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, 2003

                                       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)

                             (972) 248-1922 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,  2003 were  $8,678.00  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 February
10, 2004 was $664,418.

At February 10, 2004, 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.                                             4

Item 3.  Legal Proceedings.                                                   4

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


                                     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.                                                7

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


                                    PART III

Item 9.  Directors, Executive Officers, Promoters and Control Persons;
         Compliance with Section 16(a) of the Exchange Act.                   8

Item 10. Executive Compensation.                                              7

Item 11. Security Ownership of Certain Beneficial Owners and Management
         And Related Stockholder Matters.                                     8

Item 12. Certain Relationships and Related Transactions.                      9

Item 13. Exhibits and Reports on Form 8-K.                                    9

Item 14. Controls and Procedures.                                             9



















                                       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 3, 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. Tea from this region has
been recognized as one of the best teas in the world for over a century.

We buy our teas at auctions,  package them under the "Millennia"  label and ship
the from Sri Lanka to our leased  warehouse in DeSoto,  Texas.  The tea auctions
occur on a weekly basis in Colombo,  the capital of Sri Lanka. The bidding is on
a variety of loose leaf teas.  The purchased tea is then paid for and shipped to
a  packaging  plant  in  Colombo,  where  a  local  company  packages  it to our
specification, utilizing our preprinted tea envelopes and boxes. Accordingly, we
do not own and packaging  equipment.  The facilities used are deemed by us to be
adequate for the foreseeable future. Our goals are to give the consumer a choice
between the ordinary teas found in the  supermarkets and high grown black Ceylon
teas,  which are  considered  far  superior.  Our  products  consist  of English
Breakfast tea and Earl Grey, both of which are consumed as hot teas. In the iced
tea category our products  feature both  unflavored and flavored  teas,  such as
peach, raspberry and strawberry.

The shelf life of teas can vary. High grown black teas,  properly  fermented and
oxidized will have a minimum shelf life of at least five years.  All of our teas
fit this category.

The tea market is highly  competitive.  A number of companies  with  significant
market share and resources can make the penetration of the existing tea market a
very difficult task for any new entrant. We have therefore decided to market our
teas directly to the consumer through our website (www.millenniatea.coM), direct
mailing,  fund raising and trade shows.  We have developed our own website which
we also maintain ourselves  internally without significant costs attached to it.
We  currently  are in the process to ensure  visibility  to our website  through
various search engines.

Our limited  operating  history and losses to date make it difficult to evaluate
our business.  Since our  formation in August 1988,  we have sold  approximately
$19,994 in tea products. Our revenue and income potential are unproven.  Through
December  31, 2003 we have lost over  $624,647  which sum  includes an inventory
reserve of $251,534.  Developing market acceptance for our products and services
will require  substantial  marketing and sales efforts and the  expenditure of a
significant amount of funds.

Even though tea has unlimited  shelf life it kept under proper  conditions,  any
deterioration of our products, which represents essentially all of the company's
assets, could become worthless.

Employees.

As of December 31, 2003, the Company had no employees.



                                       3
<PAGE>

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 two years, expiring on December 31, 2004. 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, 2003.



                                     PART II



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

Market Information.

Our common stock was approved for trading on the OTC Bulletin  Board on December
16, 2003 under the symbol "MTEM".

The  following  table sets forth the high and low bid prices for the 4th quarter
of  the  calendar  year  ended  December  31,  2003.  These  quotations  reflect
inter-dealer prices, without retail mark-up, markdown, or commission and may not
represent actual transactions.

High                       Low
$0.85             $0.85

Shareholders of Record.

As of the date of this  Annual  Report,  there  were 199  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.



                                       4
<PAGE>


Results of Operations - 2003 compared to 2002.
The  Company  commenced  operations  during the  fourth  quarter of 1998 and has
focused  significant  resources through December 2003 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  $624,647  which  amount  includes  the  recording of an inventory
reserve of $251,534.

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.

Through  direct mail  advertising we have increased our customer base during the
year, but it is still at a very low level. Budget constraints limit our campaign
expenditures,  thus growth will continue to be limited.  We are exploring  other
avenues which may bring us increased  revenue and customer base, but the results
are as yet unknown.

Even though tea has unlimited  shelf life if kept under proper  conditions,  any
deteriation of our products,  which represents  essentially all of the company's
assets, could become worthless.

Liquidity and Capital Resources.

Due to our continued losses, we have been forced to borrow funds from affiliates
to fund the shortfall in cash generated from our operating activities.

We  believe  that cash  provided  on a loan basis  from our  affiliates  will be
sufficient  to provide the  majority of the cash  necessary  to meet our working
capital needs through the next twelve months.

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 our  ability to  continue  to operate and may not
allow us to take advantage of future opportunities.

The Company  financed  its  operations  during  calendar  year 2003 through cash
advances  (loans) from its  affiliates.  The loans that have been  received from
affiliates  are unsecured.  We have not executed any  promissory  notes or other
instruments,  but merely receive the funds based upon a verbal agreement that we
are to repay any and all such  loans  from any  excess  cash that we may have on
hand upon sale of products in the future.

Our anticipated material expenses for fiscal year 2004 include monthly warehouse
rent of $3,750 and  postage and mailing  expenses  of  approximately  $8,000 per
month to  continue  our direct  mail sales  campaign.  We have  received an oral
commitment  from  affiliates to fund us for these  expenditures  for the current
fiscal year.

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, 2003 and 2002.

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.



                                       5
<PAGE>


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.

The accompanying  financial  statements have been prepared  assuming the Company
will continue as a going concern.  We have limited operations and revenues.  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.  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.

Going-concern
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.

































                                       6
<PAGE>

Item 7.  FINANCIAL STATEMENTS.

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

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

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.                       68
Kevin B. Halter Jr.     Vice President, Secretary & Treasurer           43



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


                                       7
<PAGE>
<TABLE>
<CAPTION>

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,
2003,  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.

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

The following  table sets forth  information as of February 10, 2004  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
Title of Class     of beneficial owner                      beneficial owner     Percent of class
--------------     -------------------                      ----------------     ----------------
<S>                <C>                                      <C>                  <C>
Common             Kevin B. Halter                          1,139,729 (2)         57.5%
                   2591 Dallas Parkway - Suite 102
                   Frisco, TX 75034

Common             Kevin Halter, Jr.                          245,228 (1) (2)      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              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.L.  Halter  Family  Partnership  LTD.
(2)  Includes   145,229  shares   registered  in  the  name  of  Halter  Capital
Corporation, 100% Owned by Kevin B. Halter and Kevin Halter, Jr.


                                       8
<PAGE>

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 2003 and 2002, 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.




(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: February 11, 2004










                                       9
<PAGE>








                                                     MILLENNIA TEA MASTERS, INC.
                                                   (A Development Stage Company)


                                                            Financial Statements


                                                      December 31, 2003 and 2002


<PAGE>

                           Millennia Tea Masters, Inc.
                          (A Development Stage Company)

                              Financial Statements

                           December 31, 2003 and 2002


                   (With Independent Auditor's Report Thereon)



<PAGE>

                           MILLENNIA TEA MASTERS, INC.
                          (A Development Stage Company)

                                Table of Contents





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

Financial Statements:
    Balance Sheets...........................................................F-2
    Statements of Operations.................................................F-3
    Statements of Changes in Stockholders' Equity............................F-4
    Statements of Cash Flows.................................................F-5

Notes to Financial Statements................................................F-6


<PAGE>

                          TSCHOPP, WHITCOMB & ORR, P.A.
                     2600 Maitland Center Parkway, Suite 330
                               Maitland, FL 32751


               Report of Independent Certified Public Accountants


Board of Directors and Stockholder
Millennia Tea Masters, Inc.

We have audited the accompanying  balance sheets of Millennia Tea Masters,  Inc.
(a  development  stage company) as of December 31, 2003 and 2002 and the related
statements of operations,  changes in stockholders'  equity,  and cash flows for
the years then ended and for the cumulative  period from August 3, 1998 (date of
inception)  through  December  31,  2003.  These  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion  on these  financial  statements  based on our  audits.  The  cumulative
statements of operations, changes in stockholders' equity and cash flows for the
period from August 3, 1998 (date of inception) through December 31, 2003 include
amounts for the period from August 3, 1998 (date of inception)  through December
31, 2001 which were audited by other auditors whose report has been furnished to
us, and our  opinion,  insofar as it relates  to the  amounts  included  for the
period  from August 3, 1998 (date of  inception)  through  December  31, 2001 is
based solely on the report of the other auditors.

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 audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our  opinion,  based on our  audits  and the  report of other  auditors,  the
financial  statements  referred  to  above,  present  fairly,  in  all  material
respects,  the financial position of Millennia Tea Masters,  Inc. (a development
stage  company)  as of  December  31,  2003 and  2002,  and the  results  of its
operations  and its cash flows for the years  then ended and for the  cumulative
period  from August 3, 1998 (date of  inception)  through  December  31, 2003 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 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.

/s/  Tschopp, Whitcomb & Orr, P.A.

January 30, 2004
Maitland, Florida






                                      F-1
<PAGE>
<TABLE>
<CAPTION>

                           MILLENNIA TEA MASTERS, INC
                          (A Development Stage Company)

                                 Balance Sheets

                           December 31, 2003 and 2002

                                     Assets
                                     ------

                                                                 2003           2002
                                                             -----------    -----------
<S>                                                          <C>            <C>
Current assets:
       Cash on hand and in bank                              $     3,499              9
       Inventory (note 4)                                        251,534        526,161
       Prepaid expenses                                            4,425          4,060
                                                             -----------    -----------

               Total current assets                              259,458        530,230
                                                             -----------    -----------



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

Current liabilities:
       Due to affiliates (note 5)                                151,166         68,970
                                                             -----------    -----------

               Total current liabilities                         151,166         68,970
                                                             -----------    -----------

Commitments (note 6)

                             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
       Deficit accumulated during the development stage         (624,647)      (271,679)
                                                             -----------    -----------

               Total stockholders' equity                        108,292        461,260
                                                             -----------    -----------

Total liabilities and stockholders' equity                   $   259,458        530,230
                                                             ===========    ===========
</TABLE>














See accompanying notes to financial statements.

                                      F-2
<PAGE>
<TABLE>
<CAPTION>

                           MILLENNIA TEA MASTERS, INC.
                          (A Development Stage Company)

                            Statements of Operations

                                                                                       Cumulative
                                                                                       Period From
                                                                                      August 3, 1998
                                                                                         Through
                                                                                       December 31,
                                                        2003              2002              2003
                                                  --------------    --------------    --------------
<S>                                               <C>               <C>               <C>
Revenues                                          $        8,678    $        1,018            19,994

Cost of sales                                             11,213               169            13,917
                                                  --------------    --------------    --------------

               Gross profit                               (2,535)              849             6,077
                                                  --------------    --------------    --------------

Operating expenses:
     General and administrative expenses                  57,469            12,934           156,560
     Warehouse rent                                       41,430            49,841           222,630
                                                  --------------    --------------    --------------

               Total operating expenses                   98,899            62,775           379,190
                                                  --------------    --------------    --------------

               Loss from operations                     (101,434)          (61,926)         (373,113)

Other expense (note 4)                                  (251,534)             --            (251,534)
                                                  --------------    --------------    --------------

               Loss before income taxes                 (352,968)          (61,926)         (624,647)

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

               Net loss                           $     (352,968)   $      (61,926)         (624,647)
                                                  ==============    ==============    ==============

Loss per weighted-average share of common
     stock outstanding, basic and fully diluted   $        (0.20)            (0.04)
                                                  ==============    ==============

Weighted-average number of common shares
     outstanding                                       1,730,939         1,730,939
                                                  ==============    ==============
</TABLE>



See accompanying notes to financial statements.

                                      F-3
<PAGE>
<TABLE>
<CAPTION>


                           MILLENNIA TEA MASTERS, INC.
                          (A Development Stage Company)

                  Statements of Changes in Stockholders' Equity

    Period from August 3, 1998 (date of inception) through December 31, 2003



                                                                            Deficit
                                       Common Stock                       Accumulated
                                -------------------------   Additional    During The
                                 Number of                    Paid-in     Development
                                   Shares      Par Value      Capital        Stage          Total
                                -----------   -----------   -----------   -----------    -----------
<S>                               <C>         <C>           <C>           <C>            <C>
Shares issued to founders
  at inception                    1,000,000   $     1,000          --            --            1,000

Sale of common stock                308,565           309       308,256          --          308,565

Net loss                               --            --            --         (16,030)       (16,030)
                                -----------   -----------   -----------   -----------    -----------

Balances at December 31, 1998     1,308,565         1,309       308,256       (16,030)       293,535

Sale of common stock                422,374           422       422,952          --          423,374

Net loss                               --            --            --         (74,482)       (74,482)
                                -----------   -----------   -----------   -----------    -----------

Balances at December 31, 1999     1,730,939         1,731       731,208       (90,512)       642,427

Net loss                               --            --            --         (57,607)       (57,607)
                                -----------   -----------   -----------   -----------    -----------

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

Net loss                               --            --            --        (352,968)      (352,968)
                                -----------   -----------   -----------   -----------    -----------

Balances at December 31, 2003     1,730,939   $     1,731       731,208      (624,647)       108,292
                                ===========   ===========   ===========   ===========    ===========
</TABLE>








See accompanying notes to financial statements.

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

                           MILLENNIA TEA MASTERS, INC.
                          (A Development Stage Company)

                            Statements of Cash Flows



                                                                                                      Cumulative
                                                                                                      Period From
                                                                                                    August 31, 1998
                                                                                                        Through
                                                                                                      December 31,
                                                                    2003               2002               2003
                                                              ---------------    ---------------    ---------------
<S>                                                           <C>                        <C>               <C>
Cash flows from operating activities:
     Net loss                                                 $      (352,968)           (61,926)          (624,647)
     Adjustments to reconcile net loss to net cash
        provided by operating activities:
          Inventory reserve                                           251,534               --              251,534
          Increase (decrease) in:
             Inventory                                                 23,093                201           (503,068)
             Accounts payable - trade                                    --               (9,711)              --
             Prepaid expenses                                            (365)            (4,060)            (4,425)
                                                              ---------------    ---------------    ---------------

                 Net cash used in operating activities                (78,706)           (75,496)          (880,606)
                                                              ---------------    ---------------    ---------------

Cash flows from investing activities:
     Net cash advanced from affiliates                                 82,196             73,849            151,166
                                                              ---------------    ---------------    ---------------

                 Net cash  provided by investing activities            82,196             73,849            151,166
                                                              ---------------    ---------------    ---------------

Cash flows from financing activities:
     Proceeds from sale of common stock                                  --                 --              732,939
                                                              ---------------    ---------------    ---------------

                 Net cash provided by financing activities               --                 --              732,939
                                                              ---------------    ---------------    ---------------

Increase (decrease) in cash                                             3,490             (1,647)             3,499

Cash at beginning of period                                                 9              1,656               --
                                                              ---------------    ---------------    ---------------

Cash at end of period                                         $         3,499                  9              3,499
                                                              ===============    ===============    ===============
</TABLE>




See accompanying notes to financial statements.

                                      F-5


<PAGE>

                           MILLENNIA TEA MASTERS, INC.
                          (A Development Stage company)

                          Notes to Financial Statements

                           December 31, 2003 and 2002


(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   $625,000.
Accordingly, the Company is still considered to be in the development stage.

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,  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  in  procuring  and  importing  inventory  and
developing  sales and  distribution  channels  since  that date.  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   $625,000  which  includes  an
inventory reserve of $251,534.  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-6
<PAGE>

                           MILLENNIA TEA MASTERS, INC.
                          (A Development Stage Company)

                          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-7
<PAGE>

                           MILLENNIA TEA MASTERS, INC.
                          (A Development Stage Company)

                          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, 2003 and 2002,  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, 2003 and 2002  deferred  tax assets are related
               solely  to the  Company's  net  operating  loss  carryforward  of
               approximately   $600,000  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, 2003 and
               2002, the Company had no warrants and/or options outstanding.

(4)      Inventory

During  the final  quarter  of the year  ended  December  31,  2003,  management
recorded an  inventory  reserve of  $251,534.  The reserve has been  established
primarily  as a result of lower than  expected  levels of sales  volume over the
last two years.  The  relatively  small sales volume  result from the  Company's
limited marketing resources and distribution capabilities.  As a result of these
factors management may find it necessary,  for working capital purposes, to sell
its inventory at prices substantially below its carrying value. While management
expects  sales  volume  to  increase  in 2004  there  can be no  assurance  that
projected levels of revenue will be achieved.




                                      F-8
<PAGE>

                           MILLENNIA TEA MASTERS, INC.
                          (A Development Stage Company)

                          Notes to Financial Statements


(5)      Related Party Transactions
         --------------------------

As of  December  31,  2003,  the  Company  has a net  payable to two  affiliated
entities of  $151,166.  These  advances are  unsecured,  due upon demand and are
non-interest bearing.

(6)      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, 2004.  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               12-31-04
                  Renewal option                None
                  Contingent rents              No
                  Initial rent                  $3,750 per month
                  Escalation                    None

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, 2003:

                 Year Ending December 31,         Amount
                 ------------------------         ------

                           2004                  $ 45,000


















                                      F-9
<PAGE>
<TABLE>
<CAPTION>

                           MILLENNIA TEA MASTERS, INC.
                          (A Development Stage Company)

                          Notes to Financial Statements


(7)      Selected Financial Data (Unaudited)
         -----------------------------------

The following is a summary of the quarterly  results of operations for the years
ended December 31, 2003 and 2002, respectively:

                                  Quarter ended     Quarter ended      Quarter ended       Quarter ended     Year ended
                                    March 31,          June 30,        September 30,       December 31,     December 31,
                                    ---------          --------        -------------       ------------     ------------
<S>                                <C>                      <C>            <C>                  <C>              <C>
                  2003
                  ----

Net revenues                       $        60              724            4,291                3,603            8,678
Net loss                               (11,747)         (19,879)         (21,995)            (299,347)        (352,968)
Basic loss per share                     (0.01)           (0.01)           (0.01)               (0.17)           (0.20)
Weighted-average number of
   shares issued and outstanding     1,730,939        1,730,939        1,730,939            1,730,939        1,730,939

                  2002
                  ----

Net revenues                       $        96              150              276                  496            1,018
Net loss                               (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
</TABLE>





































                                      F-10