SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-KSB

                 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
                   OF THE SECURITIES AND EXCHANGE ACT OF 1934

                           For the fiscal year ended:
                                December 31, 2003

                             Commission File Number
                                    333-64840

                        Cedar Mountain Distributors, Inc.
                  --------------------------------------------
                 (Name of small business issuer in its charter)

          Nevada                                                91-2015441
--------------------------------                          ----------------------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                            Identification number)

                              1236 EAST FRONTIER LANE
                               OLATHE, KANSAS 66062
                    ----------------------------------------
                    (Address of Principal Executive offices)

                    Issuer's telephone number: (913) 782-3068
           Securities registered under Section 12(b) of the Act: None
           Securities registered under Section 12(g) of the Act: None

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

Check if there is no disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.[X]

State issuer's revenues for the most recent fiscal year. $1,264.

The aggregate market value of the voting common stock held by non-affiliates of
the Registrant as of March 2, 2004 was unknown. No public market has been
established for the Company's common stock.

There were 13,200,000 shares of common stock $.001 par value outstanding as of
March 2, 2004.

Documents incorporated by reference: None

Transitional Small Business Format (check one); Yes [ ]; No [X]

<PAGE>

Item 1. Description of Business

Introduction

Cedar Mountain Distributors, Inc. was incorporated in the State of Nevada on
December 23, 1999 using the name "KNETX Skates Corporation." On June 9, 2000,
the name was changed to Cedar Mountain Distributors, Inc. ("our Company," "us,"
"we," "our," etc.). On June 20, 2000, we acquired all common stock of Tarus
International, Inc. ("Tarus"), a company incorporated in the State of Kansas,
which is now our wholly-owned subsidiary. Before this acquisition, we were not
actively engaged in any business activity, had no revenues, and had only very
limited operating expenses. Prior to this merger, Tarus was engaged in the sale
and distribution of beverage products from the time of its formation on August
5, 1999. Our principal executive offices are located at 1236 East Frontier Lane,
Olathe, Kansas 66062. Our telephone number is (913) 782-3068. Our fiscal year
coincides with the calendar year and ends on December 31.

Business

We are an early stage beverage brokerage company based in Olathe, Kansas. We
supply a limited line of beverages to schools, universities, wholesalers,
retailers, and distributors in the Midwestern United States through our
subsidiary, Tarus. Our products include beverages in four traditional beverage
categories: bottled water, fruit beverages, soft drinks, and sports drinks. We
do not develop, produce, bottle, or otherwise manufacture any of our own
products. Our principal business is soliciting contracts to purchase beverage
products from wholesalers and arranging distribution of those products to
institutional and retail customers. Due to shortage of resources and expiration
of inventory, our sales activities have discontinued and we are focusing on
maintaining our corporate status while we seek funding or additional business
opportunities.

Marketing Strategy and Plan of Operations

We currently have rights to distribute four beverage products in the Midwest.
Kansas City is our base of operations and initial market. We plan to seek the
rights to broker additional products and will seek partnerships with bottlers,
distributors, and producers to develop markets in other areas of the country.
Once established domestically, we intend to formulate a plan to expand into
international markets

We intend to seek additional funding to implement this plan through one of two
methods on terms not yet determined. The first method would involve securing
additional loans, most likely from our existing investors or possibly from
banks. The second method would involve a private offering of our stock in
reliance on Regulation D and/or Section 4(2) of the Securities Act. We may also
revise our business plan to enable us to continue operations with reduced
funding. We have no commitments to obtain additional funding through either of
the above referenced means and there can be no assurance that we will obtain
additional funding.

Competition

The sports drink, fruit drink, and bottled water beverage markets are dominated
by major players such as Coca Cola, Pepsi, Cadbury, Quaker Oats, and others
whose total sales exceeded $20 billion in 1997. While many of our competitors
have greater financial resources, we believe we can successfully compete in
niche markets for two reasons. First, consumers like variety and choice and the
beverage industry is highly diversified. As a result, smaller beverage companies
have been successful in catering to market niches. Second, Mr. Smith's
experience and customer contacts have given us a foothold in the local
distribution market. An important factor in our early sales growth is Mr.
Smith's personal contacts with local school districts. As we expand our markets
beyond school programs, a key component of the Company's success will be the
caliber and commitment of Mr. Smith.

                                       2
<PAGE>

Regulation

Except for laws, rules and regulations that are applicable to all businesses
generally, the Company's business is not regulated by any governmental agency
and approval from any governmental agency is not required for it to market or
sell its products.

Concentration

Our business depends heavily on a key supplier. As a distributor, we face a
number of risks over which we will have little control. Since we do not bottle
the products we distribute, we are and will be dependent on our suppliers.
Suppliers at anytime will determine prices, availability, delivery time, and the
quality of our products. Any failure by the supplier to meet product demand or
to maintain product quality could adversely affect us. At present, our only
supplier is Vancol Industries ("Vancol") of Denver, Colorado, with which we have
no formal agreement, only a operational understanding whereby we request product
and they determine whether or not to fill our requests as is customary in the
beverage distribution market. If Vancol or future suppliers were to experience
production delays, work stoppages, an act of God, or were to discontinue
production of one or more of these beverages or go out of business, we would
suffer financial losses.

We have no exclusive licensing rights and our territory not guaranteed. Our
primary beverage supplier, Vancol, does not grant exclusive marketing
territories, nor are licensing rights guaranteed for any defined period of time.
As a result, the target marketing area might be given to a competitor if we fail
to support the existing customer base, aggressively market to new customers, or
fail to grow sales.

Facilities

We currently operate from a home office where all current orders, deliveries,
billing, and communications are handled. This office is the personal residence
of James R. Smith, our President, who provides the space at no charge with no
formal lease. We have no other properties or facilities currently.

Employees

The Company presently has one part-time employee, James R. Smith, who is also
the sole director and officer. The Company will add additional personnel as
funding is available and the business plan develops.

Item 2. Description of Property

The Company's executive offices are located at 1236 East Frontier Lane, Olathe,
KS 66062, in the home of its president.

The Company does not own or invest in, nor does the Company intend in the
future, to own or invest in real estate or interests in real estate, real estate
mortgages or securities of or interests in persons primarily engaged in real
estate activities.

Item 3. Legal Proceedings.

The Company is not a party to any material pending or threatened legal
proceedings nor is any of its property subject to any such legal proceedings.

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

No matters were submitted to a vote of security holders during the fourth
quarter of the Company's fiscal year ended December 31, 2003, either through the
solicitation of proxies or otherwise.

                                       3
<PAGE>

                                     PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.

There is no established public trading market for the Company's common stock.

The Company has not paid any dividends on its common stock and the Board of
Directors presently intends to continue a policy of retaining earnings, if any,
for use in the Company's operations and to finance expansion of its business.
The declaration and payment of dividends in the future, of which there can be no
assurance, will be determined by the Board of Directors in light of conditions
then existing, including earnings, financial condition, capital requirements and
other factors. There are no restrictions that currently materially limit the
Company's ability to pay dividends or which the Company reasonably believes are
likely to limit materially the future payment of dividends on common stock. On
March 2, 2004, the Company had 37 shareholders of record. The Company does not
have any securities authorized for issuance under equity compensation plans.

Item 6. Management's Discussion and Analysis of Financial Condition and Result
        of Operations.

Results of Operations for the year ended December 31, 2003.

For the year ended December 31, 2003, the Company had revenues of $1,264, cost
of product sales of $7,989 and operating expenses of $46,101, resulting in a
loss from operations of $52,826. Cost of product sales included approximately
$7,000 of cost incurred because of product expirations. For the year ended
December 31, 2002, the Company had revenues of $25,452, cost of product sales of
$20,655 and operating expenses of $130,062, resulting in a loss from operations
of $125,265. Management expects that operating expenses will be reduced until
additional funding is obtained.

Liquidity and Capital Resources.

On December 31, 2003, the Company had $5,026 in cash, representing all of the
its current assets. Total current liabilities at December 31, 2003 were $40,823,
resulting in a net working capital deficit of $35,797, of which substantially
all is owed to a shareholder and officer. Net cash used in operating activities
for the year ended December 31, 2003 was $28,614, compared to $114,055 for the
year ended December 31, 2002. Net cash provided by financing activities for the
year ended December 31, 2003 was $23,800 compared to $116,909 for the year ended
December 31, 2002.

In November of 2002, the Company completed an offering of its common stock. Two
hundred thousand shares were sold at a price of $1.00 per share, resulting in
gross proceeds of $200,000. Expenses of the offering were $30,091 and net
proceeds to the Company from the offering were $169,909, of which $94,359 was
used to repay existing notes payable. The Company used the net cash proceeds in
its operations.

In August of 2003, the Company sold 10,000,000 shares of its common stock in an
individual transaction for a total of $20,000. The proceeds were used to pay
operating expenses and maintain the Company's legal existence. The Company will
need to obtain additional cash resources to continue to operate or pursue other
business activities.

                                       4
<PAGE>

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that is material to investors.

Critical Accounting Policies

Due to the lack of current operations and limited business activities, the
Company does not have any accounting policies that it believes are critical to
facilitate an investor's understanding of the Company's financial and operating
status.

Recent Accounting Pronouncements

The Company has not adopted any new accounting policies that would have a
material impact on the Company's financial condition, changes in financial
conditions or results of operations.

Item 7. Financial Statements.

See attached financial statements.

Item 8. Changes in and Disagreements with Accountants on Accounting and
        Financial Disclosure.

None.

Item 8A. Controls and Procedures.

The Company has evaluated, with the participation of the Company's Chief
Executive Officer and Chief Financial Officer, the effectiveness of the design
and operation of the Company's disclosure controls and procedures as of December
31, 2003, pursuant to Exchange Act Rule 15d-15. Based upon that evaluation, the
Chief Executive Officer and Chief Financial Officer concluded that the Company's
disclosure controls and procedures are effective in timely alerting him to
material information relating to the Company required to be included in the
Company's periodic SEC filings. There have been no significant changes in
internal controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation.

                                       5
<PAGE>

                                    PART III

Item 9. Directors and Executive Officers of the Registrant.

The executive officers, directors and key employees of the Company and their
ages are as follows:

James Smith                   65              President, Treasurer, Secretary
                                              and Director

The Company's director is elected to hold office until the next annual meeting
of shareholders and until their respective successors have been elected and
qualified. Officers are elected by the board of directors and hold office until
their successors are elected and qualified.

The Company has only one part-time employee that is also the sole director and
officer. Therefore, the Company has no audit, compensation or nominating
committee. Moreover, the Company has elected not to adopt a code of ethics due
to the fact that it has only one part time employee.

James R. Smith is President, Secretary, Treasurer, Director and key manager of
the company. He has over 39 years business and administrative experience,
including thirteen years of part or full time work in the beverage industry
(Europa Distributers, 1982-84; Frontier, Inc., 1992-2001; Tarus International,
our subsidiary, 1999-2001). Mr. Smith has demonstrated abilities in the areas of
administration, management (budget, personnel, and facilities), sales, service,
business consulting, personnel interrelationships, advertising, and leadership.
He has experience and the ability to develop a business from start-up through
implementation. His business creation experience include the creation and
development of real estate ownership/partnerships, a computer consulting
company, a physical fitness center, and two beverage distribution companies.

Mr. Smith's beverage distribution career began in 1982 when he created Europa
Distributors, Inc., a beverage distribution company very similar to Cedar
Mountain Distributors. Europa, based in Olathe, Kansas, obtained the exclusive
distributing rights for Chapelle(R)Sparkling Mineral Waters that were imported
from Germany. In a one-year period, Europa conducted $700,000 in sales in 23
states. Mr. Smith set up distribution nationwide with beer wholesalers and
served as President of the company. In 1984 Mr. Smith sold his shares in the
company to take the position of Vice President of University Relations at Ottawa
University. In 1992, Mr. Smith returned to the beverage industry and created
Frontier, Inc., a Kansas City based vending machine supplier of soft drinks and
snacks. In 1999, Mr. Smith established Tarus International, Inc., a wholesale
beverage supplier that serves both retail stores and schools. Each of these
entities with which Mr. Smith works, including the Company service different
markets and do not compete with each other. Frontier, Inc.'s operation differs
from Tarus by only providing vending products: Tarus does not market or provide
vending products. Additionally, Frontier, Inc. does not individually market or
distribute products represented by Tarus.

Mr. Smith is a graduate of Ottawa University in Ottawa, Kansas, with a Bachelor
of Science in Physical Education and Science. Later he obtained a Master of
Science degree in Biology and Chemistry from Emporia State College in Kansas,
and also obtained an Educational Administrative Certification from the
University of Kansas. For the last six years, Mr. Smith has been employed full
time as the Director of Community Development with the Olathe Kansas School
District.

Mr. Smith devotes approximately 15 hours a week to the work of our company in
addition to his full time employment with the school district.

                                       6
<PAGE>

Item 10. Executive Compensation

Summary Compensation Table

The following table provides certain summary information concerning compensation
paid to our chief executive officer since our inception. There were no stock
appreciation rights outstanding during the fiscal year ended December 31, 2003,
nor are there any rights outstanding as of the date of this document.
<TABLE>
<CAPTION>
                   Annual Compensation                                    Long-term Compensation
                   -------------------                                    ----------------------
                                                                           Awards      Payouts
                                                                           ------      -------
                                                                         Securities   Long-Term
                                                                         Underlying   Incentive        All Other
Name and Principal      Fiscal     Salary     Bonus    Other Annual      Options        Payouts      Compensation
   Position              Year        ($)       ($)      Compensation       (#)            ($)            ($)
------------------       ----      -------    -----    -------------     -------        -------      ------------
<S>                      <C>         <C>        <C>           <C>           <C>            <C>            <C>
James R. Smith           2003        0          0             0             0              0              0
 President, Director     2002        0          0             0             0              0              0
 Treasurer, Secretary    2001        0          0             0             0              0              0
</TABLE>

Employment Agreements

The Company does not have an employment agreement with its sole officer and
director. Mr. Smith received no salary in 2003 and intends to receive a salary
only if operations improve and funding is available.

Item 11. Security Ownership of Certain Beneficial Owners and Management.

The following table and notes set forth information concerning the beneficial
ownership of the Company's shares as of December 31, 2003 for (i) each current
Director and each nominee for Director (ii) each named executive officer of the
Company as defined in 402(a)(2) of Regulation S-B of the Securities Act of 1933,
(iii) all persons known by the Company to beneficially own more than 5% of the
Company's voting shares, and (iv) all officers and Directors of the Company as a
group. As of December 15, 2002, we had 13,200,000 shares of common stock
outstanding.
<TABLE>
<CAPTION>

                                                                                 Amount and      Percentage
                                                                                  Nature of          of
Name                                  Title                                    Ownership(1)(2)    Class(3)
---------------------------------     ---------------------------------------  --------------   --------------
<S>                                   <C>                                        <C>               <C>
James R. Smith(4)..............       President, Secretary/Treasurer,              1,000,000         7.6%
                                       Acting Chief Financial Officer,
                                       and Director
Brenda M. Hall(5)                     Beneficial Owner                            10,000,000        75.8%
Freedom III, LLC(6)                   Beneficial Owner                             1,275,000         9.7%
All Directors and Executive Officers as a Group...........................         1,000,000         7.6%
--------------------
</TABLE>

                                       7
<PAGE>

(1)      Unless otherwise noted, the Company believes that all shares are
         beneficially owned and that all persons named in the table or family
         members have sole voting and investment power with respect to all
         shares owned by them.
(2)      A person is deemed to be the beneficial owner of securities that can be
         acquired by such person within 60 days from the date hereof upon the
         exercise of warrants or options.
(3)      Assumes 13,200,000 shares outstanding plus, for each individual, any
         securities that such individual has the right to acquire upon exercise
         of presently exercisable stock options. Each beneficial owner's
         percentage ownership is determined by assuming that options or warrants
         that are held by such person (but not those held by any other person)
         and which are exercisable within 60 days from the date hereof have been
         exercised.
(4)      Mr. Smith's address is 1236 East Frontier Lane, Olathe, Kansas 66062.
(5)      Ms. Hall's address is 1065 West 1150 South, Provo, Utah 84601.
(6)      Freedom III, LLC address is 77 West 200 South, Salt Lake City, Utah
         84101.

         CERTAIN TRANSACTIONS INVOLVING OUR OFFICERS, DIRECTORS AND AFFILIATES

Our corporate offices are located at the personal residence of James R. Smith.
Under an oral agreement with Mr. Smith, we pay no rent for the use of this
office space.

On June 15, 2000, our shareholders approved the acquisition of Tarus
International, Inc, a Kansas corporation, Tarus was owned by Mr. Smith who was
the sole officer and stockholder prior to our acquisition of Tarus. As part of
the acquisition agreement, shareholders approved the exchange of 1,000,000
shares of restricted common stock for Cedar Mountain Distributors, Inc. in
exchange for 200,000 shares of common stock of Tarus. As a result, Tarus became
a wholly-owned subsidiary of Cedar Mountain Distributors, Inc.

David C. Owen and Malcolm K. Green have provided consulting services to the
Company in exchange for the right to purchase the ownership interests they
acquired in the Company as set forth under Principal Stockholders above.

On August 20, 2003, the Company approved and closed on the sale of 10,000,000
shares of newly issued and restricted shares of its restricted common stock (the
"Shares") to Ms. Brenda Hall for an aggregate purchase price of $20,000 in a
private offering. The Shares represented approximately seventy-six percent (76%)
of the total issued and outstanding shares of common stock of the Company
immediately after the sale. The proceeds from the sale were used to pay
outstanding obligations of the Company and for working capital.

                                       8
<PAGE>

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

(a)      Exhibits

         3.01     Articles of Incorporation (1)
         3.02     Bylaws(2)
         31.1     Certification by James R. Smith under Section 302 of the
                  Sarbanes-Oxley Act of 2002.
         31.2     Certification by James R. Smith under Section 302 of the
                  Sarbanes-Oxley Act of 2002.
         32.1     Certification of James R. Smith pursuant to 18 U.S.C. Section
                  1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
                  Act of 2002.

(1)  Incorporated by reference to Exhibit 3.01 to the registration statement on
     Form SB-2 of Registrant filed with the Securities and Exchange Commission
     on September 8, 1999 (File No. 333-86711).

(2)  Incorporated by reference to Exhibit 3.02 to the registration statement on
     Form SB-2 of Registrant filed with the Securities and Exchange Commission
     on September 8, 1999 (File No. 333-86711).

(b)  No reports on From 8-K were filed during the quarter ended December 31,
     2003.

Item 14. Principal Accountant Fees and Services

Audit Fees

The aggregate fees billed for professional services rendered by our principal
accountant for the audit of our annual financial statements, review of financial
statements included in our quarterly reports and other fees that are normally
provided by the accountant in connection with statutory and regulatory filings
or engagements for the fiscal years ended December 31, 2003 and 2002 were $5,662
and $13,315, respectively.

Audit Related Fees

The aggregate fees billed for assurance and related services by our principal
accountant that are reasonably related to the performance of the audit or review
of our financial statements, other than those previously reported in this Item
14, for the fiscal years ended December 31, 2003 and 2002 were $-0- and $-0-,
respectively.

Tax Fees

The aggregate fees billed for professional services rendered by our principal
accountant for tax compliance, tax advice and tax planning for the fiscal years
ended December 31, 2003 and 2002 were $-0- and $-0-, respectively.

All Other Fees

The aggregate fees billed for products and services provided by the principal
accountant, other than those previously in this Item 14, for the fiscal years
ended December 31, 2003 and 2002 were $-0- and $-0-, respectively.

Audit Committee

The Company's Board of Directors functions as its audit committee. It is the
policy of the Company for all work performed by our principal accountant to be
approved in advance by the Board of Directors. All of the services described
above in this Item 14 were approved in advance by our Board of Directors.

                                       9
<PAGE>

                                   SIGNATURES

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

                                   Cedar Mountain Distributors, Inc.

Dated: March 2, 2004               By: /s/ James R. Smith
                                       -----------------------------------------
                                       James R. Smith
                                       President and Principal Executive Officer


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

Signatures                            Title                            Date
----------                            -----                            ----

 /s/ James R. Smith        President, Secretary,                  March 2, 2004
-------------------        Treasurer, Director
James R. Smith             Principal Executive Officer
                           Principal Financial and
                           Accounting Officer

Supplemental information to be Furnished With Reports Filed Pursuant to Section
15(d) of the Exchange Act by Non-reporting Issuers.

No annual report or proxy material was sent to security holders during 2003.

                                       10
<PAGE>

CEDAR MOUNTAIN DISTRIBUTORS, INC.
CONTENTS
--------------------------------------------------------------------------------


                                                                       Page

Independent Auditors' Report                                            F-2

Independent Auditors' Report                                            F-3

Financial Statements:

     Consolidated Balance Sheets                                        F-4

     Consolidated Statements of Operations                              F-5

     Consolidated Statement of Changes in Stockholders' Deficit         F-6

     Consolidated Statements of Cash Flows                              F-7

     Notes to Consolidated Financial Statements                         F-8




                                      F-1
<PAGE>

                          Independent Auditors' Report




To the Stockholders
Cedar Mountain Distributors, Inc.
Olathe, Kansas


We have audited the accompanying consolidated balance sheet of Cedar Mountain
Distributors, Inc. as of December 31, 2003, and the related consolidated
statements of operations, changes in stockholders' deficit, and cash flows for
the year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.

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

The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in Note 1 the Company
has incurred losses since inception, has a deficit working capital position and
a net capital deficiency that raise substantial doubt about the Company's
ability to continue as to going concern. Management's plans in regard to these
matters are also described in Note 1. The consolidated financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.


/s/ Cordovano and Honeck, P.C.

Cordovano and Honeck, P.C.
February 23, 2004
Denver, Colorado

                                      F-2
<PAGE>

                          Independent Auditors' Report




To the Stockholders
Cedar Mountain Distributors, Inc.
Olathe, Kansas


We have audited the accompanying balance sheet of Cedar Mountain Distributors,
Inc. as of December 31, 2002, and the related statements of operations,
stockholders' deficit, and cash flows for the year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Cedar Mountain Distributors,
Inc. as of December 31, 2002 and the results of its operations and its cash
flows for the year then ended in conformity with accounting principles generally
accepted in the United States of America.

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 1 the Company has a loss
from operations, a deficit working capital position and a net capital deficiency
that raise substantial doubt about the Company's ability to continue as to going
concern. Management's plans in regard to these matters are also described in
Note 1. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.



March 15, 2003                                /s/  Sartain Fischbein & Co.
Tulsa, Oklahoma

                                      F-3
<PAGE>
<TABLE>
<CAPTION>
CEDAR MOUNTAIN DISTRIBUTORS, INC.
CONSOLIDATED BALANCE SHEETS
-------------------------------------------------------------------------------------------------------------------------

                                                                                 December 31,           December 31,
                                                                                     2003                   2002
-------------------------------------------------------------------------------------------------------------------------

ASSETS
<S>                                                                                <C>                    <C>
Current Assets:
  Cash                                                                             $      5,026           $      9,840
  Accounts receivable                                                                         -                  1,297
  Inventories                                                                                 -                  7,989
                                                                                   ------------           ------------

Total Current Assets                                                                      5,026                 19,126
                                                                                   ------------           ------------

Total Assets                                                                       $      5,026           $     19,126
                                                                                   ============           ============


LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities:
  Accounts payable                                                                 $      8,595           $      8,017
  Accrued interest payable -  related party (Note 2)                                      5,928                  3,565
  Notes payable - related party (Note 2)                                                 26,300                 22,500
                                                                                   ------------           ------------

Total Current Liabilities                                                                40,823                 34,082
                                                                                   ------------           ------------

Stockholders' Deficit (Note 7):
  Preferred stock, $.001 par value, 5,000,000 shares
    authorized, -0- and -0- shares issued and
    outstanding, respectively                                                                 -                      -
  Common stock, $.001 par value, 50,000,000 shares
    authorized, 13,200,000 and 3,200,000 shares
    issued and outstanding, respectively                                                 13,200                  3,200
  Additional paid-in capital                                                            244,019                219,619
  Accumulated deficit                                                                  (293,016)              (237,775)
                                                                                   ------------           ------------

Total Stockholders' Deficit                                                             (35,797)               (14,956)
                                                                                   ------------           ------------

Total Liabilities and Stockholders' Deficit                                        $      5,026           $     19,126
                                                                                   ============           ============



                                                             F-4
-------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CEDAR MOUNTAIN DISTRIBUTORS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
------------------------------------------------------------------------------------------------------------------------

                                                                                   Year Ended              Year Ended
                                                                                   December 31,            December 31,
                                                                                       2003                    2002
------------------------------------------------------------------------------------------------------------------------
<S>                                                                                <C>                     <C>
Sales                                                                              $      1,264            $     25,452
Cost of Sales                                                                             7,989                  20,655
                                                                                   ------------            ------------

Gross Profit                                                                             (6,725)                  4,797

Operating Expenses (Note 2)                                                              46,101                 130,062
                                                                                   ------------            ------------

Operating Loss                                                                          (52,826)               (125,265)

Interest Expense (Note 2)                                                                 2,415                   8,997
                                                                                   ------------            ------------

Net Loss                                                                           $    (55,241)           $   (134,262)
                                                                                   ============            ============

Basic Loss Per Share                                                               $      (0.01)           $      (0.04)
                                                                                   ============            ============

Basic Weighted Average Shares Outstanding                                             6,845,836               3,031,404
                                                                                   ============            ============


                                                               F-5
-------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CEDAR MOUNTAIN DISTRIBUTORS, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
------------------------------------------------------------------------------------------------------------------------------
Years ended December 31, 2003 and 2002
------------------------------------------------------------------------------------------------------------------------------


                                                    Common Stock            Additional
                                              -------------------------      Paid-in           Accumulated
                                                 Shares        Amount         Capital             Deficit            Total
                                              ----------    -----------     -----------         -----------       -----------
<S>                                            <C>              <C>            <C>               <C>                <C>
Balance, December 31, 2001                     3,000,000        $ 3,000        $ 35,510          $ (103,513)        $ (65,003)

Exchange of common stock
  in merger, $.01 per share                            -              -               -                   -                 -

Common stock issued in
  offering, $.001 par value,
  net of offering costs of
  $30,091 (Note 7)                               200,000            200         169,709                   -           169,909

Contributions of services
  (Note 2)                                             -              -          14,400                   -            14,400

Net loss for year                                      -              -               -            (134,262)         (134,262)
                                              ----------    -----------     -----------         -----------       -----------

Balance, December 31, 2002                     3,200,000          3,200         219,619            (237,775)          (14,956)

Common stock issued in
  private transaction offering
  $.001 par value, price $.002
  (Note 7)                                    10,000,000         10,000          10,000                   -            20,000

Contributions of services
  (Note 2)                                             -              -          14,400                   -            14,400

Net loss for year                                      -              -               -             (55,241)          (55,241)
                                              ----------    -----------     -----------         -----------       -----------

Balance, December 31, 2002                    13,200,000    $    13,200     $   244,019         $  (293,016)      $   (35,797)
                                              ==========    ===========     ===========         ===========       ===========



                                                               F-6
-------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CEDAR MOUNTAIN DISTRIBUTORS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
------------------------------------------------------------------------------------------------------------------------

                                                                                Year Ended                Year Ended
                                                                                December 31,              December 31,
                                                                                    2003                      2002
------------------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>                       <C>
Cash Flows From Operating Activities:
  Net loss                                                                      $     (55,241)            $    (134,262)
  Adjustments to reconcile net loss to net
   cash used in operating activities:
     Contribution of services                                                          14,400                    14,400
     Changes in current assets and current liabilities:
        Decrease in accounts receivable                                                 1,297                     3,532
        Decrease in inventories                                                         7,989                     3,602
        Increase in accounts payable                                                      578                     2,535
        Increase (decrease) in accrued expenses                                         2,363                    (3,862)
                                                                                -------------             -------------

Net Cash Used in Operating
   Activities                                                                         (28,614)                 (114,055)
                                                                                -------------             -------------

Cash Flows From Financing Activities:
  Payments for offering costs                                                               -                   (15,091)
  Proceeds from sale of common stock                                                   20,000                   200,000
  Proceeds from notes payable - related party (Note 2)                                  3,800                    23,500
  Proceeds from notes payable - other (Note 4)                                          2,500                         -
  Repayments of note payable - related party (Note 2)                                       -                   (91,500)
  Repayments of note payable - other (Note 4)                                          (2,500)                        -
                                                                                -------------             -------------

Net Cash Provided By Financing Activities                                              23,800                   116,909
                                                                                -------------             -------------

Net Change in Cash                                                                     (4,814)                    2,854

Cash, beginning of period                                                               9,840                     6,986
                                                                                -------------             -------------

Cash, end of period                                                             $       5,026             $       9,840
                                                                                =============             =============

Cash Paid During the Year For:
  Interest                                                                      $          52             $      12,859
                                                                                =============             =============
  Income Taxes                                                                  $           -             $           -
                                                                                =============             =============

                                                               F-7
-------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>

CEDAR MOUNTAIN DISTRIBUTORS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2003 and 2002
--------------------------------------------------------------------------------

1.  SUMMARY OF    Nature of Operations: Cedar Mountain Distributors, Inc. ("the
    SIGNIFICANT   Company") was incorporated on December 23, 1999 to effect a
    ACCOUNTING    business combination with Tarus International, Inc. ("Tarus").
    POLICIES      The business combination occurred during the year ended
                  December 31, 2000, resulting in Tarus becoming a wholly-owned
                  subsidiary of Cedar Mountain Distributors, Inc. Tarus was
                  incorporated in August 1999. Through Tarus, the Company sells
                  imported soft drinks to schools, wholesalers, retailers and
                  distributors in the Midwestern Untied States.

                  The accompanying financial statements have been prepared on a
                  going concern basis, which contemplates the realization of
                  assets and satisfaction of liabilities in the normal course of
                  business. As shown in the accompanying consolidated financial
                  statements, the Company has suffered significant losses since
                  inception and has a deficit working capital position and a net
                  capital deficiency at December 31, 2003. These factors, among
                  others, may indicate that the Company will be unable to
                  continue as a going concern for a reasonable time.

                  The financial statements do not include any adjustments
                  relating to the recoverability and classification of
                  liabilities that might be necessary should the Company be
                  unable to continue as a going concern. The Company's
                  continuation as a going concern is dependent upon its ability
                  to generate sufficient cash flow to meet its obligations on a
                  timely basis and ultimately to attain profitability. During
                  the years ended December 31, 2003 and 2002, the president has
                  loaned the Company funds for working capital on an "as needed"
                  basis. There is no assurance that these loans will continue in
                  the future. The Company has also raised capital through the
                  sale of common stock. The Company plans to seek additional
                  funding to maintain its operations through debt and equity
                  financing. There is no assurance that the Company will be
                  successful in its efforts to raise additional working capital
                  or achieve profitable operations. The financial statements do
                  not include any adjustments that might result from the outcome
                  of this uncertainty.

                  Use of Estimates: The preparation of the financial statements
                  in conformity with accounting principles generally accepted in
                  the United States of America requires management to make
                  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.

                  Cash Equivalents: For the purposes of the statement of cash
                  flows, the Company considers all highly liquid debt
                  instruments purchased with an original maturity of three
                  months or less to be cash equivalents. The Company had no cash
                  equivalents at December 31, 2003.

                  Accounts Receivable: Accounts receivable consists of amounts
                  due from customers from the sale of product. These amounts are
                  uncollateralized obligations due under normal trade terms.
                  Balances are written off and the loss charged to expense when
                  they are determined to be uncollectible by management. The
                  Company wrote off $-0- and $4,365 of accounts receivable
                  during the years ended December 31, 2003 and 2002,
                  respectively.

                                      F-8
--------------------------------------------------------------------------------
<PAGE>

CEDAR MOUNTAIN DISTRIBUTORS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2003 and 2002
--------------------------------------------------------------------------------

1.  SUMMARY OF    Inventories: Inventories, which consist of purchased bottled
    SIGNIFICANT   and canned soft drinks, are stated at the lower of cost
    ACCOUNTING    (first-in, first-out method) or market. Inventory that remains
    POLICIES      on hand after the stated expiration date is removed from
    (CONTINUED)   inventory and charged to cost of sales.

                  Offering Costs: Offering costs represent costs incurred in
                  connection with the Company's public offering that was
                  completed in November 2002 (Note 7). Costs related to common
                  stock offerings are recorded initially as a deferred asset
                  until the offering is successfully completed, at which time
                  they are recorded as a reduction of gross proceeds in
                  shareholders' deficit. If an offering is not successful, the
                  costs are charged to operations at that time.

                  Per Share Information: The computation of loss per share is
                  based on the loss applicable to common stockholders, divided
                  by the weighted average number of common shares outstanding
                  during the period. No diluted per share information is
                  provided as there is no potential dilution of common shares.

                  Income Taxes: The Company uses the asset and liability method
                  of accounting for deferred income taxes. Under the asset and
                  liability method, deferred tax assets and liabilities are
                  recognized for the future tax consequences attributable to
                  differences between the financial statement carrying amounts
                  of existing assets and liabilities and their respective tax
                  basis. Deferred tax assets and liabilities are measured using
                  enacted tax rates expected to apply to taxable income in the
                  years in which those temporary differences are expected to be
                  recovered or settled.

                  Delivery Costs: Delivery and shipping costs are expensed as
                  incurred and approximated $1,200 and $2,300 for the years
                  ended December 31, 2003 and 2002, respectively. These costs
                  have been included in operating expenses in the statement of
                  operations.

                  Advertising Costs: Advertising costs are expensed as incurred
                  and amounted to approximately $-0- in 2003 and $4,300 in 2002.

                  Revenue Recognition: Upon receipt of a customer order, the
                  Company places an order with their vendor for the soft drink
                  products not currently in inventory. Vendors supplying product
                  to the Company generally require payment before the product is
                  picked up by a common carrier for delivery.

                  Funds paid to the vendor are recorded as deposits on inventory
                  until the product is picked up by the common carrier, at which
                  time the product becomes the Company's inventory. Inventory is
                  recorded at cost. The Company recognizes revenue upon delivery
                  of the products to the customer.

                  Concentration: The Company currently purchases substantially
                  all its inventory from one supplier.

                                      F-9
--------------------------------------------------------------------------------
<PAGE>

CEDAR MOUNTAIN DISTRIBUTORS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2003 and 2002
--------------------------------------------------------------------------------

1.  SUMMARY OF    New Accounting Pronouncements:
    SIGNIFICANT   Consolidation of Variable Interest Entities:
    ACCOUNTING    In January 2003, the Financial Accounting Standards Board
    POLICIES      ("FASB") issued Interpretation No. 46, "Consolidation of
    (CONTINUED)   Variable Interest Entities", an interpretation of Accounting
                  Research Bulletin No. 51, "Consolidated Financial Statements".
                  Interpretation 46 establishes accounting guidance for
                  consolidation of variable interest entities that function to
                  support the activities of the primary beneficiary.
                  Interpretation 46 applies to any business enterprise, both
                  public and private, that has a controlling interest,
                  contractual relationship or other business relationship with a
                  variable interest entity. The Company believes it has no
                  investment in or contractual relationship or other business
                  relationship with a variable interest entity and therefore the
                  adoption did not have any impact on our financial position or
                  results of operations. However, if the Company enters into any
                  such arrangement with a variable interest entity in the
                  future, our financial position or results of operations may be
                  adversely impacted.

                  Amendment of Statement 133 on Derivative Instruments and
                  Hedging Activities: On April 30, 2003, the FASB issued
                  Statement No. 149, "Amendment of Statement 133 on Derivative
                  Instruments and Hedging Activities". Statement 149 is intended
                  to result in more consistent reporting of contracts as either
                  freestanding derivative instruments subject to Statement 133
                  in its entirety, or as hybrid instruments with debt host
                  contracts and embedded derivative features. In addition,
                  Statement 149 clarifies the definition of a derivative by
                  providing guidance on the meaning of initial net investments
                  related to derivatives. Statement 149 is effective for
                  contracts entered into or modified after June 30, 2003. The
                  Company does not believe the adoption of Statement 149 will
                  have a material effect on its financial position, results of
                  operations or cash flows.

                  Financial Instruments with Characteristics of Both Liabilities
                  and Equity: On May 15, 2003, the FASB issued Statement No.
                  150, "Accounting for Certain Financial Instruments with
                  Characteristics of both Liabilities and Equity". Statement 150
                  establishes standards for classifying and measuring as
                  liabilities certain financial instruments that embody
                  obligations of the issuer and have characteristics of both
                  liabilities and equity. Statement 150 represents a significant
                  change in practice in the accounting for a number of financial
                  instruments, including mandatorily redeemable equity
                  instruments and certain equity derivatives that frequently are
                  used in connection with share repurchase programs. The Company
                  currently does not use such instruments. Statement 150 is
                  effective for all financial instruments created or modified
                  after May 31, 2003, and to other instruments as of September
                  1, 2003. The Company has adopted Statement 150 and does not
                  believe the effect of adopting this statement will have a
                  material impact on its financial position, results of
                  operations or cash flows.

                                      F-10
--------------------------------------------------------------------------------
<PAGE>

CEDAR MOUNTAIN DISTRIBUTORS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2003 and 2002
--------------------------------------------------------------------------------

2.  RELATED       During the years ended December 31, 2003 and 2002, the Company
    PARTY         utilized the services, furniture, equipment, and facilities of
    TRANSACTIONS  the Company's sole officer and director valued at $14,400 each
                  year. These services have been reflected as an operating
                  expense and additional paid in capital in the accompanying
                  consolidated financial statements.

                  During the year ended December 31, 2002, the Company paid
                  $70,000 in fees to companies affiliated with shareholders for
                  consulting services.

                  During the years ended December 31, 2003 and 2002, the
                  Company's sole officer and director advanced $3,800 and
                  $18,500, respectively, to the Company. The Company repaid
                  $5,000 during the year ended December 31, 2002. The net
                  advances increased the amount owed to the officer/director to
                  $26,300 at December 31, 2003. The advances were converted into
                  two promissory notes totaling $3,800 and $22,500 dated
                  December 31, 2003 and October 21, 2002, respectively. Both
                  notes carry a ten percent interest rate and are due on demand.
                  Interest expense on the notes totaled $2,363 and $1,783 for
                  the years ended December 31, 2003 and 2002, respectively.
                  Accrued interest payable on the notes totaled $5,928 and
                  $3,565 as of December 31, 2003 and 2002, respectively.

                  Notes payable - related party consist of the following:

                                                     December 31,   December 31,
                                                         2003           2002
                                                     ------------   ------------
                  Unsecured notes payable to
                  officer/director with interest
                  at 10 percent, due on demand.
                                                        $26,300       $22,500
                                                        =======       =======


3.  MAJOR         Four unaffiliated customers each accounted for more than 5
    CUSTOMERS     percent of the Company's total revenue and collectively
                  accounted for approximately 96 percent of the Company's total
                  revenue during the year ended December 31, 2003. Four
                  unaffiliated customers each accounted for more than 5 percent
                  of the Company's total revenue and collectively accounted for
                  approximately 69 percent of the Company's total revenue during
                  the year ended December 31, 2002. At December 31, 2002
                  receivables from these customers represented 100 percent of
                  the total receivables balance.

                                      F-11
--------------------------------------------------------------------------------
<PAGE>

CEDAR MOUNTAIN DISTRIBUTORS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2003 and 2002
--------------------------------------------------------------------------------

4.  NOTE PAYABLE  In April 2003, the Company issued a promissory note for $2,500
                  to an unrelated third party. The note carries a six percent
                  interest rate and is due on demand. The Company repaid the
                  $2,500 note and $52 in related interest expense during August
                  2003.


5.  INCOME TAXES  A reconciliation of the U.S. statutory federal income tax rate
                  to the effective rate is as follows:

                                                 December 31,     December 31,
                                                     2003             2002
                                                 ------------     ------------
                  U.S. federal statutory
                    graduated rate                  15.00%           24.44%
                  State income tax rate,
                    net of federal benefit          3.40%            3.02%
                  Contributed services             (4.80%)          (2.94%)
                  Net operating loss for
                    which no tax benefit is
                    currently available           (13.60%)         (24.52%)
                                                ----------      -----------
                  Net deferred tax asset        $   0.00%       $    0.00%
                                                ==========      ===========

                  At December 31, 2003, deferred taxes consisted of a net tax
                  asset of $82,515, due to operating loss carryforwards of
                  $249,816, which was fully allowed for in the valuation
                  allowance of $82,515. The valuation allowance offsets the net
                  deferred tax asset for which there is no assurance of
                  recovery. The deferred tax assets for the years ended December
                  31, 2003 and 2002 were $7,515 and $32,921, respectively. The
                  change in the valuation allowance for the years ended December
                  31, 2003 and 2002 were also $7,515 and $32,921, respectively.
                  Net operating loss carryforwards will expire through 2023.

                  The valuation allowance will be evaluated at the end of each
                  year, considering positive and negative evidence about whether
                  the asset will be realized. At that time, the allowance will
                  either be increased or reduced; reduction could result in the
                  complete elimination of the allowance if positive evidence
                  indicates that the value of the deferred tax asset is no
                  longer impaired and the allowance is no longer required.

                  Should the Company undergo an ownership change as defined in
                  Section 382 of the Internal Revenue Code, the Company's tax
                  net operating loss carryforwards generated prior to the
                  ownership change will be subject to an annual limitation,
                  which could reduce or defer the utilization of these losses.

                                      F-12
--------------------------------------------------------------------------------
<PAGE>

CEDAR MOUNTAIN DISTRIBUTORS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2003 and 2002
--------------------------------------------------------------------------------

6.  STOCK OPTION  Effective January 6, 2000, the Company adopted a Stock Option
    PLAN          Plan ("the Plan") that provides for qualified and
                  non-qualified plans. The Plan covers an aggregate 2,000,000
                  shares of common stock, except that no more than 1,000,000
                  shares shall be issued in connection with the exercise of
                  incentive options. The incentive plan is administered by a
                  committee appointed by the Board of Directors ("Committee"),
                  and requires that options be granted at an exercise price of
                  100 percent of the fair value of the common stock of the
                  Company on the date of the grant. Options granted to
                  stockholders who possess more than 10 percent of the
                  outstanding common stock have a required exercise price of 100
                  percent of the fair value of the common stock on the date of
                  grant.

                  The options expire up to ten years from date of grant or up to
                  five years from the date of grant for options to stockholders
                  who possess more than 10 percent of the outstanding common
                  stock.

                  The non-qualified plan is also administered by the Committee
                  and is covered by the same 2,000,000 shares as the incentive
                  plan. The non-qualified plan provides that options may be
                  granted at exercise prices and terms as determined by the
                  Committee.

                  No options have been granted under the Plan as of December 31,
                  2003.

7.  STOCKHOLDERS' Preferred Stock: The Board of Directors has authorized
    EQUITY,       5,000,000 of $.001 par value preferred stock with attributes
    CHANGE IN     to be determined by the Board of Directors.
    CONTROL
                  Common Stock: On June 6, 2001, the Board of Directors approved
                  the sale of 200,000 shares of common stock at $1.00 per share
                  in a public offering. This public offering was completed in
                  November 2002 and resulted in the Company receiving net
                  proceeds of $169,909 after offering costs.

                  On August 20, 2003, the Board of Directors approved the sale
                  of 10,000,000 shares of common stock for a total price of
                  $20,000 in an individual transaction. This transaction was
                  completed in August 2003 and effected a change in control of
                  the company.

                                      F-13
--------------------------------------------------------------------------------