U.S. SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB


(Mark One)
 [X]      ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934

                    For Fiscal Year Ended: December 31, 2003

                                       or

 [  ]       TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934

                        For the transition period from To


                        Commission file number 000-28095

                             MCCARTHY GRENACHE, INC.
                 (Name of small business issuer in its charter)

            Nevada                                                88-0412635
-------------------------------                             --------------------
State or other jurisdiction of                                 (I.R.S. Employer
incorporation or organization                                Identification No.)

            1516 E. Tropicana Ave. Suite 195, Las Vegas, Nevada 89119
 -------------------------------------------------------------------------------
               (Address of principal executive offices) (Zip code)


Issuer's telephone number                      (702) 597-9447/2786
                                              --------------------

Securities registered under Section 12(b) of the Act: NONE Securities registered
under Section 12(g) of the Act:

                                          Common Stock, $0.001 Par Value
                                                 (Title of class)

         Check whether the issuer (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the registrant was



<PAGE>



required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes X No

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

         State issuer's revenues for its most recent fiscal year. $ 9,000

         As of March 16, 2004, there were 15,739,000  shares of the Registrant's
common stock,  par value $0.001,  issued and  outstanding.  The aggregate market
value of the Registrant's  voting stock held by non-affiliates of the Registrant
was N/A. There has been no trading market for the common stock.


                       DOCUMENTS INCORPORATED BY REFERENCE

         If the following  documents  are  incorporated  by  reference,  briefly
describe them and identify the part of the Form 10-KSB  (e.g.,  Part I, Part II,
etc.) into which the document is incorporated: (1) any annual report to security
holders;  (2) any proxy or information  statement;  and (3) any prospectus filed
pursuant to Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act"):

The  Company's  Form  10-SB/A,  filed on February  29,  2000,  and the  exhibits
attached thereto, are incorporated by reference.

         Transitional Small Business Disclosure Format (check one): Yes ; NO X


















                                        2

<PAGE>



                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
Item Number and Caption                                                                                           Page

PART I

<S>               <C>                                                                                             <C>
Item 1.           Description of Business.........................................................................4

Item 2.           Description of Property.........................................................................6

Item 3.           Legal Proceedings...............................................................................7

Item 4.           Submission of Matters to a Vote of Security Holders.............................................7


PART II

Item 5.           Market for Common Equity and Related Stockholder Matters........................................7

Item 6.           Management's Discussion and Analysis or Plan of Operations......................................8

Item 7.           Financial Statements...........................................................................11

Item 8.           Changes in and Disagreements With Accountants on Accounting and
                  Financial Disclosure...........................................................................12

PART III

Item 9.           Directors, Executive Officers, Promoters and Control Persons;
                  Compliance with Section 16(a) of the Exchange Act..............................................12

Item 10.          Executive Compensation.........................................................................14

Item 11.          Security Ownership of Certain Beneficial Owners and Management.................................14

Item 12.          Certain Relationships and Related Transactions.................................................15

Item 13.          Exhibits and Reports on Form 8-K...............................................................15

Item 14           Controls and Procedures........................................................................16

Item 15.          Principal Accountant Fees and Services.........................................................16
</TABLE>

                                        3

<PAGE>



                                     PART I

                         ITEM 1 DESCRIPTION OF BUSINESS


General

         On December 31, 2003, the Company entered into an agreement and plan of
reorganization  with Bonanza  Realty,  LLC that involved the  abandonment of the
Company's previous business plan.

         The Company's current  principal  business activity is an investment in
approximately  2.7 acres of land for the  purpose  of selling  or  developing  a
senior  citizen  residential  project,  which is proposed to include about three
hundred and twenty six units of senior citizen assisted living  apartments,  and
approximately 20,000 square feet of commercial space in Las Vegas, Nevada.

History

         McCarthy  Grenache,  Inc., (the "Issuer" or "Company") was incorporated
under the laws of the State of Nevada on  December  19,  1997.  The  Company was
formed by Gregorian  Surgical  Instruments,  Inc.  ("Gregorian").  Gregorian,  a
corporation formed under the laws of the Province of British Columbia, Canada in
November of 1997 was the predecessor  parent company.  On December 26, 1997, the
stockholders of Gregorian  approved an exchange of all of the outstanding  stock
in  Gregorian  for an equal number of shares of McCarthy  Grenache,  Inc. At the
time of the exchange there were 4,942,000  Gregorian  shares  outstanding  which
resulted in the issuance of 4,942,000 shares of McCarthy  Grenache,  Inc. common
stock at a par value of $.001 per share for a total of $4,942.  On December  31,
2003,  the Company  entered into an agreement  and plan of  reorganization  with
Bonanza Realty,  LLC. The Company issued  5,300,000  shares in exchange for 100%
ownership of Bonanza. Both of these transactions were accounted for as a reverse
merger.

         The Company's  authorized  capital stock is 25,000,000 shares of common
stock, par value $0.001 per share.

         The executive  offices of the Company are located at 1516 E.  Tropicana
Ave  Suite  195,  Las  Vegas,  Nevada  89119.  Its  telephone  number  is  (702)
597-9447/2786 Fax (702) 597-9689

Competition

         The Company expects to encounter substantial competition in its efforts
to  locate  attractive   opportunities,   primarily  from  business  development
companies,  venture  capital  partnerships  and  corporations,  venture  capital
affiliates  of  large  industrial  and  financial  companies,  small  investment
companies,   and  wealthy   individuals.   Many  of  these  entities  will  have
significantly greater experience, resources and managerial capabilities than the
Company and will  therefore be in a better  position  than the Company to obtain
access to attractive real estate development opportunities.

                                        4

<PAGE>



OPERATING LOSSES

         The Company has incurred net operating losses of approximately  $16,000
for the fiscal year ended  December  31, 2003.  Such  operating  losses  reflect
developmental and other start-up activities. The Company expects to incur losses
in the near future until profitability is achieved. The Company's operations are
subject  to  numerous  risks  associated  with  establishing  any new  business,
including  unforeseen  expenses,  delays  and  complications.  There  can  be no
assurance that the Company will achieve or sustain profitable operations or that
it will be able to remain in business.

FUTURE CAPITAL NEEDS AND UNCERTAINTY OF ADDITIONAL FUNDING

         Revenues  are not yet  sufficient  to support the  Company's  operating
expenses.  Since the  Company's  formation,  it has  funded its  operations  and
capital  expenditures  primarily  through private  placements of debt and equity
securities.  See "Recent Sales of Unregistered  Securities." The Company expects
that it will be required to seek additional  financing in the future.  There can
be no  assurance  that such  financing  will be available at all or available on
terms acceptable to the Company.

GOVERNMENT REGULATION

         The Company is subject to all pertinent Federal,  State, and Local laws
governing its business.  The Company is subject to licensing and regulation by a
number of authorities in its State or  municipality.  These may include  health,
safety,  and fire  regulations.  The  Company's  operations  are also subject to
Federal and State minimum wage laws governing such matters as working conditions
and overtime.

RISK OF LOW-PRICED STOCKS

         Rules 15g-1 through 15g-9 promulgated under the Securities Exchange Act
of 1934 (the "Exchange  Act") impose sales practice and disclosure  requirements
on certain brokers and dealers who engage in certain  transactions  involving "a
penny stock."

         Currently,  the Company's  Common Stock is considered a penny stock for
purposes of the  Exchange  Act. The  additional  sales  practice and  disclosure
requirements imposed on certain brokers and dealers could impede the sale of the
Company's  Common  Stock  in the  secondary  market.  In  addition,  the  market
liquidity for the Company's securities may be severely adversely affected,  with
concomitant adverse effects on the price of the Company's securities.

         Under the penny stock  regulations,  a broker or dealer  selling  penny
stock to anyone  other than an  established  customer or  "accredited  investor"
(generally,  an  individual  with net worth in excess  of  $1,000,000  or annual
incomes  exceeding  $200,000,  or $300,000 together with his or her spouse) must
make a special suitability  determination for the purchaser and must receive the
purchaser's  written consent to the transaction prior to sale, unless the broker
or dealer or the

                                        5

<PAGE>



transaction  is  otherwise  exempt.  In  addition,  the penny stock  regulations
require the broker or dealer to deliver,  prior to any  transaction  involving a
penny  stock,  a disclosure  schedule  prepared by the  Securities  and Exchange
Commission (the "SEC") relating to the penny stock market,  unless the broker or
dealer  or the  transaction  is  otherwise  exempt.  A broker  or dealer is also
required  to  disclose  commissions  payable  to the  broker or  dealer  and the
registered   representative  and  current  quotations  for  the  Securities.  In
addition,  a broker or dealer is required to send monthly statements  disclosing
recent  price  information  with respect to the penny stock held in a customer's
account and information with respect to the limited market in penny stocks.

EMPLOYEES

         The  Company's  only  employee at the present time is its sole officer,
who will  devote as much time as he  determines  is  necessary  to carry out the
affairs of the Company.


                         ITEM 2 DESCRIPTION OF PROPERTY


         The Company through its wholly owned subsidiary owns  approximately 2.7
acres of land on which the Company  proposes to sell or develop a senior citizen
residential project, which will include about three hundred and twenty six units
of senior citizen apartments, and approximately 20,000 square feet of commercial
space  located at 634 North Main  Street,  Las Vegas,  Nevada.  The property was
purchased for $902,020 and contains a small  warehouse that is being rented on a
month to month  bases for $750 per  month.  The  property  is subject to a first
mortgage  with  monthly  payment  of $4,000 due  September  1, 2006 at 5.75% and
additional encumbrances to secure other debt.

         In the opinion of management,  all properties  owned by the Company are
adequately insured.


                            ITEM 3 LEGAL PROCEEDINGS


         The  Company  is not  engaged in any legal  proceedings  other than the
ordinary routine  litigation  incidental to its business  operations,  which the
Company does not believe, in the aggregate,  will have a material adverse effect
on the Company, or its operations.


                        ITEM 4 SUBMISSION OF MATTERS TO A
                            VOTE OF SECURITY HOLDERS


         No matters were subject to a vote of security  holders  during the year
December 31, 2003.

                                        6

<PAGE>



                                     PART II

                       ITEM 5 MARKET FOR COMMON EQUITY AND
                           RELATED STOCKHOLDER MATTERS


MARKET INFORMATION

         The   Company's   common   stock  is  not   currently   quoted  on  the
over-the-counter.  There is no market  for the  Company's  stock at the  present
time.

         The  Company's  common stock is  considered  a "penny  stock" under the
Commission  rules.  It is the intention of the Company to create a market of its
shares via the Bulletin Board.

DIVIDENDS

         The  Company  has not  paid  any  cash  dividends  to date and does not
anticipate  paying  dividends  in the  foreseeable  future.  It is  the  present
intention of management to utilize all available  funds for the  development  of
the Company's business.

         The number of shareholders  of record of the Company's  Common Stock as
of March 16, 2004 was approximately 54.


RECENT SALES OF UNREGISTERED SECURITIES

         In December 1997, the Company issued  4,942,000  shares of Common Stock
in  connection  with the  reorganization  and  exchange  of shares only with the
shareholders of Gregorian,  the predecessor  company, on a share for share basis
with no cash or other consideration,  pursuant to an exemption from registration
under Section 4(2) of the Securities Act of 1933, as amended.  These shares were
valued at the par value of $.001 per share.  Following  the  exchange of shares,
the value of the shares of the subsidiary was written off in the period in which
the subsidiary was liquidated.  The Company recognized a loss of $4,942 pursuant
to this transaction.

         In December  1997, the Company issued 40,000 shares of Common Stock for
cash proceeds of $4,000 in a private transaction,  pursuant to an exemption from
registration under Section 4(2) of the Securities Act of 1933, as amended.

         In February  1998, the Company issued 60,000 shares of Common Stock for
cash proceeds of $6,000 in a private transaction,  pursuant to an exemption from
registration under Section 4(2) of the Securities Act of 1933, as amended.

         In September 2001, the Company issued 80,000 shares of Common Stock for
cash proceeds

                                        7

<PAGE>



of $20,000 in a private transaction,  pursuant to an exemption from registration
under Section 4(2) of the Securities Act of 1933, as amended.

         In December 2003, the Company issued  5,300,000  shares of Common Stock
for cash proceeds of $53,000 in a private transaction,  pursuant to an exemption
from registration under Section 4(2) of the Securities Act of 1933, as amended.

         In December 2003, the Company issued  5,300,000  shares of Common Stock
in  connection  with the  reorganization  and  exchange  of shares only with the
equity  members of Bonanza  Realty,  LLC,  recorded as a reverse merger with the
Company,  with no cash or  other  consideration,  resulting  in  Bonanza  Realty
becoming a wholly  owned  subsidiary.  The shares  were  issued  pursuant  to an
exemption from registration under Section 4(2) of the Securities Act of 1933, as
amended.

         All of the above  issuances  of  securities  were issued in reliance on
Section  4(2) of the  Securities  Act of 1933,  as  amended,  which  provides an
exemption from  registration for transactions not involving any public offering.
Each  distribution  above was very small for nominal amounts,  was made to close
friends and associates and was consistent with normal growth of a small company.
Management of the Company  believes that Section 4(2) of the  Securities  Act of
1933,  as  amended,  was enacted  with the intent to exempt such small  business
offerings from registration.


                       ITEM 6 MANAGEMENT'S DISCUSSION AND
                         ANALYSIS OR PLAN OF OPERATIONS


FORWARD-LOOKING STATEMENTS MAY NOT PROVE ACCURATE

When used in this Form 10-KSB,  the words  anticipated,  estimate,  expect,  and
similar expressions are intended to identify  forward-looking  statements.  Such
statements are subject to certain risks, uncertainties and assumptions including
the  possibility  that the Company's will fail to generate  projected  revenues.
Should  one or more of  these  risks or  uncertainties  materialize,  or  should
underlying assumptions prove incorrect,  actual results may vary materially from
those anticipated, estimated or projected.

General

         The  following   discusses  the  financial   position  and  results  of
operations of the Company.

         The Company rents  warehouse space on the property that will eventually
be torn down to make room for the proposed Senior Citizen Center.

Results of  Operations  - The  following  table set forth,  for the years  ended
December  31,  2003  and  2002,  certain  items  from  the  Company's  Condensed
Statements of Operations expressed as a

                                        8

<PAGE>



percentage of net sales.
<TABLE>
<CAPTION>
                                                     2003                2002
                                               -----------------  ------------------

<S>                                                          <C>                 <C>
Rental Income, Net                                           100.0%              100.0%
Cost of Rental Sales                                          64.7%               71.0%
                                               -----------------  ------------------

Gross Margin                                                  35.3%               29.0%

Operating Expenses                                           199.6%              111.3%
                                               -----------------  ------------------

Operating Income (Loss)                                     (164.3)%             (82.3)%

Other Income (Expense), Net                                  (19.4)%             (15.6)%
                                               -----------------  ------------------

Net Income (Loss)                                           (183.7)%             (97.9)%
                                               =================  ==================
</TABLE>

Net Rental Income

         Net  rental  income  for  Fiscal  2003  compared  to  Fiscal  2002  was
identical. The rent is on a month to month basis.

Cost of Rental Income

         Cost of rental income for Fiscal 2003 decreased  approximately  $570 or
9.03% compared to Fiscal 2002. As a percentage of rental income,  cost of rental
income  decreased  6.3% from  71.0% to 64.7%.  This  decrease  in cost of rental
income  was  primarily  due to renter  paying  all of the  utilities  in 2003 as
compared to 2002.

Operating Expenses

         Operating expenses during Fiscal 2003 increased approximately $7,900 or
79.0% compared to Fiscal 2002 from $10,000 to $17,900. As a percentage of rental
income,  operating expenses increased 88.3% from 111.3% to 199.6%. This increase
in  operating  expenses  is  attributable  to  increased  legal  and  accounting
expenses.

Liquidity and Capital Resources

         The Company  requires  working capital to fund its current  operations.
Generally the Company has adequate funds for its activities. There are no formal
commitments  from banks or other lending  sources for lines of credit or similar
short-term borrowing.  On February 24, 2004 the Company entered into a letter of
intent for the sale of real property located at 634 North Main Street,

                                        9

<PAGE>



Las Vegas,  Nevada for $3,000,000 in cash by a third party.  The letter provides
that within 5 business days after the execution of a written purchase  agreement
the buyer will deposit a $100,000 deposit that is refundable in the buyer's sole
discretion if the buyer is not satisfied  with the results of its  investigation
of the property as set forth in the letter of intent.  In addition,  the Company
is also  required to apply to the City of Las Vegas for a 180 day extension of a
special use permit  currently  expiring on November 1, 2004. The Company is also
required to continue  with  efforts to acquire FHA  221(d)(4)  financing  of the
property in the amount of  $24,000,000.  The buyer has also agreed to  cooperate
with the Company to  accomplish  a 1031  exchange.  On March 9, 2004 the Company
entered  into a soft  engagement  letter with a lender to provide  approximately
$27,000,000  as a construction  loan for the Las Vegas project.  There can be no
assurance that the Company will be able to obtain such financing.

         The Company  generates and uses cash flows  through  three  activities:
operating, investing, and financing. During 2003, operating activities used cash
of approximately  $14,000 as compared to net cash used of  approximately  $8,000
for 2002. Much of this decrease in attributable to the slowing economy.

         Cash  flows  used  in  investing  activities  is  primarily  due to the
engineering and  architectural  planning for the Senior Center of  approximately
$234,000 in 2003 and $127,000 in 2002.

         Financing  activities  provided  approximately  $291,000 primarily from
advances from a related party for 2003 and $136,000 for 2002

         Management believes that the Company's current cash and funds available
will be  sufficient  to meet capital  requirements  and short term and long term
working  capital  needs in the fiscal year ending  December 31, 2003 and beyond,
unless a  significant  acquisition  or expansion is  undertaken.  The Company is
constantly searching for potential acquisitions and/or expansion  opportunities.
However,  there are no arrangements or ongoing  negotiations for any acquisition
or expansion.  There are  negotiations for new ventures in the regular course of
business.

Inflation and Regulation

         The Company's  operations  have been, and in the near term are expected
to be,  materially  affected  by  inflation  or  changing  prices.  The  Company
encounters competition from a variety of Companies in its markets. Many of these
companies have long standing  customer  relationships  and are  well-staffed and
well financed.  The Company  believes that  competition in the its industries is
based on customer  satisfaction and production of quality products and services,
although the ability,  reputation and support of management is also significant.
The Company  does not believe that any  recently  enacted or  presently  pending
proposed  legislation  will have a  material  adverse  effect on its  results of
operations.




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<PAGE>



Factors That May Affect Future Results

         Management's  Discussion  and  Analysis  and other parts of this annual
report contain  information  based on management's  beliefs and  forward-looking
statements that involve a number of risks, uncertainties, and assumptions. There
can be no  assurance  that actual  results  will not differ  materially  for the
forward-looking  statements  as a result of various  factors,  including but not
limited to the following:

Government Regulations - The Company is subject to all pertinent Federal, State,
and Local laws  governing its business.  The Company is subject to licensing and
regulation by a number of  authorities in its State or  municipality.  These may
include health, safety, and fire regulations.  The Company's operations are also
subject to Federal and State minimum wage laws governing such matters as working
conditions and overtime.


                           ITEM 7 FINANCIAL STATEMENTS


         The  financial  statements  of the Company and  supplementary  data are
included beginning  immediately following the signature page to this report. See
Item 13 for a list of the financial statements and financial statement schedules
included.


              ITEM 8 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
                     ON ACCOUNTING AND FINANCIAL DISCLOSURE


         There are not and have not been any  disagreements  between the Company
and its  accountants  on any  matter  of  accounting  principles,  practices  or
financial statements disclosure.


                                    PART III


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


Executive Officers and Directors

The members of the Board of Directors of the Company serve until the next annual
meeting of  stockholders,  or until  their  successors  have been  elected.  The
officers serve at the pleasure of the

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<PAGE>



Board of Directors.  The following  table sets forth the name, age, and position
of each executive officer and director of the Company:

         Directors and Executive Officers.
<TABLE>
<CAPTION>
         (1)                                       (2)                               (3)
NAME and AGE                                    POSITION                         TERM OF OFFICE

<S>                              <C>                                            <C>
Haggai Ravid                     43         President & Director                Until next meeting
</TABLE>


Haggai Ravid -  During the past 5 years, Mr. Ravid has served as an Officer and
                Director of Har Meron;  05PC;  and Microbell  Technologies  In
                addition to Serving as an Officer and Director of the Company

Conflicts of Interest

         Certain  conflicts  of interest  existed at  December  31, 2003 and may
continue to exist  between the Company and its officers and directors due to the
fact that each has other business interests to which he devotes attention.  Each
officer  and  director  may  continue  to do so  notwithstanding  the fact  that
management time should be devoted to the business of the Company.

         Certain  conflicts  of interest  may exist  between the Company and its
management,  and  conflicts  may  develop in the  future.  The  Company  has not
established  policies or procedures  for the  resolution of current or potential
conflicts of  interests  between the  Company,  its  officers  and  directors or
affiliated entities.  There can be no assurance that management will resolve all
conflicts  of interest in favor of the  Company,  and failure by  management  to
conduct the  Company's  business in the  Company's  best  interest may result in
liability to the  management.  The officers and directors are accountable to the
Company as  fiduciaries,  which means that they are  required  to exercise  good
faith and integrity in handling the Company's affairs.  Shareholders who believe
that the  Company  has been  harmed by  failure of an  officer  or  director  to
appropriately  resolve any conflict of interest may,  subject to applicable rule
of  civil  procedure,  be able to bring a class  action  or  derivative  suit to
enforce their rights and the Company's rights.

Board Meetings and Committees

         The Directors  will not receive  remuneration  from the Company until a
subsequent offering has been successfully completed, or cash flow from operating
permits, all in the discretion of the Board of Directors.  Directors may be paid
their expenses, if any, of attendance at such meeting of the Board of Directors,
and may be paid a fixed  sum for  attendance  at each  meeting  of the  Board of
Directors or a stated  salary as Director.  No such payment  shall  preclude any
Director  from  serving the  Corporation  in any other  capacity  and  receiving
compensation therefor. No compensation has been paid to the Directors. The Board
of Directors may designate from among its members an

                                       12

<PAGE>



executive  committee and one or more other  committees.  No such committees have
been appointed.

Audit Committee Financial Expert

         The  Company's  board of  directors  does not have an "audit  committee
financial   expert,"  within  the  meaning  of  such  phrase  under   applicable
regulations  of the  Securities  and Exchange  Commission,  serving on its audit
committee.  The  board of  directors  believes  that all  members  of its  audit
committee are financially literate and experienced in business matters, and that
one or more  members of the audit  committee  are  capable of (i)  understanding
generally accepted accounting principles ("GAAP") and financial statements, (ii)
assessing the general  application  of GAAP  principles  in connection  with our
accounting for estimates,  accruals and reserves, (iii) analyzing and evaluating
our  financial   statements,   (iv)  understanding  our  internal  controls  and
procedures  for  financial  reporting;  and (v)  understanding  audit  committee
functions,  all of which are attributes of an audit committee  financial expert.
However,  the board of directors  believes that there is not any udit  committee
members who has obtained these  attributes  through the experience  specified in
the SEC's definition of "audit committee  financial expert." Further,  like many
small  companies,  it is  difficult  for the Company to attract and retain board
members who qualify as "audit committee financial experts, " and competition for
these  individuals  is  significant.  The board  believes that its current audit
committee is able to fulfill its role under SEC regulations despite not having a
designated "audit committee financial expert."

Compliance with Section 16(a) of the Exchange Act

         Based solely upon a review of forms 3, 4, and 5 and amendments thereto,
furnished to the Company during or respecting its last fiscal year, no director,
officer,  beneficial owner of more than 10% of any class of equity securities of
the  Company  or any other  person  known to be  subject  to  Section  16 of the
Exchange  Act of 1934,  as  amended,  failed to file on a timely  basis  reports
required by Section 16(a) of the Exchange Act for the last fiscal year.


                         ITEM 10 EXECUTIVE COMPENSATION


         None of the  executive  officer's  salary and bonus  exceeded  $100,000
during any of the Company's last two fiscal years.

         There has been no executive compensation in any form to date due to the
lack of working capital in the company.






                                       13

<PAGE>


                 ITEM 11 SECURITY OWNERSHIP OF BENEFICIAL OWNERS
                                 AND MANAGEMENT


Principal Shareholders

         The table  below sets forth  information  as to each  person  owning of
record or who was known by the Company to own  beneficially  more than 5% of the
15,739,000  shares of issued and  outstanding  Common Stock of the Company as of
December 31, 2003 and  information as to the ownership of the Company's Stock by
each of its directors and executive  officers and by the directors and executive
officers  as a group.  Except  as  otherwise  indicated,  all  shares  are owned
directly,  and the persons  named in the table have sole  voting and  investment
power with respect to shares shown as beneficially owned by them.
<TABLE>
<CAPTION>
             (1)                                     (2)                                (3)                (4)
                                                   Name and                         Amount and
                                                  Address of                         Nature of
           Title of                               Beneficial                        Beneficial          Percent of
            Class                                   Owner                              Owner              Class
----------------------------------------------------------------------------------------------------------------------

<S>                     <C>                                                              <C>                        <C>
Common Stock                    A S Holdings, LLC                                        5,300,000                  33.67%
                                10611/2Spaulding Avenue
                        West Hollywood, California 90046



Directors & Executives
                                Haggai Ravid, President & Director                       5,300,000*                 33.67%
                                10573 West Pico Blvd
                                Los Angeles, California 90064


Directors and executive                                                                  5,300,000                  33.67%
officers as a Group
</TABLE>

* The stock is registered to GR Assets, LLC which is owned by Mr. Ravid.

             ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS



         As of  December  31, 2003 A S Holdings,  LLC has  advanced  the Company
$496,340, due on

                                       14

<PAGE>



demand at 0% interest.  There have been no other  material  transactions  in the
past two years or  proposed  transactions  to which the  Company  has been or is
proposed to be a party in which any  officer,  director,  nominee for officer or
director,  or  security  holder  of more  than 5% of the  Company's  outstanding
securities is involved.

         The Company has no  promoters  other than its  executive  officers  and
directors.

                   ITEM 13. EXHIBITS, AND REPORTS ON FORM 8-K


         (a) The following documents are filed as part of this report.

1. Financial Statements                                                    PAGE

Independent Auditor's Report                                                 F-1
Consolidated Balance Sheet, December 31, 2003                                F-2
Consolidated Statements of Operations,
  For the Years Ended December 31, 2003 and 2002                             F-3
Consolidated Statements of Changes in Stockholders' Equity,
  For the Years Ended December 31, 2003 and 2002                             F-4
Consolidated Statements of Cash Flows,
  For the Years Ended December 31, 2003 and 2002                             F-5
Notes to Consolidated Financial Statements                                   F-6

2.  Financial Statement Schedules
         The following  financial statement schedules required by Regulation S-X
are included herein.

         All  Schedules  are  omitted  because  they are not  applicable  or the
required information is shown in the financial statements or notes thereto.

3.  Exhibits

         The following exhibits are included as part of this report:
Exhibit
Number            Exhibit

3        Articles of Incorporation and By-Laws. (1)

31       Certification  Pursuant  to Section  302 of the  Sarbanes-Oxley  Act of
         2002.

32       Certification  Pursuant  to Section  906 of the  Sarbanes-Oxley  Act of
         2002.

(1)  Incorporated by reference

                                       15

<PAGE>



4. Reports on Form 8-K

         On December 31, 2003 the Company  filed a report on Form 8-K  reporting
Item 2 Acquisition or Disposition of Assets.


                        ITEM 14. CONTROLS AND PROCEDURES


         The Company's Chief Executive  Officer and Chief Financial Officer have
concluded,  based on an evaluation  conducted within 90 days prior to the filing
date of this  Annual  Report  on Form 10- KSB,  that  the  Company's  disclosure
controls and  procedures  have  functioned  effectively  so as to provide  those
officers the information necessary to evaluate whether:

         (i) this Annual Report on Form 10-KSB contains any untrue  statement of
         a material fact or omits to state a material fact necessary to make the
         statements  made,  in  light  of the  circumstances  under  which  such
         statements were made, not misleading with respect to the period covered
         by this Annual Report on Form 10-KSB, and

         (ii) the financial statements, and other financial information included
         in this Annual  Report on Form 10-KSB,  fairly  present in all material
         respects the financial condition,  results of operations and cash flows
         of the  Company as of, and for,  the periods  presented  in this Annual
         Report on Form 10-KSB.

There have been no significant  changes in the Company's internal controls or in
other  factors  since  the  date of the  Chief  Executive  Officer's  and  Chief
Financial Officer's  evaluation that could  significantly  affect these internal
controls,   including  any   corrective   actions  with  regard  to  significant
deficiencies and material weaknesses.

                 ITEM 15. PRINCIPAL ACCOUNTANT FEES AND SERVICES


         The following is a summary of the fees billed to us by Robison,  Hill &
Co. for  professional  services  rendered for the yerars ended December 31, 2003
and 2002:

                            Year Ending December 31,
                               ------------------------------------------
                                      2003                   2002
                               -------------------   --------------------

Audit Fees                     $      6,280                   -
Audit-Related Fees                      -                     -
Tax Fees                               200                    -
All Other Fees                          -                     -
                               -------------------   --------------------

Total Fees                     $      6,480                   -
                               ===================   ====================


                                       16
<PAGE>

Audit Fees.  Consists of fees billed for professional  services rendered for the
audits  of  our  consolidated  financial  statements,  reviews  of  our  interim
consolidated  financial  statements  included  in  quarterly  reports,  services
performed in connection  with filings with the Securities & Exchange  Commission
and related  comfort  letters and other  services that are normally  provided by
Robison,  Hill & Co. In  connection  with  statutory and  regulatory  filings or
engagements.

Tax Fees.  Consists of fees billed for professional  services for ta compliance,
tax  advice  and tax  planning.  These  services  include  assistance  regarding
federal,  state and local tax compliance  and  consultation  in connection  with
various transactions and acquisitions.

Audit  Committee  Pre-Approval of Audit and  Permissible  Non-Audit  Services of
Independent Auditors

         The Audit Committee  (Board of Directors),  under the  responsibilities
and duties  outlined in its charter,  is to pre-approve  all audit and non-audit
services provided by the independent  auditors.  These services my include audit
services,  audit-related services, tax services and other services as allowed by
law or regulation. Pre-approval is generally provided for up to one year and any
pre- approval is detailed as to the  particular  service or category of services
and is generally  subject to a specifically  approved  amount.  The  independent
auditors  and  management  are  required  to  periodically  report  to the Audit
Committee regarding the extent of services provided by the independent  auditors
in accordance  with this  pre-approval  and the fees incurred to date. The Audit
Committee may also pre-approve particular services on a case-by-case basis.

         The Audit Committee  pre-approved 100% of the Company's 2003 audit fees
and tax  fees to the  extent  the  services  occurred  after  May 6,  2003,  the
effective date of the Securities and Exchange  Commission's  final  pre-approval
rules.


















                                       17

<PAGE>




                                   SIGNATURES


         Pursuant to the  requirements  of section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended,  the Registrant has duly caused this report to
be signed on it behalf by the undersigned, thereunto duly authorized.

                             MCCARTHY GRENACHE, INC.

Dated: March 26, 2003                       By  /S/     Haggai Ravid
                                            ------------------------------------
                                            Haggai Ravid,
                                            C.E.O. and Director

         Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf of
the Registrant and in the capacities indicated on this 26th day of March 2003.

Signatures                                  Title

/S/     Haggai Ravid
Haggai Ravid                                C.E.O. and Director
                                           (Principal Executive Officer)
                                           (Principal Financial and Accounting
                                            Officer)



















                                       18

<PAGE>
                             MCCARTHY GRENACHE, INC.


                                       -:-

                         INDEPENDENT ACCOUNTANTS' REPORT

                                DECEMBER 31, 2003







<PAGE>






                                    CONTENTS
<TABLE>
<CAPTION>
                                                                                                          Page

<S>                                                                                                       <C>
Independent Accountants' Report............................................................................F - 1

Consolidated Balance Sheet
  December 31, 2003........................................................................................F - 2

Consolidated Statements of Operations for the
  Years Ended December 31, 2003 and 2002...................................................................F - 3

Consolidated Statements of Changes in Stockholders' Equity for the
  Years Ended December 31, 2003 and 2002...................................................................F - 4

Consolidated Statements of Cash Flows for the
  Years Ended December 31, 2003 and 2002...................................................................F - 5

Notes to Consolidated Financial Statements.................................................................F - 6
</TABLE>



<PAGE>











                          INDEPENDENT AUDITOR'S REPORT


McCarthy Grenache, Inc.


         We have audited the accompanying consolidated balance sheet of McCarthy
Grenache,  Inc. as of December 31, 2003, and the related consolidated statements
of operations,  changes in stockholders' equity and cash flows for the two years
ended 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.

         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,  the  financial  statements  referred to above  present
fairly, in all material  respects,  the financial position of McCarthy Grenache,
Inc. as of December 31,  2003,  and the results of its  operations  and its cash
flows for the two years ended  December 31, 2003 in conformity  with  accounting
principles generally accepted in the United States of America.

                                                    Respectfully submitted



                                                    /s/ Robison, Hill & Co.
                                                    Certified Public Accountants


Salt Lake City, Utah
March 16, 2004



                                      F - 1

<PAGE>



                             MCCARTHY GRENACHE, INC.
                           CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
                                                                               December 31,
                                                                            ------------------
                                                                                   2003
                                                                            ------------------
ASSETS
Current Assets:
<S>                                                                         <C>
Cash and cash equivalents                                                   $           42,600
                                                                            ------------------

Fixed Assets:
Land                                                                                   893,020
Building and improvements                                                                9,000
Construction in progress                                                               362,180
                                                                            ------------------
                                                                                     1,264,200
Less Accumulated Depreciation                                                             (424)
                                                                            ------------------
      Total Fixed Assets                                                             1,263,776
                                                                            ------------------

     TOTAL ASSETS                                                           $        1,306,376
                                                                            ==================



LIABILITIES AND MEMBER'S EQUITY
Current Liabilities:
Accounts Payable                                                             $            2,119
Related Party Loans - Parent Company                                                    496,340
Current Portion Long-Term Debt                                                          755,386
                                                                             ------------------

     Total Current Liabilities                                                        1,253,845
                                                                             ------------------

Common Stock, Authorized 25,000,000 shares at $.001 par
   value, issued and outstanding 15,739,000 shares                                       15,739
Additional Paid-in Capital                                                               62,136
Retained Deficit                                                                        (25,344)
                                                                             ------------------

     Total Stockholders' Equity                                                          52,531
                                                                             ------------------

TOTAL LIABILITIES AND
   STOCKHOLDERS' EQUITY                                                      $        1,306,376
                                                                             ==================
</TABLE>





                See accompanying notes and accountants' report.



                                      F - 2

<PAGE>



                             MCCARTHY GRENACHE, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                       AND CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>




                                                                                       For The Year Ended
                                                                                          December 31,
                                                                             --------------------------------------
                                                                                    2003                2002
                                                                             ------------------  ------------------
REVENUES
<S>                                                                          <C>                 <C>
   Rental Revenues                                                           $            9,000  $            9,000

   Rental Expenses                                                                        5,821               6,389
                                                                             ------------------  ------------------

     Income from Operations                                                               3,179               2,611

EXPENSES
   General & Administrative                                                              17,964              10,022

Other Income (Expense)
   Interest                                                                               1,743               1,405
                                                                             ------------------  ------------------

NET INCOME (LOSS)                                                            $          (16,528) $           (8,816)
                                                                             ==================  ==================
</TABLE>


















                 See accompanying notes and accountants' report.


                                      F - 3

<PAGE>



                             MCCARTHY GRENACHE, INC.
            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002
<TABLE>
<CAPTION>






                                                     Common Stock             Paid-In        Retained
                                                 Shares        Par Value      Capital         Deficit
                                             --------------- -------------  ------------   -------------
<S>                                          <C>             <C>            <C>            <C>
Balance at January 1, 2002                         5,139,000 $       5,139  $     38,403   $            -

Net Loss                                                   -             -             -          (8,816)
                                             --------------- -------------  ------------   -------------

Balance at December 31, 2002                       5,139,000         5,139        38,403          (8,816)

December 1, 2003 Issuance of Stock
 for cash                                          5,300,000         5,300        47,700               -

December 31, 2003 Issuance of
  Stock in Reverse Merger                          5,300,000         5,300       (23,967)              -


Net Loss                                                   -             -             -         (16,528)
                                             --------------- -------------  ------------   -------------

Balance at December 31, 2003                      15,739,000 $      15,739  $     62,136   $     (25,344)
                                             =============== =============  ============   =============
</TABLE>














                 See accompanying notes and accountants' report.



                                      F - 4

<PAGE>



                             MCCARTHY GRENACHE, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                                       For The Year Ended
                                                                                          December 31,
                                                                             --------------------------------------
                                                                                    2003                2002
                                                                             ------------------  ------------------
Cash Flows From Operating Activities
<S>                                                                          <C>                 <C>
   Net income (loss) for the period                                          $          (16,528) $           (8,816)
Adjustments to reconcile net loss to net cash provided by
operating activities
     Depreciation                                                                           224                 200
Changes in Operating Assets and Liabilities
     Increase in Accounts Payable                                                         1,994                   -
                                                                             ------------------  ------------------
Net Cash Provided by (Used in) Operating
     Activities                                                                         (14,310)             (8,616)
                                                                             ------------------  ------------------

Cash Flows from Investing Activities
   Purchase of Land and Building                                                              -                   -
   Land Development Costs                                                              (234,433)           (127,747)
                                                                             ------------------  ------------------
Net Cash Provided by (Used in) Investing
     Activities                                                                        (234,433)           (127,747)
                                                                             ------------------  ------------------

Cash Flows From Financing Activities
   Proceeds from Loans - Related Party                                                  242,769             140,542
   Sale of Common Stock                                                                  53,000                   -
   Principle Payments on Long-term Debt                                                  (4,426)             (4,179)
                                                                             ------------------  ------------------
Net Cash Provided by (Used in) Financing
   Activities                                                                           291,343             136,363
                                                                             ------------------  ------------------

Increase (Decrease) in Cash                                                              42,600                   -
Cash at beginning of period                                                                   -                   -
                                                                             ------------------  ------------------
Cash at End of Period                                                        $           42,600  $                -
                                                                             ==================  ==================

Supplemental Disclosure of Interest and Income Taxes Paid
   Interest paid during the period                                           $           43,574  $           43,821
                                                                             ==================  ==================
   Income taxes paid during the period                                       $                -  $                -
                                                                             ==================  ==================
</TABLE>

Supplemental  Disclosure  of Non-cash  Investing and  Financing  Activities:  On
   December  31, 2003 the Company  issued  5,300,000  shares of common  stock in
   exchange for a 100% ownership interest in Bonanza Realty, LLC.


                 See accompanying notes and accountants' report.

                                      F - 5

<PAGE>



                             MCCARTHY GRENACHE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   THE YEARS ENDED DECEMBER 31, 2003 AND 2002

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         This summary of accounting policies for McCarthy Grenache, Inc. and its
100% owned  subsidiary,  Bonanza  Realty,  LLC ( the  "Company") is presented to
assist in  understanding  the Company's  financial  statements.  The  accounting
policies  conform to  generally  accepted  accounting  principles  in the United
States of America and have been  consistently  applied in the preparation of the
financial statements.

Organization

         The  Company  was  organized  under  the laws of the State of Nevada on
December 19, 1997.  The Company was formed by  Gregorian  Surgical  Instruments,
Inc. with McCarthy Grenache, Inc. as a wholly owned subsidiary.  On December 26,
1997, the  stockholders  of Gregorian  Surgical  Instruments,  Inc.  approved an
exchange of all of the outstanding stock in Gregorian Surgical Instruments, Inc.
for an equal  number of shares of  McCarthy  Grenache,  Inc.  At the time of the
exchange  there were 4,942,000  Gregorian  shares  outstanding.  On December 31,
2003,  the Company  entered into an agreement  and plan of  reorganization  with
Bonanza Realty,  LLC. The Company issued  5,300,000  shares in exchange for 100%
ownership of Bonanza. Both of these transactions were accounted for as a reverse
merger.

Nature of Business

         The  Company's   principal   business  activity  is  an  investment  in
approximately  2.7 acres of land for the purpose of developing a senior  citizen
residential project, which is proposed to include about three hundred and twenty
six units of senior citizen assisted living apartments, and approximately 20,000
square feet of commercial space in Las Vegas,  Nevada. The Company's offices are
located in the States of Nevada and California.

Principles of Consolidation

         The  consolidated  financial  statements  include  the  accounts of its
wholly  owned  subsidiary,  Bonanza  Realty,  LLC (a  Nevada  Limited  Liability
Company).  All  significant  intercompany  accounts and  transactions  have been
eliminated.

Basis of Presentation

         On  October  28,  2002  the  Bonanza  Realty,   LLC  ("LLC)"  purchased
approximately  2.7 acres of land from  Bonanza  Realty,  Inc.  ("Inc.") a Nevada
corporation at the  predecessor's  cost basis. Inc. had some common ownership at
the time of the purchase, however, management of LLC believes the purchase to be
essentially equivalent to an arms length transaction. References to December 31,
2002 are from the operations of Bonanza Realty, Inc. the "predecessor business."

                                      F - 6

<PAGE>



                             MCCARTHY GRENACHE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   THE YEARS ENDED DECEMBER 31, 2003 AND 2002
                                   (Continued)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

Cash and Cash Equivalents

         For purposes of the statement of cash flows, the Company  considers all
highly liquid debt instruments purchased with a maturity of three months or less
to be cash equivalents to the extent the funds are not being held for investment
purposes.

Income Taxes

         As of December 31,  2003,  the Company had a net  operating  loss carry
forward for income tax reporting  purposes of approximately  $16,000 that may be
offset against  future  taxable income through 2017.  Current tax laws limit the
amount of loss  available  to be offset  against  future  taxable  income when a
substantial  change in  ownership  occurs.  Therefore,  the amount  available to
offset future taxable income may be limited. No tax benefit has been reported in
the financial statements, because the Company believes there is a 50% or greater
chance the  carryforwards  will expire  unused.  Accordingly,  the potential tax
benefits of the loss  carryforwards  are offset by a valuation  allowance of the
same amount.

Pervasiveness of Estimates

         The  preparation of financial  statements in conformity  with generally
accepted  accounting  principles  required  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.

Types of amounts included in operating expenses

         Selling,  general & administrative  expenses include professional fees,
travel & entertainment,  bad debts, depreciation,  telephone, insurance, office,
and other general expenses.

Concentrations of Credit Risk

         The  Company has no  significant  off-balance-sheet  concentrations  of
credit  risk such as foreign  exchange  contracts,  options  contracts  or other
foreign hedging arrangements.




                                      F - 7

<PAGE>



                             MCCARTHY GRENACHE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   THE YEARS ENDED DECEMBER 31, 2003 AND 2002
                                   (Continued)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

Depreciation

         Fixed  assets  are stated at cost.  Depreciation  and  amortization  is
calculated on a straight-line  basis over the estimated useful lives of 10 to 39
years for buildings and building improvements.

         Maintenance  and  repairs are charged to  operations;  betterments  are
capitalized.  The  cost  of  property  sold  or  otherwise  disposed  of and the
accumulated  depreciation  thereon are eliminated  from the property and related
accumulated depreciation accounts, and any resulting gain or loss is credited or
charged to income.

         The Company has adopted the Financial  Accounting  Standards Board SFAS
No., 121,  "Accounting  for the  Impairment of Long-lived  Assets." SFAS No. 121
addresses  the  accounting  for (i)  impairment of  long-lived  assets,  certain
identified  intangibles and goodwill  related to assets to be held and used, and
(ii) long-live lived assets and certain identifiable  intangibles to be disposed
of.  SFAS No. 121  requires  that  long-lived  assets and  certain  identifiable
intangibles  be  evaluated  for  impairment   whenever   events  or  changes  in
circumstances  indicate  that  the  carrying  amount  of an  asset  may  not  be
recoverable.  If the sum of the expected  future cash flows from the used of the
asset and its eventual disposition  (un-discounted and without interest charges)
is less than the carrying amount of the asset, an impairment loss is recognized.

Revenue recognition

         Revenue is  recognized  from  rental  property  as the lessee  uses the
property.

NOTE 2 - ECONOMIC DEPENDENCE

         The Company does not utilize any  specialized raw materials and as such
any and all  materials  are readily  available.  The Company is not aware of any
problem that exist at present time or that is projected to occur within the near
future that will materially affect the source and availability of raw materials,
which would be required by the Company.

NOTE 3 - COMMITMENTS

         As of  December  31,  2003 all  activities  of the  Company  have  been
conducted by officers  from either their homes or business  offices.  Currently,
there  are no  outstanding  debts  owed by the  company  for  the  use of  these
facilities and there are no commitments for future use of the facilities.


                                      F - 8

<PAGE>



                             MCCARTHY GRENACHE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   THE YEARS ENDED DECEMBER 31, 2003 AND 2002
                                   (Continued)

NOTE 4 - LAND BUILDING AND IMPROVEMENTS

         The Company  purchased  eleven parcels of land and  improvements  for a
total cost of $902,020 in October,  2002.  During the period ended  December 31,
2003, the Company incurred $234,433 in land improvement costs.

         The rental property and land under  development are encumbered by notes
secured by deeds of trust and assignment of rent associated with the property.

         The Company has only one tenant. The lease term expired on December 31,
2002 and has continued on a month to month basis since then.

         Land development  costs include interest and property taxes on the real
property during the development phase.  During the year ended December 31, 2003,
interest  of  $41,830  and  property  taxes  of  $6,413  are  included  as  land
development costs and are therefore, capitalized holding costs.

NOTE 5 - RELATED PARTY TRANSACTIONS

Notes payable to related parties are as follows:
<TABLE>
<CAPTION>
                                                                                December 31,
                                                                   --------------------------------------
                                                                          2003                2002
                                                                   ------------------  ------------------
Promissory note, repayable to member of
   A S Holdings, LLC, due upon demand,
<S>                                                                <C>                 <C>
   bearing no interest, secured by real estate                     $          225,000  $          225,000
Promissory note, repayable to member of
   A S Holdings, LLC, due upon demand,
   bearing no interest, secured by real estate                                271,340              28,571
Less current portion of debt                                                 (496,340)           (253,571)
                                                                   ------------------  ------------------

Total                                                              $                -  $                -
                                                                   ==================  ==================
</TABLE>










                                      F - 9

<PAGE>


                             MCCARTHY GRENACHE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   THE YEARS ENDED DECEMBER 31, 2003 AND 2002
                                   (Continued)

NOTE 6 - LONG-TERM DEBT
<TABLE>
<CAPTION>
                                                                       December 31,
                                                            -------------------------------------
                                                                  2003                2002
                                                            -----------------   -----------------
Note payable to a company in monthly instalments
  $4,000,  including interest at
  5.75%, maturing September 4, 2004, secured by
<S>                                                         <C>                 <C>
  real estate                                               $         755,386   $         759,813

Less current portion of long-term debt                                755,386               4,426
                                                            -----------------   -----------------

                                                            $               -   $         755,387
                                                            =================   =================
</TABLE>

The Company is in the process of  negotiating  an  extension of the terms of the
note.

NOTE 7 SUBSEQUENT EVENT

         On February  24, 2004 the Company  entered into a letter of intent with
third party for the sale of the approximate  2.7 acres in Las Vegas,  Nevada for
$3,000,000 cash.

         On March 9, 2004 the Company entered into a soft engagement letter with
a lender to provide approximately $27,000,000 as a construction loan for the Las
Vegas project. There can be no assurance that the Company will be able to obtain
such financing.

                                     F - 10