Financial Statements

                           GSV, INC. AND SUBSIDIARIES
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


Report of Independent Public Accountants                                  F-2
Consolidated Balance Sheet as of December 31, 2003                        F-3
Consolidated Statements of Operations for the years
  ended December 31, 2003 and 2002                                        F-4
Consolidated Statements of Changes in Stockholders' Equity
  for the years ended December 31, 2003 and 2002                          F-5
Consolidated Statements of Cash Flows for the years
  ended December 31, 2003 and 2002                                        F-6
Notes to the Consolidated Financial Statements                    F-7 to F-16


                                      -F-1-
<PAGE>
                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



The Board of Directors
GSV, Inc and subsidiaries
Westport, Connecticut

We have audited the  accompanying  consolidated  balance  sheets of GSV, Inc., a
Delaware  corporation and  Subsidiaries  ("the Company") as of December 31, 2003
and the related consolidated statements of operations,  changes of stockholders'
equity and cash  flows for the year  ended  December  31,  2003 and 2002.  These
consolidated  financial  statements  are  the  responsibility  of the  Company's
management.  Our  responsibility is to express an opinion on these  consolidated
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audits to obtain reasonable  assurance that the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.  An
audit also includes  assessing the accounting  principles  used and  significant
estimates  made by  management,  as well as  evaluating  the  overall  financial
statement  presentation.  We believe that our audits provide a reasonable  basis
for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  financial  position of GSV,  Inc. and
Subsidiaries  as of December 31, 2003 and the results of its  operations and its
cash flows for the year ended  December  31,  2003 and 2002 in  conformity  with
accounting principles generally accepted in the United States of America.

The  accompanying  financial  statements are prepared  assuming that the Company
will  continue as a going  concern.  As more fully  described in Footnote 1, the
Company has incurred recurring operating losses, and it has a deficit in working
capital at December 31, 2003 of $ 404,618. The Company's expected future sources
of  revenue  will be  derived  from  its  investments  in oil and  gas,  but the
exploitation  of  the  Company's  holdings  will  be  dependent  upon  obtaining
financing  to engage in  drilling  of the  prospects,  of which  there can be no
assurance.  These conditions raise substantial doubt about the Company's ability
to continue as a going concern.  Management's plans to overcome this uncertainty
are also described in Footnote 1. The accompanying  financial  statements do not
include  any  adjustments  which may be  necessary  if the  Company is unable to
continue.



Denver, Colorado
March 29, 2004


                                                        /s/ Comiskey & Company
                                                        Comiskey & Company
                                                        Professional Corporation



                                      -F-2-
<PAGE>
                           GSV, Inc. and Subsidiaries
                           CONSOLIDATED BALANCE SHEET
                                December 31, 2003


        ASSETS
CURRENT ASSETS
  Cash and cash equivalents                             $       18,410
  Accounts receivable and other current assets                  18,778
                                                        --------------

        Total current assets                                    37,188


  Investments                                                   50,000
  Other long-term assets - geologic studies                  2,316,721
  Option to purchase oil and gas properties                          -
  Investments - oil & gas wells, net                           452,249
  Property and equipment, net                                   10,374
  Other assets                                                  13,173
                                                        --------------
                                                             2,842,517

        Total assets                                    $    2,879,705
                                                        ==============


        LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
  Accounts payable                                      $      241,806
  Note payable                                                 200,000
                                                        --------------

        Total current liablities                               441,806
                                                        --------------

        Total liablities                                       441,806
                                                        --------------

STOCKHOLDERS' EQUITY
  Series B Preferred stock, $0.001 par value;
   1,500,000 shares authorized; 1,500,000 shares
   issued and outstanding                                        1,500
  Common stock, $0.001 par value; 75,000,000 shares
   authorized; 7,422,016 issued;
   7,253,416 outstanding                                         7,422
  Additional paid-in capital                                40,867,897
  Treasuy stock                                               (558,998)
  Accumulated deficit                                      (37,879,922)
                                                        --------------

        Total stockholders' equity                           2,437,899
                                                        --------------

        Total liabilities and stockholders' equity      $    2,879,705
                                                        ==============

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


                                     -F-3-
<PAGE>
                           GSV, Inc. and Subsidiaries
                      CONSOLIDATED STATEMENT OF OPERATIONS
                           December 31, 2003 and 2002


                                                     2003            2002
                                                  ----------       --------

Sublease income                                 $    150,384    $   159,742
Oil and gas income                                   134,366        145,869
                                                ------------    -----------

  Total revenues                                     284,750        305,611

General and administrative expenses                  988,494        725,333
                                                ------------    -----------

  Total operating expenses                           988,494        725,333

  Loss from operations before
  other income and expense                          (703,744)      (419,722)


  Interest income, net                                 3,845         13,546
  Interest expense                                    (6,667)             -
  Writedown of investments                           (15,000)      (498,888)
  Gain on sale of investments                              -         45,000
                                                ------------    -----------

  NET LOSS                                          (721,566)      (860,064)
                                                ------------    -----------

Preferred stock dividends                                  -         48,000
                                                ------------    -----------

Net loss available to common shareholders       $   (721,566)   $  (908,064)
                                                ============    ===========

Net loss per common share:
Loss per common share from
  operations - basic                            $      (0.15)   $     (0.38)
                                                ============    ===========

Weighted average common shares
  outstanding, basic                               4,668,929      2,286,117
                                                ============    ===========


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


                                     -F-4-
<PAGE>
                           GSV, Inc. and Subsidiaries
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

<TABLE>
<S>                                                   <C>             <C>             <C>             <C>
                                                      Preferred Stock, Series A       Preferred Stock, Series B
                                                      -------------------------       -------------------------
                                                      Number of          Par          Number of          Par
                                                       Shares           Value           Shares          Value
                                                      ----------       --------       ---------        -------
Balance at December 31, 2001                           363,637       $  380,000              --       $     --
 Sale of common stock                                       --               --              --             --
 Preferred stock dividend                                   --               --              --             --
 Net loss, as restated                                      --               --              --             --
                                                      --------       ----------       ---------       --------

Balance at December 31, 2002                           363,637          380,000              --             --
 Issuance of preferred stock for asset purchase             --               --       1,500,000          1,500
  Issuance of common stock for asset purchase               --               --              --             --
  Issuance of common stock for services                     --               --              --             --
  Redemption of preferred stock                       (363,637)        (380,000)             --             --
  Net loss                                                  --               --              --             --
                                                      --------       ----------       ---------       --------
Balance at December 31, 2003                                --       $       --       1,500,000       $  1,500
                                                      ========       ==========       =========       ========
<CAPTION>
<S>                                               <C>             <C>         <C>            <C>            <C>
                                                  Common Stock
                                                  -------------------------     Additional
                                                   Number of         Par         Paid-In       Treasury     Accumulated
                                                     Shares         Value        Capital        Stock        Deficit
                                                  ------------    ---------   ------------   -----------    -----------
Balance at December 31, 2001                         1,790,090    $   1,959   $ 38,009,029   $ (558,998)    $(36,178,151)
 Sale of common stock                                  850,000          850        211,650           --              --
 Preferred stock dividend                                   --           --             --           --          (48,000)
 Net loss, as restated                                      --           --             --           --         (860,064)
                                                  ------------    ---------   ------------   ----------     ------------

Balance at December 31, 2002                         2,640,090        2,809     38,220,679     (558,998)     (37,086,215)
 Issuance of preferred stock for asset purchase             --           --             --           --               --
  Issuance of common stock for asset purchase        4,500,000        4,500      2,619,000           --          (72,141)
  Issuance of common stock for services                113,326          113         28,218           --               --
  Redemption of preferred stock                            --            --             --           --               --
  Net loss                                                 --            --             --           --         (721,566)
                                                  -----------     ---------   ------------   ----------     ------------
Balance at December 31, 2003                        7,253,416     $   7,422   $ 40,867,897   $ (558,998)    $(37,879,922)
                                                  ===========     =========   ============   ==========     ============
</TABLE>

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

                                     -F-5-
<PAGE>
                           GSV, Inc. and Subsidiaries
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 For the years ended December 31, 2003 and 2002

<TABLE>
<S>                                                                     <C>                 <C>

                                                                         2003                2002
                                                                        ------              ------
CASH FLOWS FROM OPERATING ACTIVITIES
 Net loss                                                               (721,566)            (860,064)
 Adjustments to reconcile net loss to net cash flows
  from operating activities:
     Cost of preferred stock previously issued                            20,000                    -
     Common stock issued for services                                     28,331                    -
     Depreciation                                                         52,668              160,900
     Depletion                                                            51,883               59,232
     Gain on disposal of investments                                           -              (45,000)
     Impairment of property and equipment                                120,580                    -
     Writedown of investments                                             15,000              498,888
 Increase (decrease) in cash from changes in:
     Account receivable and other current assets                         (78,517)             (18,779)
     Other assets                                                         22,426                    -
     Accounts payable                                                    279,927               (9,053)
     Tenant security deposit                                            (51,250)                    -
                                                                        --------            ---------

         Net cash flows from operating activities                       (260,518)            (213,876)

CASH FLOWS FROM INVESTING ACTIVITIES
 Proceeds from disposal of investment                                          -               75,000
 Purchase of investment - oil & gas wells                                (55,739)            (550,000)
                                                                        --------            ---------

         Net cash flows from investing activities                        (55,739)            (475,000)

CASH FLOWS FROM FINANCING ACTIVITIES

 Redemption of preferred stock                                          (200,000)                   -
 Preferred dividends paid                                                (63,801)             (25,000)
                                                                        --------            ---------

         Net cash flows from financing activities                       (263,801)             (25,000)
                                                                        --------            ---------

         Net decrease in cash                                           (580,058)            (713,876)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                             598,467            1,312,343
                                                                        --------            ---------

CASH AND CASH EQUIVALENTS,  END OF YEAR                                   18,409              598,467
                                                                        ========            =========
</TABLE>
                                                                           (1)
    The accompanying notes are an integral part of the financial statements.
\

                                     -F-6-
<PAGE>

                           GSV, Inc. and Subsidiaries
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2003
1.   Description of the Business and Basis of Presentation
     -----------------------------------------------------

     Commencing in June 2001, GSV, Inc. and Subsidiaries ("the Company") changed
     the direction of its business. The Company's business operations since June
     2001 include entering into new business operations through  acquisitions or
     mergers and managing existing  investments  including the Company's oil and
     gas assets.

     Prior to June  2001,  the  Company  had  sought  to  identify  and  develop
     attractive early stage Internet  companies in exchange for equity positions
     in such  companies.  In  connection  with this  activity,  the Company made
     investments in Fasturn,  Inc.,  Weema  Technologies,  Inc.,  Telephone.com,
     Inc.,  MeetChina.com,  Inc., and e-Commerce Solutions, Inc. The Company has
     since made  substantial  write downs of its  internet  investments  to more
     accurately reflect current market valuations,  and these investments do not
     represent a significant  asset. In September 2002 the Company  restructured
     its  investment  in  Telephone.com,  Inc. and received  $75,000 in cash and
     358,000  shares of common  stock of  Telephone.com,  Inc. in  exchange  for
     600,000 shares of series A preferred stock of Telephone.com. The Company is
     presently  investigating  whether or not there are any  business  prospects
     through which material value can be realized from its internet investments.

     Effective June 1, 2002, the Company acquired  working  interests in two oil
     and gas  wells in the  state of  Louisiana  pursuant  to an asset  purchase
     agreement with Polystick U.S. Corp., a privately held New York corporation.
     Additionally,  the Company  acquired an option,  including a right of first
     refusal,  to purchase other oil and gas  properties  held by Polystick U.S.
     Corp. The consideration consisted of $550,000 in cash and 850,000 shares of
     the Company's common stock valued at $0.25 per share.

     Concurrent  with  the  asset  purchase  agreement,  the  Company  signed  a
     management agreement with Polystick U.S. Corp. to assist the Company in the
     management of its oil and gas working  interests and the development of new
     oil and gas  activities.  The  agreement  is for one  year  with an  annual
     consulting fee of $150,000, paid in monthly installments.

     On July 21, 2003, the Company  entered into an Agreement and Plan of Merger
     (the "Merger  Agreement") with Polystick U.S. Corp.,  Cybershop,  L.L.C., a
     New Jersey limited  liability  company and  wholly-owned  subsidiary of the
     Company  ("Merger  Sub"),  and  Polystick  Oil  &  Gas,  Inc.,  a  Delaware
     corporation and a wholly-owned subsidiary of Polystick ("POGI), pursuant to
     which,  on the same day, POGI was merged into Merger Sub (the "Merger") and
     in consideration  thereof the company issued to Polystick  4,500,000 shares
     of Common Stock and 1,500,000 shares of Series B Preferred Stock.

     As a result of the Merger,  the Company,  through  Merger Sub,  acquired an
     interest in Century  Royalty LLC  ("Century"),  a Texas  limited  liability
     company  that  holds  certain  oil  and gas  properties  in  Texas  plus an
     additional  interest  in the  Louisiana  properties  in which  the  Company
     previously  held an  interest.  Century  also  holds the  rights to certain
     geologic studies.

     Presentation as a Going Concern

     The Company has  incurred  substantial  operating  losses,  resulting in an
     accumulated  retained  earnings  deficit of  approximately  $38,000,000  at
     December 31, 2003. Its current  investments  are limited to its investments
     in certain oil and gas producing  properties in Louisiana,  and an interest
     in Century  Royalty LLC,  which has as its primary  asset an  investment in
     geologic studies to exploit other as yet unowned oil and gas properties. At
     the present time,  the Company is receiving  minimal cash flow from its oil
     and gas  investments.  Future  realization  of the Company's  investment in
     geologic  studies will be dependent  upon the  Company's  ability to obtain
     financing for drilling and development, of which there can be no assurance.
     The  Company  projects  that  potential  future  cash flows  related to the
     studied  prospects will exceed their carrying  value, if all of the subject
     prospects  are  developed.  The  Company  intends  to defer the  payment of
     existing  liabilities  and pursue  settlements  of other  amounts using its
     common stock.


                                      -F-7-
<PAGE>
                           GSV, Inc. and Subsidiaries
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2003

2.   Summary of Significant Accounting Policies
     ------------------------------------------

     Use of Estimates

     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.

     Principles of Consolidation

     The consolidated  financial  statements include the accounts of the Company
     and  its   subsidiaries.   All   significant   intercompany   accounts  and
     transactions have been eliminated.

     Cash and Cash Equivalents

     The Company considers all short-term  marketable securities with a maturity
     of three months or less to be cash equivalents.

     Investments

     Investments are accounted for on the cost basis.

     Advertising

     Advertising costs are expensed as incurred.

     Property and Equipment

     Property and equipment are recorded at cost. Depreciation is computed using
     the  straight-line  method over the assets'  estimated useful lives,  which
     range from three to ten years.

     Long-Lived Assets

     The Company reviews its long-lived  assets and certain related  intangibles
     for   impairment   periodically,   and   whenever   events  or  changes  in
     circumstances  indicate  that the  carrying  amount  of an asset may not be
     fully  recoverable.  As a result of its review, the Company determined that
     impairment existed in certain of its investments as explained in Note 4. An
     impairment was also  recognized on leasehold  improvements  as explained in
     Note 9.

     Stock-Based Compensation

     The  Financial  Accounting  Standards  Board  has  issued  "Accounting  for
     Stock-Based  compensation"  ("SFAS 123").  SFAS 123 requires that an entity
     account  for  employee  stock-based  compensation  under a fair  value base
     method.  However,  SFAS 123 also  allows an entity to  continue  to measure
     compensation cost for employee stock-based compensation using the intrinsic
     value  based  method  of  accounting  prescribed  by APB  Opinion  No.  25,
     "Accounting  for  Stock  Issued  to  Employees"  ("Opinion  25").  Entities
     electing to remain with the  accounting  under  Opinion 25 are  required to
     make pro  forma  disclosures  of net loss and loss per share as if the fair
     value  based  method of  accounting  under SFAS 123 had been  applied.  The
     Company continues to account for employee  stock-based  compensation  under


                                      -F-8-
<PAGE>
                           GSV, Inc. and Subsidiaries
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2003

     Opinion 25 and has  included,  in a note below,  the pro forma  disclosures
     required under SFAS 123.

     Income Taxes

     The  Company  recognizes  deferred  tax  assets  and  liabilities  based on
     differences  between the  financial  reporting  and tax bases of assets and
     liabilities  using the enacted  Federal,  state, and local income tax rates
     and laws that are expected to be in effect when the differences reverse.

     Significant Concentrations

     From  time-to-time,  the Company  maintains cash balances in excess of FDIC
     insured  limits.  The  amount  of such  excess  at  December  31,  2003 was
     approximately $0.

     Fair Value of Financial Instruments

     Unless  otherwise  indicated,  the fair  value of all  reported  assets and
     liabilities which represent financial instruments  approximate the carrying
     values of such instruments.

3.   Correction of an error
     ----------------------

     The  accompanying  financial  statements  for 2002  have been  restated  to
     correct  an  error  in the  accrual  of oil and gas  income  receivable  at
     December 31, 2002. The effect of the  restatement  was to increase net loss
     for the year ended December 31, 2002 by $28,789, or $0.02 per share.

4.   Investments
     -----------

     The Company has investments in five internet-related  companies, which have
     been  accounted for using the cost method.  During the years ended December
     31, 2003 and 2002,  the Company  recorded a charge to  operations of $0 and
     $20,000, respectively, for impairment of these investments. During the year
     ended  December  31,  2002,  the  Company  surrendered  600,000  shares  of
     preferred  stock in one of the internet  companies in exchange for $75,000,
     paid  in  three   installments,   and  358,000   shares  of  common  stock,
     representing a 5% ownership  interest in the company. A gain of $45,000 was
     recognized  on  the  surrender  for  the  year  ended  December  31,  2002.
     Subsequent to year end, one investment was disposed of for its book value.

     As described above,  the Company acquired working  interests in two oil and
     gas wells  effective  June 1, 2002 for $550,000 in cash and common stock of
     the Company  valued at $212,500,  for a total  investment of $762,500.  The
     asset is depleted on a periodic basis using the units of production method.
     Depletion  expense  for the  years  ended  December  31,  2003 and 2002 was
     $51,883  and  53,001,  respectively.  In the fourth  quarter  of 2002,  the
     properties  exhibited  a  marked  decrease  in the  volume  of oil  and gas
     produced. Based upon an independent reserve study performed effective March
     2003, the Company reduced the carrying amount of its oil and gas properties
     by approximately $479,000 for the year ended December 31, 2002.

     As described  above,  on July 21, 2003, the Company entered into the Merger
     Agreement,  pursuant to which, on the same day, POGI was merged into Merger
     Sub and in consideration  thereof the Company issued to Polystick 4,500,000
     shares of Common Stock and  1,500,000  shares of Series B Preferred  Stock.
     Each share of Series B Preferred  Stock is  convertible  at any time at the
     holder's  option  into a number of shares  of Common  Stock  equal to $1.00



                                      -F-9-
<PAGE>
                           GSV, Inc. and Subsidiaries
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2003

     divided by the conversion  price then in effect.  The  conversion  price is
     initially  $1.00. No dividends are payable on the Series B Preferred Stock,
     except that in the event  dividends  are  declared  with  respect to Common
     Stock,  each holder of share of Series B Preferred  Stock shall be entitled
     to receive an amount equal to the amount of dividends  that would have been
     paid on the shares of Common Stock issuable upon  conversion of such shares
     of Series B  Preferred  Stock has such shares  been  converted  into Common
     Stock immediately  before such dividend was declared.  Upon any Liquidation
     Event,  the holders of the  outstanding  Series B  Preferred  Stock will be
     entitled  to be paid an amount  equal to $1.00 per share plus the amount of
     any declared and unpaid dividends  thereon.  If upon any Liquidation Event,
     the net assets of the Company are insufficient to permit payment in full of
     such  preferential  amount to the holders of Series B Preferred Stock, then
     the entire net assets of the Company will be distributed  ratably among the
     holders of the Series B Preferred Stock.

     Following  is a  condensed  balance  sheet  showing  the fair values of the
     assets  acquired  and  the  liabilities  assumed  as of  the  date  of  the
     acquisition:

     Current assets                           $  210,784
     Other long-term assets                    2,316,721
     Investments - oil & gas wells               219,420
                                               ---------
                                               2,746,925
     Current liabilities                      (121,925)
                                               ---------
     Net assets acquired                      $2,625,000
                                              ==========

     In connection with and as a condition to the Merger,  the Company  redeemed
     all of its existing  outstanding Series A Preferred Stock, par value $0.001
     per share, for $400,001,  plus dividends payable. The Company paid $263,801
     of the redemption price in cash and $200,000 by a full recourse  promissory
     note bearing  interest at a rate of 8% per annum and due September 4, 2004,
     secured by a lien on all of the Company's assets.

     As a result of the  merger,  the  Company  acquired  an interest in Century
     Royalty LLC  ("Century"),  which holds  certain oil and gas  properties  in
     Texas plus an additional interest in the Louisiana  properties in which the
     Company  presently  holds an  interest.  Century  also  holds the rights to
     certain geologic studies that are included in other long term assets on the
     accompanying  balance  sheet.  Century  is a member of a  working  interest
     partnership  that  has  identified   several  prospects  derived  from  the
     geological studies and is working towards drilling these prospects. Century
     has a carried  interest  with this  partnership  of 20% for the first  well
     drilled in the first 5 prospects or $ 1.25 million of investment, whichever
     comes first.  Century has a 20%  participation  interest in all  subsequent
     wells  drilled in the first 5 prospects.  For later  prospects,  Century is
     entitled  to an 80%  participation  interest.  GSV is entitled to the first
     $4,168,659 of net income in Century and to 75% of net income thereafter.

5.   Stockholders' Equity
     --------------------

     Pursuant to the terms of the Asset  Purchase  Agreement with Polystick U.S.
     Corp.  (Polystick")  effective  June 1, 2002,  the Company  issued  850,000
     shares of common  stock  valued at a price of $.25 per share,  the  closing
     price on May 28, 2002, to Polystick.

     On March 1, 2001, the Company  entered into a Convertible  Preferred  Stock
     Purchase Agreement (the "Purchase Agreement") with Brooks Station Holdings,
     Inc.  ("Brooks  Station") for the issuance and sale of its preferred  stock
     for  aggregate   consideration  of  $400,000.   Pursuant  to  the  Purchase
     Agreement, the Company sold and issued to Brooks Station a total of 363,637
     shares of its Series A Convertible  Preferred  Stock,  $0.001 par value per
     share (the "Series A Convertible Preferred"),  at a purchase price of $1.10
     per share (the "Purchase Price").

     The  Series A  Convertible  Preferred  is  convertible  into  shares of the
     Company's Common Stock, at a conversion  price of $1.10 per share,  subject
     to certain anti-dilution adjustments. The current conversion price is $0.25
     per share. The Preferred Stock carries a cumulative 12% dividend payable in
     June and  December  of each  year,  and may  participate  in  common  share
     dividends,  if any, on an as-if  converted  basis,  and has preference upon
     liquidation,


                                      -F-10-
<PAGE>
                           GSV, Inc. and Subsidiaries
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2003

     including  accumulated unpaid dividends.  The shares may be redeemed at the
     option of the holder,  but only upon the  occurrence of certain  triggering
     events,  which include  bankruptcy,  material  judgments and defaults,  and
     suspension of trading of the  Company's  stock for more than 20 days (which
     days need not be consecutive).

     On October 31, 2003,  the Company issued 113,326 share of common stock to a
     consultant  to  the  Company,  in  exchange  for  the  cancellation  of the
     Company's obligation to pay accrued fees aggregating $28,331.

6.   Stock Option Plan
     -----------------

     In 1998,  the Company  adopted the 1998 Stock Option Plan (the "1998 Option
     Plan").  Under the 1998  Option  Plan,  stock  options  may be  granted  to
     directors,  officers,  employees, and consultants of the Company. Under the
     1998 Option Plan the number of shares available for issuance is 600,000.

     The 1998 Option Plan is summarized as follows:

<TABLE>
<S>                                            <C>                              <C>
                                                                                 Weighted
                                                                                  Average
                                                                                 Exercise
                                                Shares                             Price
                                                ------                          ---------
Outstanding at December 31, 2001                210,000                               .30
Granted                                              --                                --
Cancelled                                      (170,000)                              .30
Exercised                                            --                                --
                                               ---------                        ---------
Outstanding at December 31, 2002                 40,000                          $   0.30
Granted                                         400,000                              0.56
Cancelled                                            --                                --
Exercised                                            --                                --
                                               ---------                        ---------
Outstanding at December 31, 2003                440,000                          $   0.54
                                               =========                        =========
</TABLE>

     The options granted prior to 2003 vest one-third  annually over three years
     and expire five years from the date of grant.  The options  granted in 2003
     vested immediately and expire five years from the date of grant.

     The Company  applies  Accounting  Principles  Board No. 25,  Accounting for
     Stock Issued to Employees,  and related  interpretations  in accounting for
     its plan.  Accordingly,  no  compensation  costs were  recorded for options
     issued  at  prices  which  reflect  no  intrinsic  value  at the  grant  or
     modification  date.  The  Company  considered  the  effects of  recognizing
     compensation  cost  pursuant to the  provisions  of  Statement of Financial
     Accounting  Standards No. 123,  Accounting  for  Stock-Based  Compensation,
     (SFAS No. 123). Using the Black-Scholes  option pricing model,  which takes
     into account the  exercise  price of the options,  expected  life,  current
     price of the underlying stock, its expected  volatility and dividends,  and
     the risk-free  interest  rate,  net income would have been decreased to the
     pro forma amounts as follows for the years ending December 31:


                                      -F-11-
<PAGE>
                           GSV, Inc. and Subsidiaries
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2003
<TABLE>
<CAPTION>
<S>                     <C>                                     <C>
                                      2003                                        2002
                        -----------------------------------     ------------------------------------
</TABLE>
<TABLE>
<S>                     <C>                 <C>                 <C>                     <C>
                        As                  Pro                 As                      Pro
                        Reported            Forma               Reported                Forma
                        --------------      ------------        ------------            ------------

        Net loss        $    (721,566)      $  (721,566)        $  (860,064)            $  (860,064)
                        ==============      ============        ============            ============

        Net loss
         per share      $      (0.15)       $     (0.15)        $     (0.36)            $     (0.36)
                        ==============      ============        ============            ============
</TABLE>

     There were options granted in the year ended December 31, 2003. The average
     fair  value of  options  granted  was $0.  The fair  value  of  options  is
     estimated on the date of grant using the Black-Scholes option-pricing model
     with the following weighted average assumptions: risk-free interest rate of
     5.0 percent;  expected life of 1,825 days; dividend yield percentage of 0%;
     and volatility of 300%.


7.   Statement of Cash Flows
     -----------------------

     Supplemental disclosure of other cash information:

     Non-cash investing activities:
        Net assets acquired during the year                     $2,625,000
        Value of preferred shares issued for acquisition        (1,500,000)
        Value of common shares issued for acquisition           (1,125,000)
                                                                -----------

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

8.   Notes Payable
     -------------

     As described in Note 4, a $200,000 note payable bearing  interest at 8% per
     annum was issued in  conjunction  with the redemption of Series A Preferred
     Stock. The note is due September 4, 2004.  Accrued interest at December 31,
     2003 totals $6,667.


9.   Property and Equipment
     ----------------------

        Office equipment and software           $   608,855
        Furniture and fixtures                      127,381
        Leasehold improvement                       355,273
                                                ------------
                                                  1,091,509
        Less: Accumulated depreciation           (1,081,135)
                                                ------------
                                                $    10,374
                                                ============

     The Company  determined  that an  impairment  existed on certain  leasehold
     improvements and recorded a write down of $120,580.

10.  Leases
     ------

     The  Company  leases for its own use office  space  under a  non-cancelable
     operating  lease  expiring  April 30, 2004,  with an option for a six-month
     renewal.  Future  minimum lease payments on this  non-cancelable  operating
     lease for 2004 are approximately $6,800.

     Rent  expense for the years ended  December  31, 2003 and 2002 was $194,366
     and $112,265, respectively.


                                      -F-12-
<PAGE>
                           GSV, Inc. and Subsidiaries
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2003

     In June 2001, the Company sublet to Nekema.com its former offices in Jersey
     City,  New Jersey  through  December 31, 2008. The rent on the sublease was
     guaranteed by Lumbermens  Mutual Casualty  Company,  d/b/a Kemper Insurance
     Company until May 2003. In September 2002 Nekema ceased business operations
     and defaulted on the sublease.  Kemper Insurance  Company made all payments
     of rent due under the  sublease  from  October,  2002 through May 31, 2003,
     totaling $133,091.  The Company is actively seeking a replacement subtenant
     for the property.  If the Company is unable to find a subtenant,  or unable
     to negotiate a settlement with the landlord,  the Company will be obligated
     to pay rent on the space  until the lease  expires in  December  2008.  The
     lease  contains  automatic  increases  based upon the consumer price index.
     Estimated  minimum  future lease  payments  including such increases are as
     follows:

                2004            $  164,908
                2005               172,329
                2006               180,084
                2007               188,188
                2008               196,656
                                ----------
                                $  902,165
                                ==========

11.  Income Taxes
     ------------

     Deferred  taxes are  recognized  on the  differences  between the financial
     reporting and income tax basis of assets and liabilities  using enacted tax
     rates.

     The tax  effects  of  temporary  differences  and the  net  operating  loss
     carryforwards  that give rise to  significant  portions of the net deferred
     income tax asset at December 31, 2003 are as follows:

        Net operating loss carryforwards              $12,109,998
        Net book value of property and equipment          125,000
        Investments                                     (   7,500)
                                                      ------------
                                                       12,227,498
        Valuation allowance                           (12,227,498)
                                                      ------------
                                                      $        --
                                                      ============

     Due to the uncertain realization of the deferred tax asset, the Company has
     provided a full valuation  allowance.  As of December 31, 2003, the Company
     had net operating loss  carryforwards of approximately  $31,067,000,  which
     begin to expire in 2013.

12.  Net Loss Per Common Share
     -------------------------

     Basic net loss per common  share is  calculated  by  dividing  net loss per
     common share after effect of adjustable common stock warrants, as explained
     below, by the weighted average number of shares of common stock outstanding
     during the period as follows:


                                      -F-13-
<PAGE>
                           GSV, Inc. and Subsidiaries
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2003
<TABLE>
<S>                             <C>                                             <C>
                                                2003                                           2002
                                ---------------------------------------         -------------------------------------
</TABLE>
<TABLE>
<S>                             <C>             <C>             <C>             <C>             <C>             <C>
                                                                 Per                                             Per
                                Loss            Shares          Share           Loss            Shares          Share
                                ---------------------------------------         --------------------------------------

        Loss from continuing
        operations              $ (721,566)     4,668,929       $ (.15)         $(860,064)      2,286,275       $(.36)
        Effect of preferred
        stock dividends                 --            ---           --            (48,000)            ---        (.02)
                                -----------     ---------       -------         ----------      ---------       ------
        Net loss available
        for common
        shareholders            $ (721,566)     4,668,929       $ (.15)         $(908,064)      2,286,117        (.38)

                                ===========     =========       =======         =========       =========       ======
</TABLE>

13.  Subsequent Events
     -----------------

     Subsequent to year end, the Company  issued a note payable in the amount of
     $25,000  bearing  interest at 8% per annum due September 1, 2004 and issued
     100,000 restricted shares of common stock.


14.  Unaudited Oil and Gas Reserve Quantities
     ----------------------------------------

     This  section  provides  information  required by  Statement  of  Financial
     Accounting  Standards  No.  69,  "Disclosures  about Oil and Gas  Producing
     Activities."

     The following unaudited reserve estimates were prepared  internally,  based
     upon  a  study  conducted  by  Pressler  Petroleum  Consultants,  Inc.,  an
     independent  engineering  company, as of April 5, 2004, and adjusted by the
     Company for production  through Dec. 31, 2003. There are many uncertainties
     inherent in estimated  proved reserve  quantities and in projecting  future
     production rates and the timing of development  expenditures.  In addition,
     reserve  estimates of new discoveries that have little  production  history
     are more imprecise than those of properties with more  production  history.
     Accordingly,  these estimates are expected to change as future  information
     becomes available.

     Proved oil and gas  reserves  are the  estimated  quantities  of crude oil,
     condensate,  natural  gas,  and natural gas liquids  which  geological  and
     engineering data demonstrate with reasonable certainty to be recoverable in
     future years from known  reservoirs  under existing  economic and operating
     conditions.

     Proved  developed  oil and gas reserves are those  reserves  expected to be
     recovered  through  existing  wells with  existing  equipment and operating
     methods.

     Unaudited net quantities of proved and proved  developed  reserves of crude
     oil (including condensate) and natural gas, all of which are located within
     the continental United States, are summarized below:


                                      -F-14-
<PAGE>
                           GSV, Inc. and Subsidiaries
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2003

     Changes in Proved Reserves:
                                                (BBLS)          (MCF)

        Estimated quantity, December 31, 2002     624           46,393

        Production                               (263)         (11,927)
        Acquisitions                              953           75,875
        Discoveries                                 -                -
        Revisions of previous estimates          (276)          (8,653)
                                                 -----         --------
        Estimated quantity, December 31, 2003    1,038         101,688
                                                 =====         ========

        Proved developed reserves:

        Oil                     (BBLS)

        December 31, 2002         624
        December 31, 2003       1,038

        Gas                     (MCF)

        December 31, 2002        46,393
        December 31, 2003       101,688

        Proved undeveloped reserves:

        Oil                     (BBLS)

        December 31, 2003       5,120

     The  following  table  presents a  standardized  measure of the  discounted
     future  net cash flows  attributable  to the  Company's  proved oil and gas
     reserves.  Future cash inflows were computed by applying  period-end prices
     of oil and gas to the  estimated  future  production  of proved oil and gas
     reserves.  The  future  production  and  development  costs  represent  the
     estimated  future  expenditures  (based on current costs) to be incurred in
     developing  and producing the proved  reserves,  assuming  continuation  of
     existing  economic  conditions.  Future  unexpected  costs  or  changes  in
     production could affect discounted future net cash flows.

     A discount  factor of 10% was used to reflect the timing of future net cash
     flows. The standardized  measure of discounted future net cash flows is not
     intended to  represent  the  replacement  cost or fair market  value of the
     Company's oil and gas properties.

                                                     As of Dec. 31,
                                                           2003
                                                     --------------

        Future cash inflows                           $  838,325
        Future development and production costs         (180,938)
                                                      -----------

        Future net cash flows                            657,387
        10% annual discount for
        estimating timing of cash flows                 (154,801)
                                                      -----------


                                      -F-15-
<PAGE>
                           GSV, Inc. and Subsidiaries
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2003

        Standardized measure of
        discounted future net cash flows              $  502,586
                                                      ===========

        Changes in Standardized measure are as follows:

        Standardized measure of
        discounted future net
        cash flows, December 31, 2002                 $  144,170

        Purchase of reserves in place                    275,956

        Changes in price, net of future
        production costs                                  88,311

        Changes in estimated future
        development costs                                105,534

        Changes in estimated quantities                  (63,649)

        Changes due to operations:
        Production                                       (84,092)
        Accretion of discount                             (3,063)

        Other                                             39,419
                                                      -----------

        Standardized measure of
        discounted future net
        cash flows, December 31, 2003                 $  502,586
                                                      ==========


                                      -F-16-