<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
------------------                                   ----------------------
September 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 November 1, 2004


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                             TABLE OF CONTENTS

                                                                            PAGE
PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

(a)      Balance Sheets                                                       4
(b)      Statements of Operations                                             5
(c)      Statements of Shareholders' Equity                                   6
(d)      Statement of Cash Flows                                              7
(e)      Notes to Financial Statements                                        8

Item 2.  Management's Discussion and Analysis
         of Financial Condition and Results of Operations                     9

Item 3.  Controls and Procedures                                             10

PART II. OTHER INFORMATION                                                   11

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                                                                   12


                                       1
<PAGE>


                         HOUSTON OPERATING COMPANY, INC.

                              Financial Statements
               For the Three Month Period Ended September 30, 2004
                                   (Unaudited)


                                       2
<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 September 30, 2004 and the related statements of operations for the
three month and nine month period ended September 30, 2004 and 2003, and the
cash flows for the nine months ended September 30, 2004 and 2003 included in the
accompanying Securities and Exchange Commission Form 10-QSB for the period ended
September 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.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2, conditions
exist which raise substantial doubt about the Company's ability to continue as a
going concern unless it is able to generate sufficient cash flows to meet its
obligations and sustain its operations. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.

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
September 30, 2004 is fairly stated in all material respects in relation to the
balance sheet from which it has been derived.


/s/ Michael Johnson & Co., LLC.
Denver, Colorado
November 4, 2004


                                       3
<PAGE>

                         HOUSTON OPERATING COMPANY, INC.
                                 BALANCE SHEETS
                                   (Unaudited)


                                                   September 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' DEFICIT
CURRENT LIABILITIES:
  Accounts payable and accrued expenses            $    13,449      $     9,733
  Advances from shareholders'                           32,640           19,613
                                                   ------------     ------------
    Total Current Liabilities                           46,089           29,346
                                                   ------------     ------------


STOCKHOLDERS' 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                                     (86,716)         (71,443)
                                                   ------------     ------------

TOTAL STOCKHOLDERS' DEFICIT                            (40,571)         (25,298)
                                                   ------------     ------------

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

                        See accountant's review report.

                                       4
<PAGE>


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


                                               Three Months Ended                 Nine Months Ended
                                                  September 30,                     September 30,
                                         -----------------------------     -----------------------------
                                             2004             2003             2004             2003
                                         ------------     ------------     ------------     ------------

<S>                                      <C>              <C>              <C>              <C>
REVENUES:                                $        --      $        --      $        --      $        --

OPERATING EXPENSES:
  Sales and marketing                             --               --               --               --
  General and administrative                    (669)           5,224           13,421           18,350
                                         ------------     ------------     ------------     ------------
Total Operating Expenses                        (669)           5,224           13,421           18,350
                                         ------------     ------------     ------------     ------------

Net Loss from Operations                         669           (5,224)         (13,421)         (18,350)
                                         ------------     ------------     ------------     ------------

Other Income and expenses:
  Interest income                                 --               --               --               --
  Interest expense                              (653)              --           (1,852)              --
  Other                                           --               --               --           19,298
                                         ------------     ------------     ------------     ------------
                                                (653)              --           (1,852)          19,298
                                         ------------     ------------     ------------     ------------

NET LOSS                                 $        16      $    (5,224)     $   (15,273)     $       948
                                         ============     ============     ============     ============

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     $        --      $        --      $        --      $        --
                                         ============     ============     ============     ============

                                     See accountant's review report.


                                                    5
</TABLE>
<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                      --            --            --       (15,273)       (15,273)
                                  ----------    ----------    ----------    ----------     ----------
Balance - September 30, 2004      7,795,171     $   7,795     $  38,350     $ (86,716)     $ (40,571)
                                  ----------    ----------    ----------    ----------     ----------

                                   See accountant's review report.


                                                  6
</TABLE>
<PAGE>


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


                                                            Nine Months Ended
                                                              September 30,
                                                         -----------------------
                                                           2004          2003
                                                         ---------     ---------

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net (Loss)                                             $(15,273)     $    948
  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)       (4,024)
    Increase in accounts payable                            3,716         2,845
                                                         ---------     ---------
                                                            2,097       (20,477)
                                                         ---------     ---------
Net Cash Used in Operating Activities                     (13,176)      (19,529)
                                                         ---------     ---------

CASH FLOW FROM FINANCING ACTIVITIES:
  Advances from Stockholders                               13,027        19,365
  Issuance of Common Stock                                     --            --
                                                         ---------     ---------
  Net Cash Provided By Financing Activities                13,027        19,365
                                                         ---------     ---------

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.


                                       7
<PAGE>


                         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 September 30, 2004, and the results of operations for
         the three month and nine months ended September 30, 2004 and 2003, and
         cash flows for the nine months ended September 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 $86,716.

         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.


                                       8
<PAGE>

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 SEPTEMBER
30, 2004 COMPARED TO QUARTER ENDED SEPTEMBER 30, 2003.

The Company had no revenues or operations for the three month period in 2004 or
2003. The Company incurred $(669) in general and administrative expenses in the
quarter ended September 30, 2004 and $5,224 in the same period in 2003. The net
loss for the three month period was $16 in 2004 and $(5,224) 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.


                                       9

<PAGE>


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 September 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


                                       10

<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) Exhibit No.        Description
    -----------        -----------
    Exhibit 31         CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF
                       FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE
                       SARBANES-OXLEY ACT

    Exhibit 32         CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF
                       FINANCIAL OFFICER PURSUANT TO SECTION 906 OF THE
                       SARBANES-OXLEY ACT

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


                                       11

<PAGE>


                                   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: November 4, 2004

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


                                       12