FROM JUNE 1, 2003 THROUGH NOVEMBER 30, 2004

                                  Add'l Paid
               Number of  At Par  in Capital  Retained  Accum. other      Total
                  Shares   Value  & Treasury  Earnings  Comprehen-  Stockholder
                  Issued  $.0001    Stock       (Loss)   sive Inc.       Equity
                ---------- ------ ----------- ---------- ---------- -----------
Balance 6/01/03         5  $   0      $    0   $     0    $      0   $       0

Cancellation of Common Stock
 held by eCom eCom     (5)    (0)         (0)        0           0           0

Issuance of Common Stock
To eCom eCom.com Inc. 
 shareholders    2,497,756    250          -         -           -         250

Issuance of Common Stock
 for the acquisition
 of ACHI, Inc.
assets.         13,226,147  1,322  13,176,443        -           -  13,177,765

Issuance of
 detachable warrants     -      -      10,050        -           -      10,050

Purchase of IS Direct
 Agency NY for 800,000,
 subscribed but 
 unissued shares         -     80     999,920        -           -   1,000,000

Conversion of 
 $500,000 Debt
 to stock - unissued     -     50     499,950        -           -     500,000

Accumulated other
 Comprehensive loss      -      -          -         -    (512,997)   (512,997)

Net Operating Loss       -      -          -   (651,224)         -    (651,224)
                ---------- ------ ----------- ---------- ---------- -----------
Balance 5/31/04 15,723,903  1,702  14,686,363  (651,224)  (512,997) 13,523,844

Sale of 295,000
 shares of Common
 Stock - unissued        -     30     294,970        -           -     295,000

Accumulated other
 Comprehensive Loss      -      -          -         -   (1873,994) (1,873,994)

Net Operating Loss       -      -          -   (579,778)         -    (579,778)
                ---------- ------ ----------- ---------- ---------- -----------
Bal. 11/30/04   15,723,903 $1,732 $14,981,333$(1231,002)$(2386,991)$11,365,072
                ========== ====== =========== ========== ========= ============

See accompanying summary of accounting policies, notes to financial
statements and independent accountants' review report.
                                    F-24

AMERICAN CAPITAL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 2004 AND 2003

                                           NOVEMBER 30, 2004   NOVEMBER 30, 2003


Cash Flows From Operating Activities
    Cash received from customers               $        123      $          -
    Cash paid to suppliers of goods           
        and services                               (570,201)                -
    Income Taxes Paid                                     -                 -
    Interest Paid                                   (14,863)                -
    Interest Received                                   448                 -
                                              _______________  _______________
        Net Cash Flows Used in            
         Operating Activities                      (584,493)                -
                                              _______________  _______________
Cash Flows From Investing Activities            
    Purchase of Equipment                            (1,400)                -
    Deposit Made on Insurance Carrier in Escrow    (250,000)                -
    Sale of Marketable Securities                   821,636                 -
    Purchase of Marketable Securities              (377,348)                -
    Purchase of Promissory Notes                    (11,906) 
                                              _______________  _______________
        Net Cash Flows Provided By            
         (Used In) Investing Activities             180,982                 -
                                              _______________  _______________
Cash Flows From Financing Activities            
    Loans from Related Companies                    882,736                 -
    Repayment of Loans from Related Companies      (978,221)                -
    Proceeds from Sale of Stock                     545,000                 -
    Payments on Notes Payable                       (35,000)                -
                                              _______________  _______________
        Net Cash Flows Provided By            
         Financing Activities                       414,515                 -
                                              _______________  _______________
Net Increase / (Decrease) in Cash                    11,004                 -
            
Cash and Cash Equivalents at            
 Beginning of Period, June 1, 2004 and 2003          22,614                 0
                                              _______________  _______________
Cash and Cash Equivalents at            
End of Period, November 30, 2004 and 2003      $     33,618     $           0
                                              ===============  ===============





See accompanying summary of accounting policies, notes to financial
statements and independent accountants' review report.



                                    F-25

AMERICAN CAPITAL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 2004 AND 2003


Reconciliation of Net Loss to Net Cash Flows Used in Operating Activities
            
                                          NOVEMBER 30, 2004  NOVEMBER 30, 2003
            
    Net Income (Loss)                          $ (2,453,772)     $          -
    Cash was increased by:            
        Increase in accrued expenses                          
         Other Comprehensive Income               1,873,994                 -
         Valuation Loss                                       
         Amortization                                     -                 -
         Depreciation                                 8,079                 -
         Increase in Accrued Expenses                10,924                 -
    Cash was decreased by            
         Decrease in Accounts Payable                (7,166)                -
         Increase in Prepaid Expenses               (16,552)                -
                                              _______________  _______________
        Net Cash Flows Used in            
         Operating Activities                  $   (584,493)    $           - 
                                              ===============  ===============




            
Supplemental Disclosures
Of Non Cash Investing and
Financing Activities:
------------------------
On February 29, 2004 the Company acquired approximately $137,000 in notes 
receivable, common and preferred stock in various entities valued at $3.1 
million, equipment of $47,000, intangible assets of $6,000, intellectual 
property valued at $3.5 million, various prepaid assets valued at $92,000, 
goodwill of $7.2 million and assumed $1,005,000 in debt for the issuance of 
13,226,147 shares of the Company's common stock.








See accompanying summary of accounting policies, notes to financial
statements and independent accountants' review report.






                                   F-26

AMERICAN CAPITAL HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED NOVEMBER 30, 2004

NOTE A - NATURE OF OPERATIONS

American Capital Holdings, Inc. (the "Company") was incorporated in the State 
of Florida on January 27, 1999 as U S Amateur Sports Company, a wholly owned 
subsidiary of eCom eCom.com, Inc.("eCom") which trades on the OTC/Bulletin 
Board under the symbol 'ECEC.' On March 19, 2003, the Company changed its name 
to USA SportsNet Company, and on December 12, 2003 changed its name to American 
Capital Holdings, Inc. in connection with its spin off by eCom and its 
acquisition of certain assets of a company formerly known as American Capital 
Holdings, Inc. (now known as ACHI, Inc.)  The Company's main office is located 
at 100 Village Square Crossing, Suite 202, Palm Beach Gardens, Florida 33410, 
and the telephone number is (561) 207-6395.

IS Direct Agency, Inc. ("ISDA") was incorporated in the State of Florida on May 
20, 2004.  On May 21, 2004 ISDA acquired the assets of IS Direct Agency, Inc., a
New York Corporation.  ISDA provides internet based term life insurance quotes.

While a wholly owned subsidiary of eCom, the Company developed an e-commerce 
Internet infrastructure. This product provided an affordable, user-friendly 
technological platform and professional resources to facilitate web business 
development.  It also operated an on-line business as a test model using 
Company developed e-commerce concepts to sell sports products.  

The Spin-Off.  The Company was one of ten wholly owned subsidiaries of eCom, 
with varying business plans.  In recent years, eCom concluded that it did not 
have the financial resources necessary to develop all of its ten business units 
collectively.  eCom decided to spin off its subsidiaries into independent 
companies in the belief that independent companies, each with a distinct 
business, would be better able to obtain necessary funding and develop their 
business plans.  This belief was based in part on eCom's experience with 
potential business partners which sought involvement with only one of eCom's 
subsidiaries, rather than involvement with the multi-faceted eCom. 

On December 1, 2003, the Board of Directors of eCom approved the spin-off of 
the Company.  They voted to issue to the shareholders of eCom one share of the 
Company for every one share of eCom owned as of the record date of January 5, 
2004.  Fractional shares will be purchased by the Company. No payment was 
required of the eCom shareholders.

Acquisition from American Capital Holdings.  After the spin off of the Company 
was completed, the Company was presented with an opportunity to acquire certain 
assets of American Capital Holdings, Inc. (now known as, and referred to 
hereafter as ACHI).  On January 12, 2004, the Company entered into an Asset 
Purchase Agreement with ACHI whereby the Company acquired certain assets of 
ACHI in return for the issuance of common stock of the Company in an amount 
equal to 84.1% of the total ownership of the Company.  In order to accomplish 
this transaction, the Company effected a 20 to 1 reverse stock split, which 
reduced its outstanding stock to 2,497,756 shares, and agreed to issue to ACHI 

See accompanying summary of accounting policies, notes to financial
statements and independent accountants' review report.
                                   F-27
AMERICAN CAPITAL HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED NOVEMBER 30, 2004

NOTE A - NATURE OF OPERATIONS (CONTINUED)

49,955,112 shares.  ACHI agreed to accept the issuance of 13,561,804 shares at 
closing, and assigned its right to receive the 13,561,804 shares to its 
principle, Barney A. Richmond, now the President of the Company.  The remaining 
36,393,308 shares were reserved for issuance by the Company in connection with 
future acquisitions and financings.  The Company then changed its name to 
American Capital Holdings, Inc., and ACHI changed its name to ACHI, Inc.  Of the
36,393,308 shares reserved for future issuance, 2,162,099 shares have now been 
issued to the shareholders of Spaulding Ventures, LLC, in replacement of shares 
of ACHI to be issued to Spaulding in connection with a prior acquisition of 
assets by ACHI from Spaulding. 

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation, Use of Estimates
The Company maintains its accounts on the accrual basis of accounting. The
preparation of financial statements in conformity with U.S. generally accepted 
accounting principles requires management to make estimates and assumptions 
that affect the reported amounts of assets and liabilities and disclosure of 
contingent assets and liabilities at the date of the financial statements and 
the reported amounts of revenues and expenses during the reporting period. 
Actual results could differ from those estimates.

Revenue Recognition
Revenue and Dividends from investments is recognized at the time the investment 
dividends are declared payable by the underlying investment.  Capital Gains and 
losses is recorded on the date of sale of the investment.

Cash
Cash consists of deposits in banks and other financial institutions having
original maturities of less than ninety days.

Allowance for Doubtful Accounts
It is the policy of management to review the outstanding accounts receivable
at year end, as well as the bad debt write-offs experienced in the past, and
establish an allowance for doubtful accounts for uncollectible amounts.

Depreciation
Property and equipment is recorded at cost and is depreciated over the
estimated useful lives of the related assets. Depreciation is computed using
the straight-line method.

Amortization
The accounting for a recognized intangible asset acquired after June 30, 2001 
is based on its useful life to the Company.  If an intangible asset has a 
finite life, but the precise length of that life is not known, that intangible 



See accompanying summary of accounting policies, notes to financial
statements and independent accountants' review report.     
                                   F-28
AMERICAN CAPITAL HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED NOVEMBER 30, 2004

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

asset shall be amortized over management's best estimate of its useful life.  
An intangible asset with a indefinite useful life is not amortized.  The useful 
life to an entity is the period over which the asset is expected to contribute 
directly or indirectly to the future cash flows of that entity.

Investments
Investments are stated at the lower of cost and market value.

NOTE C -  NOTES RECEIVABLE

Notes Receivable at November 30, 2004 consist of the following:

   An 8% non-collateralized note that matures in December 2004,
   Interest is payable quarterly.  Included in the balance is
   $15,957 of accrued interest receivable.                         $115,957

   A 4% non-collateralized note due on demand.  Included in
   The balance is $2,490 of accrued interest receivable.             27,490

   Nine 8% promissory notes purchased from holders of notes
   with Air Media Now, Inc.                                          11,906
                                                                  ----------
       Total Notes Receivable                                      $155,353
                                                                  ==========
Management has made a determination that all of the notes receivable are 
collectable and therefore, has not established an allowance for doubtful 
accounts.

NOTE D - LOANS RECEIVABLE RELATED PARTIES

The three loans receivable from related corporate entities are non-
collateralized, non-interest bearing and are due on demand.

The loans due as of November 30, 2004 are as follows:

    A Super Deal.com, Inc    $  10,000
    Swap and Shop.net Corp.      8,000
    A Classified Ad, Inc.       10,000
    AAB National Company         8,000
    Pro Card Corporation         8,000
    USAS Digital, Inc.          10,000
    eSecureSoft Company          8,000
    eCom eCom.com Inc.          64,527
    Freedom 4 Wireless, Inc.   597,915
     Less bad debts           (343,995)
                              ---------
        Total                $ 380,447
                              =========
See accompanying summary of accounting policies, notes to financial statements 
and independent accountants' review report.
                                  F-29
AMERICAN CAPITAL HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED NOVEMBER 30, 2004


NOTE E - INVESTMENTS

The Company accounts for its investments in common stock using the equity 
method for those investments which the Company does not own a controlling 
interest.  These investments are currently recorded at cost.  The Company's 
share of the investors earnings or losses, if any, are not available at the 
date of these financial statements.  No quoted market price is available for 
these investments.

The Company accounts for investments in common stock for which there is a 
quoted market price as an Available-for-Sale security under Statement of 
Financial Accounting Standards No. 115, Accounting for Certain Investments in 
Debt and Equity Securities.  

On November 30, 2004, investments consisted of the following:

Equity Method of Accounting
Investment Securities at Cost
   @Visory, LLC                          $   112,500
   Brilliant Coatings, Inc.                  250,000
   Century Aerospace Corporation             285,000
   eSmokes, Inc.                                   0
   Efficien, Inc.                            287,000
   Smartpill Diagnostics, Inc.               345,000
   Metroflex, Inc.                           900,000
                                          -----------
Total Equity Method Securities at Cost     2,179,500

Available-for-Sale method of accounting
  eCom eCom.com Inc.                          97,626
                                          -----------
    Total Available-for-Sale securities       97,626
                                          -----------
Total Investment Securities              $ 2,277,126
                                          ===========

Equity Method Securities:

@Visory, LLC is a limited liability company located in East Aurora NY.  The 
Company owns 250,000 Series A units of @Visory LLC.  The Company's investment 
amounts to 1.2% of the outstanding units of @Visory, LLC.  @Visory, LLC is 
taxed as a partnership, not publicly traded.  As of August 31, 2004 @Visory, 
LLC had investments in the following companies: Appraisal.com; SmartPill 
Diagnostics; Efficien; Liquid Matrix; Saturn Internet Reservations; 
StudentVoice; Synacor; and Yipee, Inc.




See accompanying summary of accounting policies, notes to financial
statements and independent accountants' review report.
                                  F-30
AMERICAN CAPITAL HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED NOVEMBER 30, 2004

NOTE E - INVESTMENTS (CONTINUED)

Brilliant Coatings is a Nevada Corporation.  The Company owns 15,000,000 common 
shares of Brilliant Coatings.  The Company's investment amounts to 2.3% of the 
outstanding common shares of Brilliant Coatings Inc.

Century Aerospace is a Delaware Corporation.  The Company owns 57,000 common 
shares of Century Aerospace.  The Company's investment amounts to .7% of the 
outstanding common shares of Century Aerospace

eSmokes, Inc is a Florida Corporation.  The company owns 300,000 common shares 
of eSmokes, Inc.  The Company's investment amounted to 3.3% of the outstanding 
shares of eSmokes, Inc. On October 19, 2004, the company sold the 300,000 
commons shares for the cost of $45,000, with a loss of $55,000.00.
 
Efficien, Inc. is a Delaware Corporation.  The Company owns 500,000 common 
shares of Efficien. The Company's investment amounts to 11.9% of the 
outstanding common shares of Efficien, Inc.  Efficent specializes in the 
development of internet based applications to improve the efficiency of 
hospital supply and material flow through an integrated application service 
provider (ASP) solution.

SmartPill Diagnostics, Inc. is a Delaware Corporation.  The Company owns 
1,194,824 Series A preferred shares of SmartPill Diagnostics, Inc.  The 
Company's investment amounts to 11.60% of the outstanding shares of SmartPill 
Diagnostics, Inc.  SmartPill Diagnostics is a leading developer of SmartPill 
Capsule endoscopy technology.   About the size of a vitamin pill, the SmartPill 
Capsule is a capsule endoscopy device that uses patented technology to measure 
peristaltic pressure, pH and transit time, and determine real-time location; 
factors that aid Gastroenterologists in the diagnosis of such GI motility 
disorders as Gastroparesis and Dyspepsia.  The patient benefits from a more 
accurate diagnosis and a more comfortable, non-invasive, non-surgical approach 
to GI exploratory examinations.  On June 28, 2004 the Company sold all 1,194,824
shares for $776,635.60, resulting in a gain on sale of $6,635.60.  On June 30, 
2004 the Company purchased 175,909 shares for $345,000.


Metroflex, Inc. is a Delaware Corporation.  The Company owns 900,000 common 
shares of Metroflex, Inc.  Metroflex's MetroFlexCard operates as a MasterCard 
debit card. The card enables employers to set up programs through which 
employees can pay for commuter expenses-mass transit and parking expenses on a 
pretax basis.

Available-for-Sale Securities:

eCom eCom.com, Inc. is a Florida Corporation and trades on the OTC/BB:ECEC. The 
company which was the former parent of USA SportsNet Company now American 
Capital Holdings, Inc. owns 1,437,100 common shares of eCom.  The Company's 


See accompanying summary of accounting policies, notes to financial
statements and independent accountants' review report.
                                   F-31
AMERICAN CAPITAL HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED NOVEMBER 30, 2004


NOTE E - INVESTMENTS (CONTINUED)

investment amounts to 2.9% of the outstanding shares of eCom.  The cost for 
this investment as of August 31, 2004 was $235,071.  On May 31, 2004 the 
market value based on a closing bid price of 0.16 per share was $215,565.  The 
difference in cost versus market value is recorded as a deficit in Accumulated 
Other Comprehensive Income of $19,506.


NOTE F - PROPERTY AND EQUIPMENT

Equipment consisting of various Cisco routers, switches, cables, and dual speed 
hubs were acquired from a company owned by a majority stockholder of American 
Capital Holdings, Inc.  The equipment is being to support a hosting operations 
center.  Additional equipment was purchased by IS Direct Agency during the 
quarter ending August 31, 2004.  Depreciation expense of $4,010 has been 
recorded for the quarter ending November 30, 2004.  Accumulated depreciation at 
November 30, 2004 is $11,973.


NOTE G - PREPAID EXPENSES

Prepaid expenses consist principally of amounts paid for auditing work for the 
Company, along with marketing and research material to be used for investor 
relations.  


NOTE H - INTANGIBLE ASSETS


On February 29, 2004, the Company received intellectual property rights when it 
acquired 53,910,922 common shares of Air Media Now, Inc. from a related 
company.  The fair value of the publicly traded shares at date of receipt was
$3,469,622.  The Intellectual property rights were not amortized at February 
29, 2004.  Management reviews intangible assets for impairment annually.
Intangible assets with a finite useful life acquired after June 30, 2001 are 
amortized over their useful lives to the company.  Intangible assets acquired
after June 30, 2001 having a infinite useful life are recorded at their fair
value and are not amortized.  Management reviews all intangible assets for 
impairment annually.  Market value of the Air Media Now property decreased
between February 29, 2004 and November 30, 2004.  This decrease has been 
recorded
has been recorded as a decrease in paid in capital of $1,609,811.





See accompanying summary of accounting policies, notes to financial
statements and independent accountants' review report.

                                   F-32

AMERICAN CAPITAL HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED NOVEMBER 30, 2004


NOTE I - OTHER ASSETS

Other assets consist primarily of security deposits on the lease of office
facilities.


NOTE J - PROMISSORY NOTES

Promissory Notes as of November 30, 2004 consisted of:

                                                      November 30, 2004 
                                                      ---------------  
Four interest bearing, non-collateralized
loans.  The loans have various maturities 
throughout 2004.                                         $ 469,950 
                                                         ---------- 
     Total Notes Payable                                   469,950 
     Less Current Portion                                 (469,950)
                                                         ----------
     Net Long-term Debt                                  $       0 
                                                         ==========
The short-term notes payable mature as follows:
     November 30, 2004                                   $ 469,950
                                                         ==========


The notes and loans can be converted to shares of the Company's $.0001 par value
common stock at the option of the holder.  The notes pay interest at 10% per 
annum.  Interest is paid quarterly.  The loan can be converted at 80% of the 
average closing price of Company's common stock for the preceding five (5) 
consecutive trading days with a floor of $1.  The holder of a $500,000 10% note 
payable with accrued interest of $9,315 agreed on May 7, 2004 to convert their 
debt to common shares.  By Agreement, the shares of common stock at conversion 
will not be issued until the effective date of the Company's filings with the 
United States Securities & Exchange Commission.

NOTE K - WARRANTS
The Company has issued 1,005,000 (505,000 + 500,000) detachable warrants for 
each dollar of debt as described in Note J above.  Management has determined 
that the value of the detachable warrants to be $.01 on the date of issuance and
have charged paid in capital $10,050 during the period.  Each warrant entitles 
the holder to purchase one (1) share of common stock at $.01.  The Company also 
issued 400,000 warrants to one of the former owners of IS Direct Agency for 
providing his insurance licensing in all fifty states.  The warrants can be 
exercised for $.01 each.  An additional 216,209 warrants were issued in 
connection with the Spaulding acquisition, each unit of Spaulding entitled the 
owner to one warrant with an exercise price of $6.00 each.

See accompanying summary of accounting policies, notes to financial
statements and independent accountants' review report.
                                   F-33
AMERICAN CAPITAL HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED NOVEMBER 30, 2004

 
NOTE K - WARRANTS (CONTINUED)

The following is a summary of warrants through November 30, 2004:
 
       Outstanding warrants at the beginning of the year   1,621,209
       Warrants issued                                             0
       Warrants expired                                            0
       Warrants exercised                                          0
                                                         ------------
       Warrants outstanding at November 30, 2004           1,621,209



NOTE L - COMMITMENTS AND CONTINGENCIES

The Company leases approximately 1200 feet office facilities in Palm Beach 
Gardens, Florida under an operating lease of $3,297 per month which expires on 
January 31, 2005.  ISDA leases approximately 200 square feet of office 
facilities in Buffalo, NY under a month to month agreement of $425.00 per month.
Future minimum lease payments including sales tax as of November 30, 2004 are:
Fiscal Years ending:

            May 31, 2005                        7,018
                                               -------
            Total Minimum Lease Payments      $ 7,018

Rent expense for the six month period ending November 30, 2004 was $21,239


NOTE M - INCOME TAXES

No provision for federal and state income taxes has been recorded
because the Company has incurred net operating losses since inception.  The
Company's net operating loss carry-forward as of November 30, 2004 totals
approximately $1,059,400.  These carry-forwards, which will be available to
offset future taxable income, expire beginning in May 31, 2024.

The Company does not believe that the realization of the related net
deferred tax asset meets the criteria required by generally accepted
accounting principles and, accordingly, the deferred income tax asset arising
from such loss carry forward has been fully reserved.

The Company accounts for income taxes in accordance with FASB Statement No. 
109, Accounting for Income Taxes (FASB 109). Under FASB 109, income taxes are 
provided for the tax effects of transactions reported in the financial 
statements and consist of taxes currently due plus deferred taxes related to 
certain income and expenses recognized in different periods for financial and 
income tax reporting purposes. Deferred tax assets and liabilities represent 

See accompanying summary of accounting policies, notes to financial
statements and independent accountants' review report.
                                   F-34
AMERICAN CAPITAL HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED NOVEMBER 30, 2004

NOTE M - INCOME TAXES (CONTINUED)

the future tax return consequences of those differences, which will either be 
taxable or deductible when the assets and liabilities are recovered or settled.
Deferred taxes also are recognized for operating losses and tax credits that 
are available to offset future taxable income and income taxes, respectively.  
A valuation allowance is provided if it is more likely than not that some or 
all of the deferred tax assets will not be realized. 


NOTE N  STOCKHOLDERS' EQUITY
 
To facilitate the purchase of the assets of ACHI, the Company recorded a one 
for twenty reverse split on the Effective Date of the currently outstanding 
common stock, while maintaining the conversion and exercise prices of the 
Senior Notes, the Secured Notes, the Subordinated Notes and the related 
warrants.  All prior period share and per-share amounts have been restated to 
account for the reverse split.  Any fractional shares remaining after the 
reverse split will be paid out in cash to the shareholder on the Effective 
Date.

Warrants were granted to Promissory Note holders with detachable warrants.  
Management has determined that the fair value of each warrant is $0.01.

The computation of diluted loss per share before extraordinary item for the six 
months ended November 30, 2004 does not include shares from potentially dilutive
securities as the assumption of conversion or exercise of these would have an 
antidilutive effect on loss per share before extraordinary items.  In accordance
with generally accepted accounting principles, diluted loss per share from 
extraordinary item is calculated using the same number of potential common 
shares as used in the computation of loss per share before extraordinary items.


NOTE O - DEFERRED TAX ASSET

Deferred income taxes are provided for temporary differences between the
financial reporting and income tax basis of the Company's assets and
liabilities.  Temporary differences, net operating loss carry forwards
and valuation allowances comprising the net deferred taxes on the balance
sheets is as follows:
                                                  November 30, 2004
                                                  -----------------
         Loss carry forward for tax purposes          $  1,059,411
                                                  =================
         Deferred tax asset (34%)                          360,200
         Valuation allowance                              (360,200)
                                                  -----------------
         Net deferred tax asset                       $          -
                                                  =================

See accompanying summary of accounting policies, notes to financial
statements and independent accountants' review report.
                                   F-35
AMERICAN CAPITAL HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED NOVEMBER 30, 2004


NOTE O - DEFERRED TAX ASSET (CONTINUED)

No provision for federal and state income taxes has been recorded because the
Company has incurred net operating losses since inception. The Company's net
operating loss carry-forward as of November 30, 2004 was approximately
$1,059,000. These carry-forwards, which will be available to offset future
taxable income, will expire through the year 2024.

The Company does not believe that the realization of the related net deferred
tax asset meets the criteria required by generally accepted accounting
principles and, accordingly, the deferred income tax asset arising from such
loss carry forward has been fully reserved.

NOTE P - RELATED PARTY TRANSACTIONS

The Company has accounts receivables due from nine related company entities.  
eCom eCom.com, Inc. owes $64,527 for services paid to the Company's transfer 
agent and accountant.  Freedom 4 Wireless, Inc. owes the Company $597,915 for 
working capital and inventory purchased by ACHI, subsequently purchased by the 
Company on February 29, 2004.  Addition advances were made of $10,000 into each 
of the following seven spin-off of eCom;  A Super Deal.com, Inc, Swap and 
Shop.net Corp, A Classified Ad, Inc, AAB National Company, Pro Card Corporation,
USAS Digital Inc, and eSecureSoft Company.  These related party transactions 
totaled $380,447 on November 30, 2004.  The Company has received loans from 
various Officers and Directors.  As of November 30, 2004, the company owes 
$243,524 to Barney A. Richmond.


NOTE Q - RECENT ACCOUNTING PRONOUNCEMENTS

The FASB issued SFAS No. 143, Accounting for Asset Retirement Obligations with 
an effective date for financial statements issued for fiscal years beginning 
after June 15, 2002.  The statement addresses financial accounting and 
reporting for obligations related with the retirement of tangible long-lived 
assets and the costs associated with asset retirement. The statement requires
the recognition of retirement obligations which will, therefore, generally 
increase liabilities; retirement costs will be added to the carrying value of 
long-lived assets, therefore, assets will be increased; and depreciation and 
accretion expense will be higher in the later years of an assets life than in 
earlier years.  The Company adopted SFAS No. 143 at January 1, 2002.  The 
adoption of SFAS No. 143 had no impact on the Company's operating results or 
financial positions.

The FASB also issued SFAS No. 144, Accounting for the Impairment or Disposal
of Long-Lived Assets and is effective for financial statements issued for
fiscal years beginning January 1, 2002.  This statement addresses financial
accounting and reporting for the impairment or the disposal of long-lived
asset.  An impairment loss is recognized if the carrying amount of a long-

See accompanying summary of accounting policies, notes to financial
statements and independent accountants' review report.
                                   F-36
AMERICAN CAPITAL HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED NOVEMBER 30, 2004


NOTE Q - RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)

lived group exceeds the sum of the undiscounted cash flow expected to result
from the use and eventual disposition of the asset group.  Long-lived assets
should be tested at least annually or whenever changes in circumstances
indicate that its carrying amount may not be recoverable.  This statement
does not apply to goodwill and intangible assets that are not amortized.
The Company adapted SFAS No. 144 in the first quarter of 2002.  The adoption
of SFAS No. 144 had no impact on the Company's operating results or
financial position.

In April 2002, the FASB issued SFAS No. 145, "Rescission of the FASB Statements 
No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical 
Corrections"("SFAS No. 145"). SFAS No. 145 eliminates the requirement to 
classify gains and losses from the extinguishment of indebtedness as 
extraordinary, requires certain lease modifications to be treated the same as a 
sale-leaseback transaction, and makes other non-substantive technical 
corrections to existing pronouncements. SFAS No. 145 is effective for fiscal 
years beginning after May 15, 2002. SFAS No. 145 was adopted on June 1, 2003 
and did not have a material effect on the Company's financial position or 
results of operations.

The FASB issued SFAS No. 150, "Accounting for Certain Financial Instruments 
with Characteristics of both Liabilities and Equity" and is effective for 
financial instruments entered into after May 31, 2003.  This Statement 
establishes standards for how an issuer classifies and measures in its 
statement of financial position certain financial instruments with 
characteristics of both liabilities and equity.  It requires that an issuer 
classify a financial instrument that is within its scope as a liability because 
that financial instrument embodies an obligation of the issuer.  The Company 
has adopted SFAS No. 150 and the adoption has had no impact on the Company's 
operating results or financial position.

Goodwill and intangible assets acquired prior to July 1, 2001 will continue to 
be amortized and tested for impairment in accordance with pre- SFAS No. 142 
requirements until adoption of SFAS No. 142. Under the provision of SFAS 
No.142, intangible assets with definite useful lives will be amortized to their 
estimated residual values over those estimated useful lives in proportion to 
the economic benefits consumed. Such intangible assets remain subject to the 
impairment provisions of SFAS No. 121. Intangible assets with indefinite useful 
lives will be tested for impairment annually in lieu of being amortized. The 
impact of adopting SFAS Nos. 141 and 142 will not cause a material change in the
Company's consolidated financial statements as of the date of this report.




See accompanying summary of accounting policies, notes to financial
statements and independent accountants' review report.

                                   F-37
End of November 30, 2004 Financials
No dealer, sales representative or any other person has been authorized to give 
any information or to make any representations other than those contained in 
this prospectus and, if given or made, such information or representation must 
not be relied upon as having been authorized by American Capital Holdings, Inc. 
This prospectus does not constitute an offer of any securities other than those 
to which it relates or an offer to sell, or a solicitation of any offer to buy, 
to any person in any jurisdiction where such an offer or solicitation would be 
unlawful. Neither the delivery of this prospectus nor any sale made hereunder 
shall, under any circumstances, create an implication that the information set 
forth herein is correct as of any time subsequent to the date hereof.


TABLE OF CONTENTS


                    Page

Prospectus Summary                   2
Risk Factors                         5              20,000,000 shares
Forward-Looking Statements           8                 Common Stock
Use of Proceeds                      8                      and
Capitalization                       8              2,000,000 warrants
Dilution                             9
Plan of Operation                    9        AMERICAN CAPITAL HOLDINGS, INC.
Management                          15
Executive Compensation              18                  PROSPECTUS
Certain Relationships and       
   Related Transactions             18
Principal Shareholders              19
Description of Securities           20               January 18, 2004
Plan of Distribution                20
Where You Can Find More Information 21           
Legal Matters                       22
Experts                             22
Financial Statements                23 / F-1


PART II
INFORMATION NOT REQUIRED IN PROSPECTUS 

ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS 
The Florida Business Corporation Act allows us to indemnify each of our officers
and directors who are made a party to a proceeding if:

     (a)     the officer or director conducted himself or herself in good faith;

     (b)     his or her conduct was in our best interests, or if the conduct was
not in an official capacity, that the conduct was not opposed to our best 
interests; and

     (c)     in the case of a criminal proceeding, he or she had no reasonable 
cause to believe that his or her conduct was unlawful.  We may not indemnify our
officers or directors in connection with a proceeding by or in our right, where 
the officer or director was adjudged liable to us, or in any other proceeding, 
where our officer or director are found to have derived an improper personal 
benefit.
                                     II-1
Our by-laws require us to indemnify directors and officers against, to the 
fullest extent permitted by law, liabilities which they may incur under the 
circumstances described above. 

Insofar as indemnification for liabilities arising under the Securities Act may 
be permitted to directors, officers or persons controlling the Registrant 
pursuant to the foregoing provisions, the registrant has been informed that, in 
the opinion of the Securities and Exchange Commission, such indemnification is 
against public policy as expressed in the act and is therefore unenforceable. 
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION 
Set forth below are expenses expected to be incurred in connection with the 
issuance and distribution of the securities registered hereby. With the 
exception of the Securities and Exchange Commission registration fee, the 
amounts set forth below are estimates and actual expenses may vary considerably 
from these estimates depending upon how long the common stock is are offered and
other factors: 

       Securities and Exchange Commission registration fee    $  14,542
       Accounting fees and expenses                              50,000
       Blue Sky fees and expenses                                10,000
       Legal fees and expenses                                   65,000
       Printing expenses                                         15,000
       Miscellaneous                                              5,458
                                                           --------------
          TOTAL                                               $ 160,000


ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES

In February 2004, the Company issued 13,226,147 shares of its common stock to 
American Capital Holdings, Inc. in connection with the Company's acquisition of 
certain assets from that company (See "Description of Business - Acquisition of 
American Capital Holdings").  Inasmuch as American Capital Holdings had access 
to comprehensive information about the Company, the shares were issued in 
reliance upon Section 4(2) of the Securities Act.  A legend was placed on the 
certificates stating that the securities were not registered under the 
Securities Act and setting forth appropriate restrictions on their transfer or 
sale.


ITEM 27. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 

     (a)     Exhibits

Exhibit No.                    Descriptions

3.1  Articles of Incorporation of the Company, including amendments
     (incorporated by reference to the Company's Form 10-SB filed May 24, 2004)
3.2  Articles of Incorporation of the Company, including amendments
     (incorporated by reference to the Company's Amended Form 10-SB filed  
     January 11, 2005) 
3.3  Bylaws of the Company (incorporated by reference to the Company's 
     Form 10-SB filed May 24, 2004 )
4.1  Form of Warrant to be issued hereunder
5.1   Opinion of Redgrave & Rosenthal LLP with respect to legality 
      of Common Stock (to be supplied by amendment)
                                     II-2
10.1  Asset Purchase Agreement dated January 12, 2004, between the Registrant
      and American Capital holdings, Inc. (incorporated by reference to the 
      Company's Form 10-SB filed May 24, 2004)
10.2  Letter Agreement dated December 30, 2003, between the Registrant and 
      Spaulding Ventures, LLC (incorporated by reference to the Company's Form 
      10-SB filed May 24, 2004)
10.3  IS Direct acquisition agreement (incorporated by reference to the 
      Company's Amended Form 10-SB filed January 11, 2005) 
10.4  Universe Life acquisition agreement (incorporated by reference to the  
      Company's Amended Form 10-SB filed January 11, 2005) 
10.5  Lease Agreement between Gemini Property Management, LLC and the Company 
      dated January 23, 2004. (incorporated by reference to the Company's 
      Amended Form 10-SB filed January 11, 2005) 
10.6  Form of Outstanding Warrants (incorporated by reference to the Company's 
      Amended Form 10-SB filed January 11, 2005) 
21.1  Subsidiaries of the Registrant (incorporated by reference to the Company's
      Amended Form 10-SB filed January 11, 2005) 
23.1  Consent of Redgrave & Rosenthal LLP (included in Exhibit 5.1)
23.2  Consent of Wieseneck, Andres & Company, P.A.


ITEM 28. UNDERTAKINGS 

Insofar as indemnification for liabilities arising under the Securities Act of 
1933 (the "Securities Act") may be permitted to directors, officers and 
controlling persons of the registrant pursuant to the foregoing provisions, or 
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as 
expressed in the Securities Act, and is, therefore, unenforceable. In the event 
that a claim for indemnification against such 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 such 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 whether 
such indemnification by it is against public policy as expressed in the 
Securities Act and will be governed by the final adjudication of such issue. 
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,
             an increase or decrease in 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,
                                     II-3
             in the aggregate, the changes in volume and price represent no more
             than a 20% change in the maximum aggregate offering price set forth
             in the "Calculation of Registration Fee" table in the effective 
             registration statement;



 
       (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.

   (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.


SIGNATURES

Pursuant to 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 for filing on Form SB-2 and has duly caused this Registration 
Statement to be signed on its behalf by the undersigned, thereunto duly 
authorized, in Palm Beach Gardens, State of Florida, on January 18, 2005.

                         AMERICAN CAPITAL HOLDINGS, INC.


                         By:     /s/ Barney A. Richmond
                                -------------------------
                                 Barney A. Richmond
                                 Chief Executive Officer


                         By:     /s/ Richard C. Turner
                                -------------------------
                                 Richard C. Turner
                                 Chief Financial Officer










                                     II-4
Pursuant to the requirements of the Securities Act of 1933, as amended, this 
registration statement has been signed by the following persons in the 
capacities and on the dates indicated below. 


     Signature               Title                         Date
                        Chairman of the Board, President,
                        Chief Executive Officer
 /s/ Barney A. Richmond (Principal Executive Officer)    January 18, 2005
-----------------------
 Barney A. Richmond

                        Director, Chief Financial Officer
/s/ Richard C. Turner  (Principal Accounting and Financial 
-----------------------            Officer)              January 18, 2005
Richard C. Turner


/s/ Norman E. Taplin               Director              January 18, 2005
----------------------
Norman E. Taplin


/s/ Michael Camilleri              Director              January 18, 2005
----------------------
Michael Camilleri

 
 
 
 
                                     II-5