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

                                   FORM 10-KSB

  [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934
                   For the fiscal year ended December 31, 2002

                                       OR

    [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
                  For the transition period from _____ to_____


                           Commission File No: 0-28985

                           MILLENNIA TEA MASTERS, INC.
                 (Name of small business issuer in its charter)

            Texas                                                 75-2785941
(State or other jurisdiction of                              (I.R.S. Employer
 incorporation or organization)                              Identification No.)

               2591 Dallas Parkway, Suite 102, Frisco, Texas 75034
               (Address of principal executive offices) (Zip Code)

                                 (469) 633-0100
                 Issuer's telephone number, including area code

        Securities registered pursuant to Section 12(b) of the Act: None

           Securities registered pursuant to Section 12(g) of the Act:
                         Common Stock, $0.001 Par Value



Check  whether  the issuer  (1) has filed all  reports  required  to be filed by
Section 13 or 15(d) of the Securities  Exchange Act of 1934 during the preceding
12 months (or for such shorter  period that the  registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days. YES [X] NO [ ]

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

Issuer's revenues for the year ended December 31, 2002 were $1,017.53

The aggregate  market value of the voting and  non-voting  common equity held by
non-affiliates computed by reference to the price at which the common equity was
sold, or the average bid and asked price of such common  equity,  as of March 3,
2003 was $0. There is no public market for the Company's common stock.

At March 10, 2003,  the registrant had  outstanding  1,730,939  shares of common
stock.



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


<PAGE>

                                TABLE OF CONTENTS

                                     PART I


                                                                            Page
                                                                            ----

Item 1.  Description of Business.                                             3

Item 2.  Description of Property.                                             3

Item 3.  Legal Proceedings.                                                   3

Item 4.  Submission of Matters to a Vote of Security Holders.                 3


                                     PART II

Item 5.  Market for Common Equity and Related Stockholder Matters.            4

Item 6.  Management's Discussion and Analysis or Plan of Operations.          4

Item 7.  Financial Statements.                                                6

Item 8.  Changes in and Disagreements with Accountants on Accounting
         And Financial Disclosure.                                            6


                                    PART III

Item 9.  Directors, Executive Officers, Promoters and Control Persons;
         Compliance with Section 16(a) of the Exchange Act.                   6

Item 10. Executive Compensation.                                              6

Item 11. Security Ownership of Certain Beneficial Owners and Management
         And Related Stockholder Matters.                                     7

Item 12. Certain Relationships and Related Transactions.                      7

Item 13. Exhibits and Reports on Form 8-K.                                    7

Item 14. Controls and Procedures.                                             8

Signatures                                                                    8











                                       2
<PAGE>

                                     PART I

This Annual Report on Form 10-KSB contains forward-looking statements within the
meaning of Section  27A of the  Securities  Act of 1933 and  Section  21E of the
Securities Exchange Act of 1934,  including  statements  regarding the Company's
expectations,  beliefs,  intentions  and  strategies  regarding the future.  All
forward-looking  statements  included in this document are based on  information
available  to the  Company as of the date  hereof,  and the  Company  assumes no
obligation to update any such forward-looking statements. A detailed description
of the factors that could cause  future  results to  materially  differ from the
Company's  recent results or those projected in the  forward-looking  statements
are  contained in the section of this Form 10-KSB  entitled  "Important  Factors
Regarding Forward-Looking Statements."



Item 1.  DESCRIPTION OF BUSINESS.

Corporate Profile.

The  Company  was  incorporated  on August 4, 1988 as a Texas  corporation.  Our
principal business is the importation and sale of high quality tea products from
Sri Lanka, formerly known as Ceylon.

Employees.

As of December 31, 2002, the Company had no employees.

Miscellaneous.

The Company will send an annual report to all  shareholders,  including  audited
financial statements.

The Company files periodic reports with the Securities and Exchange  Commission.
Said filings can be obtained  through the Edgar system by anyone  accessing  the
internet at  http://www.sec.gov  or you may read and copy any  materials we file
with the SEC at the  SEC's  Public  Reference  Room at 450 Fifth  Street,  N.W.,
Washington,  D.C.  20549.  You may obtain  information  on the  operation of the
Public Reference Room by calling the SEC at 1-800-732-0330.

Item 2.  DESCRIPTION OF PROPERTY.

As of  December  31, 2003 the Company  leased an 8,000  sq.ft.  warehouse/office
building in DeSoto,  Texas from a  non-related  third party.  The lease is for a
period of three years,  expiring on December  31,  2005.  The monthly net rental
price is $3,750.

Item 3.  LEGAL PROCEEDINGS.

The  Company  is not  engaged  in any legal  proceedings  as of the date of this
report.

Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

No matters were  submitted to a vote of  shareholders  of the Company during the
fourth quarter ended December 31, 2002.





                                       3
<PAGE>

                                     PART II

Item 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

Market Information.

As of March 10, 2003, no public market exists for the Company's common stock.

Shareholders of Record.

As of the date of this  Annual  Report,  there  were 17  record  holders  of the
Company's common stock.

Dividends.

The Company has never  declared or paid cash  dividends  on its Common Stock and
does not anticipate paying any cash dividends in the foreseeable future.

Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.

The financial  information set forth in the following  discussion should be read
in conjunction with, and qualified in its entirety by, the financial  statements
of the Company included elsewhere herein.

Results of Operations - 2002 compared to 2001.

The  Company  commenced  operations  during the  fourth  quarter of 1998 and has
focused  significant  resources through December 2002 in procuring and importing
inventory and  developing  sales and  distribution  channels.  Accordingly,  the
Company has generated only minimal revenues and experienced cumulative losses of
approximately $271,679.54

During this  start-up  phase,  the Company is dependent  upon cash advances from
affiliates to provide  working  capital.  The Company's  continued  existence is
dependent upon its ability to generate  sufficient cash flows from operations to
support its daily operations as well as provide  sufficient  resources to retire
any incurred liabilities and/or obligations on a timely basis.

The  Company  expects  meaningful  sales of its tea  products to commence in the
second quarter of 2003, with its products being offered directly to the consumer
through our website  (WWW.MILLENNIATEA.COM)  and through direct consumer channel
distribution.

Liquidity and Capital Resources.

Due to its continuing  losses,  The Company has been forced to borrow funds from
affiliates  to  fund  the  shortfall  in  cash   generated  from  its  operating
activities.

The Company believes that cash generated from operations  together with the cash
provided on a loan basis from its  affiliates  will be sufficient to provide the
majority of the cash  necessary to meet its working  capital  needs  through the
next twelve  months based upon the  anticipated  level of revenues and operating
expenses.

There can be no assurance,  however,  that additional loans will be available on
acceptable terms or at all, and the failure to obtain additional loans as needed
may have an adverse  effect on the Company's  ability to continue to operate and
may not allow the Company to take advantage of future opportunities.

The Company financed its operations during calendar year 2002 through internally
generated  cash flow,  existing  cash and from cash  advances  (loans)  from its
affiliates..



                                       4
<PAGE>

Recently Issued Accounting Pronouncements.

Any recently  issued  accounting  pronouncements  have no material effect on the
financial statements of the Company.




Effects on Inflation.

The Company  believes that the effect of inflation has not been material  during
each of the years ended December 31, 2002 and 2001.

Important Factors Regarding Forward-Looking Statements.

Various forward-looking  statements have been made in this Annual Report on Form
10-KSB.  Forward-looking  statements  may  also be made in the  Company's  other
reports filed under the  Securities  Exchange Act of 1934, in its press releases
and in other documents. In addition, from time to time, the Company, through its
management, may make oral forward-looking statements.

Forward-looking  statements  are subject to risks and  uncertainties,  including
those  identified  below,  that could cause actual results to differ  materially
from such statements. The words "anticipate",  "believe",  "estimate", "expect",
`'intend",  "should",  "will" or similar  expressions  are  intended to identify
forward-looking statements. Readers are cautioned not to place undue reliance on
these forward-looking statements,  which speak only as of the date on which they
are made. The Company  undertakes no obligation to update publicly or revise any
forward-looking statements.

Should one or more of the risks  materialize,  or should underlying  assumptions
prove  incorrect,  actual  results or outcomes  may vary  materially  from those
described herein as anticipated, believed, estimated, expected or intended.

Going Concern.

The accompanying  financial  statements have been prepared  assuming the Company
will continue as a going concern.  We have limited  operations and revenues.  We
continue to incur operating  expenses in excess of revenues.  We had substantial
working capital and  shareholders'deficits  at December 31, 2002. These factors,
among others, raise substantial doubt about the Company's ability to continue as
a going concern.  The financial  statements do not include any adjustments  that
might result from the outcome of this uncertainty.

There  can be no  assurances  that  the  Company  will be  able to  successfully
implement  its  ongoing  plans,   including  generating  profitable  operations,
generating  positive cash flows from operations and obtaining  additional equity
capital to meet present and future working capital demands.











                                       5
<PAGE>

Item 7.  FINANCIAL STATEMENTS.

Independent Auditors' Report.................................................F-1

Financial Statements:
    Balance Sheets...........................................................F-3
    Statements of Operations.................................................F-4
    Statements of Changes in Stockholders' Equity............................F-5
    Statements of Cash Flows.................................................F-6

Notes to Financial Statements................................................F-7


Item  8.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE.

None.

                                    PART III


Item 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

The following table sets forth the officers and directors of the Company.

Name                    Position                                         Age
----                    --------                                         ---

Kevin B. Halter         Chairman, President, CEO.                         67
Kevin B. Halter Jr.     Vice President, Secretary & Treasurer             42


Kevin B. Halter has served as Chairman, President, Chief Executive Officer and a
director of the Company since August,  1998.  Mr. Halter has served as President
and Chief  Executive  Officer of Halter  Capital  Corporation , a privately held
investment  and  consulting  company,  since  1987.  Mr.  Halter  has  served as
President of Millennia, Inc. and Chairman of the Board of Digital Communications
Technology Corporation since 1994. Mr. Halter is the father of Kevin Halter Jr.

Kevin  Halter Jr. has served as Vice  President,  Secretary  &  Treasurer  and a
director of the  Company  since  August,  1998.  Mr.  Halter also serves as Vice
President  and  Secretary  of Halter  Capital  Corporation.  He is  President of
Securities  Transfer  Corporation,  a stock transfer company registered with the
Securities and Exchange Commission,  a position that he has held since 1987. Mr.
Halter has served as Vice President, Secretary and a director of Millennia, Inc.
and Digital  Communications  Technology Corporation since 1994. He is the son of
Kevin B. Halter.

All directors hold office until the next annual meeting of the  shareholders  of
the  Company,  and until  their  successors  have been  elected  and  qualified.
Officers serve at the discretion of the Board of Directors.

Section 16(a) Beneficial Ownership Reporting Compliance.
--------------------------------------------------------

Section  16(a) of the  Securities  Exchange Act of 1934  requires the  Company's
directors  and  executive  officers,  and  persons  who own  more  than 10% of a
registered class of the Company's equity securities, to file with the Securities
and Exchange  Commission  initial reports of ownership and reports of changes in
ownership  of common  stock and other equity  securities  of the Company.  These
insiders  are required by  Securities  and Exchange  Commission  regulations  to
furnish the Company with copies of all Section 16(a) forms they file,  including
Forms 3, 4 and 5. To the  Company's  knowledge,  based  solely  on review of the
copies of such reports furnished to the Company and written representations that
no other  reports were  required,  during the calendar  year ended  December 31,
2002,  all Section  16(a) filing  requirements  applicable  to its insiders were
complied with.


Item 10.  EXECUTIVE COMPENSATION.

The Company pays no compensation to its officers and directors currently and has
paid no  compensation  in  amount  or of any kind to is  executive  officers  or
directors  since  inception.  Executive  management  and oversight  services are
provided to the Company by a controlling shareholder. The accompanying financial
statements  reflect  management's  estimate of the  estimated  fair value of the
services  contributed  to the Company  during each fiscal year based on the time
and effort required to administer the Company's operations and affairs.



                                       6
<PAGE>
<TABLE>
<CAPTION>

Item 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The following  table sets forth  information as of February 10, 2003  concerning
the  beneficial  ownership of the common stock of the Company by (i) each person
who is known to us to own beneficially more than five percent of the outstanding
shares of common stock,  (ii) each director and executive officer of the Company
and (iii) all directors and executive officers as a group.

                                                       Amount and
                 Name and address                      nature of           Percent of
Title of Class   of beneficial owner                   beneficial owner    class
--------------   -------------------                   ----------------    ----------
<S>              <C>                                   <C>                 <C>

Common           Kevin B. Halter                            994,500           57.5%
                 2591 Dallas Parkway - suite 102
                 Frisco, TX 75034

Common           Kevin Halter, Jr.                          100,000 (1)        5.8%
                 2591 Dallas Parkway - Suite 102
                 Frisco, TX 75034

                 All executive officers and directors     1,094,500           63.2%
                 a group (2 persons)

Common           Halter Capital Corporation                 145,229 (2)        8.4%
                 2591 Dallas Parkway - Suite 102
                 Frisco, TX 75034

Common           Stuart G. Johnston
                 12001 Shirestone Lane
                 Dallas, TX 75244                           100,831            5.8%

Common           Ronald Robbins                             100,000            5.8%
                 6334 N. Vuelta Tajo
                 Tucson, AZ 85717
</TABLE>

(1)      The shares are owned by K.P. Halter Family Partnership LTD.
(2)      Halter  Capital  Corporation is 100% owned by Kevin B. Halter and Kevin
         Halter Jr.



Item 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

In order to maintain liquidity,  the Company has received  non-interest  bearing
cash advances from Kevin Halter and Halter Capital  Corporation  during calendar
years 2002 and 2001, its controlling shareholders.


Item 13. EXHIBITS AND REPORTS ON FORM 8-K.

         (a)      Exhibits


         3.1*     Articles of Incorporation
         3.2*     By-Laws
         4.0*     Instruments   defining   the  rights  of  holders,   including
                  indentures


*  Incorporated  by reference to Exhibits  filed with issuer's  10-SB Form filed
January 19, 2000.



                                       7
<PAGE>

         (b)      Reports on Form 8-K

                  None


Item 14. Controls and Procedures.

(a)      Evaluation of Disclosure Controls and Procedures

The Company's Chief Executive and Financial  Officer,  Kevin Halter has reviewed
the Company's  disclosure  controls and  procedures  within 90 days prior to the
filing of this report.  Based upon this review,  the officer  believes  that the
Company's  disclosure  controls and  procedures  are  effective in ensuring that
material  information  related  to the  Company  is made known to them by others
within the Company.

(b)      Changes in Internal Controls.

There were no significant changes in the Company's internal controls or in other
factors  that could  significantly  affect  these  controls  during the  quarter
covered by this  report or from the end of the  reporting  period to the date of
this Form 10-KSB.


                                   SIGNATURES

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

MILLENNIA TEA MASTER,  INC.

By: /s/ Kevin B. Halter
   -----------------------------
   Kevin B. Halter
   (Principal Executive Officer)
   Date: March 20, 2003















                                       8
<PAGE>

                                  CERTIFICATION

I  Kevin Halter, certify that:

1.       I have  reviewed  this annual  report on Form 10-KSB of  Millennia  Tea
         Masters, Inc.
2.       Based on my  knowledge,  this annual report does not contain any untrue
         statement of material fact or omit to state a material  fact  necessary
         to make the statements made, in light of the circumstances  under which
         such  statements  were made, not misleading  with respect to the period
         covered by this annual report.
3.       Based on my knowledge,  the financial  statements,  and other financial
         information  included  in this  annual  report,  fairly  present in all
         material  respects the financial  condition,  results of operations and
         cash flows of the  registrant as of, and for, the periods  presented in
         this annual report.
4.       The registrant's  other  certifying  officers and I are responsible for
         establishing  and  maintaining  disclosure  controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         have:
         a.       designed  such  disclosure  controls and  procedures to ensure
                  that  material   information   relating  to  the   registrant,
                  including its consolidated  subsidiaries,  is made known to us
                  by others  within  those  entities,  particularly  during  the
                  period in which this annual report is being prepared.
         b.       evaluated the  effectiveness  of the  registrant's  disclosure
                  controls and  procedures  as of a date within 90 days prior to
                  the filing date of this annual report (the "Evaluation Date");
                  and
         c.       presented  in this  annual  report our  conclusions  about the
                  effectiveness of the disclosure  controls and procedures based
                  on our Evaluation Date.
5.       The registrant's other certifying officers and I have disclosed,  based
         on our most recent  evaluation,  to the  registrant's  auditors and the
         audit  committee  of  registrant's   board  of  directors  (or  persons
         performing the equivalent functions):
         a.       all  significant  deficiencies  in the design or  operation of
                  internal   controls   which   could   adversely   affect   the
                  registrant's ability to record, process,  summarize and report
                  financial  data  and  have  identified  for  the  registrant's
                  auditors any material weakness in internal controls; and
         b.       any fraud,  whether or not material,  that involves management
                  or  other  employees  who  have  a  significant  role  in  the
                  registrant's internal controls; and
6.       The registrant's other certifying officers and I have indicated in this
         annual  report  whether  there were  significant  changes  in  internal
         controls or in other factors that could  significantly  affect internal
         controls  subsequent  to  the  date  of  our  most  recent  evaluation,
         including   any   corrective   actions   with  regard  to   significant
         deficiencies and material weaknesses.

     Date: March 20, 2003

                                                      /s/ Kevin B. Halter
                                                     ---------------------------
                                                     Principal Executive Officer


                                       9
<PAGE>

                                  CERTIFICATION

I  Kevin Halter Jr. , certify that:

7.       I have  reviewed  this annual  report on Form 10-KSB of  Millennia  Tea
         Masters, Inc.
8.       Based on my  knowledge,  this annual report does not contain any untrue
         statement of material fact or omit to state a material  fact  necessary
         to make the statements made, in light of the circumstances  under which
         such  statements  were made, not misleading  with respect to the period
         covered by this annual report.
9.       Based on my knowledge,  the financial  statements,  and other financial
         information  included  in this  annual  report,  fairly  present in all
         material  respects the financial  condition,  results of operations and
         cash flows of the  registrant as of, and for, the periods  presented in
         this annual report.
10.      The registrant's  other  certifying  officers and I are responsible for
         establishing  and  maintaining  disclosure  controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         have:
         a.       designed  such  disclosure  controls and  procedures to ensure
                  that  material   information   relating  to  the   registrant,
                  including its consolidated  subsidiaries,  is made known to us
                  by others  within  those  entities,  particularly  during  the
                  period in which this annual report is being prepared.
         b.       evaluated the  effectiveness  of the  registrant's  disclosure
                  controls and  procedures  as of a date within 90 days prior to
                  the filing date of this annual report (the "Evaluation Date");
                  and
         c.       presented  in this  annual  report our  conclusions  about the
                  effectiveness of the disclosure  controls and procedures based
                  on our Evaluation Date.
11.      The registrant's other certifying officers and I have disclosed,  based
         on our most recent  evaluation,  to the  registrant's  auditors and the
         audit  committee  of  registrant's   board  of  directors  (or  persons
         performing the equivalent functions):
         a.       all  significant  deficiencies  in the design or  operation of
                  internal   controls   which   could   adversely   affect   the
                  registrant's ability to record, process,  summarize and report
                  financial  data  and  have  identified  for  the  registrant's
                  auditors any material weakness in internal controls; and
         b.       any fraud,  whether or not material,  that involves management
                  or  other  employees  who  have  a  significant  role  in  the
                  registrant's internal controls; and
12.      The registrant's other certifying officers and I have indicated in this
         annual  report  whether  there were  significant  changes  in  internal
         controls or in other factors that could  significantly  affect internal
         controls  subsequent  to  the  date  of  our  most  recent  evaluation,
         including   any   corrective   actions   with  regard  to   significant
         deficiencies and material weaknesses.

     Date: March 20, 2003




                                                      /s/ Kevin Halter, Jr.
                                                     ---------------------------
                                                     Principal Financial Officer




                                       10

 <PAGE>












                                                     Millennia Tea Masters, Inc.

                                                            Financial Statements

                                                      December 31, 2002 and 2001

<PAGE>











                           Millennia Tea Masters, Inc.

                              Financial Statements

                           December 31, 2002 and 2001


                   (With Independent Auditor's Report Thereon)




<PAGE>


                           MILLENNIA TEA MASTERS, INC.

                                Table of Contents





Independent Auditors' Report.................................................F-1

Financial Statements:
    Balance Sheets...........................................................F-3
    Statements of Operations.................................................F-4
    Statements of Changes in Stockholders' Equity............................F-5
    Statements of Cash Flows.................................................F-6

Notes to Financial Statements................................................F-7


<PAGE>

               Report of Independent Certified Public Accountants
               --------------------------------------------------



Board of Directors and Stockholder
Millennia Tea Masters, Inc.

We have audited the accompanying balance sheet of Millennia Tea Masters, Inc. as
of December  31,  2002 and the  related  statements  of  operations,  changes in
stockholders'  equity,  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 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 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  audit  provides  a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above,  presents fairly, in
all material respects,  the financial position of Millennia Tea Masters, 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 that the
Company  will  continue  as a  going  concern.  As  discussed  in  note 2 to the
financial  statements,  the Company's has experienced limited sales and incurred
cumulative operating losses since its inception.  The Company has been dependent
upon the  proceeds  from the sales of common  stock and  advances  from  related
parties to provide working capital.  This situation  raises a substantial  doubt
about the  Company's  ability to  continue  as a going  concern.  The  financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.




March 10, 2003
Maitland, Florida


                                      F-1
<PAGE>

S. W. HATFIELD, CPA
certified public accountants

Member:    Texas Society of Certified Public Accountants
           Press Club of Dallas


               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
               --------------------------------------------------


Board of Directors and Shareholder
Millennia Tea Masters, Inc.

We have audited the accompanying balance sheet of Millennia Tea Masters, Inc. (a
Texas  corporation)  as of  December  31,  2001 and the  related  statements  of
operations and  comprehensive  loss,  changes in  shareholder's  equity and cash
flows for the year ended December 31, 2001.  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 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 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 financial  statements  referred to above present fairly, in
all material respects,  the financial position of Millennia Tea Masters, Inc. as
of December  31, 2001 and the results of its  operations  and cash flows for the
year ended December 31, 2001, in conformity with accounting principles generally
accepted in the United States of America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 2 to the
financial  statements,  the Company has  experienced  limited sales and incurred
cumulative operating losses since its inception.  The Company has been primarily
dependent  upon the proceeds  from the sales of common stock to provide  working
capital.  This situation raises a substantial  doubt about the Company's ability
to continue as a going  concern.  The  financial  statements  do not include any
adjustments that might result from the outcome of this uncertainty.




                                                             S. W. HATFIELD, CPA
Dallas, Texas
January 17, 2002


                                       F-2
<PAGE>

                           MILLENNIA TEA MASTERS, INC

                                 Balance Sheets

                           December 31, 2002 and 2001

                                     Assets
                                     ------

                                                           2002         2001
                                                         ---------    ---------
Current assets:
    Cash on hand and in bank                             $       9        1,616
    Due from affiliates (note 4)                              --          4,879
    Inventory                                              526,161      526,362
    Prepaid expenses                                         4,060         --
                                                         ---------    ---------

           Total current assets                            530,230      532,857
                                                         ---------    ---------



                      Liabilities and Stockholders' Equity
                      ------------------------------------

Current liabilities:
    Accounts payable - trade                             $    --          9,711
    Due to affiliates (note 4)                              68,970         --
                                                         ---------    ---------

           Total current liabilities                        68,970        9,711
                                                         ---------    ---------

Commitments (note 5)

Stockholders' equity:
    Common stock - $0.001 par value
      25,000,000 shares authorized
      1,730,939 shares issued and outstanding                1,731        1,731
    Additional paid-in capital                             731,208      731,208
    Accumulated deficit                                   (271,679)    (209,753)
                                                         ---------    ---------

           Total stockholders' equity                      461,260      523,186
                                                         ---------    ---------

Total liabilities and stockholders' equity               $ 530,230      532,897
                                                         =========    =========



See accompanying notes to financial statements.

                                      F-3
<PAGE>

                           MILLENNIA TEA MASTERS, INC.

                            Statements of Operations

                     Years Ended December 31, 2002 and 2001


                                                         2002           2001
                                                     -----------    -----------

Revenues                                             $     1,018            356

Cost of sales                                                169             61
                                                     -----------    -----------

               Gross profit                                  849            295
                                                     -----------    -----------

Operating expenses:
    Marketing, promotion and product development            --            1,033
    General and administrative expenses                   12,934         14,653
    Warehouse rent                                        49,841         46,243
                                                     -----------    -----------

           Total operating expenses                       62,775         61,929
                                                     -----------    -----------

           Loss from operations                          (61,926)       (61,634)

Other income (expense)                                      --             --
                                                     -----------    -----------

           Loss before income taxes                      (61,926)       (61,634)

Provision for income taxes                                  --             --
                                                     -----------    -----------

           Net loss                                  $   (61,926)   $   (61,634)
                                                     ===========    ===========


Loss per weighted-average share of common
    stock outstanding, basic and fully diluted       $     (0.04)         (0.04)
                                                     ===========    ===========


Weighted-average number of common shares
    outstanding                                        1,730,939      1,730,939
                                                     ===========    ===========




See accompanying notes to financial statements.

                                      F-4
<PAGE>
<TABLE>
<CAPTION>

                           MILLENNIA TEA MASTERS, INC.

                  Statements of Changes in Stockholders' Equity

                     Years ended December 31, 2002 and 2001




                            Common Stock
                      -------------------------   Additional
                       Number of                    Paid-in     Accumulated
                         Shares      Par Value      Capital       Deficit         Total
                      -----------   -----------   -----------   -----------    -----------
<S>                   <C>           <C>           <C>           <C>            <C>
Balances at
  December 31, 2000     1,730,939   $     1,731       731,208      (148,119)       584,820

Net loss                     --            --            --         (61,634)       (61,634)
                      -----------   -----------   -----------   -----------    -----------

Balances at
  December 31, 2001     1,730,939         1,731       731,208      (209,753)       523,186

Net loss                     --            --            --         (61,926)       (61,926)
                      -----------   -----------   -----------   -----------    -----------

Balances at
  December 31, 2002     1,730,939   $     1,731       731,208      (271,679)       461,260
                      ===========   ===========   ===========   ===========    ===========
</TABLE>






















See accompanying notes to financial statements.

                                      F-5

<PAGE>
<TABLE>
<CAPTION>

                           MILLENNIA TEA MASTERS, INC.

                            Statements of Cash Flows

                     Years Ended December 31, 2002 and 2001


                                                                2002          2001
                                                             ----------    ----------
<S>                                                          <C>           <C>
Cash flows from operating activities:
    Net loss                                                 $  (61,926)      (61,634)
    Adjustments to reconcile net loss to net cash
       provided by operating activities:
        Increase (decrease) in:
           Inventory                                                201            61
           Accounts payable - trade                              (9,711)        9,711
           Prepaid expenses                                      (4,060)         --
                                                             ----------    ----------

                Net cash used in operating activities           (75,496)      (51,862)
                                                             ----------    ----------

Cash flows from investing activities:
    Net cash advanced from affiliates                            73,849        52,902
                                                             ----------    ----------

                Net cash  provided by investing activities       73,849        52,902
                                                             ----------    ----------

Increase (decrease) in cash                                      (1,647)        1,040

Cash at beginning of year                                         1,656           616
                                                             ----------    ----------

Cash at end of period                                        $        9         1,656
                                                             ==========    ==========
</TABLE>









See accompanying notes to financial statements.

                                      F-6
<PAGE>

                           MILLENNIA TEA MASTERS, INC.

                          Notes to Financial Statements

                           December 31, 2002 and 2001


(1)  Organization and Description of Business
     ----------------------------------------

     Millennia Tea Masters,  Inc.  (Company) was  incorporated on August 3, 1998
     under the laws of the  State of Texas.  The  Company  was  formed to engage
     principally in the marketing and sale of imported teas.

     The Company has had no substantial  operations since inception.  Due to the
     lack  of  sustaining   operations  the  Company  generated  no  significant
     operating  revenues  and  has  incurred  cumulative   operating  losses  of
     approximately $270,000.

     The Company's principal product, imported teas from Sri Lanka, is processed
     by a single unrelated Sri Lankan entity.  In the event of any disruption in
     the  availability  of imported teas from Sri Lanka, if any, the Company may
     experience a negative  economic  impact.  The Company  believes  that other
     processors of imported  teas of comparable  quality and price are available
     from the same region and that no interruption of product  availability will
     occur.

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

(2)  Going Concern Uncertainty
     -------------------------

     The Company commenced  operations during the fourth quarter of 1998 and has
     focused  significant  resources  through  December  2000 in  procuring  and
     importing  inventory  and  developing  sales  and  distribution   channels.
     However,  marketplace  conditions  caused management to virtually cease all
     activities during 2001. Management is investigating  alternative methods to
     generate product demand and market acceptance.

     The Company has generated  only minimal  revenues  since  inception and has
     incurred  cumulative  operating  losses of  approximately  $270,000.  Since
     inception, the Company has been dependent upon the sale of common stock and
     advances  from  affiliates  to  provide  working  capital.   The  Company's
     continued  existence is dependent  upon its ability to generate  sufficient
     cash  flows from  operations  to support  its daily  operations  as well as
     provide sufficient resources to retire existing liabilities and obligations
     on a timely basis.  This  situation  raises a  substantial  doubt about the
     Company's ability to continue as a going concern.
                                                                     (Continued)




                                      F-7
<PAGE>

                           MILLENNIA TEA MASTERS, INC.

                          Notes to Financial Statements


(2)  Going Concern Uncertainty - (Continued)
     ---------------------------------------

     Management  is  reviewing  the  actions  to be taken in future  periods  to
     generate operational results sufficient to provide resources to sustain its
     operations.   Further,  management  believes  that  its  efforts  to  raise
     additional  capital through the sale of equity  securities  and/or new debt
     financing  will provide  additional  cash flows.  However,  there can be no
     assurance  that the Company will be able to obtain  additional  funding or,
     that such funding, if available,  will be obtained on terms favorable to or
     affordable by the Company.

(3)  Summary of Significant Accounting Policies
     ------------------------------------------

     (a)  Cash and Cash Equivalents
          -------------------------

          For purposes of reporting cash flows,  the Company  considers all cash
          on hand, in banks,  including  accounts in book  overdraft  positions,
          certificates of deposit and other highly liquid debt  instruments with
          a maturity of three  months or less at the date of purchase to be cash
          and cash equivalents.

          Cash overdraft positions may occur from time to time due to the timing
          of making bank deposits and releasing  checks,  in accordance with the
          Company's cash management policies.

     (b)  Inventory
          ---------

          Inventory  consists of  imported  tea  products  and are valued at the
          lower of cost or market using the first-in, first-out method.

     (c)  Revenue Recognition
          -------------------

          The Company  sells it products to the general  public  through  direct
          sales on a prepaid basis. Accordingly,  the Company recognizes revenue
          at the  point of  shipment  to its  customers.  Sales  allowances  are
          recorded  concurrent  with the related sale of product.  Sales returns
          are recorded at the time and point that  products  are  received  back
          from a dissatisfied consumer.

                                                                     (Continued)


                                      F-8
<PAGE>

                           MILLENNIA TEA MASTERS, INC.

                          Notes to Financial Statements

(3)  Summary of Significant Accounting Policies - (Continued)
     --------------------------------------------------------

     (d)  Income Taxes
          ------------

          The Company  uses the asset and  liability  method of  accounting  for
          income  taxes.  At December 31, 2002 and 2001,  the deferred tax asset
          and deferred tax liability accounts,  as recorded when material to the
          financial   statements,   are   entirely   the  result  of   temporary
          differences.   Temporary  differences  represent  differences  in  the
          recognition of assets and liabilities for tax and financial  reporting
          purposes.

          At December 31, 2002 and 2001  deferred tax assets are related  solely
          to the Company's  net operating  loss  carryforward  of  approximately
          $270,000  which is fully  reserved.  If  these  carryforwards  are not
          utilized, they will begin to expire in 2018.

     (e)  Earnings (Loss) Per Share
          -------------------------

          Basic earnings (loss) per share is computed by dividing the net income
          (loss) by the  weighted-average  number of shares of common  stock and
          common stock equivalents (primarily outstanding options and warrants).
          Common stock equivalents  represent the dilutive effect of the assumed
          exercise of the  outstanding  stock  options and  warrants,  using the
          treasury  stock method.  The  calculation  of fully  diluted  earnings
          (loss)  per share  assumes  the  dilutive  effect of the  exercise  of
          outstanding  options  and  warrants  at either  the  beginning  of the
          respective  period  presented  or the date of  issuance,  whichever is
          later.  As of December 31, 2002 and 2001,  the Company had no warrants
          and/or options outstanding.

     (4)  Related Party Transactions
          --------------------------

          As  of  December  31,  2002,  the  Company  has a  net  payable  to an
          affiliated entity of $68,970.  At December 31, 2001, the Company has a
          net receivable  from an affiliated  Company of $4,879.  These advances
          are unsecured, due upon demand and are non-interest bearing.

     (5)  Commitments
          -----------

          Beginning  December  15,  2002,  the  Company  leased an 8,000 sq. ft.
          office/warehouse   under  a  lease  from  a  non-related  third  party
          scheduled to expire  December 31, 2005.  The following  summarizes the
          Company's current  obligations under a three year lease as of December
          31, 2002.

                        Date of lease                 12-15-02
                        Lease term begins             01-01-03
                        Lease term ends               12-31-05
                        Renewal option                None
                        Contingent rents              No
                        Initial rent                  $3,750 per month
                        Escalation                    None

                                                                     (Continued)

                                      F-9

<PAGE>
<TABLE>
<CAPTION>

                           MILLENNIA TEA MASTERS, INC.

                          Notes to Financial Statements


(5)  Commitments - (Continued)
     -------------------------

     Future   minimum   payments,   by  years  and  in  the   aggregate,   under
     noncancellable  operating lease with initial or remaining terms of one year
     or more consisted of the following at December 31, 2002:

               Year Ending December 31,                    Amount

                         2003                                 $   45,000
                         2004                                     45,000
                         2005                                     45,000
                                                              ----------

                         Total                                $  135,000
                                                              ==========

(6)  Selected Financial Data (Unaudited)
     -----------------------------------

     The following is a summary of the quarterly  results of operations  for the
     years ended December 31, 2002 and 2001, respectively:

                                   Quarter ended    Quarter ended    Quarter ended    Quarter ended     Year ended
                                     March 31,         June 30,      September 30,     December 31,     December 31,
        2002                       -------------    -------------    -------------    -------------    -------------
        ----
<S>                                <C>              <C>              <C>              <C>              <C>
Net revenues                       $          96              150              276              496            1,018
Net loss from operations                 (16,265)         (12,246)         (14,425)         (18,990)         (61,926)
Basic loss per share                       (0.01)           (0.01)           (0.01)           (0.01)           (0.04)
Weighted-average number of
   shares issued and outstanding       1,730,939        1,730,939        1,730,939        1,730,939        1,730,939

        2001
        ----

Revenues                           $          82               80              148               46              356
Net loss from operations                 (21,198)          (6,183)         (15,849)         (18,404)         (61,634)
Basic loss per share                       (0.01)           (0.01)           (0.01)           (0.01)           (0.04)
Weighted-average number of
   shares issued and outstanding       1,730,939        1,730,939        1,730,939        1,730,939        1,730,939
</TABLE>





                                      F-10