<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549

                                   FORM 10-QSB

                  Quarterly Report under Section 13 or 15(d) of
                       the Securities Exchange Act of 1934

For Quarter Ended                                 Commission File Number
-----------------                                 ----------------------
June 30, 2004                                            000-31553

                            HOUSTON OPERATING COMPANY
                       ----------------------------------
             (Exact name of registrant as specified in its charter)

            Delaware                                     76-0307819
--------------------------------                      -------------------
     (State of incorporation)                           (I.R.S. Employer
                                                       Identification No.)

       610 Newport Center Drive, Suite 1400, Newport Beach, CA 92660
       --------------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code:  (949) 760-6832

Indicate by check mark whether the registrant (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 the filing
requirements for at least the past 90 days.

                                    Yes [X]     No [ ]

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

                7,795,172 common shares as of August 1, 2004



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                             TABLE OF CONTENTS                 PAGE

PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

(a)      Balance Sheets                                          3
(b)      Statements of Operations                                4
(c)      Statements of Shareholders' Equity                      5
(d)      Statement of Cash Flows                                 6
(e)      Notes to Financial Statements                           7

Item 2.  Management's Discussion and Analysis
         of Financial Condition and Results of Operations        8

Item 3. Controls and Procedures                                  9

PART II. OTHER INFORMATION                                       10
Item 1.  Legal Proceedings

Item 2.  Changes in Securities and Use of Proceeds

Item 3.  Defaults On Senior Securities

Item 4.  Submission of Items to a Vote

Item 5.  Other Information

Item 6.

(a) Exhibits (b) Reports on Form 8K

SIGNATURES                                                       11


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                         HOUSTON OPERATING COMPANY, INC.

                              Financial Statements
                  For the Six Month Period Ended June 30, 2004
                                   (Unaudited)

<PAGE>


           REPORT ON REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT


To the Board of Directors
Houston Operating Company, Inc.

We have reviewed the accompanying balance sheet of Houston Operating Company,
Inc. as of June 30, 2004 and the related statements of operations for the three
month and six months period ended June 30, 2004 and 2003, and the cash flows for
the six months ended June 30, 2004 and 2003 included in the accompanying
Securities and Exchange Commission Form 10-QSB for the period ended June 30,
2004. These financial statements are the responsibility of the Company's
management.

We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with auditing standards in the United States of America and standards
of PCAOB, the objective of which is the expression of an opinion regarding the
financial statements as a whole. Accordingly, we do not express such an opinion.

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

We have previously audited, in accordance with auditing standards generally
accepted in the United States of America, the balance sheet as of December 31,
2003, and the related statements of operations, stockholders' equity and cash
flows for the year then ended (not presented herein). In our report dated March
18, 2004, we expressed an unqualified opinion on those financial statements. In
our opinion, the information set forth in the accompanying balance sheet as of
June 30, 2004 is fairly stated in all material respects in relation to the
balance sheet from which it has been derived.



Michael Johnson & Co., LLC.
Denver, Colorado
August 11, 2004


<PAGE>

                        HOUSTON OPERATING COMPANY, INC.
                                 BALANCE SHEETS
                                  (Unaudited)


                                                         June 30,   December 31,
                                                           2004        2003
                                                        ---------    ---------
ASSETS:
CURRENT ASSETS:
  Cash                                                  $     --     $    149
  Prepaid expenses                                         5,518        3,899
                                                        ---------    ---------
     Total Current Assets                                  5,518        4,048
                                                        ---------    ---------

TOTAL ASSETS                                            $  5,518     $  4,048
                                                        =========    =========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
  Accounts payable and accrued expenses                 $ 17,507     $  9,733
  Advances from shareholders'                             31,828       19,613
                                                        ---------    ---------
    Total Current Liabilities                             49,335       29,346
                                                        ---------    ---------


STOCKHOLDERS' EQUITY (DEFICIT):
  Common stock, $.001 par value; 50,000,000
    shares authorized; 7,795,171 shares issued
     and outstanding, respectively                         7,795        7,795
  Additional paid-in capital                              38,350       38,350
  Retained deficit                                       (89,962)     (71,443)
                                                        ---------    ---------

TOTAL STOCKHOLDERS' EQUITY (DEFICIT)                     (43,817)     (25,298)
                                                        ---------    ---------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)    $  5,518     $  4,048
                                                        =========    =========

                        See accountant's review report.

                                       3
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<TABLE>

                                            HOUSTON OPERATING COMPANY, INC.
                                                STATEMENTS OF OPERATIONS
                                                      (Unaudited)


                                                 Three Months Ended                  Six Months Ended
                                                     June 30,                            June 30,
                                          ------------------------------      ------------------------------
                                              2004              2003             2004               2003
                                          ------------      ------------      ------------      ------------
<S>                                       <C>               <C>               <C>               <C>
REVENUES:                                 $        --       $        --       $        --       $        --

OPERATING EXPENSES:
  Sales and marketing                              --                --                --                --
  General and administrative                    6,634            13,035            17,320            13,126
                                          ------------      ------------      ------------      ------------
Total Operating Expenses                        6,634            13,035            17,320            13,126
                                          ------------      ------------      ------------      ------------

Net Loss from Operations                       (6,634)          (13,035)          (17,320)          (13,126)
                                          ------------      ------------      ------------      ------------

Other Income and expenses:
  Interest income                                  --                --                --                --
  Interest expense                               (627)               --            (1,199)               --
  Other                                            --            19,298                --            19,298
                                          ------------      ------------      ------------      ------------
                                                 (627)           19,298            (1,199)           19,298
                                          ------------      ------------      ------------      ------------

NET LOSS                                  $    (7,261)      $     6,263       $   (18,519)      $     6,172
                                          ============      ============      ============      ============

Weighted average number of
  shares outstanding                        7,795,171         7,795,171         7,795,171         7,795,171
                                          ============      ============      ============      ============

Basic and diluted net loss per share      $        --       $        --       $        --       $        --
                                          ============      ============      ============      ============
</TABLE>

                                            See accountant's review report.

                                                           4
<PAGE>
<TABLE>

                                                 HOUSTON OPERATING COMPANY, INC.
                                          STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                                           (Unaudited)


                                                         Common Stock               Additional
                                                      -------------------------      Paid-In       Accumulated
                                                        Shares         Amount        Capital         Deficit         Totals
                                                      ----------     ----------     ----------     ----------      ----------
<S>                                                  <C>            <C>            <C>            <C>             <C>
Balance -  December 31, 1997                          2,795,171      $   2,795      $  28,820      $ (38,874)      $  (7,259)

Net loss for period                                          --             --             --         (1,725)         (1,725)
                                                      ----------     ----------     ----------     ----------      ----------
Balance - December 31, 1998                           2,795,171          2,795         28,820        (40,599)         (8,984)
                                                      ----------     ----------     ----------     ----------      ----------

Conversion of loan payable to additional paid-in
 capital                                                     --             --          9,530             --           9,530
Net loss for year                                            --             --             --         (1,000)         (1,000)
                                                      ----------     ----------     ----------     ----------      ----------
Balance - December 31, 1999                           2,795,171          2,795         38,350        (41,599)           (454)
                                                      ----------     ----------     ----------     ----------      ----------

Stock issuance for cash                               1,000,000          1,000             --             --           1,000
Stock issuance for services                           4,000,000          4,000             --             --           4,000
Net loss for year                                            --             --             --         (7,254)         (7,254)
                                                      ----------     ----------     ----------     ----------      ----------
Balance - December 31, 2000                           7,795,171          7,795         38,350        (48,853)         (2,708)
                                                      ----------     ----------     ----------     ----------      ----------

Net loss for year                                            --             --             --         (7,051)         (7,051)
                                                      ----------     ----------     ----------     ----------      ----------
Balance - December 31, 2001                           7,795,171          7,795         38,350        (55,904)         (9,759)
                                                      ----------     ----------     ----------     ----------      ----------

Net loss for year                                            --             --             --         (9,226)         (9,226)
                                                      ----------     ----------     ----------     ----------      ----------
Balance - December 31, 2002                           7,795,171          7,795         38,350        (65,130)        (18,985)
                                                      ----------     ----------     ----------     ----------      ----------

Net loss for year                                            --             --             --         (6,313)         (6,313)
                                                      ----------     ----------     ----------     ----------      ----------
Balance - December 31, 2003                           7,795,171          7,795         38,350        (71,443)        (25,298)
                                                      ----------     ----------     ----------     ----------      ----------

Net loss for period                                          --             --             --        (18,519)        (18,519)
                                                      ----------     ----------     ----------     ----------      ----------
Balance - June 30, 2004                               7,795,171      $   7,795      $  38,350      $ (89,962)      $ (43,817)
                                                      ----------     ----------     ----------     ----------      ----------
</TABLE>
                                                 See accountant's review report.

                                                                5
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                         HOUSTON OPERATING COMPANY, INC.
                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                            Six Months Ended
                                                                June 30,
                                                        ------------------------
                                                          2004           2003
                                                        ---------      ---------

Cash Flows From Operating Activities:
  Net (Loss)                                            $(18,519)      $  6,172
  Adjustments to reconcile net loss to net cash
    used in operating activities:
   Forgiveness of debt                                        --        (19,298)
   Changes in assets and liabilities:
    Increase in prepaid expenses                          (1,619)        (4,899)
    Increase in accounts payable and accrued expenses      7,774             --
                                                        ---------      ---------
                                                           6,155        (24,197)
                                                        ---------      ---------
Net Cash Used in Operating Activities                    (12,364)       (18,025)
                                                        ---------      ---------

Cash Flow From Financing Activities:
  Advances from shareholders                              12,215         17,861
  Issuance of common stock                                    --             --
                                                        ---------      ---------
  Net Cash Provided By Financing Activities               12,215         17,861
                                                        ---------      ---------

Increase (Decrease) in Cash                                 (149)          (164)

Cash and Cash Equivalents - Beginning of period              149            313
                                                        ---------      ---------

Cash and Cash Equivalents - End of period               $     --       $    149
                                                        =========      =========

Supplemental Cash Flow Information:
  Interest paid                                         $     --       $     --
                                                        =========      =========
  Taxes paid                                            $     --       $     --
                                                        =========      =========

                        See accountant's review report.


                                       6
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                         HOUSTON OPERATING COMPANY, INC.
                          NOTES TO FINANCIAL STATEMENTS


1.       PRESENTATION OF INTERIM INFORMATION

         In the opinion of the management of Houston Operating Company, Inc.,
         the accompanying unaudited financial statements include all normal
         adjustments considered necessary to present fairly the financial
         position as of June 30, 2004, and the results of operations for the
         three month and six months ended June 30, 2004 and 2003, and cash flows
         for the six months ended June 30, 2004 and 2003. Interim results are
         not necessarily indicative of results for a full year.

         The financial statements and notes are presented as permitted by Form
         10-QSB, and do not contain certain information included in the
         Company's audited financial statements and notes for the fiscal year
         ended December 31, 2003.


2.       GOING CONCERN

         The accompanying financial statements have been prepared in conformity
         with accounting principles generally accepted in the United States,
         which contemplates continuation of the Company as a going concern. The
         Company's operations generated no income during the current period
         ended and the Company's deficit is $89,962.

         The future success of the Company is likely dependent on its ability to
         attain additional capital to develop its proposed products and
         ultimately, upon its ability to attain future profitable operations.
         There can be no assurance that the Company will be successful in
         obtaining such financing, or that it will attain positive cash flow
         from operations.


                                       7


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Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS PRELIMINARY
        NOTE REGARDING FORWARD-LOOKING STATEMENTS

Statements contained in this Plan of Operation of this Quarterly Report on Form
10-QSB include "forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933 as amended (the "Securities Act") and Section 21E of
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Forward-looking statements involve known and unknown risks, uncertainties and
other factors which could cause the actual results of the Company (sometimes
referred to as "we", "us" or the "Company"), performance (financial or
operating) or achievements expressed or implied by such forward-looking
statements not to occur or be realized. Such forward-looking statements
generally are based upon the Company's best estimates of future results, general
merger and acquisition activity in the marketplace, performance or achievement,
based upon current conditions and the most recent results of operations.
Forward-looking statements may be identified by the use of forward-looking
terminology such as "may," "will," "project," "expect," "believe," "estimate,"
"anticipate," "intends," "continue", "potential," "opportunity" or similar
terms, variations of those terms or the negative of those terms or other
variations of those terms or comparable words or expressions. (See the Company's
Form 10SB for a description of certain of the known risks and uncertainties of
the Company.)

RESULTS OF OPERATION FOR THE QUARTER ENDED JUNE
30, 2004 COMPARED TO QUARTER ENDED JUNE 30, 2003.

The Company had no revenues or operations for the three month period in 2004 or
2003. The Company incurred $91 in miscellaneous expenses in the period in 2003
and no expenses in the period in 2002. The net loss for the three month period
was ($7,261) in 2004 and $6,263 in 2003.

LIQUIDITY AND CAPITAL RESOURCES

The Company does not have capital sufficient to meet the Company's cash needs,
including the costs of compliance with the continuing reporting requirements of
the Securities and Exchange Act of 1934. The Company will have to seek loans or
equity placements to cover such cash needs. In the event the Company is able to
complete a business combination during this period, lack of its existing capital
may be a sufficient impediment to prevent it from accomplishing the goal of
completing a business combination. There is no assurance, however, that without
funds it will ultimately allow registrant to complete a business combination.
Once a business combination is completed, the Company's needs for additional
financing are likely to increase substantially.

Irrespective of whether the Company's cash assets prove to be inadequate to meet
the Company's operational needs, the Company might seek to compensate providers
of services by issuances of stock in lieu of cash.

                                       8


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ITEM 3. CONTROLS AND PROCEDURES.

The Company has disclosure controls and procedures (as defined in Rules 13a-14
and 15d-14 under the Securities Exchange Act of 1934, as amended) to ensure that
material information contained in its filings with the Securities and Exchange
Commission is recorded, processed, summarized and reported on a timely and
accurate basis. Based on such evaluation as of June 30, 2004, the Company's
principal executive officer and principal financial officer have concluded that
the Company's disclosure controls and procedures are effective at ensuring that
material information is recorded, processed, summarized and reported on a timely
and accurate basis in the Company's filings with the Securities and Exchange
Commission. Since such evaluation there have not been any significant changes in
the Company's internal controls, or in other factors that could significantly
affect these controls

                                       9


<PAGE>

                           PART II - OTHER INFORMATION

PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS- NONE

ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS-NONE

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES- NONE

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS- NONE

ITEM 5 - OTHER INFORMATION- NONE

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits      Exhibit No.       Description
    --------     -----------        -----------
                 Exhibit 99.1       CERTIFICATION OF CHIEF EXECUTIVE OFFICER
                                    AND CHIEF FINANCIAL OFFICER

(b)      Reports on Form 8-K No reports on Form 8-K were filed during the
         quarter ended June 30, 2004.

                                       10


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                                   SIGNATURES

         In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                     HOUSTON OPERATING COMPANY
                                     Date: August 22, 2004

                                     By /s/ Low Chin Sin
                                     --------------------------------------
                                     President and Chief Financial Officer
                                     (PRINCIPAL EXECUTIVE AND FINANCIAL OFFICER)

                                       11