SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549
                             ______________________

                                   FORM 10-KSB


                             Annual Report Pursuant
                          to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934


                            For the fiscal year ended
                               September 30, 2004

                             Commission file number
                             ----------------------
                                    333-89628

                         QUEST GROUP INTERNATIONAL, INC.
              -----------------------------------------------------
             (Exact name of registrant as specified in its charter)


           Nevada                                           87-0681500
-------------------------------               ---------------------------------
(State or other jurisdiction of               (IRS Employer Identification No.)
      incorporation)

        967 West Center, Orem, Utah 84057               (801) 765-1301
    ----------------------------------------    -------------------------------
    (Address of principal executive offices)    (Registrant's telephone number,
                                                     including area code)

         Securities registered under Section 12(b) of the Exchange Act: None

         Securities registered under Section 12(g) of the Exchange Act: None

         Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days.
Yes [X]  No [ ]

         Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B contained herein, and will not 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]

         The issuer's revenue for its most recent fiscal year was $1,305,960

         The aggregate market value of the common stock held by non-affiliates
(i.e., does not include directors, executive officers or ten percent
stockholders identified in Item 11 hereof) of the issuer as of December 9, 2004
was: There is no trading market for the issuer's securities.

         As of December 9, 2004, the Company had 10,249,000 shares of common
stock outstanding.

<PAGE>

                         QUEST GROUP INTERNATIONAL, INC.

                       TABLE OF CONTENTS TO ANNUAL REPORT
                                 ON FORM 10-KSB
                          YEAR ENDED SEPTEMBER 30, 2004




                                     PART I

Item 1.     Description of Business............................................3
Item 2.     Description of Property............................................9
Item 3.     Legal Proceedings..................................................9
Item 4.     Submission of Matters to a Vote of Security Holders................9


                                     PART II

Item 5.     Market for Common Equity, Related Stockholder Matters.............10
Item 6.     Management's Discussion and Analysis or Plan of Operation.........11
Item 7.     Financial Statements..............................................16
Item 8.     Changes in and Disagreements with Accountants on Accounting
              and Financial Disclosures.......................................16
Item 8A.    Controls and Procedures ..........................................16
Item 8B.    Other Information.................................................17


                                    PART III

Item 9.     Directors, Executive Officers, Promoters and Control
              Persons; Compliance With Section 16(a) of the Exchange Act......18
Item 10.    Executive Compensation............................................20
Item 11.    Security Ownership of Certain Beneficial Owners and
              Management and  Related Stockholder Matters ....................21
Item 12.    Certain Relationships and Related Transactions....................22
Item 13.    Exhibits..........................................................22
Item 14.    Principal Accountant Fees and Services............................22

                                       2
<PAGE>

Forward-Looking Statements

         This annual report contains forward-looking statements within the
meaning of the securities laws. These forward-looking statements are subject to
a number of risks and uncertainties, many of which are beyond our control. All
statements other than statements of historical facts included in this annual
report, including the statements under "Description of Business," "Management
Discussion and Analysis or Plan of Operation" and elsewhere in this annual
report regarding our strategy, future operations, financial position, projected
costs, projected revenues, prospects, plans and objectives of management, are
forward-looking statements. When used in this annual report, in our press
releases or other public or stockholder communications, or in oral statements
made with the approval of our executive officers, the words or phrases "would
be," "intends to," "will likely result," "are expected to," "is anticipated,"
"estimate," "project," or similar expressions are intended to identify
"forward-looking statements", although not all forward-looking statements
contain such identifying words.

         We caution readers not to place undue reliance on any forward-looking
statements, which speak only as of the date made, are based on certain
assumptions and expectations which may or may not be valid or actually occur,
and which involve various risks and uncertainties. We disclose important factors
that could cause our actual results to differ materially from our expectations
under the caption "Management Discussion and Analysis or Plan of Operation--Risk
Factors," including but not limited to our history of losses, working capital
deficit, need for additional funds to execute our business plan, dependence on
our distributors, and the risk of product demand, economic conditions,
competitive products, changes in the regulation of our industry and other risks.
As a result, our actual results for future periods could differ materially from
those anticipated or projected.

         Unless otherwise required by applicable law, we do not undertake, and
specifically disclaim any obligation, to update any forward-looking statements
to reflect occurrences, developments, unanticipated events or circumstances
after the date of such statement.


                                     PART I

Item 1. Description of Business

General

         We were organized as a Nevada corporation on August 14, 2001 as Quest
Group International, Inc. to sell nutritional products to independent
distributors and customers. We sell our products to customers and independent
distributors who use the products themselves or resell them to others.

         During the fiscal year ended September 30, 2004, we generated
$1,305,960 in revenues. We do not extend credit to our distributors. Payment for
product is required prior to shipping, all sales are paid for in U.S. dollars
through an InterCash account or other arrangements and we do not maintain
offices outside the U.S.

Our Products

         We develop and distribute a line of nutritional products that we call
the NeoSource products. The NeoSource product line is comprised of seven
products. Six of these products are grouped into thirteen different combinations
called Product Sets. An antioxidant and vitamin product, called NeoGuard
Chewable, is not included in any of the product sets. Our approximate net sales
breakdown for the fiscal year ended September 30, 2004 is as follows:

         o        69.1% of net sales are generated from sales of Product Sets.

                                       3
<PAGE>

         o        8.8% of net sales are generated from sales of individual
                  products, excluding NeoGuard Chewable.
         o        5.5% of net sales are generated from sales of NeoGuard
                  Chewable.
         o        0.1% revenues from enrollment fees, which fees include payment
                  for distributor kits.
         o        10.6% of our net sales are generated from shipping fees.
         o        The remaining 5.9% of our net sales are generated from
                  miscellaneous sales and shipping fees.

         Our NeoSource products are nutritional supplements. Our products are
not intended to diagnose, treat, cure or prevent any disease. Our products have
not been evaluated by the Food and Drug Administration. We have not conducted
product testing to determine whether the products are effective for the intended
use. Our individual product offerings are as follows:

         NeoPak

         NeoPak contains nutrients derived from quality ingredients, including
vitamins, bioflavinoids, minerals, food based enzymes, fatty acids and
phyto-nutrient rich fruits and vegetables, freshly harvested sea vegetables and
other nutritious foods. Phyto-nutrients, also known as phyto-chemicals, are the
natural components isolated in vegetables and fruits. NeoPak is intended to act
as a general nutritional supplement. There can be no assurance that the NeoPak
will prove effective as a general nutritional supplement.

         NeoGuard

         NeoGuard contains a combination of antioxidant nutrients that are
intended to help the human body to defend against free radicals, but there can
be no assurance that it will prove effective in defending against free radicals.

         NeoSpring

         NeoSpring contains a blend of natural ingredients intended to help
sustain the body's energy-producing systems and replenish vital nutrients, but
there can be no assurance that it will sustain the body's energy-producing
systems or replenish nutrients.

         NeoSlim

         NeoTrim is a blend of herbs and minerals that are intended to act as a
dietary supplement to assist with weight loss, but there can be no assurance
that it will prove effective as a dietary supplement to assist with weight loss.

         NeoBalance

         NeoBalance is created from sea vegetables and herbs. NeoBalance is
designed primarily as a nutritional supplement for women, but there can be no
assurance that it will provide any nutritional benefit.

         NeoSurge

         NeoSurge is created from sea vegetables, vitamins and herbs. NeoSurge
is designed primarily as a nutritional supplement for men, but there can be no
assurance that it will prove effective as a nutritional supplement for men.

                                       4
<PAGE>

         NeoGuard Chewable

         NeoGuard Chewable is designed to provide essential nutrients and
antioxidants to support good health and fight free radicals. NeoGuard Chewable
is made with many of the same ingredients as NeoGuard in a dosage that is
suitable for children and seniors, but there can be no assurance that it will
prove effective as a nutritional supplement.

         Miscellaneous Products

         We also sell a variety U.S. manufactured supplements and skin care
items otherwise unavailable to our customers in Japan on special request.

Foreign Operations

         We had approximately $1,305,960 in sales for the fiscal year ended
September 30, 2004, of which $1,280,000 was generated from purchasers in Japan
and $26,000 was generated from purchasers in the U.S. We use direct-selling
efforts to sell our products in both markets. Products sold in Japan are shipped
using Nippon Express from their El Segundo, California facility as the customs
representative, air cargo and ground delivery carrier. We pay Nippon Express
their standard rates to ship our products. The charges depend on the weight of
the package and vary from $20 for a .5 kg package to $161.60 for a 30 kg
package. On average, customers receive their orders in Japan within five
business days of order payment confirmation.

         We require payment for our products through bank wire transfer or
credit card. We pay commissions to distributors residing in the U.S. by check
and to distributors residing in Japan by bank wire transfer. We do not extend
credit to our Japanese or other distributors. Payment for product being
delivered in Japan or elsewhere is required prior to shipping, all sales are
paid for in U.S. dollars through an InterCash account or other arrangements.

         Quest does not maintain offices outside the U.S. Quest does not have
manufacturing facilities outside the U.S.

Distribution and Marketing

         Both Quest and our independent distributors market our products to
consumers through direct-selling techniques. Our distributors sell NeoSource
products on a part-time basis to friends or associates or use the products
themselves. We incentivize our independent distributors through a combination of
quality products, product support and financial benefits. The financial benefits
include retail commissions, rebates and group development bonuses.

         All product sales are packaged for delivery by our shipping agent,
Nippon Express, in El Segundo, California. Products sold in Japan are shipped
with Nippon Express as described above. Products sold domestically are sent via
Federal Express from the same Nippon Express warehouse. Nippon Express maintains
a secure storage facility for our products in El Segundo. On average, customers
receive their orders in Japan or the U.S. within five business days of order
payment confirmation.

         As of December 9, 2004, we had 112 active distributors, 12 of these
distributors were in the U.S. and 100 of the distributors were in Japan. On that
date we also had 911 active members who buy product from us but who do not act
as distributors. A distributor or member is considered active if their most
recent purchase was made less than 12 months ago. Distributors buy product at
wholesale prices mainly for resale. Our members are able to buy product at a
discount from retail prices and the products purchased by members are not
intended for resale. One may become a Quest distributor by applying to Quest
under the sponsorship of someone who is already a distributor, paying an $50
enrollment fee, providing an email address and other contact information for
communications purposes.

                                       5
<PAGE>

Compensation of Distributors

         Our distributors are entitled to the following compensation:

         o        Retail Profit: Distributors may purchase products from us at
                  wholesale prices (a discount of approximately 30% from
                  suggested retail price), and sell them to their customers at a
                  retail price. Distributors may establish their own retail
                  prices.

         o        Service Bonus: If a customer who is not a distributor or
                  member purchases directly from us, we pay the referring
                  distributor a Service Bonus. The bonus is the difference
                  between the retail price the customer paid and the wholesale
                  price.

         o        Group Development Bonus: Distributors in a distributor group
                  receive a 5 - 15% Group Development Bonus based on the volume
                  of products sold by their distributor group. A distributor
                  group includes a distributor and his or her sponsored
                  distributors who have not yet sold $6,000 in cumulative group
                  volume (a "Distributor Group"). Sponsored distributors include
                  a distributor who is first sponsored to become a distributor
                  by the sponsoring distributor and all distributors who are
                  down line from the sponsored distributor.

                  For example, if Jane was a distributor and she sponsored John
                  who becomes a distributor and John sponsors Joe who becomes a
                  distributor and Joe sponsors Sam who becomes a distributor
                  then Jane's Distributor Group includes Jane, John, Joe and
                  Sam. If Joe and the distributors down line from Joe
                  subsequently sell $6,000 in cumulative group volume then
                  Jane's Distributor Group would no longer include Joe, Sam or
                  any other distributors who are down line from Joe.

         o        Producer Bonus: Distributors in a Distributor Group can earn
                  up to an additional 5% Producer Bonus on the revenue generated
                  by their Distributor Group when the aggregate sales volume of
                  the Distributor Group exceeds $3,000 in one month.

         o        Leadership Override Bonus: Distributors become a "Leader"
                  after their Distributor Group generates over $6,000 in
                  cumulative group revenues and the Leader becomes eligible to
                  earn Leadership Override Bonuses. Leadership Override Bonuses
                  are not paid on the Leader's Distributor Group sales like the
                  Group Development Bonus. Rather, Leadership Override Bonuses
                  of 5% are paid only on the group volume of Leaders who are not
                  more than six levels down line from a distributor who is also
                  a Leader.

                  For example, if Jane was a Leader and she sponsored John who
                  becomes a Leader and John sponsors Joe who becomes a Leader
                  and Joe sponsors Sam who becomes a Leader and Sam sponsors
                  Jill who becomes a Leader and Jill sponsors Mary who becomes a
                  Leader and Mary sponsors Martha who becomes a Leader and
                  Martha sponsors Cindy who becomes a Leader then Jane would be
                  entitled to a Leadership Override Bonus based on the group
                  sales volume of John, Joe, Sam, Jill, Mary and Martha. Jane
                  would not be entitled to a Leadership Override Bonus from
                  sales of Cindy because Cindy is more than six levels down line
                  from Jane. In addition and unlike the Group Development Bonus,
                  only sales of the Leaders (and not the Distributor Groups of
                  the Leaders) are taken into consideration when calculating the
                  Leadership Override Bonus.

Customer Loyalty Program

         Beginning in March of 2004, the Company implemented a customer loyalty
program which rewards customers with "Shopping Points" based on purchases of
certain products. Shopping points may be redeemed for product. Certain

                                       6
<PAGE>

limitations apply and shopping points expire after one year. The value of
unredeemed shopping points expected to be redeemed are recorded on the balance
sheet as deferred revenue.

Information Systems

         We use Infotrax to assist us with our information systems, including
order processing, commission payments, Web hosting and other back office data
management. Infotrax markets itself as a company providing technology solutions
to the direct marketing industry. Either party may terminate the relationship on
not more than 90 day notice. While InfoTrax is the only service provider that we
have used for assistance with our information systems, we have the option to use
other service providers. We believe that there are many service providers with
whom we could contract to provide back office support and otherwise assist us in
managing our information systems.

Our Web Site

         We maintain a Web site at www.questgrp.net. Our Web site is mainly for
information purposes, although we expect to generate some revenues from product
orders through our Web site as well as by phone and facsimile.

Manufacturing

         NeoSource products are manufactured for Quest exclusively by Perfect
Source. The time between Quest placing an order for NeoSource products and
delivery of those products from Perfect Source has averaged between two and four
weeks. While Perfect Source is the only vendor that we have used for production
of our NeoSource product, we have the option to use other manufacturers. We
believe that there are many manufacturers with whom we could contract to produce
NeoSource products.

Source and Availability of Raw Materials

         Raw materials used in the manufacture of our NeoSoure products are
available from a number of suppliers. To date, we have not experienced
difficulty in obtaining adequate sources of supply. Although there can be no
assurance we will be successful in locating raw materials in the future, we
believe it is unlikely that we will have difficulty obtaining sufficient supply
in the future.

Trademarks and Trade Names

         We have registered trademarks from the U.S. Patent and Trademark Office
for the NeoPack, NeoGuard, NeoSpring, NeoSlim, NeoBalance, NeoSource and
NeoGuard Chewable names.

Regulation

         FDA regulations relating specifically to foods for human use are set
forth in Title 21 of the Code of Federal Regulations. These regulations include
basic food labeling requirements and Good Manufacturing Practices ("GMPs") for
foods. Detailed dietary supplement GMPs have been proposed; however, no
regulations establishing such GMPs have been adopted that relate to the
NeoSource products. Additional regulations to implement the specific DSHEA
(defined below) requirements for dietary supplement labeling have also been
proposed, and final regulations may be implemented over a period of time upon
final publication.

         While our NeoSource products are not presently required to be submitted
to the Food and Drug Administration ("FDA") or any other regulatory agency for
approval, the manufacturing, packaging, labeling, advertising, distribution and
sale of our NeoSource products is subject to regulation by the Food and Drug
Administration ("FDA") which regulates our products under the Federal Food, Drug
and Cosmetic Act ("FDCA") and regulations promulgated thereunder. The FDCA

                                       7
<PAGE>

defines the terms "food" and "dietary supplement" and sets forth various
conditions that unless complied with may constitute adulteration or misbranding
of such products. The FDCA has been amended several times with respect to
dietary supplements, most recently by the Nutrition Labeling and Education Act
of 1990 (the "NLEA") and the Dietary Supplement Health and Education Act of 1994
(the "DSHEA").

         Compliance with manufacturing, packaging and labeling is done by our
third-party manufacturer and packager. We are careful to have our product labels
appropriately reviewed to help assure that the labels on our products comply
with all applicable laws, rules and regulations. We do not inspect our product
prior to shipment, however, the product is inspected and tested several times at
different stages in the manufacturing process by our manufacturer, Perfect
Source. In addition, Nippon Express inspects the product for damage upon receipt
from Perfect Source and also inspects each box that is shipped to assure that
they are packaged safely and the product is not damaged. As part of our review
and quality control efforts, we have received written representations from our
manufacturer, Perfect Source, that the products, including product labeling
requirements, comply with all CFR, NLEA and DSHEA regulations.

         Our products are also regulated by the Federal Trade Commission
("FTC"), the Consumer Product Safety Commission ("CPSC"), the United States
Department of Agriculture ("USDA") and the Environmental Protection Agency
("EPA"). Our activities, including our multi-level distribution activities, are
also regulated by various agencies of the states, localities and foreign
countries in which our products are sold.

         In the future, we may be subject to additional laws or regulations
administered by the FDA or other federal, state, local or foreign regulatory
authorities, the repeal or amendment of laws or regulations which we consider
favorable and/or more stringent interpretations of current laws or regulations.
We can neither predict the nature of such future laws, regulations,
interpretations or applications, nor what effect additional governmental
regulations or administrative orders, when and if promulgated, would have on its
business. They could, however, require reformulation of certain products to meet
new standards, recall or discontinuance of certain products not able to be
reformulated, imposition of additional record-keeping requirements, expanded
documentation of the properties of certain products, expanded or altered
labeling and/or scientific substantiation. Any or all such requirements could
have a material adverse effect on our results of operations, liquidity and
financial position.

         We believe that we are in compliance with all laws and governmental
regulations that are applicable to our company.

Competition

         We are engaged in a highly competitive business and are competing
directly with companies that have longer operating histories, more experience,
substantially greater financial resources, greater size, more substantial
marketing organizations, and established distribution channels that are better
situated in the market than us. We compete in the nutritional industry against
companies, which sell through retail stores as well as against other direct
selling companies. For example, we compete against manufacturers and retailers
of nutritional supplements which are distributed through supermarkets, drug
stores, health food stores, discount stores, etc. In addition to competition
from these manufacturers and retailers, we compete for product sales and
independent distributors with many other direct sales companies, including
Shaklee, NuSkin, Unicity, Amway and Nature's Sunshine. We believe that the
principal methods of competition in the direct sales marketing of nutritional
products are quality, price and brand name. In addition, the recruitment,
training, travel and financial incentives for the independent sales force are
important factors. We believe that our products compete strongly in quality and
price, but that our brand name is not well recognized in the industry at this
time. We also believe that our financial incentives for our independent sales
force is competitive with the financial incentives offered by our competitors.
No assurance can be given that we will be successful in competing in this
industry.

                                       8
<PAGE>

Research and Development

         To date, we have not conducted research and development activities as
understood using generally accepted accounting principles. Rather, we identified
the types of products and ingredients that we would like to produce. Perfect
Source, our manufacturer, then completed the development of the products to our
specifications. We believe that there are many manufacturers with whom we could
contract to produce our NeoSource products. We did not spend any funds on
research and development activities during the past two fiscal years.

Dependence Upon Customers and Distributors

         No single customer or distributor has been or is expected to be
responsible for ten percent or more of our revenues in any given quarterly
period. However, we believe that we have a core group of between six and eight
distributors who significantly influence and motivate our other distributors.
Our core distributors are not compensated any differently than our other
distributors and participate in the same contractual arrangement with Quest as
our other distributors. We do not offer distributorships for a fee and, to our
knowledge, none of our distributors offer distributorships for a fee. In the
future we may, however, modify our business strategy and have more than one
compensation arrangements in place for our distributors. The loss of any of our
core distributors would likely result in the loss of additional distributors and
could have a material adverse affect on our revenues and operations. We have no
arrangements in place whereby our distributors are required to continue working
with Quest.

Backlog

         Orders for our products are typically shipped within one business day
after receipt of an order. As a result, there is no significant backlog at any
time.

Employees

         As of December 9, 2004, we employed two people who work for us on a
full time basis and one person who works for us on a part-time basis. We believe
that our relations with our employees are satisfactory.

Item 2. Description of Property

         Our principal offices are located at 967 West Center, Orem, Utah 84057,
under terms of a one year lease with an unaffiliated lessor. Our current lease
began in September 2004. We are paying approximately $975 per month for
approximately 1100 square feet of space. We believe that this office space will
be adequate to meet the needs of current and expected growth during the next
twelve months. If our lease was terminated, we believe that comparable office
space is readily available at similar prices.

Item 3. Legal Proceedings

         None

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


         None


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                                       9
<PAGE>

                                     PART II

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


Market Information

         Currently, there is no public trading market for our securities and
there can be no assurance that any market will develop. If a market develops for
our securities, it will likely be limited, sporadic and highly volatile. We do
not have any agreements with market makers regarding the trading of our shares,
but at some time in the future a market maker may make application for listing
our shares.

Dividends

         To date, we have not paid dividends on our common stock. The
outstanding preferred stock is not entitled to receive dividend payments. The
payment of dividends on the common stock in the future, if any, is within the
discretion of the Company's board of directors (the "Board") and will depend
upon our earnings, capital requirements, financial condition and other factors
the Board views are relevant. The Board does not intend to declare any dividends
in the foreseeable future, but instead intends to retain all earnings, if any,
for use in our operations.

Holders of Record

         As of December 9, 2004, there were approximately 54 holders of record
of our common stock.

Issuance of Securities

         We had outstanding 1,000,000 shares of Series A Convertible Preferred
Stock. This stock was converted into common stock on a one-for-two basis in
September, 2004.

         The Company also had outstanding 259,000 shares of Series B Convertible
Preferred Stock. The Series B Convertible Preferred Stock is convertible into
common stock on a one-for-one basis after August 1, 2004 and each share is
entitled to one vote at a meeting of stockholders. Between August 4, 2004 and
December 9, 2004, 249,000 of these shares were converted into common stock. We
currently have only 10,000 shares of Series B Convertible Preferred Stock
outstanding, none of which is owned by the people identified in the Security
Ownership table below. The conversion of these securities was exempt from
registration under Sections 4(2) and 4(6) of the Securities Act of 1933 and
pursuant to Regulation D as promulgated under the Securities Act of 1933. The
Company did not use an underwriter in connection with this private offering.

Purchases of Equity Securities by the Small Business Issuer and Affiliated
Purchasers

         Neither the issuer nor, to the knowledge of the issuer, any affiliated
purchaser purchased any equity securities of the Company during the period
covered by this report.

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

         The following discussion and analysis provides information which
management believes is relevant to an assessment and understanding of our
consolidated results of operations and financial condition. The discussion
should be read in conjunction with the consolidated financial statements and
notes thereto.

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<PAGE>

Overview

         We develop and distribute a line of nutritional products that we call
the NeoSource products. The NeoSource product line is comprised of seven
products. Six of these products are grouped into seven different combinations
called Product Sets. An antioxidant and vitamin product, called NeoGuard
Chewable, is not included in any of the product sets. Our approximate net sales
for the fiscal year ended September 30, 2004 breakdown is as follows:

         o        69.1% of net sales are generated from sales of Product Sets.
         o        8.8% of net sales are generated from sales of individual
                  products, excluding NeoGuard Chewable.
         o        5.5% of net sales are generated from sales of NeoGuard
                  Chewable.
         o        0.1% revenues from enrollment fees, which fees include payment
                  for distributor kits.
         o        10.6% of our net sales are generated from shipping fees.
         o        The remaining 5.9% of our net sales are generated from
                  miscellaneous sales and shipping fees.

         Our products are nutritional supplements. Our products are not intended
to diagnose, treat, cure or prevent any disease. Our products have not been
evaluated by the Food and Drug Administration. We have not conducted product
testing to determine whether the products are effective for the intended use.

Financial Position

         We had $86,637 in cash as of September 30, 2004, an increase of $39,387
from September 30, 2003. Working capital as of September 30, 2004 was $22,544 as
compared to a working capital of $18,056 at September 30, 2003. These increases
were primarily due to increased revenues over the prior year.

Years Ended September 30, 2004 and 2003

         During the fiscal year ended September 30, 2004 we had net sales of
$1,305,960 and our cost of goods sold was $371,379 compared to $817,440 in net
sales and a $223,113 cost of goods sold during the year ended September 30,
2003. Approximately 98% of our 2004 revenues and approximately 96% of our 2003
sales were generated from purchasers in Japan and the remaining revenues were
generated from purchasers in the U.S. Our revenues were approximately comprised
of the following components:

                                                         2004          2003
                                                         ----          ----
Sales of product sets                                 $902,419      $577,930
Sales of individual products                           114,925        73,570
Sales of NeoGuard Chewable                              71,828        42,507
Revenues from distributors' enrollment fees,
  which includes kits                                      350         7,976
Shipping and handling fees                             138,432        78,665
Miscellaneous                                           78,006        36,792

         During the fiscal year ended September 30, 2004 our selling, general
and administrative ("SG&A") expenses were $897,183 compared to $618,359 for the
prior fiscal year. Our SG&A expenses were approximately comprised of the
following components:

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                                             2004                 2003
                                             ----                 ----
         Commissions                      $395,135             $212,764
         Salaries and Wages                182,137              144,674
         Contract Labor                     25,225               22,916
         Fee Payment Expense                60,000               60,000
         Professional Fees                  71,148               47,424
         Travel                             42,713               39,264
         Rent                               11,700               24,701
         Bank Service charges               27,586               14,117
         Payroll taxes and fees             23,668               18,747
         Misc.                              57,873               33,752

         During the two prior fiscal years we did not conduct research and
development activities. Rather, we identified the types of products and
ingredients that we would like to produce. Perfect Source, our manufacturer,
then completed the development of the products to our specifications. We are
charged for the product purchased, but are not charged for research and
development fees incurred by Perfect Source for their work in creating products
utilizing the specified ingredients. We believe that there are many
manufacturers with whom we could contract to produce our NeoSource products. We
expect this type of arrangement to continue in the future and do not expect to
incur costs relating to research and development.

         During the fiscal year ended September 30, 2004 our interest expenses
was $11,167 and our interest expense for the comparable period during the prior
year was $12,330. This expense was comprised primarily of interest on
outstanding revolving loans.

Liquidity and Capital Resources

         We realized a net income of $112,395 during our fiscal year ended
September 30, 2004. This is our first fiscal year of profitable operations. To
date, we have financed our operations principally through funds borrowed under
revolving loan arrangements, private placements of equity securities and product
sales. Specifically, during the fiscal year ended September 30, 2004, we
generated $13,374 in net cash from operating activities and $31,773 in net cash
from investing activities. As of September 30, 2004, we had $86,637 in cash,
$225,930 in current assets, $203,386 in current liabilities and working capital
of $22,544. At September 30, 2004, we had not committed to spend any material
funds on capital expenditures.

         In October 2001 and February 2002, Quest entered into Revolving Loan
and Security Agreements (the "McKinley Revolving Loans") with McKinley
Enterprises Inc. Profit Sharing Plan and Trust ("McKinley"). Under the terms of
the agreements, McKinley agreed to make periodic loans to Quest in an aggregate
principal amount at any one time outstanding not to exceed $103,000. As of
December 9, 2004, the principal amount of $103,000 was owing under the McKinley
Revolving Loans. All amounts lent were evidenced by promissory notes that bear
interest at the rate of percent (10%) per annum. Principal and accrued interest
are due and payable in a single balloon payment on April 18, 2005. Accrued
interest at September 30, 2004 was approximately $28,000. No assurance can be
given that we will have the resources to repay any or all of the amounts owing
to McKinley when the obligations come due.

         In September 2001, Quest entered into a Revolving Loan and Security
Agreement (the "Bateman Revolving Loan") with Bateman Dynasty, LC, a Utah
limited liability company ("Bateman") and a stockholder of Quest. Under the
terms of the agreement, Bateman lent Quest the approximately $50,000. This
amount was subsequently repaid with interest at the rate of ten percent per
annum. As additional consideration to lend the funds, Bateman (i) is entitled to
quarterly payments equal to two percent of net sales in perpetuity during
periods where Quest has pre-tax income in excess of $20,000 and (ii) is entitled
to payments in perpetuity equal to (a) $5,000 per month which payment is due
only when monthly net sales exceeds $100,000, (b) $10,000 per month in any month
in which net sales exceed $200,000, and (c) $20,000 per month in any month in
which net sales exceed $1,000,000. The effect of this arrangement will be to

                                       12
<PAGE>

increase our costs in perpetuity by the stated amounts. Quest entered into this
type of arrangement because, at the time, these were the best terms that it was
able to negotiate for such capital.

Off-Balance Sheet Arrangements

         We do not have any off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that is material to
investors.

Critical Accounting Policies

         The following is a discussion of our critical accounting policies and
estimates that management believes are material to an understanding of our
results of operations and which involve the exercise of judgment or estimates by
management.

         Revenue is recognized when products are shipped, which is when title
passes to independent distributors and to consumers. A reserve for product
returns is accrued based on historical experience. The Company generally
requires cash or credit card payment at the point of sale.

         The Company has determined that no allowance for doubtful accounts is
necessary. Amounts received prior to shipment and title passage to distributors
are recorded as deferred revenue.

         Independent distributors are able to earn financial benefits (retail
commissions, rebates and group development bonuses) if certain monthly minimum
sales qualifications are met. These financial benefits are recognized in the
same period that the products are shipped to the independent distributors.

         Enrollment fees paid by independent distributors are recognized as
revenue when the fee is paid.

         During 2004, the Company implemented a customer loyalty program which
rewards customers with "Shopping Points" based on purchases of certain products.
Shopping points may be redeemed for product. Certain limitations apply and
shopping pints expire after one year. The value of unredeemed shopping points
expected to be redeemed are recorded on the balance sheet as deferred revenue.

Recent Accounting Pronouncements

         In May 2003, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 150, Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity (SFAS 150). The
Statement establishes standards for how an issuer classifies and measures
certain financial instruments with characteristics of both liabilities and
equity. The Statement is effective for financial instruments entered into or
modified after May 31, 2003. This statement is not expected to have a material
effect on the Company's financial position or results of operations.

         In April 2003, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 149, Amendment of Statement 133
on Derivative Instruments and Hedging (SFAS 149). This Statement amends and
clarifies accounting for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities under SFAS
133. The Statement is effective (with certain exceptions) for contracts entered
into or modified after June 30, 2003. This statement is not expected to have a
material effect on the Company's financial position or results of operations.

         In January 2003, the FASB issued Interpretation 46, "Consolidation of
Variable Interest Entities" (FIN 46), which addresses consolidation by business
enterprises of variable interest entities. FIN 46 clarifies the application of
Accounting Research Bulletin No. 51, "Consolidated Financial Statements", to
certain entities in which equity investors do not have the characteristics of a
controlling financial interest or do not have sufficient equity at risk for the
entity to finance its activities without additional subordinated financial

                                       13
<PAGE>

support from other parties. FIN 46 applies immediately to variable interest
entities created after January 31, 2003 and to variable interest entities in
which an enterprise obtains an interest after that date. It applies in the first
fiscal year or interim period beginning after June 15, 2003, to variable
interest entities in which an enterprise holds a variable interest that it
acquired before February 1, 2003. The Company has not identified and does not
expect to identify any variable interest entities that must be consolidated.

Inflation

         We do not expect the impact of inflation on operations to be
significant.

Risk Factors

         In addition to the risks set forth above, we are subject to certain
other risk factors due to the industry in which we compete and the nature of our
operations. These risk factors include the following:

         Because we are a new business and we have not proven our ability to
generate regular profit, an investment in Quest is risky. We have no meaningful
operating history so it will be difficult for you to evaluate an investment in
our stock. Our operations are subject to all risks inherent in the creation of a
new business and the marketing of new products, including the absence of a
history of significant operations and of proven products which have been
produced and sold over a significant period of time. We are continuing to
establish many functions which are necessary to conduct business, including,
managerial and administrative structure, marketing activities, financial
systems, computer systems, web development and personnel recruitment. For the
fiscal year ended September 30, 2004, we had $1,305,960 in net income of
$112,395. We cannot assure that we will ever be profitable. Since we have not
proven the essential elements of profitable operations, you will be furnishing
venture capital to us and will bear the risk of complete loss of your investment
in the event we are not successful.

         At September 30, 2004 we had a nominal amount of working capital and a
stockholder's (deficit) of ($52,137). As of September 30, 2004, we had assets of
$306,249, liabilities of $358,386 and a working capital of $22,544. We are
devoting substantially all of our present efforts to establishing new business.
.. In the past, we have been able to extend the terms of the McKinley Revolving
Loans that now are due in April 2005. We expect in the future to be able extend
the terms or otherwise re-negotiate the payment of this loan on terms that are
advantageous to us. If not, we estimate that we will need to raise at least
$30,000 in additional funding to pay off the McKinley Revolving Loans that come
due in April 2005. If we are unsuccessful in re-negotiating these loans or
raising additional funds it may result in the discontinuance of our business due
to lack of funding.

         We do not have sufficient funding to repay outstanding debt. Our cash
reserves are not sufficient to pay the amounts owing on outstanding promissory
notes to McKinley in the principal amount of $103,000. On September 30, 2004,
approximately 28,000 in accrued interest was owing on this obligation. These
obligations are due in a single balloon payment on April 18, 2005. . In the
past, we have been able to extend the terms of the McKinley Revolving Loans that
now are due in April 2005. We expect in the future to be able extend the terms
or otherwise re-negotiate the payment of this loan on terms that are
advantageous to us. If not, we estimate that we will need to raise at least
$30,000 in additional funding to pay off the McKinley Revolving Loans that come
due in April 2005., If we are unsuccessful in re-negotiating these loans or
raising additional funds it may result in the discontinuance of our business due
to lack of funding. We will be looking primarily to funding from new investment
and revenue generated from our business operations to repay these amounts.

         Our assets are subject to a security interest held by McKinley
Enterprises Inc. Profit Sharing Plan and Trust. Our assets are subject to a
security interest held by McKinley Enterprises Inc. Profit Sharing Plan and
Trust relating to outstanding promissory notes in the principal amount of
$103,000 and approximately $28,000 in accrued interest as of September 30, 2004.
Principal and interest are payable in a single balloon payment on April 18,
2005. In the event we are not able to repay the amounts owing on these
obligations, it will have a material adverse effect on our operations, including
the possibility of requiring us to deliver all of our assets to McKinley
Enterprises Inc. Profit Sharing Plan and Trust and cease operations.

                                       14
<PAGE>

         If our marketing costs exceed our estimates, it may impact our ability
to continue operations. We believe we have accurately estimated our needs for
the next twelve months based on our projected revenues. There can be no
assurance that we have accurately projected future revenues. It is possible that
our marketing costs will exceed our estimates or that our other costs will be
higher than estimated. If this happens, it may impact our ability to generate
revenue and we would need to seek additional funding. We have no arrangements in
place whereby we could obtain additional funding.

         Our success is dependent on our ability to attract, maintain and
motivate distributors. Our success depends in significant part upon our ability
to attract, maintain, and motivate a large base of distributors who act as
independent contractors. As of December 9, 2004, we had 112 distributors and 911
members who buy product from us but who do not act as distributors. No single
distributor is responsible for ten percent or more of our revenues in any given
quarterly period. However, we believe that we have a core group of between six
and eight distributors who significantly influence and motivate our other
distributors. The loss of any of our core distributors would likely result in
the loss of additional distributors and could have a material adverse affect on
our revenues and operations. In addition, our ability to attract distributors
could be negatively affected by adverse publicity relating to our industry, our
products, our operations or competition with competing businesses who may
recruit our distributors. Because of the number of factors that impact the
recruiting and retention of distributors, we cannot predict when or to what
extent such increases or decreases in the number of distributors will occur.

         If we lose the services of Mr. Craig Davis, it is unlikely that our
business could continue. We are in the development stage and require the
services of our president to become established. There is intense competition
for management and marketing personnel in our business. If we lost the services
of our president, it is questionable whether we would be able to find a
replacement and it is likely our business would fail.

         Our product formulas are not patented and could be misappropriated and
used by competitors. We have no patented products that would preclude or inhibit
competitors from selling products that are substantially similar to our
products. We have filed trademark applications for the names we are using to
market a number of our NeoSource products. However, our NeoSource product
ingredients are listed on our product labels and could be replicated by our
competitors. As a result, our competitors could manufacture and market products
that are substantially similar to our NeoSource products under a different
label. If this occurs it is unlikely that we would have any legal recourse to
prohibit such conduct.

         We depend on Perfect Source to manufacture our products. Our products
were developed and are manufactured for us by Perfect Source Natural Products,
Inc. Perfect Source is located in Fullerton, California and is not affiliated
with Quest. We have no written agreement with Perfect Source. We submit purchase
orders to Perfect Source for product meeting our specifications and, upon
acceptance of such purchase orders, Perfect Source manufactures our product.
There are no arrangements whereby Perfect Source has agreed or is required to
continue to accept our purchase orders or manufacture product for us. We believe
that the ingredients to produce our NeoSource products are widely available,
that our products could be produced through a number of other third parties and
that there are a large number of companies with whom we could contract to
produce our product. However, any termination in our arrangement with Perfect
Source might interrupt service to our customers and distributors and possibly
impair our ability to market and sell products.

         We do not anticipate paying dividends in the foreseeable future. We
have never paid dividends on our stock. The payment of dividends, if any, on the
common stock in the future is at the discretion of the Board of Directors and
will depend upon our earnings, if any, capital requirements, financial condition
and other relevant factors. The Board does not intend to declare any dividends
on our common stock in the foreseeable future.

         Our business could be adversely affected by currency fluctuation
between the U.S. dollar and the Japanese yen. Over 90% of our sales are to

                                       15
<PAGE>

purchasers in Japan. Payment for our products is required prior to shipping and
all sales are paid for in U.S. dollars. If the U.S. dollar strengthens against
the Japanese yen, our products will become more expensive to purchasers in Japan
which could adversely impact our sales.

         We have no independent directors serving on our Board of Directors. As
a result, our Board may be influenced by the concerns, issues or objectives of
management to a greater extent than would occur with independent board members.
In addition, we do not have the benefit of having persons independent of
management review, comment and direct our corporate strategies and objectives.

         We have an obligation to make payments to Bateman Dynasty, LC in
perpetuity which will result in a reduction in our profits, if any. In September
2001, we entered into a Revolving Loan and Security Agreement with Bateman
Dynasty, LC, a Utah limited liability company and a stockholder. Under the terms
of the agreement, Bateman lent us approximately $50,000. This amount was
subsequently repaid with interest at the rate of ten percent per annum. As
additional consideration to lend the funds, Bateman (i) is entitled to quarterly
payments equal to two percent of net sales in perpetuity during periods where
Quest has pre-tax income in excess of $20,000 and (ii) is entitled to payments
in perpetuity equal to (a) $5,000 per month which payment is due only when
monthly net sales exceeds $100,000, (b) $10,000 per month in any month in which
net sales exceed $200,000, and (c) $20,000 per month in any month in which net
sales exceed $1,000,000. The effect of this arrangement will be to increase our
costs in perpetuity by the stated amounts. We entered into this type of
arrangement because, at the time, these were the best terms that we were able to
negotiate for capital.

         We do not anticipate paying dividends in the foreseeable future. The
Company does not currently intend to pay cash dividends on its common or
preferred stock and does not anticipate paying such dividends at any time in the
foreseeable future. At present, the Company will follow a policy of retaining
all of its earnings, if any, to finance the development and expansion of its
business.

         There is not a public market for the Company's securities. The
Company's outstanding securities are not listed on any public market. There can
be no assurance that the Company's securities will ever be listed on a public
market, or that if they are listed, that a regular and established market will
be developed and maintained for the securities. There can also be no assurance
as to the depth or liquidity of any such market for the common stock or the
prices at which holders may be able to sell the shares. As a result, an
investment in our securities may be illiquid, and investors may not be able to
liquidate their investment readily or at all when they need or desire to sell.

Item 7. Financial Statements

         See index to consolidated financial statements and consolidated
financial statement schedules beginning on page F-1 hereof.

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

         None

Item 8A. Controls and Procedures

         The Company has evaluated, with the participation of the Company's
Chief Executive Officer and Chief Financial Officer, the effectiveness of the
design and operation of the Company's disclosure controls and procedures as of
September 30, 2004, pursuant to Exchange Act Rule 15d-15. Based upon that
evaluation, the Chief Executive Officer and Chief Financial Officer concluded
that the Company's disclosure controls and procedures are effective in timely
alerting him to material information relating to the Company required to be
included in the Company's periodic SEC filings. There have been no significant
changes in internal controls or in other factors that could significantly effect
internal controls subsequent to the date of our most recent evaluation.

                                       16
<PAGE>

Item 8B. Other Information

         None


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       17
<PAGE>

                                    PART III

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

         Set forth below is certain information concerning our directors and
executive officers as of December 9, 2004.

                                                                   With the
   Name            Age          Position                         Company Since
   ----            ---          --------                         -------------

Craig Davis        46     President and Director                       2001

Teresa Fackrell    33     Vice President, Secretary, Treasurer
                          & Director                                   2001

Brenda Hall        36     Director                                     2001
---------------

         Craig Davis. Mr. Davis is our president and a director. He has been a
director and officer since August 2001 and his term as a director expires at the
next annual meeting of stockholders. Mr. Davis has been involved in the direct
sales business for approximately fourteen years as a corporate executive or
industry consultant. Mr. Davis has experience in the marketing and selling of
nutritional products. Mr. Davis does not have prior experience in research and
development activities for nutritional products. From 1996 to 1998, Mr. Davis
was the Executive Vice President of Global Connections, a private company, and
his duties included information systems, warehousing, inventory and customer
service oversight. Global Connections' principal business involved procuring
overstocked and discontinued products and selling them to independent
distributors and customers at discount prices. While Mr. Davis does not have
personal knowledge of the details, it is his understanding that Global
Connections went through some kind of reorganization with another company and is
no longer conducting business under the Global Connection name. From 1998 to
1999, Mr. Davis was the Director of support services for Nu Skin Enterprises,
Inc., a public company, and his duties involved management of ISP and
telecommunications service centers. Nu Skin Enterprises, Inc. is a multinational
direct sales company. Nu Skin Enterprises, Inc. was founded in 1984 and has
expanded into more than 30 markets worldwide with products being sold one-to-one
by over 500,000 active distributors through three fully owned subsidiaries, Nu
Skin, Pharmanex and Big Planet. Nu Skin distributes personal care products with
an emphasis on skin care. Pharmanex distributes nutritional products. Big Planet
provides Internet and Web page hosting service, mobile phone and voice mail
service and web mail service. From 1999 to 2001, Mr. Davis was the Chief
Operating Officer of One World Online.com, a public company, and his duties
involved product development and purchasing, information systems, customer
support and human resources oversight. One World Online provided its members
Internet and Web page hosting service, miscellaneous discount merchandise and
purchase incentives on the Internet. One World Online ceased to conduct business
in 2001. Prior to 1996, Mr. Davis work as either an executive or consultant for
Neways, Enrich International, 2021 Software and others. His range of experience
includes product development and marketing, international business development
and operations. Mr. Davis is not engaged in consulting work or providing other
services to his prior employers.

         Teresa Fackrell. Ms. Fackrell is our vice president, secretary,
treasurer and a director. She has been an officer since August 2001, a director
since May 2002 and her term as a director expires at the next annual meeting of
stockholders. Ms. Fackrell has been employed by several direct sales companies
during the past ten years in a wide range of management and operations
assignments for established public companies and an operations consultant for
start-up companies. She has experience in the marketing and selling of
nutritional products. Ms. Fackrell does not have prior experience in research
and development activities for nutritional products. Her prior assignments
include, director of Business Operations for Global Connections from 1995 to
1998 and her duties included management of customer service and data processing.
Ms. Fackrell acted as Director of Business Operations for Big Planet from 1998

                                       18
<PAGE>

to 2000 and her duties included management of business processes and data
processing. Ms. Fackrell acted as Director of Business Operations for One World
Online.com from 2000 to 2001 and her duties included management of business
processes and data processing. Ms. Fackrell is not engaged in consulting work or
providing other services to her prior employers.

         Brenda Hall. Ms. Hall has been a director since August 2001 and her
term as a director expires in 2002. For the past five years Ms. Hall has been
principally employed as the president of Dassity, Inc., a private company.
Dassity, Inc. provides bookkeeping, accounting and other services. Ms. Hall's
duties at Dassity, Inc. include bookkeeping and accounting services. She does
not have prior experience in the nutritional products industry.

         Our executive officers are elected by the board of directors on an
annual basis and serve at the discretion of the board.

         There are no family relationship among our directors, executive
officers or persons nominated or chosen to become directors or executive
officers.

         Our policy is to encourage, but not require, members of the Board of
Directors to attend annual stockholder meetings. We did not have an annual
stockholder meeting during the prior year.

         Our Board of Directors does not have a standing, audit, nominating or
compensation committee. Given our size, it is not practicable to staff these
committees. The Board of Directors, which includes each member of the Board who
is then serving, participates in the consideration of director nominees. The
Board of Directors is in the process of formulating a policy with regard to the
consideration of director candidates recommended by security holders and the
minimum qualifications of such candidates. It anticipates having such a policy
in place before our next annual stockholders meeting. Two of the members of the
board of directors are also officers of the Company and are not considered
"independent" as defined by Rule 4200(a) of the NASD's Marketplace Rules. The
Company believes that Ms. Hall, however, is independent under this rule.

         The Board of Directors met on two occasions during the fiscal year
ended September 30, 2004. It also acted by written consents of the Board during
this period.

Security Holder Communication

         Stockholders who would like to send communications to the Board of
Directors may do so by submitting such communications to them at
contactus@questgrp.net. The Board of Director's current policy is to disseminate
emails received at this email address to all members of the Board of Directors.
In the event that the number of emails (including spam) received at such email
address become unmanageable, then the Board of Directors may change its policy
and/or procedure with respect to security holder communication. The Board of
Directors suggests, but does not require, that such submissions include the name
and contact information of the security holder making the submission

Section 16(a) Beneficial Ownership Reporting Compliance

         Our executive officers, directors and persons who beneficially own more
than 10% of our common stock are not required to file initial reports of
ownership and reports of changes in ownership with the SEC pursuant to Section
16(a) of the Securities Exchange Act of 1934.

Code of Ethics

         We have adopted a code of ethics that applies to our principal
executive officer, principal financial officer, principal accounting officer or
controller and persons performing similar functions.

                                       19
<PAGE>

Item 10. Executive Compensation

         The table below set forth certain information concerning compensation
we paid to our president (chief executive officer) and all other executive
officers with annual compensation in excess of $100,000, determined for the year
ended September 30, 2004 (the "Named Executive Officers").

Summary Compensation Table. The following table provides certain information
regarding compensation paid to the Named Executive Officers.
<TABLE>
<CAPTION>
                                                   SUMMARY COMPENSATION TABLE


                                           Annual Compensation                     Awards           Payouts
                                  ---------------------------------------- ----------------------- ------------
                                                                           Restricted     Stock                   All Other
        Name and                                          Other Annual       Stock       Options/    LTIP        Compensation
   Principal Position       Year  Salary ($)  Bonus ($)   Compensation($)   Awards ($)    SAR(#)    Payouts($)       ($)
   ------------------       ----  ----------  ---------   ---------------  -----------   --------   ----------   ------------
<S>                         <C>    <C>          <C>            <C>            <C>           <C>       <C>            <C>
Craig Davis,                2002   60,000       ---            ---            ---           ---       ---            ---
President and Director      2003   60,000       ---            ---            ---           ---       ---            ---
                            2004   96,000       ---            ---            ---           ---       ---            ---
---------------
</TABLE>
Compensation of Directors

         We paid no cash fees or other consideration to our directors for
service as directors during the last three fiscal years. We have made no
agreements regarding future compensation of directors. All directors are
entitled to reimbursement for reasonable expenses incurred in the performance of
their duties as members of the Board of Directors.

Employment Agreement

         We have entered into an employment agreement with Craig Davis for a
term expiring in September 2005, subject to automatic renewal for successive one
year periods unless notice of termination is given by either party within thirty
days of the expiration of the then current term. His employment agreement
provides that he shall receive (i) an annual salary of $96,000, (ii) increases
in his annual salary if and when Quest reaches targeted sales amounts, (iii)
bonuses in an amount equal to 1.2% of monthly net sales, provided that Quest has
monthly pre-tax monthly income in excess of $20,000 and Quest is not indebted
under its current loan arrangements, and (iv) may participate in other benefits
offered to Quest employee's generally. The employment agreement also provides
for a six-month non-compete.

Indemnification for Securities Act Liabilities

         Nevada law authorizes, and our Bylaws and Certificate of Incorporation
provide for, indemnification of our directors and officers against claims,
liabilities, amounts paid in settlement and expenses in a variety of
circumstances. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted for directors, officers and controlling
persons pursuant to the foregoing, or otherwise, we have been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable.

Compensation Committee Interlocks and Insider Participation

         None of our executive officers serve on our compensation committee (or
in a like capacity) or on the compensation committees of any other entity.

                                       20
<PAGE>

Item 11. Security Ownership of Certain Beneficial Owners and Management

         Common Stock

         Except as otherwise notes, the following table sets forth certain
information with respect to the beneficial ownership of our common stock as of
December 9, 2004, for: (i) each person who is known by us to beneficially own
more than five percent of the our common stock, (ii) each of our directors,
(iii) our Named Executive Officer, and (iv) all directors and executive officers
as a group. As of December 9, 2004, we had 10,249,000 shares of common stock
outstanding.


     Name and Address      Shares Beneficially   Percentage
  of Beneficial Owner(1)           Owned          of Total       Position
  ----------------------   -------------------   ----------      --------

Craig A. Davis                   2,660,000          26.0%   President & Director

Teresa Fackrell                    996,000           9.7%   Secretary, Treasurer
                                                                  & Director
Brenda Hall                             --                         Director

Executive Officers and           3,656,000          35.7%
  Directors as a Group
 (three persons)

Bateman Dynasty, LC (2)          6,323,000          61.7%
1065 W. 1150 S.,
Provo, Utah 84601
-----------------

(1)  Except where otherwise indicated, the address of the beneficial owner is
     deemed to be the same address as our address.
(2)  These shares are owned by Bateman Dynasty, LC, a private limited liability
     company owned by the Bateman Dynasty Trust, of which Brenda M. Hall is the
     trustee and Mr. Lynn Bateman's grandchildren are the beneficiaries. Mr.
     Bateman is the sole manager of the Bateman Dynasty, LC which is deemed to
     have sole voting and dispositive powers with respect to these shares.

Preferred Stock

         We had outstanding 1,000,000 shares of Series A Convertible Preferred
Stock. This stock was converted into common stock on a one-for-two basis in
September, 2004.

         The Company also had outstanding 259,000 shares of Series B Convertible
Preferred Stock. The Series B Convertible Preferred Stock is convertible into
common stock on are one-for-one basis after August 1, 2004 and each share is
entitled to one vote at a meeting of stockholders. Between August 4, 2004 and
December 9, 2004, 249,000 of these shares were converted into common stock. We
currently have only 10,000 shares of Series B Convertible Preferred Stock
outstanding, none of which is owned by the people identified in the above table.

Changes in Control

         We are not aware of any arrangements which may, at a subsequent date,
result in a change in control of our company.

Securities Authorized for Issuance Under Equity Compensation Plans

         We have no securities authorized for issuance under equity compensation
plans.

                                       21
<PAGE>

Item 12. Certain Relationships and Related Transactions

         In October 2001 and February 2002, Quest entered into Revolving Loan
and Security Agreements (the "McKinley Revolving Loans") with McKinley
Enterprises Inc. Profit Sharing Plan and Trust ("McKinley"). The trustee and
participant of McKinley is David Nemelka. Mr. Nemelka is a business acquaintance
of both Mr. Davis and Ms. Hall. Due in part to this relationship, McKinley
entered into the McKinley Revolving Loans and McKinley's relationship to Quest
is that of a lender. Under the terms of the agreements, McKinley agreed to make
periodic loans to Quest in an aggregate principal amount at any one time
outstanding not to exceed $103,000. As of September 30, 2004, the principal
amount of $103,000 was owing under the McKinley Revolving Loans and accrued
interest of approximately $28,000 was due as of that date. All amounts lent were
evidenced by promissory notes that bear interest at the rate of percent (10%)
per annum. Principal and accrued interest are due and payable in a single
balloon payment on April 18, 2005.

         In September 2001, Quest entered into Revolving Loan and Security
Agreement (the "Bateman Revolving Loan") with Bateman Dynasty, LC, a Utah
limited liability company ("Bateman") and a stockholder of Quest. Under the
terms of the agreement, Bateman lent Quest the approximately $50,000. This
amount was subsequently repaid with interest at the rate of ten percent per
annum. As additional consideration to lend the funds, Bateman (i) is entitled to
quarterly payments equal to two percent of net sales in perpetuity during
periods where Quest has pre-tax income in excess of $20,000 and Quest is not
indebted under its current loan arrangements and (ii) is entitled to payments in
perpetuity equal to (a) $5,000 per month which payment is due only when monthly
net sales exceeds $100,000, (b) $10,000 per month in any month in which net
sales exceed $200,000, and (c) $20,000 per month in any month in which net sales
exceed $1,000,000.

Item 13. Exhibits

Exhibits

         Listed on page 25 hereof.

Reports on Form 8-K

         None

Item 14. Principal Accountant Fees and Services

Audit Fees

          The aggregate fees billed for professional services rendered by our
principal accountant for the audit of our annual financial statements, review of
financial statements included in our quarterly reports and other fees that are
normally provided by the accountant in connection with statutory and regulatory
filings or engagements for the fiscal years ended September 30, 2004 and 2003
were $13,023 and $8,705, respectively.

Audit Related Fees

          The aggregate fees billed for assurance and related services by our
principal accountant that are reasonably related to the performance of the audit
or review of our financial statements, other than those previously reported in
this Item 14, for the fiscal years ended September 30, 2004 and 2003 were $0 and
$0, respectively.

                                       22
<PAGE>

Tax Fees

          The aggregate fees billed for professional services rendered by our
principal accountant for tax compliance, tax advice and tax planning for the
fiscal years ended September 30, 2004 and 2003 were $600 and $600, respectively.

All Other Fees

          The aggregate fees billed for products and services provided by the
principal accountant, other than those previously in this Item 14, for the
fiscal years ended September 30, 2004 and 2003 were $600 and $600, respectively.

Audit Committee

         The Company's Board of Directors functions as its audit committee. It
is the policy of the Company for all work performed by our principal accountant
to be approved in advance by the Board of Directors. All of the services
described above in this Item 14 were approved in advance by our Board of
Directors.

                                       23
<PAGE>

                                   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.

                                               QUEST GROUP INTERNATIONAL, INC.
                                               (Registrant)



Date: December 21, 2004                        By  /s/ Craig Davis
                                               ---------------------------------
                                               Craig Davis,
                                               President and Director


         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.

     Signature                        Title                           Date
     ---------                        -----                           ----

 /s/ Craig Davis          President and Director (Principal    December 21, 2004
-----------------------   Executive Officer and Principal
Craig Davis               Financial and Accounting Officer)


 /s/ Teresa Fackrell      Vice President, Secretary,           December 21, 2004
-----------------------   Treasurer & Director
Teresa Fackrell


 /s/ Brenda Hall          Director                             December 21, 2004
-----------------------
Brenda Hall

                                       24
<PAGE>

                                  EXHIBIT INDEX

EXHIBIT
  NO.                          DESCRIPTION OF EXHIBIT
-------                        ----------------------

3(i).1   Restated Certificate of Incorporation (Incorporated by reference to
         Exhibit 3(i).1 of the Company's Registration Statement on Form SB-2
         filed June 3, 2002, File No. 333-89628).

3(i).2   Certificate of Designation for the Series A Convertible Preferred Stock
         (Incorporated by reference to Exhibit 3(i).2 of the Company's
         Registration Statement on Form SB-2 filed June 3, 2002, File No.
         333-89628).

3(i).3   Certificate of Amendment to the Certificate of Designation
         (Incorporated by reference to Exhibit 3(i).3 of the Company's
         Registration Statement on Form SB-2 filed June 3, 2002, File No.
         333-89628).

3(i).4   Certificate of Designation for the Series B Convertible Preferred Stock
         (Incorporated by reference to Exhibit 3(i).4 of the Company's Annual
         Report on Form 10-KSB for the period ended September 30, 2003).

3(ii).1  Bylaws (Incorporated by reference to Exhibit 3(ii).1 of the Company's
         Registration Statement on Form SB-2 filed June 3, 2002, File No.
         333-89628).

10.1     Employment Agreement of Craig Davis (Incorporated by reference to
         Exhibit 10.1 of the Company's Registration Statement on Form SB-2 filed
         June 3, 2002, File No. 333-89628).

10.2     Employment Agreement of Teresa Fackrell (Incorporated by reference to
         Exhibit 10.2 of the Company's Registration Statement on Form SB-2 filed
         June 3, 2002, File No. 333-89628).

10.3     Revolving Loan and Security Agreement by and between Quest and Craig
         Davis (Incorporated by reference to Exhibit 10.3 of the Company's
         Registration Statement on Form SB-2 filed June 3, 2002, File No.
         333-89628).

10.4     Revolving Loan and Security Agreement by and between Quest and Bateman
         Dynasty, LC, dated September 1, 2001 (Incorporated by reference to
         Exhibit 10.4 of the Company's Registration Statement on Form SB-2 filed
         June 3, 2002, File No. 333-89628).

10.5     Amendment No. 1 to the Revolving Loan and Security Agreement by and
         between Quest and Bateman Dynasty, LC, dated February 1, 2002
         (Incorporated by reference to Exhibit 10.5 of the Company's
         Registration Statement on Form SB-2 filed June 3, 2002, File No.
         333-89628).

10.7     Revolving Loan and Security Agreement by and between Quest and McKinley
         Enterprises Inc. Profit Sharing Plan and Trust, dated October 12, 2001
         (Incorporated by reference to Exhibit 10.6 of the Company's
         Registration Statement on Form SB-2 filed June 3, 2002, File No.
         333-89628).

10.7     Revolving Loan and Security Agreement by and between Quest and McKinley
         Enterprises Inc. Profit Sharing Plan and Trust, dated February 13, 2002
         (Incorporated by reference to Exhibit 10.7 of the Company's
         Registration Statement on Form SB-2 filed June 3, 2002, File No.
         333-89628).

10.8     Amendment Number One to the Revolving Loan and Security Agreement by
         and between Quest and McKinley Enterprises Inc. Profit Sharing Plan and
         Trust, dated July 15, 2002 (Incorporated by reference to Exhibit 10.8
         of the Company's Registration Statement on Form SB-2 filed August 29,
         2002, File No. 333-89628).

10.9     Amendment Number Two to the Revolving Loan and Security Agreement by
         and between Quest and McKinley Enterprises Inc. Profit Sharing Plan and
         Trust, dated December 31, 2002 (Incorporated by reference to Exhibit
         10.9 of the Company's Registration Statement on Form SB-2 filed
         February 10, 2003, File No. 333-89628).

                                       25
<PAGE>

EXHIBIT
  NO.                          DESCRIPTION OF EXHIBIT
-------                        ----------------------

10.10    Amendment Number Four to the Revolving Loan and Security Agreement by
         and between Quest and McKinley Enterprises Inc. Profit Sharing Plan and
         Trust, dated September 28, 2004.

14.1     Code of Ethics (Incorporated by reference to Exhibit 14.1 of the
         Company's Annual Report on Form 10-KSB for the period ended September
         30, 2003).

31.1     Certification by Craig Davis under Section 302 of the Sarbanes-Oxley
         Act of 2002.

31.2     Certification by Craig Davis under Section 302 of the Sarbanes-Oxley
         Act of 2002.

32.1     Certification of Craig Davis pursuant to 18 U.S.C. Section 1350, as
         adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

                                       26
<PAGE>

                         QUEST GROUP INTERNATIONAL, INC.

                                      INDEX

                                                                    Page


Report of Independent Public Accountants                             F-2

Balance Sheets                                                       F-4

Statements of Operations                                             F-5

Statements of Stockholders' Deficit                                  F-6

Statements of Cash Flows                                             F-7

Notes to Financial Statements                                        F-8


                                      F-1
<PAGE>

                          INDEPENDENT AUDITORS' REPORT



To the Stockholders and

Board of Directors of
Quest Group International, Inc.


We have audited the accompanying balance sheets of Quest Group International,
Inc., as of September 30, 2004 and 2003, and the related statements of
operations, stockholders' deficit, and cash flows for the years then ended.
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 generally accepted auditing standards
as established by the Auditing Standards Board (United States) and in accordance
with the auditing standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting. Our audit
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Company's internal control over financial reporting. Accordingly we express no
such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, 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 Quest Group International,
Inc., as of September 30, 2004 and 2003, and the results of its operations and
its cash flows for the years then ended, in conformity with accounting
principles generally accepted in the United States of America.

/s/ Jones Simkins, P.C.

JONES SIMKINS, P.C.
Logan, Utah
November 3, 2004

                                      F-2
<PAGE>
<TABLE>
<CAPTION>
                                         QUEST GROUP INTERNATIONAL, INC.
                                                 BALANCE SHEETS
                                           September 30, 2004 and 2003


                                                     ASSETS                            2004              2003
                                                                                 ----------------  ----------------
<S>                                                                              <C>               <C>
Current assets:
  Cash                                                                           $        86,637            47,250
  Accounts receivable                                                                     50,669            26,098
  Inventories                                                                             71,624            55,277
  Current portion of deferred tax asset                                                   17,000                 -
                                                                                 ----------------  ----------------

          Total current assets                                                           225,930           128,625

Property and equipment, net                                                                8,973             6,637
Deposits                                                                                   1,346             1,975
Deferred tax asset                                                                        70,000                 -
                                                                                 ----------------  ----------------

          Total assets                                                           $       306,249           137,237
                                                                                 ================  ================


                                    LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
  Accounts payable                                                               $        29,781            60,450
  Accrued expenses                                                                        70,266            45,092
  Related party note payable                                                                   -             5,027
  Notes payable                                                                          103,000                 -
  Deferred revenue                                                                           339                 -
                                                                                 ----------------  ----------------

          Total current liabilities                                                      203,386           110,569

Notes payable                                                                                  -           103,000
Related party fee payment payable                                                        155,000           125,000
                                                                                 ----------------  ----------------

        Total liabilities                                                                358,386           338,569
                                                                                 ----------------  ----------------

Commitments

Stockholders' deficit:
    Series A preferred stock, $.001 par value, 1,000,000 shares designated,
      0 and 1,000,000 shares issued and outstanding, respectively                              -             1,000
    Series B preferred stock, $.001 par value, 500,000 shares designated,
      62,000 and 0 shares issued and outstanding, respectively                                62                 -
    Common stock, $.001 par value, 50,000,000 shares
      authorized, 10,197,000 shares issued and outstanding                                10,197            10,000
    Additional paid-in capital                                                           105,541            68,000
    Accumulated deficit                                                                 (167,937)         (280,332)
                                                                                 ----------------  ----------------

          Total stockholders' deficit                                                    (52,137)         (201,332)
                                                                                 ----------------  ----------------


          Total liabilities and stockholders' deficit                            $       306,249           137,237
                                                                                 ================  ================

                                                              F-3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                         QUEST GROUP INTERNATIONAL, INC.
                                            STATEMENTS OF OPERATIONS
                                     Years Ended September 30, 2004 and 2003


                                                                                 2004                  2003
                                                                         -------------------   -------------------
<S>                                                                      <C>                   <C>
Sales, net                                                               $         1,305,960               817,440

Cost of goods sold                                                                   371,379               223,113
                                                                         -------------------   -------------------

          Gross profit                                                               934,581               594,327

Selling, general and administrative expenses                                        (897,183)             (618,359)
                                                                         -------------------   -------------------

          Income (loss) from operations                                               37,398               (24,032)
                                                                         -------------------   -------------------

Other income (expense):
    Loss on disposal of assets                                                          (836)                    -
    Interest expense                                                                 (11,167)              (12,330)
                                                                         -------------------   -------------------

          Net other expense                                                          (12,003)              (12,330)
                                                                         -------------------   -------------------

          Income (loss) before income taxes                                           25,395               (36,362)

Income tax benefit                                                                   (87,000)                    -
                                                                         -------------------   -------------------

          Net income (loss)                                              $           112,395               (36,362)
                                                                         ===================   ===================


Income (loss) per common share - basic and diluted                       $               .01                     -
                                                                         ===================   ===================


Weighted average common shares - basic and diluted                                 8,937,000            10,000,000
                                                                         ===================   ===================


                                                              F-4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                         QUEST GROUP INTERNATIONAL, INC.
                                                       STATEMENTS OF STOCKHOLDERS' DEFICIT
                                                     Years Ended September 30, 2004 and 2003


                                  Series A           Series B
                               Preferred Stock    Preferred Stock          Common Stock        Additional
                       -----------------------   -----------------  -------------------------   Paid-In    Accumulated
                          Shares       Amount     Shares    Amount     Shares        Amount      Capital     Deficit        Total
                       -----------   ---------   --------  -------  -----------   -----------  ----------   ----------   -----------
<S>                    <C>           <C>         <C>       <C>      <C>           <C>          <C>          <C>          <C>
Balance at
 October 1, 2002         1,000,000   $   1,000          -  $     -   10,000,000   $    10,000  $   68,000   $ (243,970)  $ (164,970)

Net loss                         -           -          -        -            -             -           -      (36,362)     (36,362)
                       -----------   ---------   --------  -------  -----------   -----------  ----------   ----------   ----------
Balance at
 September 30, 2003      1,000,000       1,000          -        -   10,000,000        10,000      68,000     (280,332)    (201,332)

Issuance of preferred
 stock                           -           -    259,000      259            -             -      51,541            -       51,800

Purchase and retirement
 of common stock                 -           -          -        -   (2,000,000)       (2,000)    (13,000)           -      (15,000)

Conversion of Series
 A preferred stock to
 common stock           (1,000,000)     (1,000)         -        -    2,000,000         2,000      (1,000)           -            -

Conversion of Series B
 preferred stock to
 common stock                    -           -   (197,000)    (197)     197,000           197           -            -            -

Net income                       -           -          -        -            -             -           -      112,395      112,395
                       -----------   ---------   --------  -------  -----------   -----------  ----------   ----------   ----------

Balance at
 September 30, 2004              -   $       -     62,000  $    62   10,197,000   $    10,197  $  105,541   $       (7)  $  (52,137)
                       ===========   =========   ========  =======  ===========   ===========  ==========   ==========   ==========


                                                                      F-5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                 QUEST GROUP INTERNATIONAL, INC.
                                                    STATEMENTS OF CASH FLOWS
                                             Years Ended September 30, 2004 and 2003


                                                                                    2004                 2003
                                                                              ---------------       ---------------
<S>                                                                           <C>                   <C>
Cash flows from operating activities:
Net income (loss)                                                             $       112,395               (36,362)
   Adjustments to reconcile net income (loss) to net cash
     provided by operating activities:
       Depreciation expense                                                             2,588                 1,659
       Loss on disposal of assets                                                         836                     -
       Deferred taxes                                                                 (87,000)                    -
       (Increase) decrease in:
         Accounts receivable                                                          (24,571)              (14,680)
         Inventories                                                                  (16,347)              (20,836)
         Short-term deposits                                                                -                 4,000
         Deposits                                                                         629                  (900)
       Increase (decrease) in:
         Accounts payable                                                             (30,669)               16,820
         Accrued expenses                                                              25,174                19,638
         Deferred revenue                                                                 339                     -
         Related party fee payment payable                                             30,000                60,000
                                                                              ---------------       ---------------
            Net cash provided by operating activities                                  13,374                29,339
                                                                              ---------------       ---------------
Cash flows from investing activities:
Purchase of fixed assets                                                               (5,760)               (3,269)
                                                                              ---------------       ---------------

            Net cash used in investing activities                                      (5,760)               (3,269)
                                                                              ---------------       ---------------

Cash flows from financing activities:
Proceeds from sale of preferred stock                                                  51,800                     -
Purchase and retirement of common stock                                               (15,000)                    -
Principal payments on related party notes payable                                      (5,027)                    -
                                                                              ---------------       ---------------
            Net cash provided by financing activities                                  31,773                     -
                                                                              ---------------       ---------------
            Net increase in cash                                                       39,387                26,070

Cash, beginning of year                                                                47,250                21,180
                                                                              ---------------       ---------------
Cash, end of year                                                             $        86,637                47,250
                                                                              ===============       ===============


                                                              F-6
</TABLE>
<PAGE>

                         QUEST GROUP INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS
                           September 30, 2004 and 2003


Note 1 - Organization and Summary of Significant Accounting Policies

Organization

Quest Group International, Inc. (the Company) was organized under the laws of
the State of Nevada on August 14, 2001. The Company's business activity involves
the marketing and distribution of nutritional supplements. The Company sells its
products through independent distributors across the United States and in Japan.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly
liquid investments with a maturity of three months or less to be cash
equivalents.

Inventories

Inventories consist primarily of purchased finished goods and are valued at the
lower of cost or market using the first-in first-out (FIFO) method.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation.
Depreciation is determined using the straight-line method over the estimated
useful lives of the assets. Expenditures for maintenance and repairs are
expensed when incurred and betterments are capitalized. Gains and losses on sale
of property and equipment are reflected in the statement of operations.

Property and equipment consists of office equipment with a cost of $12,941 and
$8,296 and accumulated depreciation of $3,968 and $1,659 as of September 30,
2004 and 2003, respectively.

Short-term Deposits

Short-term deposits consist of cash deposits with the manufacturer of the
Company's products. These deposits will be applied against the cost of the
products upon delivery from the manufacturer.

                                      F-7
<PAGE>

                         QUEST GROUP INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS
                           September 30, 2004 and 2003


Note 1 - Organization and Summary of Significant Accounting Policies (continued)

Deferred Revenue

During 2004, the Company implemented a customer loyalty program which rewards
customers with "Shopping Points" based on purchases of certain products.
Shopping points may be redeemed for product. Certain limitations apply and
shopping points expire after one year. The value of unredeemed shopping points
expected to be redeemed are recorded on the balance sheet as deferred revenue.

Income Taxes

Deferred income taxes are provided in amounts sufficient to give effect to
temporary differences between financial and tax reporting, principally related
to net operating loss carryforwards.

Deferred income taxes arise from temporary differences resulting from income and
expense items reported for financial accounting and tax purposes in different
periods. Deferred taxes are classified as current or noncurrent, depending on
the classification of the assets and liabilities to which they relate. Deferred
taxes arising from temporary differences that are not related to an asset or
liability are classified as current or noncurrent depending on the periods in
which the temporary differences are expected to reverse.

Revenue Recognition

Revenue is recognized when products are shipped, which is when title passes to
independent distributors and to consumers. A reserve for product returns is
accrued based on historical experience. The Company generally requires cash or
credit card payment at the point of sale.

The Company has determined that no allowance for doubtful accounts is necessary.
Amounts received prior to shipment and title passage to distributors are
recorded as deferred revenue.

Independent distributors are able to earn financial benefits (retail
commissions, rebates and group development bonuses) if certain monthly minimum
sales qualifications are met. These financial benefits are recognized in the
same period that the products are shipped to the independent distributors.

Enrollment fees paid by independent distributors are recognized as revenue when
the fee is paid.

                                      F-8
<PAGE>

                         QUEST GROUP INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS
                           September 30, 2004 and 2003


Note 1 - Organization and Summary of Significant Accounting Policies (continued)

Shipping and Handling Costs

The Company classifies shipping and handling costs as selling expenses in the
statement of income. Shipping and handling costs totaled approximately $140,000
and $76,000 for 2004 and 2003, respectively.

Research and Development

Research and development costs are expensed as incurred.

Advertising

Advertising costs are charged to expense when they first take place. Advertising
costs for 2004 and 2003 were approximately $30,000 and $11,000, respectively.

Earnings Per Share

The computation of basic earnings per common share is based on the weighted
average number of shares outstanding during the year.

The computation of diluted earnings per common share is based on the weighted
average number of shares outstanding during the year plus the common stock
equivalents which would arise from the exercise of stock options and warrants
outstanding using the treasury stock method and the average market price per
share during the year.

Common stock equivalents are not included in the diluted earnings per share
calculation when their effect is antidilutive. The Company does not have any
stock options or warrants outstanding at September 30, 2004 and 2003.

Concentration of Credit Risk

The Company maintains its cash in bank deposit accounts, which, at times, may
exceed federally insured limits. The Company has not experienced any losses in
such accounts and believes it is not exposed to any significant credit risk on
cash and cash equivalents.

                                      F-9
<PAGE>

                         QUEST GROUP INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS
                           September 30, 2004 and 2003


Note 1 - Organization and Summary of Significant Accounting Policies (continued)

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.


Note 2 - Related Party Note Payable

The related party note payable consists of a note payable with Dassity, Inc. The
shareholder of Dassity, Inc. is a Director of the Company. The note was due on
October 1, 2003 and was non-interest bearing and was secured by the Company's
property and equipment. The note had a balance of $5,027 on September 30, 2003
and was paid in full during 2004.


Note 3 - Related Party Fee Payment Payable

The Company has entered into an agreement with Bateman Dynasty, LC (a major
stockholder of the Company) which requires the Company to make monthly and
quarterly payments. The monthly payments (referred to as fee payments) are
$5,000 and increase to $10,000 in any month that net sales exceed $200,000 and
increase to $20,000 in any month that net sales exceed $1,000,000. The monthly
fee payments are due on the last day of the month following any month in which
net sales exceed $100,000. The quarterly payments (referred to as override bonus
payments) are two percent of net sales, when average pre-tax monthly income
exceeds $20,000. The fee payments and override bonus payments run in perpetuity.

Information related to the fee payments and override bonus payments are as
follows:

                                        2004                      2003
                                   ------------              ------------
Fee Payments:
     Payable                       $    155,000              $    125,000
                                   ============              ============
     Expense                       $     60,000              $     60,000
                                   ============              ============

Override Bonus Payments:
     Payable                       $          -              $          -
                                   ============              ============
     Expense                       $          -              $          -
                                   ============              ============

                                      F-10
<PAGE>

                         QUEST GROUP INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS
                           September 30, 2004 and 2003


Note 4 - Notes Payable

In October 2001 and February 2002, the Company entered into Revolving Loan and
Security Agreements (the "McKinley Revolving Loans") with McKinley Enterprises
Inc. Profit Sharing Plan and Trust ("McKinley"). Under the terms of the
agreements, McKinley agreed to make periodic loans to the Company in an
aggregate principal amount any one time outstanding not to exceed $103,000. As
of September 30, 2004 and 2003, the principal amount of $103,000 was owing under
the McKinley Revolving Loans. All amounts were evidenced by promissory notes
that bear interest at ten percent and are secured by all assets of the Company.
Principal and accrued interest is due and payable in a single balloon payment on
April 18, 2005. Accrued interest at September 30, 2004 and 2003 was
approximately $28,000 and $18,000, respectively, and is included in accrued
expenses on the balance sheet.


Note 5 -  Income Taxes

The (provision) benefit for income taxes differs from the amount computed at
federal statutory rates as follows:
<TABLE>
<CAPTION>
                                                                                      2004               2003
                                                                                --------------     -------------
         <S>                                                                    <C>                <C>
         (Provision) benefit for income taxes at statutory rate                 $        4,000           (12,000)
         Change in valuation allowance                                                 (91,000)           12,000
                                                                                --------------     -------------
                                                                                $      (87,000)                -
                                                                                ==============     =============

The income tax benefit consists of the following:
<CAPTION>
                                                                                      2004               2003
                                                                                --------------     -------------
         <S>                                                                    <C>                <C>
         Current                                                                $            -                 -
         Deferred                                                                      (87,000)                -
                                                                                --------------     -------------
         Income tax benefit                                                     $      (87,000)                -
                                                                                ==============     =============

                                      F-11
</TABLE>
<PAGE>

                         QUEST GROUP INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS
                           September 30, 2004 and 2003


Note 5 - Income Taxes (continued)

Deferred tax assets (liabilities) are comprised of the following:
<TABLE>
<CAPTION>
                                                                                      2004               2003
                                                                                --------------     -------------
         <S>                                                                    <C>                <C>
         Net operating loss carryforwards                                       $       34,000            48,000
         Related party fee payment payable                                              53,000            43,000
                                                                                --------------     -------------

                                                                                        87,000            91,000

         Valuation allowance                                                                 -           (91,000)
                                                                                --------------     -------------
                                                                                $       87,000                 -
                                                                                ==============     =============
Presented in the balance sheets as follows:
<CAPTION>
                                                                                      2004               2003
                                                                                --------------     -------------
         <S>                                                                    <C>                <C>
         Current portion of deferred tax asset                                  $       17,000                 -
         Deferred tax asset                                                             70,000                 -
                                                                                --------------     -------------
         Net deferred tax asset                                                 $       87,000                 -
                                                                                ==============     =============
</TABLE>

As of September 30, 2004, the Company had net operating loss carryforwards of
approximately $102,000. These carryforwards begin to expire in 2021. If
substantial changes in the Company's ownership should occur there would be an
annual limitation of the amount of net operation loss carryforwards which could
be utilized. Also, the ultimate realization of these carryforwards is due, in
part, on the tax law in effect at the time and future events that cannot be
determined.


Note 6 - Supplemental Cash Flow Information

For the years ended September 30, 2004 and 2003, the Company paid interest of
approximately $1,000 and $2,000, respectively.

No amounts were paid for income taxes during the years ended September 30, 2004
and 2003.

                                      F-12
<PAGE>

                         QUEST GROUP INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS
                           September 30, 2004 and 2003


Note 7 - Preferred Stock

The Company has authorized 5,000,000 shares of preferred stock with a par value
of $.001, and established two series of preferred shares designated as: Series A
Convertible Preferred Stock and Series B Convertible Preferred Stock, consisting
of 1,000,000 shares and 500,000 shares designated, respectively.

The Convertible Preferred Stock has the following rights and privileges:

Series A Convertible Preferred Stock

         o        The holders of the shares are entitled to one hundred (100)
                  votes for each share held.
         o        Upon the liquidation of the Company, the holders of the shares
                  will rank equally with the holders of common shares and Series
                  B shares.
         o        The holders of the shares are not entitled to dividends.
         o        The shares are convertible at the option of the holder at any
                  time into common shares, at a conversion rate of one share of
                  Series A Convertible Preferred Stock for two shares of common
                  stock.

During 2004, all of the Series A preferred shares were converted to common
shares.

Series B Convertible Preferred Stock

         o        The holders of the shares are entitled to one (1) vote for
                  each share held.
         o        Upon the liquidation of the Company, the holders of the shares
                  will rank equally with the holders of common shares and Series
                  A shares.
         o        The holders of the shares are not entitled to dividends.
         o        The shares are convertible at the option of the holder at any
                  time into common shares, at a conversion rate of one share of
                  Series B Convertible Preferred Stock for one share of common
                  stock.

During 2004, 197,000 shares of the Series B preferred shares were converted to
common shares.

                                      F-13
<PAGE>

                         QUEST GROUP INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS
                           September 30, 2004 and 2003


Note 8 - Geographic Sales Information

The Company's sales by geographic area were approximately as follows:

                                              2004                   2003
                                        --------------        --------------
         United States                  $       26,000        $       33,000
         Japan                               1,280,000               784,000
                                        --------------        --------------
                                        $    1,306,000        $      817,000
                                        ==============        ==============

Note 9 - Commitments

Employment Agreements

The Company has entered into an annual employment agreement with Craig Davis,
the Company's president. The agreement is subject to automatic renewal for
successive one year periods unless notice of termination is given by either
party within thirty days of the expiration of the then current term. His
employment agreement as approved by the Board of Directors provides that he
shall receive (i) an annual salary of $96,000, (ii) increases in his annual
salary if and when the Company reaches targeted sales amounts, (iii) bonuses in
an amount equal to 1.2% of monthly net sales, provided that the Company has
monthly pre-tax income in excess of $20,000 and the Company is not indebted
under its current loan arrangements, and (iv) may participate in other benefits
offered to employee's generally. The employment agreement also provides for a
six-month non-compete time period.

The Company also has entered into an annual employment agreement with Teresa
Fackrell. The agreement is subject to automatic renewal for successive one year
periods unless notice of termination is given by either party within thirty days
of the expiration of the then current term. Her employment agreement as approved
by the Board of Directors provides that she shall receive (i) an annual salary
of $72,000, (ii) increases in her annual salary if and when the Company reaches
targeted sales amounts, (iii) bonuses in an amount equal to .8% of monthly net
sales, provided that the Company has monthly pre-tax income in excess of $20,000
and the Company is not indebted under its current loan arrangements, and (iv)
may participate in other benefits offered to employee's generally. The
employment agreement also provides for a six-month non-compete time period.

                                      F-14
<PAGE>

                         QUEST GROUP INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS
                           September 30, 2004 and 2003


Note 10 - Fair Value of Financial Instruments

The Company's financial instruments consist of cash, accounts receivable,
payables and notes payable. The carrying amount of cash and payables
approximates fair value because of the short-term nature of these items. The
carrying amount of the notes payable approximates fair value as the notes bear
interest at market interest rates.


Note 11 - Recent Accounting Pronouncements

In May 2003, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 150, Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity (SFAS 150). The
Statement establishes standards for how an issuer classifies and measures
certain financial instruments with characteristics of both liabilities and
equity. The Statement is effective for financial instruments entered into or
modified after May 31, 2003. This statement is not expected to have a material
effect on the Company's financial position or results of operations.

In April 2003, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 149, Amendment of Statement 133 on Derivative
Instruments and Hedging (SFAS 149). This Statement amends and clarifies
accounting for derivative instruments, including certain derivative instruments
embedded in other contracts, and for hedging activities under SFAS 133. The
Statement is effective (with certain exceptions) for contracts entered into or
modified after June 30, 2003. This statement is not expected to have a material
effect on the Company's financial position or results of operations.

In January 2003, the FASB issued Interpretation 46, "Consolidation of Variable
Interest Entities" (FIN 46), which addresses consolidation by business
enterprises of variable interest entities. FIN 46 clarifies the application of
Accounting Research Bulletin No. 51, "Consolidated Financial Statements", to
certain entities in which equity investors do not have the characteristics of a
controlling financial interest or do not have sufficient equity at risk for the
entity to finance its activities without additional subordinated financial
support from other parties. FIN 46 applies immediately to variable interest
entities created after January 31, 2003 and to variable interest entities in
which an enterprise obtains an interest after that date. It applies in the first
fiscal year or interim period beginning after June 15, 2003, to variable
interest entities in which an enterprise holds a variable interest that it
acquired before February 1, 2003. The Company has not identified and does not
expect to identify any variable interest entities that must be consolidated.

                                      F-15