SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-KSB
            ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                      For the year ended December 31, 2002
                          Commission File No. 000-28095

                             MCCARTHY GRENACHE, INC.

             (Exact name of registrant as specified in its charter)



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



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

                 3651 Lindell Road, Suite A, Las Vegas, NV 89103
                    (Address of principal executive offices)

      Registrant's telephone number, including area code (323) 822-1750/80

                  Securities registered under Section 12(g) of
                               the Exchange Act:
                         Common stock, $0.001 par value
                                    per share

Check whether the issuer (1) filed all reports required to be file by Section 13
or 15(d) of the Exchange Act during the past 12 months and (2) has been subject
to such filing requirements for the past 90 days. Yes X

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B 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
amendments to this Form 10-KSB. [ X ]

Issuer's Revenue during the year ended December 31, 2002: $0

Aggregate market value of the voting and non-voting common equity held by
non-affiliates based on the price of N/A per share (the selling or average bid
and asked price) as of September 20, 2000:
N/A

                      DOCUMENTS INCORPORATED BY REFERENCE:

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

                                       1
<PAGE>

                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

                                   Background

As of December 31, 2003, the Company had entered into an agreement and plan of
reorganization and merger with Bonanza Realty, LCC that will involve an
abandonment of the Company's business plan. Accordingly this Form 10QSB
discusses the Company's business plan as of the time of the reporting period
involved on this form. McCarthy Grenache, Inc., (the "Issuer" or "Company") was
incorporated under the laws of the State of Nevada on December 19, 1997, as
McCarthy Grenache, Inc. McCarthy Grenache, Inc., was initially wholly owned by
Gregorian Surgical Instruments, Inc. ("Gregorian"). Gregorian, a corporation
formed under the laws of the Province of British Columbia, Canada in November of
1995, was the predecessor parent company. In December of 1997, the shareholders
of Gregorian exchanged all the shares of Gregorian on a one for one basis for
shares of Common Stock of the Company and the resulting successor corporation is
McCarthy Grenache, Inc. The Company has no subsidiaries and no affiliated
companies.

The Company is a development stage company which does not currently have supply
contracts and, therefore, does not have revenues from operations for the last
two fiscal years.

                               Business of Issuer

The Company is engaged in the development of a principally wholesale medical
supplies, surgical instruments, and equipment supply service. The Company's
products are intended to be: bathroom safety bars for the infirm, canes,
colostomy supplies, crutches, gloves, stethoscopes, nebulizers, oxygen supplies,
walkers, wheel chairs, and wheelchair van modification kits for the disabled.
The Company's products will be marketed to the aged and the infirm. Management
of the Company believes there is a demand for these products due to the rapid
increase in the age of the population in the US due to better medical care and
the baby boom population reaching retirement age. Management further believes
that the rapid expansion of the Las Vegas area will create a shortage of the
types of products the Company intends to market.

The Company intends to lease a suitable office/warehouse and will wholesale
products directly to retailers, medical and nursing home facilities through mail
order, Internet order and advertising in the press and various other media. The
Company anticipates being able to broker orders through utilizing attainable
contacts within the medical supplies industry and matching vendors with
end-users via wholesaling. The Company intends to generate revenue in the future
by being listed in the yellow pages and by developing its web-site for Internet
orders and inquiries. At this time, the Company does not have any principal
business suppliers.

The Company's competition varies among its business lines. Competition in these
products and services is primarily centered on styling, quality, price, brand
recognition and service with an emphasis on the latter. In order for the Company
to be competitive in these marketplaces, the Company must effectively maintain
and promote the quality of its services and its products among consumers and
establish strong marketing relationships with manufacturers and distributors of
products which enhance that quality image. While the Company believes that it
will compete effectively, the Company competes with a number of manufacturers
and marketers of medical supplies and equipment which have substantially greater
resources than the Company and many of which have well-recognized brand name


                                       2
<PAGE>

contracts and broader and more established distribution networks. The Company
anticipates being able to utilize its smaller size to attract those seeking more
personalized service and to maintain its ability to adapt with technological
changes over the Internet and in the marketplace. Further, the Company expects
to utilize the Internet to further attract customers via various search engines
upon completion of various web pages. Specific organizations with whom the
Company intends to compete are A to Z Medical Supply, Medical Mart and Mobility
Plus, all located in Las Vegas, Nevada. As the Company has not started marketing
products, it presently has no share of this market.

ITEM 2. DESCRIPTION OF PROPERTY.

The Company's principal executive and administrative offices are located in
Nevada at 3651 Lindell Road, Suite A, Las Vegas NV 89103 in leased premises
under an agreement for a term scheduled to expire June 1, 2000, at which time
the Company will renew the lease for another 12 month term unless the Company
has made other plans or found suitable office/warehouse space. The Company's
right to renew its lease for another term is guaranteed at the Company's option,
with thirty days' notice. The Company is obligated to pay $1,200 in rent per
year on a shared office basis. The rent for the next 12 month term, if leased,
will be $1,260 per year. The new lease term will only be executed, if necessary,
for economic reasons until the Company has adequate financing to develop its
business and requires other space. The Company considers its executive and
administrative offices to be adequate and suitable for its current needs. The
Company does not own or lease any other real estate.

ITEM 3. LEGAL PROCEEDINGS

The Company is not a party to any material pending legal proceedings and, to the
best of its knowledge, no such action by or against the Company has been
threatened.

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

No such matters were submitted during the fourth quarter of the Company's fiscal
year ending December 31, 2001.

                                     PART II

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

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.

Effective August 11, 1993, the Securities and Exchange Commission adopted Rule
15g-9, which established the definition of a "penny stock," for purposes
relevant to the Company, as any equity security that has a market price of less
than $5.00 per share or with an exercise price of less than $5.00 per share,
subject to certain exceptions. For any transaction involving a penny stock,
unless exempt, the rules require: (i) that a broker or dealer approve a person's
account for transactions in penny stocks; and (ii) the broker or dealer receive
from the investor a written agreement to the transaction, setting forth the
identity and quantity of the penny stock to be purchased. In order to approve a
person's account for transactions in penny stocks, the broker or dealer must (i)
obtain financial information and investment experience and objectives of the
person; and (ii) make a reasonable determination that the transactions in penny
stocks are suitable for that person and that person has sufficient knowledge and


                                       3
<PAGE>

experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks. The broker or dealer must also deliver, prior to
any transaction in a penny stock, a disclosure schedule prepared by the
Commission relating to the penny stock market, which, in highlight form, (i)
sets forth the basis on which the broker or dealer made the suitability
determination; and (ii) that the broker or dealer received a signed, written
agreement from the investor prior to the transaction. Disclosure also has to be
made about the risks of investing in penny stocks in both public offerings and
in secondary trading, and about commissions payable to both the broker-dealer
and the registered representative, current quotations for the securities and the
rights and remedies available to an investor in cases of fraud in penny stock
transactions. Finally, monthly statements have to be sent disclosing recent
price information for the penny stock held in the account and information on the
limited market in penny stocks.

The National Association of Securities Dealers, Inc. (the "NASD"), which
administers NASDAQ, has recently made changes in the criteria for initial
listing on the NASDAQ Small Cap market and for continued listing. For initial
listing, a company must have net tangible assets of $4 million, market
capitalization of $50 million or net income of $750,000 in the most recently
completed fiscal year or in two of the last three fiscal years. For initial
listing, the common stock must also have a minimum bid price of $4 per share. In
order to continue to be included on NASDAQ, a company must maintain $2,000,000
in net tangible assets and a $1,000,000 market value of its publicly-traded
securities. In addition, continued inclusion requires two market-makers and a
minimum bid price of $1.00 per share.

                                     Holders

As of September 20, 2000, there were 51 shareholders of record of the Company's
common stock.

                                    Dividends

The Registrant has not paid any dividends to date, and has no plans to do so in
the immediate future.

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 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.

All of the above issuances of securities were issued in reliance on Section 4(2)


                                       4
<PAGE>

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 PLAN OF OPERATION

NOTE REGARDING PROJECTIONS AND FORWARD LOOKING STATEMENTS

This registration statement contains statements that are forward- looking
statements within the meaning of the federal securities laws. These include
statements about our expectations, beliefs, intentions or strategies for the
future, which we indicate by words or phrases such as "anticipate," "expect,"
"intend," "plan," "will," "believe" and similar language. These statements
involve known and unknown risks, including those resulting from economic and
market conditions, the regulatory environment in which we operate, competitive
activities, and other business conditions, and are subject to uncertainties and
assumptions set forth elsewhere in this registration statement. Our actual
results may differ materially from results anticipated in these forward-looking
statements. We base our forward-looking statements on information currently
available to us, and we assume no obligation to update these statements.

                                Plan of Operation

The Company is organizing to wholesale medical supplies, surgical instruments
and equipment specializing in ambulatory aids for the aged. Additional funding
through private placement will be necessary to enable the Company to lease a
suitable office warehouse facility in Las Vegas and to enable the Company to
complete its Web Page and to secure contracts with suppliers and users.

The Company intends to raise adequate funds from interested local parties to
provide adequate working capital of up to $750,000 for the next 12 months. When
the Company seeks to actually raise such funds, it is anticipated it will do so
by undertaking an offering of securities pursuant to Regulation D, Rule 505 or
506, which provides an exemption from registration under the Securities Act of
1933, as amended. Management will select the exemption at the time it makes such
an offering based upon advice of counsel. At this time, management has not
commenced any such offering. Such raised funds would be used to develop Internet
business, pay professionals and for advertising in the Yellow Pages and media.
No product research or development is considered necessary; no new equipment or
plant is required, nor is there expected to be a significant change in the
number of employees over the next 12 months.

The Company plans to market and promote its wholesale medical supplies starting
in Nevada. The Company has reserved the Internet site "www.mccarthymedical.com"
which is currently under development and is expected to be operational by March
15, 2000 or shortly thereafter. Since public interest in health is at an all
time high and growing, our presence on the Internet, along with increased
information on the Internet, and the aging of the baby boom generation, should
result in the development of a vastly improved medical supply industry. Many
items such as wheelchairs, walkers, and mobility equipment for the aged and
infirm are automatically approved by most medical insurance programs. There is a
shortage of ambulatory equipment in the United States today due to the
increasing age of the population.

                             Website and E-Commerce



                                       5
<PAGE>

The Company is in the process of developing an Internet Website located on the
World Wide Web at www.mccarthymedical.com. The Website is in the process of
being constructed. The Company anticipates that the Website, once it is
constructed, will promote the Company's medical supplies and equipment.

                                    Marketing

The Company intends to acquire and market medical supplies and equipment for the
aged direct to the retailers from the manufacturers. The Company intends to rely
on a marketing team and for the prospects of e-commerce to implement the
Company's marketing objectives. The Company also intends to utilize direct
mailing, and e-mail to solicit manufacturers and retailers.

The Company's marketing and licensing strategy is to (i) establish and expand
the sales of the Company's products; (ii) selectively establish licensed product
lines to be marketed and promoted on the Company's offline developed website;
(iii) expand the number of representatives; and, (iv) acquire or establish
relationships with major manufacturers businesses, companies, properties or
technologies.

The Company will purchase most of its inventory from existing manufacturers
principally in North America and Asia. To date, no contracts have been executed
and the Company does not anticipate entering into any contracts due to lack of
funding. Upon funding, letters of credit may be sought.

The Company does not anticipate being dependent on one major or a few major
customers. The Company intends to supply to large nursing facilities and
hospitals as well as to major drug store chains and emergency clinics. However,
at this time, the Company does not have any contracts with any such
organizations. Also, management of the Company expects that the proliferation of
web pages throughout various search engines on the Internet will attract
customers. However, there is no guarantee that the Company's web-site, when
completed, will have a positive impact on the Company's business.

                                    Employees

The Company's only employees at the present time are its president and the 5
members of the Advisory Board, who will devote as much time as the Board of
Directors determine is necessary to carry out the affairs of the Company.

                                       6
<PAGE>

ITEM 7. FINANCIAL STATEMENTS.

                          INDEPENDENT AUDITOR'S REPORT


To the Board of Directors and Stockholders
of McCarthy Grenache, Inc.
Las Vegas, Nevada

     I have audited the accompanying  balance sheets of McCarthy Grenache,  Inc.
     (a development stage company) as of December 31, 2002 and December 31, 2001
     and the  related  statements  of  operations,  cash  flows,  and changes in
     stockholders'  equity for the years then ended,  as well as the  cumulative
     period from  December  19, 1997 (date of  inception)  to December 31, 2002.
     These financial  statements are the  responsibility  of McCarthy  Grenache,
     Inc.'s  management.  My  responsibility  is to  express an opinion on these
     financial statements based on my audit.

     I  conducted  my audit in  accordance  with  auditing  standards  generally
     accepted in the United States of America.  Those  standards  require that I
     plan and  perform  the  audit to obtain  reasonable  assurance  that  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  evalluating  the  overall  financial  statement
     presentation.  I believe that my audits  provide a reasonable  basis for my
     opinion.

     In my opinion, the accompanying financial statements present fairly, in all
     material respects, the financial position of McCarthy Grenache,  Inc. as of
     December 31, 2002 and December 31, 2001 and the results of operations, cash
     flows,  and changes in  stockholders'  equity for the years then ended,  in
     conformity  with  accounting  principles  generally  accepted in the United
     States of America.

     The  accompanying  statements have been prepared  assuming that the Company
     will continue as a going  concern.  The Company has not generated  revenues
     from  operations  which  raises  substantial  doubt  about its  ability  to
     continue as a going  concern.  The financial  statements do not include any
     adjustments that might result from the outcome of this uncertainty.



/s/ David E. Coffey
David E. Coffey, C. P. A.
Las Vegas, Nevada
November 21, 2003


                                       7
<PAGE>
McCARTHY GRENACHE, INC.
( A DEVELOPMENT STAGE COMPANY )
BALANCE SHEETS
<TABLE>

                                                      December 31,             December 31,
                                                            2002                     2001
                                                      ------------------       ------------------
ASSETS

Cash                                               $                0       $                 0
                                                      ------------------       ------------------
     Total Assets                                  $                0       $                 0
                                                      ===========              ===========

LIABILITIES & STOCKHOLDERS' EQUITY

Accounts payable                                   $              125       $               125
                                                      ------------------       ------------------
     Total Liabilities                                            125                       125

Stockholders' Equity
          Common stock, authorized 25,000,000
          shares at $.001 par value, issued and
          oustanding 5,139,000 shares                           5,139                     5,139
          Additional paid-in capital                           38,403                    38,403
          Deficit accumulated during the
          development stage                                   (43,667)                  (43,667)
                                                      ------------------       ------------------
              Total Stockholders' Equity                         (125)                     (125)


     Total Liabilities and Stockholders' Equity    $                0       $                 0
                                                      ===========              ===========



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</TABLE>







The accompanying notes are an integral part of
these financial statements.

                                       8
<PAGE>

McCARTHY GRENACHE, INC.
( A DEVELOPMENT STAGE COMPANY )
STATEMENTS OF OPERATIONS AND DEFICIT
ACCUMULATED DURING THE DEVELOPMENT STAGE
( With Cumulative Figures From Inception )
<TABLE>


                                          Year ending December 31,                       From Inception,
                                                    2002                   2001          Dec. 19, 1997, to
                                                                                         Dec. 31, 2002
                                          ---------------------- ----------------------  ----------------------
Income                                  $                   0 $                    0 $                     0

Expenses
     Organizational expense                                 0                      0                     400
     Rent                                                   0                      0                   5,600
     Professional fees                                      0                  3,200                  11,450
     Loss on investment in subsidiary                       0                      0                   4,942
     Consulting                                             0                      0                  18,000
     Fees and licenses                                      0                    625                   1,125
     Office expenses                                        0                    815                   2,150
                                          ---------------------- ----------------------  ----------------------
Total expenses                                              0                  4,640                  43,667

Net loss                                                    0                 (4,640)$               (43,667)
                                                                                         =============
Retained earnings,
beginning of period                                   (43,667)               (39,027)
                                          ---------------------- ----------------------
Deficit accumulated during
the development stage                   $             (43,667)$              (43,667)
                                          =============          =============


Earnings ( loss ) per share
     assuming dilution:
Net loss                                $                0.00 $                 0.00 $                 (0.01)
                                          =============          =============           =============
Weighted average shares
outstanding                                         5,139,000              5,133,333               5,098,066
                                          =============          =============           =============


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</TABLE>

The accompanying notes are an integral part of
these financial statements.

                                       9
<PAGE>

McCARTHY GRENACHE, INC.
( A DEVELOPMENT STAGE COMPANY )
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FROM DECEMBER 19, 1997,  ( Date of Inception ) TO DECEMBER 31, 2002
<TABLE>

                                                       Common Stock           Additional     Deficit accumul-      Total
                                               Shares          Amount         Paid-in        ated during devel-
                                                                              Capital        opment stage
                                               --------------  -------------- --------------  -----------------------------------
                                                            $              $              $                      $
Beginning balance, December 19, 1997                   ----            ----           ----                 ----            ----

Issuance of common stock for cash
December 24, 1997                                    40,000             40          3,960                      0          4,000
Exchange of stock  (Page 6, Note D )
December 26, 1997                                 4,942,000          4,942              0                      0          4,942
Less net loss                                             0              0              0                 (4,942)        (4,942)
                                                -------------  -------------  -------------   ----------------------------------
Balance, December 31, 1997                        4,982,000          4,982          3,960                 (4,942)         4,000

Issuance of common stock for cash
February, 1998                                       60,000             60          5,940                      0          6,000
Less offering costs                                       0              0         (3,000)                     0         (3,000)
Less net loss                                             0              0              0                 (5,983)        (5,983)
                                                -------------  -------------  -------------   ----------------------------------
Balance, December 31, 1998                        5,042,000          5,042          6,900                (10,925)         1,017

Issuance of common stock for cash
September 30, 1999                                   80,000             80         19,920                      0         20,000
Less net loss                                             0              0              0                 (2,602)        (2,602)
                                                -------------  -------------  -------------   ----------------------------------
Balance, December 31, 1999                        5,122,000          5,122         26,820                (13,527)        18,415

Less net loss                                             0              0              0                (25,500)       (25,500)
                                                -------------  -------------  -------------   ----------------------------------
Balance, December 31, 2000                        5,122,000          5,122         26,820                (39,027)        (7,085)

Forgiveness of debt, March 2001                           0              0          4,500                      0          4,500
Issuance of common stock to pay debt,
May 7, 2001                                          17,000             17          3,383                      0          3,400
Forgiveness of debt, September, 2001                      0              0          3,700                      0          3,700
Less net loss                                             0              0              0                 (4,640)        (4,640)
                                                -------------  -------------  -------------   ----------------------------------
Balance, December 31, 2001                        5,139,000          5,139         38,403                (43,667)          (125)

Less net loss                                             0              0              0                      0              0
                                                -------------  -------------  -------------   ----------------------------------
Balance, December 31, 2002                        5,139,000 $        5,139 $       38,403 $              (43,667)$         (125)
                                               ========          =======       =======        ============           =======
The accompanying notes are an integral part of these financial statements.

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</TABLE>

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<PAGE>

McCARTHY GRENACHE, INC.
( A DEVELOPMENT STAGE COMPANY )
STATEMENTS OF CASH FLOWS
( With Cumulative Figures From Inception )
<TABLE>

                                             Year ending December 31,                        From Inception,
                                                       2002                    2001          Dec. 19, 1997, to
                                                                                             Dec. 31, 2002
                                             ----------------------- ----------------------- --------------------------
CASH FLOWS PROVIDED BY
OPERATING ACTIVITIES
Net Loss                                  $                     0 $               (4,640)$                  (43,667)
Non-cash items included in net loss                             0                      0                          0
Adjustments to reconcile net loss to
   cash used by operating activity
     Accounts payable                                           0                 (3,275)                       125
                                                      ---------------         ---------------         ------------------
          NET CASH PROVIDED BY
          OPERATING ACTIVITIES                                  0                 (7,915)                   (43,542)

CASH FLOWS USED BY
INVESTING ACTIVITIES                                            0                      0                          0
                                                      ---------------         ---------------         ------------------
          NET CASH USED BY
          INVESTING ACTIVITIES                                  0                      0                          0

CASH FLOWS FROM FINANCING
ACTIVITIES
     Issuance of stock to pay debt                              0                     17                         17
     Debt retired in excess of par value                        0                  3,383                      3,383
     Sale of common stock                                       0                      0                      5,122
     Paid-in capital                                            0                  3,700                     38,020
     Less offering costs                                        0                      0                     (3,000)
                                                      ---------------         ---------------         ------------------
          NET CASH PROVIDED BY
          FINANCING ACTIVITIES                                  0                  7,100                     43,542
                                                      ---------------         ---------------          -----------------
          NET INCREASE IN CASH                                  0                   (815)$                        0
                                                                                                     ===========
CASH AT BEGINNING OF PERIOD                                     0                    815
                                                      ---------------         ---------------
          CASH AT END OF PERIOD           $                     0 $                    0
                                                      =========               =========
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</TABLE>


The accompanying notes are an integral part of these financial statements.

                                       11
<PAGE>

McCARTHY GRENACHE, INC.
( A DEVELOPMENT STAGE COMPANY )
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND DECEMBER 31, 2001

NOTE A        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

              The Company was incorporated on December 19, 1997, under
              the laws of the State of Nevada.  The business purpose of
              the Company is to produce medical equipment.

              The Company will adopt accounting policies and procedures
              based upon the nature of future transactions.

NOTE B        OFFERING COSTS

              Offering costs are reported as a reduction in the amount of
              paid-in capital received for sale of the shares.

NOTE C        EARNINGS (LOSS) PER SHARE

              Basic EPS is determined using net income divided by the
              weighted average shares outstanding during the period.
              Diluted EPS is computed by dividing net income by the
              weighted average shares outstanding, assuming all dilutive
              potential common shares were issued.  Since the Company
              has no common shares that are potentially issuable, such as
              stock options, convertible securities or warrants, basic and
              diluted EPS  are the same.

NOTE D        RELATED PARTY TRANSACTIONS - STOCK EXCHANGE

              In December of 1997, the Company was formed by Gregorian
              Surgical Instruments, Inc. with McCarthy Grenache, Inc. as a
              wholly-owned subsidiary.  On December 26, 1997, the stock-
              holders 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 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.  The
              excess of par value over the value of assets acquired was
              $4,942.  This transaction was accounted for as a reverse
              merger.


                                       12
<PAGE>


McCARTHY GRENACHE, INC.
( A DEVELOPMENT STAGE COMPANY )
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND DECEMBER 31, 2001
(continued)

NOTE D        RELATED PARTY TRANSACTIONS - STOCK EXCHANGE  (continued)

              Upon the completion of the stock exchange, Gregorian Surgical
              Instruments, Inc. became a wholly-owned subsidiary of McCarthy
              Grenache, Inc.  The Board of Directors approved the dissolution
              of Gregorian Surgical Instruments, Inc. in December of 1997.

NOTE E        COMMON STOCK

     In December of 1997,  the Company sold 40,000 shares of its common stock at
     $.10 per share,  for a total of $4,000.  In February  of 1998,  the Company
     sold  another  60,000  shares of its  common  stock at $.10 per share for a
     total of $6,000.  Then in September of 1999, the Company sold 80,000 shares
     of its common stock at $.25 per share for a total of $20,000.  The proceeds
     were to be used for the development of a medical equipment supply business.

              On May 7, 2001 the Company issued 17,000 shares of its common
              stock at $.20 per share to pay $3,400 of its accounts payable.

              All of the above shares were issued pursuant to an exemption
              from registration requirements under Section 4 (2) of the
              Securities Act.

NOTE F        DEBT FORGIVEN BY CREDITORS

     In March of 2001, the Company received forgiveness of debt totaling $4,500.
     In  September,  2001,  the Company  received  forgiveness  of debt totaling
     $3,700. The debt forgiven was recorded as an increase in paid-in capital.

NOTE G        GOING CONCERN

     The Company's financial statements are prepared using accounting principles
     generally  accepted  in the United  States of America and  applicable  to a
     going concern, which contemplates  realization of assets and liquidation of
     liabilities in the normal course of business.  However, the Company has not
     generated revenues from its planned principal  operations through September
     30, 2001.  Without  realization of additional  capital it would be unlikely
     for the Company to continue as a going concern.


                                       13
<PAGE>

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS

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

There are no agreements for any officer or director to resign at the request of
any other person, and none of the officers or directors named below are acting
on behalf of, or at the direction of, any other person.

Information as to the directors and executive officers of the Company is as
follows:

Name/Address             Age    Position
Sean McCarthy            46     President/Secretary/Treasu
3651 Lindell Rd., Suite         rer/
A                               Director
Las Vegas, NV  89103



The biography of Mr. McCarthy is included in the Company's Amended Form 10-SB,
and is incorporated by reference to Item 5 of that document.

ITEM 10. EXECUTIVE COMPENSATION

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

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

There are no persons known to the Company, as of September 11, 2000, to be a
beneficial owner of five percent (5%) or more of the Company's common stock, and
none of the directors or officers own any of the Company's common stock.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The shareholders of Gregorian Surgical Instruments, Inc., exchanged an aggregate
of 4,942,000 shares of Gregorian for an aggregate of 4,942,000 shares of
McCarthy Grenache, Inc. on a share for share basis pursuant to the exchange
agreement dated December 26, 1997. The aggregate value of the shares was $4,942,
or $.001 per share, which accounted for a loss of $4,942 as a result of the
exchange.

                                       14
<PAGE>

There have been no 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 sole executive officer and director.
There have been no transactions which have benefited or will benefit its sole
executive officer and director either directly or indirectly.

ITEM 13. FINANCIAL STATEMENTS AND EXHIBITS.

EXHIBITS

3.1 The exhibits, consisting of the Company's Articles of Incorporation are
attached to the Company's Amended Form 10- SB, filed on May 10, 2001. These
exhibits are incorporated by reference to that Form.

3.2 The exhibits, consisting of the Company's Bylaws are attached to the
Company's Amended Form 10-SB, filed on May 10, 2001. These exhibits are
incorporated by reference to that Form.

                                   SIGNATURES

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





Dated: January 26, 2004       MCCARTHY GRENACHE, INC.
                                   (Registrant)

                                        /s/ Moshe Schnapp
                                   By:------------------------------------------
                                        Moshe Schnapp
                                        President and Chief Executive Officer



In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.





/s/Moshe Schnapp                   Director and
---------------------     President and Chief Executive        January 26, 2004
   Moshe Schnapp       Officer (Principal Executive Officer)

s/Moshe Schnapp                    Director and                January 26, 2004
---------------------       Chief Financial Officer and
   Moshe Schnapp         Secretary (Principal Financial
                               and Accounting Officer)


                                       15
<PAGE>

CERTIFICATIONS

I, Moshe Schnapp, certify that:

1. I have reviewed this Annual Report on Form 10-KSB, for the year ended
December 31, 2001, of McCarthy Grenache, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the small business
issuer as of, and for, the periods presented in this report;

4. The small business issuer's other certifying officer(s) and I are responsible
for establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) * for the small business issuer
and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the small business issuer, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;

(b) *;

(c) Evaluated the effectiveness of the small business issuer's disclosure
controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the small business issuer's internal
control over financial reporting that occurred during the small business
issuer's most recent fiscal quarter (the small business issuer's fourth fiscal
quarter in the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the small business issuer's internal
control over financial reporting; and

5. The small business issuer's other certifying officer(s) and I have disclosed,
based on our most recent evaluation of internal control over financial
reporting, to the small business issuer's auditors and the audit committee of
the small business issuer's board of directors (or persons performing the
equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the small business issuer's ability to record,
process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the small business issuer's internal
control over financial reporting.


Date:  January 26, 2004             /s/ Moshe Schnapp
                                   ---------------------------------------------
                                   Moshe Schnapp
                                   Chief Executive Officer

* Indicates material omitted in accordance with SEC Release Nos. 33-8238;
34-47986.

                                       16
<PAGE>

CERTIFICATIONS

I, Moshe Schnapp, certify that:

1. I have reviewed this Annual Report on Form 10-KSB, for the year ended
December 31, 2001, of McCarthy Grenache, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the small business
issuer as of, and for, the periods presented in this report;

4. The small business issuer's other certifying officer(s) and I are responsible
for establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) * for the small business issuer
and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the small business issuer, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;

(b) *;

(c) Evaluated the effectiveness of the small business issuer's disclosure
controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the small business issuer's internal
control over financial reporting that occurred during the small business
issuer's most recent fiscal quarter (the small business issuer's fourth fiscal
quarter in the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the small business issuer's internal
control over financial reporting; and

5. The small business issuer's other certifying officer(s) and I have disclosed,
based on our most recent evaluation of internal control over financial
reporting, to the small business issuer's auditors and the audit committee of
the small business issuer's board of directors (or persons performing the
equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the small business issuer's ability to record,
process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the small business issuer's internal
control over financial reporting.

Date:  January 26, 2004             /s/ Moshe Schnapp
                                   ---------------------------------------------
                                   Moshe Schnapp
                                   Chief Financial Officer



* Indicates material omitted in accordance with SEC Release Nos. 33-8238;
34-47986.

                                       18
<PAGE>

In connection with the Annual Report on Form 10-KSB of Alloy Steel
International, Inc. (the "Company") for the year ended September 30, 2003, as
filed with the Securities and Exchange Commission on the date hereof (the
"Report"), I, Moshe Schnapp, Chief Executive Officer of the Company, certify,
pursuant to 18 U.S.C. 1350, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.





Date:  January 26, 2004             /s/ Moshe Schnapp
                                   ---------------------------------------------
                                   Moshe Schnapp
                                   Chief Executive Officer



In connection with the Annual Report on Form 10-KSB McCarthy Grenache, Inc. (the
"Company") for the year ended December 31, 2001, as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), I, Moshe Schnapp,
Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. 1350,
that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.





Date:  January 26, 2004             /s/ Moshe Schnapp
                                   ---------------------------------------------
                                   Moshe Schnapp
                                   Chief Financial Officer



                                       19
<PAGE>