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**UNITED STATESSECURITIES 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 **December 31, 2003**

Commission File Number**0-26065**

BANYAN CORPORATION
  (Exact name of registrant as specified in Its charter)

|**Oregon**       | **84-1346327**     
|---------------- | -------------------
|(State or other  | (IRS Employer      
|jurisdiction of  | Identification No.)
|Incorporation or |                    
|Organization)    |                    

**Suite 500, 1925 Century Park East, Los Angeles,
  CA 90067** 
  (Address of Principal Executive offices) (Zip Code)

Registrant's telephone number, with area code:**(800)
  808-0899**

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Class A Common Stock, no par value

Indicate by check mark whether the registrant (1) filed all
  reports required to be filed by Section 13 or 15(d) of the Securities Exchange
  Act of 1934 during the past twelve 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 in this form, and no disclosure will be contained,
  to the best of Registrant's knowledge, in definitive proxy or information statements
  incorporated by reference in Part III of this Form 10-KSB or any amendment to
  this Form 10-KSB.  ** ̈**

Issuers revenues for its most recent fiscal year. $1,752,999

Aggregate market value of the voting and non-voting common equity
  held by non-affiliates: $6,461,586,as of April 20, 2004,

Number of shares of outstanding of each of the issuers
  classes of common equity as of April 20, 2004: Class A Common 55,784,014

ransitional Small Business Disclosure Format (Check one): Yes ** ̈**  
  No  **x**

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Because we want to provide you with more meaningful and useful
  information, this Annual Report on Form 10-KSB contains certain "forward-looking
  statements" (as such term is defined in Section 21E of the Securities Exchange
  Act of 1934, as amended). These statements reflect our current expectations
  regarding our possible future results of operations, performance, and achievements.
  These forward-looking statements are made pursuant to the safe harbor provisions
  of the Private Securities Litigation Reform Act of 1995.

Wherever possible, we have tried to identify these forward-looking
  statements by using words such as anticipate, believe,
  estimate, expect, plan, intend
  and similar expressions. These statements reflect our current beliefs and are
  based on information currently available to us. Accordingly, these statements
  are subject to certain risks, uncertainties, and contingencies, which could
  cause our actual results, performance, or achievements to differ materially
  from those expressed in, or implied by, such statements. These risks, uncertainties
  and contingencies include, without limitation, the factors set forth under Item
  6. Managements Discussion and Analysis of Financial Condition and Results
  of Operations or Plan of Operation. We have no obligation to update or revise
  any such forward-looking statements that may be made to reflect events or circumstances
  after the date of this Form 10-KSB.

PART I

Item 1. Description of Business.

Banyan Corporation, an Oregon corporation (Banyan),
  was organized in 1978. As used herein, the terms Our, Us,
  We and the Company collectively refer to Banyan and
  its one majority-owned subsidiary: Chiropractic USA, Inc., a Colorado corporation
  (Chiropractic USA), and its two wholly-owned subsidiaries: Franchise
  Support Network, Inc. (Franchise Support Network), incorporated
  pursuant to the laws of the province of Alberta, Canada, and Banyan Financial
  Services, Inc, a Colorado corporation and Southern Health Care, Inc. (a Colorado
  corporation), in accordance with guidelines established under Emerging Task
  Force Issue 97-2 Application of FASB Statement No. 94 and APB Opinion 16
  to Physician Practice Management Entities and Certain Other Entities with Contractual
  Management Arrangements. The Company meets all six of the requirements for
  a controlling financial interest that results in the consolidation of Southern
  Health Care, Inc.

Banyan is a holding company focused on investing in and building
  a network of operating subsidiaries engaged in the development of branded chiropractic
  clinics throughout North America, providing financing to chiropractors and other
  health care professionals, and providing support services to chiropractors.

There are approximately 80,000 chiropractors in the United
  States and Canada. Approximately 2,000 new graduates enter the field each year.
  This year, an estimated 20,000,000 Americans are expected to visit a chiropractor
  and expenses for the treatment of lower back pain are expected to exceed approximately
  $50,000,000. The aging of the population, continued population growth, advanced
  Chiropractic treatments, increased health care, and greater health consciousness
  all assure the chiropractic industry a future of expanding services. Despite
  the size and potential of this market, there is no national brand.

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Management believes these factors have created a unique and
  significant business opportunity: to establish the first national franchise
  brand in the burgeoning Chiropractic market and to provide ancillary services
  to Chiropractors. Chiropractic USA was formed to establish the first national
  franchise brand in chiropractic and to develop branded chiropractic clinics
  throughout North America through acquisition of existing clinics, conversion
  of existing practices to franchised locations, and franchising new practices
  under Chiropractic USA trademarks and uniform operating systems and practices.
  We have developed a template for all its locations and offer the following advantages
  to franchisees:

| | 1. | Recognized national brand with uniform
        logo, clinic design, and operating systems.                                                    
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                               
| | 2. | Centralized accounting, marketing, billing,
        collections, and interface with insurers.                                                 
| |    |                                                                                                                                               
| | 3. | Comprehensive national marketing with
        economies of scale relative to national and regional marketing and advertising
        programs.
| |    |                                                                                                                                               
| | 4. | Franchised clinics allow the doctor
        to focus on patients, while we take care of business administration.                              
| |    |                                                                                                                                               
| | 5. | Preferential financing packages for
        start up practitioners.                                                                           

We have embarked on three main development strategies: acquiring
  clinics to be owned and operated by us as corporate clinics, direct marketing
  of franchises, and recruiting area representatives to market franchises in exclusive
  territories.

In December, 2002, we entered into an agreement in principle
  with world renowned Chiropractic Coach Dr. CJ Mertz to assist us with the development
  our franchising. Dr. Mertz has operated The Waiting List Practice Chiropractic
  Training Organization (www.teamwlp.com) and its predecessors since 1984.
  Dr. Mertz has trained with nearly seven thousand chiropractors and has visited
  over one thousand private practices worldwide. Team WLP has successfully built
  more practices seeing greater than four hundred patient visits per week profitably
  than any other coaching program in history. Dr. Mertz has received numerous
  awards from the chiropractic profession. We will utilize Team WLP in our system
  to encourage maximum potential for our franchisees. Additionally, Dr. Mertz
  will have a significant role in positioning the franchise for maximum growth
  potential as well as strategic planning and execution. During the latter half
  of 2002, we acquired a chain of three clinics in Louisiana, which have been
  re-branded under Chiropractic USA. This has allowed us to implement methods
  in our own clinics and commence the chain/brand building segment of our business
  plan. These clinics serve as a flagship or role model for the Chiropractic USA
  chain.

In the middle of 2003, we began the rollout of our franchising
  program through direct marketing to existing practitioners and chiropractic
  students.

Initial franchising activities were directed to converting
  established clinics to Chiropractic USA brand clinics. Established practices
  that convert receive a corporate identity -- logos, banners, name recognition,
  marketing capability, uniform operating and business format, practice management
  services, and other services available through us. Conversion activity began
  in the

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third quarter 2003. These conversions will establish a strong
  basis for our operations and enable us to build up rapidly our brand.

We currently have franchise agreements in place in Hawaii,
  California, Michigan, Florida, South Carolina, Texas, Minnesota, Arizona, Massachusetts,
  Georgia, Utah, Colorado and other states. We anticipate being represented in
  over twenty-five States by year-end.

Since the latter half of 2003 when we began franchising we
  have also been marketing to new practitioners and recently graduated chiropractic
  students. We offer site selection, lease negotiation, practice design, and other
  additional services are offered to new practitioners. We will continue to market
  to associate practitioners anticipating this segment to be a large
  potential future growth opportunity.

Our franchise agreements provide for payment of percentage
  royalties and charges for additional services selected by the franchisee. New
  practitioners pay a franchise fee in addition to a percentage royalty and fees
  for optional services.

We recruit area representatives from all regions of the country.
  An area representative is responsible for developing Chiropractic USA locations
  within an exclusive territory, through conversion of existing practitioners
  and startup clinics. An area representative receives a portion of the percentage
  royalty we collected from the territory. Each area developer agreement calls
  for the establishment of up to 100 franchises in each territory. We currently
  have eleven area developer agreements in place representing a potential 1,100
  clinics. We anticipate that by the end of 2004, our area developers will establish
  in excess of 100 franchise clinics throughout the United States.

Franchise Support Network is intended to be a dedicated support
  to assist the needs of people desirous of becoming Chiropractic USA franchisees.
  It will offer such support services as business plan formulation, franchise
  agreement review and negotiation, assistance in site selection, lease review
  and negotiation, local store marketing assistance, accounting services, and
  other ongoing services. We intend that Franchise Support Network will establish
  relationships with business consultants and accountants across North America
  in order to establish itself as a franchised network of one-stop franchise consultants.
  Franchise Support Network has its principal place of business in Calgary, Alberta.
  As of March 1st, 2004, operations have not commenced.

Banyan Financial Services is a specialty finance firm providing
  practice finance solutions, including start up capital, construction financing,
  equipment leasing, unsecured lines of credit, and refinancing for Chiropractic
  USA franchisees and others in the health care industry. The President of Banyan
  Financial Services is Mark Eric Bailey. Banyan Financial Services has its principal
  place of business in Cape May, New Jersey. As of March 1, 2004, operations have
  not commenced.

On May 7, 2001, Banyan Corporation entered into three contracts
  with our Chief Executive Officer and our current Chief Financial Officer in
  connection with the repositioning of our business into the chiropractic market:
  an Offer to Purchase (Intellectual Property) (the

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Chiropractic USA Acquisition); an Offer to Purchase
  Franchise Support Network, Inc. (the Franchise Support Network Acquisition);
  and, Management Agreements with each of these officers (the Management
  Agreements). Please refer to Item 10, Executive Compensation, and Item
  12, Certain Relationships and Related Transactions.

On September 11, 2001, we entered into an agreement with Advanced
  Health Center, Inc. (Advanced) of Lake Charles, Louisiana to purchase
  three chiropractic clinics and their operating assets. On June 26, 2002, we
  assigned our rights under the agreement to Southern Health Care, Inc. (Southern),
  a newly formed Colorado holding company wholly-owned our Chief Executive Officer
  and our Chief Financial Officer, in exchange for the assignment to us of operations
  and income under a comprehensive management and operations agreement. This was
  done at the request of the financial institution funding the acquisition to
  accommodate their desired organizational structure for the transaction. The
  effect of the comprehensive management and operations agreement is that our
  Chief Executive Officer and our Chief Executive Officer have no direct pecuniary
  interest in the business and operations of Southern. On July 29, 2002, Southern
  completed the acquisition of Advanced. Southern acquired accounts receivable
  of $973,469 and furniture, fixtures and equipment of $176,531 in exchange for
  $900,000 in cash, notes payable of $200,000 and the Company issued 277,778 shares
  of its Class A common stock valued at $50,000. Our Chief Executive Officer and
  our Chief Financial Officer received certain compensation upon the completion
  of the acquisition. Please refer to Item 12, Certain Relationships and Related
  Transactions.

We currently have 28employees, six of which are part
  time.

On October 30, 2002, we disposed of all of the stock of a
  former wholly owned subsidiary DoubleCase Corporation (DoubleCase)
  to Global Case Corporation for nominal consideration. DoubleCase was insolvent
  at the date of disposition and had incurred losses in the prior fiscal year
  and the fiscal year-to-date.

On September 22, 2003, Banyan Corporation amended its articles
  of incorporation without shareholder action to re-designate 10,000,000 shares
  of authorized and unissued Class B Common NPV as Class A Common Stock, no par
  value. The amendment increases from 50,000,000 to 60,000,000 the total number
  of shares of Class A Common Stock Banyan Corporation is authorized to issue.
  Management intends to submit to a shareholder vote a change the authorized capitalization
  of Banyan Corporation, including an increase in the number of shares of Common
  Stock Banyan Corporation will be authorized to issue.

At year-end, we were past due on the repayment of $323,575
  in unsecured promissory notes. Management intends to promptly negotiate alternate
  payment options including extension of the payment date and/or cancellation
  of this debt.

Item 2. Description of Property.

We sublease our executive offices in Los Angeles on a month-to-month
  for monthly rentals of $250. We also rent facilities for our chiropractic clinics
  and accounting operations in Lake Charles, Sulphur and Iowa for approximately
  $9,500 per month under a long-term lease, which expires in July 2012. We pay
  an allowance of $1,000 per month each to our Chief Executive

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Officer and our Chief Financial Officer for the use of their
  law firms office space in Calgary, Alberta.

Item 3. Legal Proceedings.

As of December 31, 2003, we owed $153,896 plus accrued interest
  at the rate of 9% per annum with respect to a stipulated money judgment in favor
  of a broker-dealer, Paine Webber, Inc. The judgment was entered in Multnomah
  County, Oregon pursuant to settlement agreement entered into in January 2001.
  This legal proceeding arose from the alleged failure to deliver a stock certificate
  to the broker-dealer.

On January 8, 2004, a former employee of the former subsidiary
  DoubleCase, Bruce Leithead, filed suit against us and former subsidiary, DoubleCase;
  in Mobile County, Alabama seeking money damages for breach of an alleged employment
  contract. The Company and its officers deny any liability and intend to vigorously
  defend the suit.

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

No matter was submitted during the fourth quarter of the fiscal
  year December 31, 2003 to a vote of security holders.

PART II

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

Our Class A Common Stock is traded on National Association
  of Securities Dealers, Inc. (the NASD) OTC Bulletin Board under
  the symbol "BANY.

|               | 2003 | 
|-------------- | ---- | 
|               |      | 
|               | HIGH | 
|Fourth Quarter | 0.52 | 
|               |      | 
|Third Quarter  | 0.69 | 
|               |      | 
|Second Quarter | 0.19 | 
|               |      | 
|First Quarter  | 0.19 | 
|               |      | 
|               | 2002 | 
|               |      | 
|               | HIGH | 
|Fourth Quarter | 0.17 | 
|               |      | 
|Third Quarter  | 0.21 | 
|               |      | 
|Second Quarter | 0.25 | 
|               |      | 
|First Quarter  | 0.25 | 

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As of April 16, 2004 there were approximately 500 record holders
  of Class A Common Stock. This does not reflect an estimated 1,400 shareholders
  who hold their shares in street name.

No dividends were declared since prior to December 31, 2001.
  We presently intend to retain our earnings to fund development and of our business.
  Decisions concerning dividend payments in the future will depend on income and
  cash requirements. Holders of common stock are entitled to receive such dividends
  as may be declared our Board of Directors. There are no contractual restrictions
  on our ability to pay dividends to our shareholders. Securities authorized for issuance under equity compensation plans.
  The following is provided with respect to compensation plans (including individual
  compensation arrangements) under which equity securities are authorized for
  issuance as of the fiscal year ending December 31, 2003.

|Equity Compensation Plan Information (1)                        
|----------------------------------------------------------------
|Plan Category and Description                                   
|Equity compensation plans approved by
      security holders    
|Equity compensation plans not approved
      by security holders
|Total                                                           

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* This does not include options held by management and directors
  that were not granted as compensation. In each case, the disclosure refers to
  options or warrants unless otherwise specifically stated.

Please refer to Item 10. Executive Compensation. for additional
  information regarding securities authorized for issuance under equity compensation
  plans.

Recent Sales of Unregistered Securities.

During 2003, Banyan sold Class A Common Stock to employees,
  consultants and investors in transactions not involving a public offering without
  registration under the Securities Act of 1933 as follows:

|     | Shares    |  |   | Consideration | 
|---- | --------- |  | - | ------------- | 
|Cash | 7,940,500 |  | $ | 890,115       | 

For sales to consultants and employees, we relied on the exemption
  from registration afforded by Section 4(2) of the Securities Exchange Act of
  1934 (the 34 Act) and for sales to investors we relied on
  the exemption from registration afforded by Rule 406 of Regulation D of the
  General Rules and Regulations under the 34 Act. We complied with the manner
  of offering, access to information and investor accreditation requirements of
  such exemptions.

The sales of securities discussed above do not include 24,000,000
  shares issued to the Chief Executive Officer and Chief Financial Officer in
  connection with the Chiropractic USA Acquisition. Please refer to Item 12. Certain
  Relationships and Related Transactions.

ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIALCONDITION
  AND RESULTS OF OPERATIONS OR PLAN OFOPERATION:

The following information should be read in conjunction with
  the audited consolidated financial statements included herein which are prepared
  in accordance with accounting principles generally accepted in the United States
  of America.

The independent auditors' report on the Company's consolidated
  financial statements as of and for the year ended December 31, 2003 includes
  a "going concern" paragraph that describes doubt about the Company's ability
  to continue as a going concern.

Managements Discussion and Analysis of Financial
  Condition and Results of Operations:

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For the year ended December 31, 2003, the Company once again
  showed record revenues. During 2003, we began our franchise operations and have
  quickly established over fifty franchisees as of the close of the first quarter
  2004. Revenue will continue to grow as the new franchises come on stream. We
  anticipate reaching our goal of 100 franchised clinics by the end of 2004. This
  is key as Chiropractic USAs primary purpose is to be a franchisor, generating
  revenues primarily by charging a 6% royalty to all franchisees in the system.
  The growth factor has a progressive effect, as when we add new franchisees we
  do not have to substantially increase our operating expenses to support additional
  units. To date, we have expended significant sums to establish our franchise
  system, but it is now on stream with great potential growth in the coming years.
  This should easily surpass the corporate clinics in both revenue and profitability
  as it is the achievement of the second phase of our business plan (the first
  being the acquisition of corporate clinics). This milestone will put us well
  on our way to becoming a household standard for Chiropractic care with tremendous
  growth potential. Below is the comparison of operations for the years ending
  December 31, 2003 and 2002.

The Year Ended December 31, 2003 compared to the year ended
  December 31, 2002:

Patient revenues for the year ended December 31,2003 were
  $1,698,861 compared to $798,128 from the date of acquisition of Southern Health
  Care, Inc .on July 29, 2002 through December 31, 2002.

Revenues from franchised operations were $54,138 for the year
  ended December 31, 2003. The franchise operations began in September 2003 and
  are growing exponentially.

Patient care costs for the year ended December 31, 2003 were
  $1,055,008 compared to $339,678 from the date of acquisition of Southern Health
  Care, Inc. on July 29, 2002 through December 31, 2002. These include the chiropractic
  doctors and related salaries and benefits and other ancillary expenses.

Selling, general and administrative expenses of $4,530,877
  for the year ended December 31, 2003, include stock based compensation, warrant
  and option expense of $2,375,940 compared to $336,300 for the year ending December
  31, 2002. While management realizes this is a significant expense, the options
  are utilized to attract the highest quality of chiropractors and area representatives
  to the system laying the groundwork for significant growth in years to come.
  Other expenses include salary and wages, legal and other professional fees,
  rent and other.

Other expenses for the year ended December 31, 2003 totaled
  $116,735 compared to $98,375 for the year ended December 31, 2002.

In October 2002, the Company sold all of the issued and outstanding
  shares of its wholly-owned subsidiary, DoubleCase Corporation to an unrelated
  party. The sale resulted in a gain on the sale of the subsidiary of $656,168,
  which was offset by losses from operations of the discontinued subsidiary of
  $188,753. For the year ended December 31, 2003, the Company did not dispose
  of any subsidiaries and therefore recognized no gains or losses.

Loss from operations increased from $834,731 in 2002 to $3,802,638
  in 2003. The increase in loss from operations was due to stock based compensation,
  warrant and option expense

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associated with franchise and area representative agreements
  and while a significant expense now, positions us strongly for long term significant
  royalty revenues.

Liquidity and Capital Resources

During 2002, Banyan Corporation had cash outflows from investing
  activities of $900,000, which represents the cash paid in the acquisition of
  Advanced Health Care Inc. This cash outflow was funded by proceeds from long-term
  debt from a financial institution of $1,000,000. During 2003, there were no
  significant cash flows from investing activities.

Cash inflows from financing activities during 2003 of $890,115
  were from additional sales of the Companys Class A common stock. Other
  cash outflows from financing activities of $391,577 were for the repayment of
  notes payable.

Over the next twelve months, a positive cash flow is expected
  to be produced from the chiropractic clinics and cash flow generated from franchise
  revenue streams. These cash flows are expected to meet of the cash needs of
  Company. We do not anticipate that additional funds will need to be raised for
  daily operating activities. Further, there are no expected plans for purchase
  of additional facilities over the next twelve months but we will investigate
  each opportunity on an individual basis.

Expected Plan of Operations

It has been the goal of Banyan to establish a national franchise
  group of chiropractors and take advantage of economies of scale. We have launched
  our franchise program by signing up the first franchisee once all required federal
  and state franchise filings were completed in September, 2003. We progressed
  rapidly, signing 10 area representatives by the end of 2003 and now have in
  excess of fifty franchisees. Now that the majority of the ground work has be
  laid, we anticipate significant growth by the continued conversion of existing
  clinics to Chiropractic USA, as well as the development of various new clinics
  under the Chiropractic USA brand. We anticipate in excess of 100 clinics by
  the end of 2004. As for now, we do not believe we will purchase any additional
  clinics during 2004 even though we will examine closely any potential opportunities.
  Banyan Financial Services will be in place during 2004 and begin funding projects
  during the period. We anticipate positive cash flow being produced from all
  subsidiaries of Banyan during 2004.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements in conformity with
  accounting principles generally accepted in the United States of America 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 revenue
  and expenses during the reporting period. Actual results could differ from those
  estimates. We believe that the following are some of the more critical accounting
  policies that currently affect our financial condition and results of operations:

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- impairment of long-lived assets
- stock based compensation
- legal contingencies

Impairment of long-lived assets

Goodwill, arising from the acquisition of the Chiropractic
  USA development plan, represents the purchase price in excess of the amounts
  assigned to the net of the amounts assigned to assets acquired and liabilities
  assumed. In June 2001, the Financial Accounting Standards Board (FASB)
  issued SFAS No. 142, Goodwill and Other Intangible Assets. Effective
  January 1, 2002, SFAS No. 142 no longer allows the amortization of goodwill
  and intangible assets with indefinite useful lives. SFAS No. 142 requires that
  these assets be reviewed for impairment at least annually, or whenever there
  is an indication of impairment. Intangible assets with finite lives will continue
  to be amortized over their estimated useful lives and reviewed for impairment
  in accordance with SFAS No. 144, Accounting for the Impairment or Disposal
  of Long-Lived Assets.

Stock based compensation

SFAS No. 123, Accounting for Stock-Based Compensationdefines
  a fair-value based method of accounting for stock-based employee compensation
  plans and transactions in which an entity issues its equity instruments to acquire
  goods or services from non-employees, and encourages but does not require companies
  to record compensation cost for stock-based employee compensation plans at fair
  value. The Company has chosen to continue to account for employee stock-based
  compensation using the intrinsic value method prescribed in Accounting Principles
  Board Opinion No. 25, Accounting for Stock Issued to Employees ("APB No. 25")
  and related interpretations. Accordingly, compensation cost for stock options
  granted to employees is measured as the excess, if any, of the quoted market
  price of the Company's stock at the date of the grant over the amount an employee
  must pay to acquire the stock.

Legal Contingencies

We are currently involved in certain legal proceedings. As
  discussed in Note 13 of our consolidated financial statements, as of December
  31, 2003, we have accrued our estimate of the probable costs for the resolution
  of these claims. This estimate has been developed in consultation with outside
  counsel handling our defense in these matters and is based upon analysis of
  potential results, assuming a combination of litigation and settlement strategies.
  We do not believe these proceedings will have a material adverse effect on our
  consolidated financial position. It is possible, however, that future results
  of operations for any particular quarterly or

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annual period could be materially affected by changes in our
  assumptions, of the effectiveness of our strategies, related to these proceedings.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In November 2002, the FASB issued Interpretation No. 45, Guarantors
  Accounting and Disclosure Requirements for Guarantees, including Indirect Guarantees
  of Indebtedness of Others.FIN 45 elaborates on the disclosures to be made
  by the guarantor in its interim and annual financial statements about its obligations
  under certain guarantees that it has issued. It also requires that a guarantor
  recognize, at the inception of a guarantee, a liability for the fair value of
  the obligation undertaken in issuing the guaranty. The initial recognition and
  measurement provisions of this interpretation are applicable on a prospective
  basis to guarantees issued or modified after December 31, 2002, while the provisions
  of disclosure requirements are effective for financial statements of interim
  and annual reports ending after December 15, 2002. The adoption of FIN No. 45
  had no impact on the financial condition or results of operations of the Company.

In May 2003, the Financial Accounting Standards Board (FASB)
  issued SFAS no. 150, Accounting for Certain Financial Instruments with Characteristics
  of both Liabilities and Equity. SFAS No. 150 establishes new standards on how
  an issuer classifies and measures certain financial instruments with characteristics
  of both liabilities and equity. The provisions of SFAS No. 150 are generally
  effective for all financial instruments entered into or modified after May 31,
  2003, except for those provisions relating to mandatory redeemable non-controlling
  interests, which have been deferred. The adoption of SFAS No. 150 did not have
  an impact on the financial position or results of the Company. If the deferred
  provisions of SFAS No. 150 are finalized in their current form, management does
  not expect to have a material effect on the financial position or results of
  operations of the Company.

In December 2002, the FASB issued SFAS No. 148, Accounting
  for Stock-Based Compensation Transition and Disclosure. This statement amends
  SFAS No. 123, Accounting for Stock-Based Compensation, and establishes
  two alternative methods of transition from the intrinsic value method to the
  fair value method of accounting for stock-based employee compensation. In addition,
  SFAS No. 148 requires prominent disclosure about the effects on reported net
  income (loss) and requires disclosure for these effects in interim financial
  information. The provisions for the alternative transition methods are effective
  for fiscal years ending after December 15, 2002, and the amended disclosure
  requirements are effective for interim periods beginning after December 15,
  2002. The Company adopted the disclosure only provisions of SFAS No. 148 in
  2003 and plants to continue accounting for stock-based compensation under APB
  25.

In January 2003, the FASB issued SFAS Interpretation No. 46,
  Consolidation of Variable Interest Entities ("FIN 46"), which changes
  the criteria by which one company includes another entity in its consolidated
  financial statements. FIN 46 requires a variable interest entity ("VIE")
  to be consolidated by a company if that company is subject to a majority of
  the risk of loss from the variable interest entity's activities or entitles
  to receive a majority of the entity's residual returns or both. In December
  2003, the FASB approved a partial deferral of FIN 46 along with various other
  amendments. The effective date for this interpretation has been extended until
  the first fiscal period ending after December 15, 2004. However, prior to the
  required application of this interpretation, a public entity that is a small
  business issuer shall apply this interpretation to those entities that are considered
  to be special purpose entities no later than as of the end of the first reporting
  period after December 15, 2003. As the Company does not currently have an interest
  in a VIE or special purpose entity, management does not expect that the adoption
  of FIN 46 will have a material effect on the financial condition or results
  of operations of the Company.

FORWARD-LOOKING STATEMENTS

The statements contained in this report which are not historical
  facts are forward-looking statements that are subject to risks and uncertainties
  that could cause actual results to differ materially from those set forth or
  implied by forward-looking statements, including but not limited to variability
  in operating results, the ability of the Company to find and retain qualified
  personnel, and the risk that the demand for the Companys services will
  not continue.

12

---

ITEM 7.	FINANCIAL STATEMENTS

The financial statements are attached hereto.

13

---

BANYAN CORPORATION CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2003 AND 2002

TABLE OF CONTENTS

|Independent auditors report       | 1                                               
|---------------------------------- | ------------------------------------------------
|                                   |                                                 
|Consolidated financial statements: |                                                 
|                                   |                                                 
|                                   | Consolidated balance sheet                      
|                                   |                                                 
|                                   | Consolidated statements of operations           
|                                   |                                                 
|                                   | Consolidated statements of stockholders deficit
|                                   |                                                 
|                                   | Consolidated statements of cash flows           
|                                   |                                                 
|                                   | Notes to consolidated financial statements      



---

INDEPENDENT AUDITORS REPORT

Board of Directors 
  Banyan Corporation

We have audited the accompanying consolidated balance sheet
  of Banyan Corporation and subsidiaries as of December 31, 2003, and the related
  consolidated statements of operations, stockholders' deficit and cash flows
  for each of the years in the two-year period ended December 31, 2003. 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 audit to obtain reasonable assurance about whether
  the financial statements are free of material misstatement. An audit includes
  examining, on a test basis, evidence supporting the amounts and disclosures
  in the financial statements. An audit also includes assessing the accounting
  principles used and significant estimates made by the 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
  Banyan Corporation and subsidiaries as of December 31, 2003 and the results
  of their operations and their cash flows for each of the years in the two-year
  period ended December 31, 2003, in conformity with accounting principles generally
  accepted in the United States of America.

The accompanying consolidated financial statements have been
  prepared assuming that the Company will continue as a going concern. As discussed
  in Note 1 to the consolidated financial statements, the Company has incurred
  a net loss of $3,919,373 during the year ended December 31, 2003 and has a stockholders
  deficit and working capital deficiency of $1,133,802 and $888,305, respectively,
  at December 31, 2003. These conditions raise substantial doubt about the Companys
  ability to continue as a going concern. Managements plans with regard
  to these matters are also described in Note 1. The financial statements do not
  include any adjustments that might result from the outcome of this uncertainty.

GELFOND HOCHSTADT PANGBURN, P.C.

Denver, Colorado 
  April 15, 2004

F-1

---

BANYAN CORPORATION
  CONSOLIDATED BALANCE SHEET DECEMBER 31, 2003



|ASSETS                                                                |  
|--------------------------------------------------------------------- | -
|                                                                      |  
|Current assets:                                                       |  
|Cash and cash equivalents                                             | $
|Accounts receivable, net of
      allowance of $72,600 (Note 2)       |  
|Total
      current assets                                            |  
|                                                                      |  
|Furniture, fixtures and equipment, net (Note 5 )                      |  
|                                                                      |  
|Other assets, net (Note 3)                                            |  
|                                                                      |  
|                                                                      | $
|                                                                      |  
|LIABILITIES AND STOCKHOLDERS' DEFICIT                                 |  
|                                                                      |  
|Current liabilities:                                                  |  
|Current portion of long-term
      debt (Note 9)                      | $
|Accounts payable                                                      |  
|Bank line of credit (Note 8)                                          |  
|Accrued liabilities                                                   |  
|Accrued interest                                                      |  
|Other liabilities (Note 13)                                           |  
|Notes payable (Note 10):                                              |  
|Related
      parties                                                 |  
|Others                                                                |  
|Total
      current liabilities                                       |  
|                                                                      |  
|Long-term debt, net of current portion (Note 9)                       |  
|                                                                      |  
|Commitments and contingencies (Notes 3, 4, 6, 9, 11 and 13)           |  
|                                                                      |  
|Stockholders' deficit (Notes 2, 3, 11, and 12):                       |  
|Preferred stock; no par value; 10,000,000 shares authorized:          |  
|Class A convertible preferred
      stock; 500,000 shares authorized; |  
|187,190
      shares issued and outstanding;                          |  
|liquidation
      preference $ 514,773                                |  
|Common stock; no par value;
      60,000,000 Class A shares           |  
|authorized;
      53,440,917 shares issued and outstanding            |  
|Deferred compensation costs                                           |  
|Common stock to be issued                                             |  
|Accumulated deficit                                                   |  
|Total
      stockholders' deficit                                     |  
|                                                                      | $

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

F-2

---

BANYAN CORPORATIONCONSOLIDATED STATEMENTS OF OPERATIONS YEARS ENDED DECEMBER 31, 2003 AND 2002

|                                                       |   | 2003       |   |   | 2002       |  
|------------------------------------------------------ | - | ---------- | - | - | ---------- | -
|                                                       |   |            |   |   |            |  
|Patient services, net                                  | $ | 1,698,861  |   | $ | 798,128    |  
|Revenues from franchised clinics                       |   | 54,138     |   |   |            |  
|                                                       |   |            |   |   |            |  
|                                                       |   | 1,752,999  |   |   | 798,128    |  
|                                                       |   |            |   |   |            |  
|Patient care costs                                     |   | 1,055,008  |   |   | 339,678    |  
|Franchise cost                                         |   | 33,830     |   |   |            |  
|Impairment loss (Note 2)                               |   | 52,000     |   |   |            |  
|Selling, general and administrative expenses (Note 11) |   | 4,414,799  |   |   | 1,292,821  |  
|                                                       |   |            |   |   |            |  
|                                                       |   | 5,555,637  |   |   | 1,632,499  |  
|                                                       |   |            |   |   |            |  
|Loss from operations                                   |   | (3,802,638 | ) |   | (834,371   | )
|                                                       |   |            |   |   |            |  
|Other income (expense):                                |   |            |   |   |            |  
|Interest expense:                                      |   |            |   |   |            |  
|Related
      parties                                  |   | (100,035   | ) |   | (41,301    | )
|Other                                                  |   | (16,700    | ) |   | (20,049    | )
|Unrealized loss on trading securities                  |   |            |   |   | (43,025    | )
|Gain on investment borrowing
      (Note 13)           |   |            |   |   | 6,000      |  
|                                                       |   |            |   |   |            |  
|Loss from continuing operations                        |   | (3,919,373 | ) |   | (932,746   | )
|                                                       |   |            |   |   |            |  
|Discontinued operations (Note 3) :                     |   |            |   |   |            |  
|Loss from operations of discontinued                   |   |            |   |   |            |  
|subsidiary                                             |   |            |   |   | (188,753   | )
|Gain on disposal of subsidiary                         |   |            |   |   | 656,168    |  
|                                                       |   | -          |   |   | 467,415    |  
|Net loss                                               | $ | (3,919,373 | ) | $ | (465,331   | )
|                                                       |   |            |   |   |            |  
|Loss from continuing operations per                    |   |            |   |   |            |  
|common share:                                          |   |            |   |   |            |  
|Basic and diluted                                      | $ | (0.08      | ) | $ | (0.05      | )
|                                                       |   |            |   |   |            |  
|Net loss per common share:                             |   |            |   |   |            |  
|Basic and diluted                                      | $ | (0.08      | ) | $ | (0.03      | )
|                                                       |   |            |   |   |            |  
|Weighted average number of common                      |   |            |   |   |            |  
|shares outstanding - basic and
      diluted           |   | 48,715,457 |   |   | 18,096,780 |  

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

F-3

---

BANYAN CORPORATIONCONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT YEARS ENDED DECEMBER 31, 2003 AND DECEMBER 31, 2002

|                                                            |                 |  |   |               |  |  |            |  |   | Common    |  |   |              |   |   |          | 
|----------------------------------------------------------- | --------------- |  | - | ------------- |  |  | ---------- |  | - | --------- |  | - | ------------ | - | - | -------- | 
|                                                            | Preferred stock |  |   | Common stock  |  |  |            |  |   | stock     |  |   |              |   |   | Stock-   | 
|                                                            | Class
      A   |  |   | Class
      A |  |  | Deferred   |  |   | to be     |  |   | Accumulated  |   |   | holders' | 
|                                                            | Shares          |  |   | Amount        |  |  | Shares     |  |   | Amount    |  |   | compensation |   |   | issued   | 
|                                                            |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          | 
|Balances at January 1, 2002                                 | 187,190         |  | $ | 334,906       |  |  | 13,934,068 |  | $ | 3,602,436 |  | $ | (67,669      | ) | $ | 3,500    | 
|                                                            |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          | 
|Issuance of common stock for services                       |                 |  |   |               |  |  | 380,000    |  |   | 75,000    |  |   |              |   |   |          | 
|                                                            |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          | 
|Issuance of stock options for services                      |                 |  |   |               |  |  |            |  |   | 157,600   |  |   |              |   |   |          | 
|                                                            |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          | 
|Transfer of common stock by shareholder                     |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          | 
|for obligation of the Company (Note
      11)               |                 |  |   |               |  |  |            |  |   | 26,000    |  |   |              |   |   |          | 
|                                                            |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          | 
|Issuance of common stock for guarantee and loan             |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          | 
|fees (Note 3)                                               |                 |  |   |               |  |  | 2,300,000  |  |   | 345,000   |  |   |              |   |   |          | 
|                                                            |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          | 
|Issuance of common stock for acquisition                    |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          | 
|of assets of Advanced Health Center,
      Inc. (Note 3)    |                 |  |   |               |  |  | 277,778    |  |   | 50,000    |  |   |              |   |   |          | 
|                                                            |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          | 
|Issuance of common stock for consulting fees                |                 |  |   |               |  |  | 750,000    |  |   | 67,500    |  |   |              |   |   |          | 
|                                                            |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          | 
|Exercise of stock options in exchange for                   |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          | 
|reduction in accounts payable and                           |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          | 
|notes payable                                               |                 |  |   |               |  |  | 700,000    |  |   | 70,000    |  |   |              |   |   |          | 
|                                                            |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          | 
|Issuance of common stock to employees                       |                 |  |   |               |  |  | 60,000     |  |   | 10,200    |  |   |              |   |   |          | 
|                                                            |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          | 
|Amortization of deferred compensation costs                 |                 |  |   |               |  |  |            |  |   |           |  |   | 28,000       |   |   |          | 
|                                                            |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          | 
|Common stock and warrants issued for cash,                  |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          | 
|net of costs of $ 2,500                                     |                 |  |   |               |  |  | 350,000    |  |   | 32,500    |  |   |              |   |   |          | 
|                                                            |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          | 
|Common stock issued for cash                                |                 |  |   |               |  |  | 700,000    |  |   | 60,560    |  |   |              |   |   |          | 
|                                                            |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          | 
|Issuance of common stock for acquisition                    |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          | 
|of assets of Franchise Support Network,
      Inc. (Note 3) |                 |  |   |               |  |  | 24,000,000 |  |   |           |  |   |              |   |   |          | 
|                                                            |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          | 
|Net loss                                                    |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          | 
|                                                            |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          | 
|Balances at December 31, 2002                               | 187,190         |  | $ | 334,906       |  |  | 43,451,846 |  | $ | 4,496,796 |  | $ | (39,669      | ) | $ | 3,500    | 

(Continued)

F-4

---

BANYAN CORPORATIONCONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT (Continued) 
  YEARS ENDED DECEMBER 31, 2003 AND DECEMBER 31, 2002

|                                                       |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   | Common   |  |   |            |   |   |            |  
|------------------------------------------------------ | --------------- |  | - | ------------- |  |  | ---------- |  | - | --------- |  | - | ------------ | - | - | -------- |  | - | ---------- | - | - | ---------- | -
|                                                       | Preferred stock |  |   | Common stock  |  |  |            |  |   | stock     |  |   |              |   |   | Stock-   | 
|                                                       | Class
      A   |  |   | Class
      A |  |  | Deferred   |  |   | to be     |  |   | Accumulated  |   |   | holders' | 
|                                                       | Shares          |  |   | Amount        |  |  | Shares     |  |   | Amount    |  |   | compensation |   |   | issued   |  |   | deficit    |   |   | deficit    |  
|                                                       |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          |  |   |            |   |   |            |  
|Balances at December 31, 2002                          | 187,190         |  | $ | 334,906       |  |  | 43,451,846 |  | $ | 4,496,796 |  | $ | (39,669      | ) | $ | 3,500    |  | $ | (5,368,516 | ) | $ | (572,983   | )
|(Carried forward)                                      |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          |  |   |            |   |   |            |  
|                                                       |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          |  |   |            |   |   |            |  
|Issuance of common stock for services                  |                 |  |   |               |  |  | 422,000    |  |   | 65,500    |  |   |              |   |   |          |  |   |            |   |   | 65,500     |  
|                                                       |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          |  |   |            |   |   |            |  
|Issuance of common                                     |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          |  |   |            |   |   |            |  
|stock for services
      (Note 11)                     |                 |  |   |               |  |  | 1,428,571  |  |   | 200,000   |  |   | (200,000     | ) |   |          |  |   |            |   |   | -          |  
|                                                       |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          |  |   |            |   |   |            |  
|Stock compensation plans                               |                 |  |   |               |  |  |            |  |   | 906,850   |  |   |              |   |   |          |  |   |            |   |   | 906,850    |  
|                                                       |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          |  |   |            |   |   |            |  
|Transfer of 100,000 shares                             |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          |  |   |            |   |   |            |  
|of subsidiary common                                   |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          |  |   |            |   |   |            |  
|stock for services                                     |                 |  |   |               |  |  |            |  |   | 6,000     |  |   |              |   |   |          |  |   |            |   |   | 6,000      |  
|                                                       |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          |  |   |            |   |   |            |  
|Conversion of notes                                    |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          |  |   |            |   |   |            |  
|payable to equity                                      |                 |  |   |               |  |  | 198,000    |  |   | 35,500    |  |   |              |   |   |          |  |   |            |   |   | 35,500     |  
|                                                       |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          |  |   |            |   |   |            |  
|Common stock issued for cash                           |                 |  |   |               |  |  | 1,930,500  |  |   | 259,115   |  |   |              |   |   |          |  |   |            |   |   | 259,115    |  
|                                                       |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          |  |   |            |   |   |            |  
|Common stock and warrants issued for cash              |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          |  |   |            |   |   |            |  
|of $596,000 and services
      of $1,397,590 (Note 11) |                 |  |   |               |  |  | 5,660,000  |  |   | 1,993,590 |  |   |              |   |   |          |  |   |            |   |   | 1,993,590  |  
|                                                       |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          |  |   |            |   |   |            |  
|Exercise of warrants for cash                          |                 |  |   |               |  |  | 350,000    |  |   | 35,000    |  |   |              |   |   |          |  |   |            |   |   | 35,000     |  
|                                                       |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          |  |   |            |   |   |            |  
|Amortization of deferred                               |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          |  |   |            |   |   |            |  
|compensation                                           |                 |  |   |               |  |  |            |  |   |           |  |   | 56,999       |   |   |          |  |   |            |   |   | 56,999     |  
|                                                       |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          |  |   |            |   |   |            |  
|Net loss                                               |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          |  |   | (3,919,373 | ) |   | (3,919,373 | )
|                                                       |                 |  |   |               |  |  |            |  |   |           |  |   |              |   |   |          |  |   |            |   |   |            |  
|Balances at December 31, 2003                          | 187,190         |  | $ | 334,906       |  |  | 53,440,917 |  | $ | 7,998,351 |  | $ | (182,670     | ) | $ | 3,500    |  | $ | (9,287,889 | ) | $ | (1,133,802 | )

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

F-5

---

BANYAN CORPORATION**CONSOLIDATED STATEMENTS OF CASH FLOWS****YEARS ENDED DECEMBER 31, 2003 AND 2002**

|                                                                       |   | 2003       |   |   | 2002      |  
|---------------------------------------------------------------------- | - | ---------- | - | - | --------- | -
|                                                                       |   |            |   |   |           |  
|Cash flows from operating activities of continuing operations:         |   |            |   |   |           |  
|Net loss                                                               | $ | (3,919,373 | ) | $ | (465,331  | )
|Adjustments to reconcile net
      loss to net cash                    |   |            |   |   |           |  
|used
      in operating activities:                                    |   |            |   |   |           |  
|Loss
      from discontinued operation                                 |   |            |   |   | 188,753   |  
|Gain
      on disposition of discontinued operations                   |   |            |   |   | (656,168  | )
|Depreciation
      and amotization                                     |   | 149,629    |   |   | 77,794    |  
|Impairment
      loss                                                  |   | 52,000     |   |   |           |  
|Unrealized
      gain on trading securuties                            |   |            |   |   | 43,025    |  
|Provision
      for doubtful accounts                                  |   | 328,100    |   |   | 24,600    |  
|Stock,
      options, and warrants issued for services                 |   | 2,375,940  |   |   | 336,300   |  
|Gain
      on investment borrowing                                     |   |            |   |   | (6,000    | )
|Note
      payable issued for services                                 |   |            |   |   | 60,000    |  
|Amortization
      of deferred compensation                            |   | 56,999     |   |   | 28,000    |  
|Changes in assets and liabilities
      from continuing operations     |   |            |   |   |           |  
|net
      of business acquisition:                                     |   |            |   |   |           |  
|Accounts
      recievable                                              |   | (30,894    | ) |   | (78,908   | )
|Accounts
      payable and accrued expenses                            |   | 321,884    |   |   | 353,093   |  
|Deferred
      revenue                                                 |   | 32,718     |   |   |           |  
|                                                                       |   |            |   |   |           |  
|Net cash used in operating activities of continuing operations         |   | (632,997   | ) |   | (94,842   | )
|                                                                       |   |            |   |   |           |  
|                                                                       |   |            |   |   |           |  
|Cash flows from investing activities:                                  |   |            |   |   |           |  
|Cash paid for acquisition of
      Advanced Health Care, Inc. (Note 3) |   |            |   |   | (900,000  | )
|Purchase of furniture fixtures
      and equipment                     |   | (3,100     | ) |   |           |  
|                                                                       |   |            |   |   |           |  
|Net cash used in investing activities
      of continuing operations   |   | (3,100     | ) |   | (900,000  | )
|                                                                       |   |            |   |   |           |  
|Cash flows from financing activities                                   |   |            |   |   |           |  
|Proceeds from notes payable,
      related parties                     |   | 73,591     |   |   | 56,250    |  
|Payments on notes payable, related
      parties                       |   | (55,000    | ) |   | (26,250   | )
|Proceeds from long term debt                                           |   |            |   |   | 1,000,000 |  
|Advances on line of credit                                             |   | 25,000     |   |   |           |  
|Payment on investment borrowing                                        |   |            |   |   | (10,625   | )
|Payments on long term debt and
      notes payable                     |   | (336,577   | ) |   | (66,778   | )
|Proceeds from issuance of common
      stock and exercise of warrants  |   | 890,115    |   |   | 93,060    |  
|                                                                       |   |            |   |   |           |  
|Net cash provided by financing activites of continuing operations      |   | 597,129    |   |   | 1,045,657 |  
|                                                                       |   |            |   |   |           |  
|Cash used in discontinued operations                                   |   |            |   |   | (2,745    | )

(continued)

F-6

---

BANYAN CORPORATION**CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) 
  YEARS ENDED DECEMBER 31, 2003 AND 2002**

|                                                                   |   | 2003    |   |   | 2002      |  
|------------------------------------------------------------------ | - | ------- | - | - | --------- | -
|                                                                   |   |         |   |   |           |  
|                                                                   |   |         |   |   |           |  
|Net increase (decrease) in cash                                    |   | (38,968 | ) |   | 48,070    |  
|Cash and cash equivalents, beginning of year                       |   | 49,177  |   |   | 1,107     |  
|Cash and cash equivalents, end of year                             | $ | 10,209  |   | $ | 49,177    |  
|                                                                   |   |         |   |   |           |  
|Supplemental disclosures of cash flow information:                 |   |         |   |   |           |  
|                                                                   |   |         |   |   |           |  
|Cash paid for interest                                             | $ | 60,358  |   | $ | 6349      |  
|                                                                   |   |         |   |   |           |  
|Supplemental disclosure of non-cash investing and                  |   |         |   |   |           |  
|financing activities:                                              |   |         |   |   |           |  
|                                                                   |   |         |   |   |           |  
|Acquisition of Advanced Health
      Care, Inc. (Note 3)           |   |         |   |   |           |  
|Fair
      value of assets acquired                                |   |         |   | $ | 1,150,000 |  
|Notes
      payable issued                                         |   |         |   |   | (200,000  | )
|Fair
      value of common stock issued                            |   |         |   |   | (50,000   | )
|                                                                   |   |         |   |   |           |  
|Cash
      paid                                                    |   |         |   | $ | 900,000   |  
|                                                                   |   |         |   |   |           |  
|Common stock issued for guarantee
      and loan fees              |   |         |   |   |           |  
|in
      connection with issuance of notes payable (Note 3)        |   |         |   | $ | 345,000   |  
|                                                                   |   |         |   |   |           |  
|Stock options exercised for
      common stock in                  |   |         |   |   |           |  
|satisfaction
      of accounts payable and notes payable (Note 11) |   |         |   | $ | 70,000    |  
|                                                                   |   |         |   |   |           |  
|Sale of DoubleCase Corporation
      (Note 3)                      |   |         |   |   |           |  
|Carrying
      value of assets                                     |   |         |   | $ | 21,366    |  
|Liabiilties
      assumed by purchaser                             |   |         |   | $ | (677,534  | )
|                                                                   |   |         |   |   |           |  
|Gain
      on sale of subsidiary                                   |   |         |   | $ | (656,168  | )
|                                                                   |   |         |   |   |           |  
|                                                                   |   |         |   |   |           |  
|Accrued
      interest payable added to notes payable              |   |         |   | $ | 34,824    |  
|                                                                   |   |         |   |   |           |  
|Class
      A common stock issued in satisfaction of note          |   |         |   |   |           |  
|payable
      (Note 11)                                            | $ | 35,500  |   |   |           |  

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

F-7

---

BANYAN CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2003 AND 2002

1. Organization, principles of consolidation, going concern, results of
  operations and managements plans:

Organization and principles of consolidation

Banyan Corporation (the Company), an Oregon corporation,`
  was incorporated on June 13, 1978. The Company primarily operates and franchises
  Chiropractic USA chiropractic clinics in the health care industry. All clinics
  are operated either by the Company or by independent entrepreneurs under the
  terms of franchise arrangements (franchisees).

The consolidated financial statements include the accounts
  of Banyan Corporation, its wholly-owned subsidiaries, Banyan Financial Services,
  Inc. (a Colorado corporation), Franchise Support Network Inc. (a Canadian corporation)
  and its majority-owned subsidiary, Chiropractic USA, Inc. (a Colorado corporation)
  and the accounts of Southern Health Care, Inc. (a Colorado corporation) in accordance
  with guidelines established under Emerging Issue Task Force 97-2 Application
  of FASB Statement No. 94 and APB Opinion 16 to Physician Practice Management
  Entities and Certain Other Entities with Contractual Management Arrangements.
  The Company meets all six of the requirements for a controlling financial interest
  that results in the consolidation of Southern Health Care, Inc. All significant
  intercompany accounts and transactions have been eliminated in consolidation.
  Banyan Financial Services Inc. and Franchise Support Network Inc. have not commenced
  operations.

Going concern, results of operations and managements plans:

The Company has incurred operating losses for several years.
  These losses have caused the Company to operate with limited liquidity and have
  created a stockholders deficit and working capital deficiency of $1,133,802
  and $888,305, respectively, as of December 31, 2003. Additionally, a significant
  portion of the Company's notes payable are past due (Note 10). These conditions
  raise substantial doubt about the Companys ability to continue as a going
  concern. Managements plans to address these concerns include implementation
  of development and consolidation plan for chiropractic clinics. Also the Company
  plans on raising equity funding through the sales of its Class A Common stock
  or preferred stock on an as needed basis.

The accompanying financial statements do not include any adjustments
  relating to the recoverability and classification of assets or the amounts of
  liabilities that might be necessary should the Company be unsuccessful in implementing
  these plans, or otherwise be unable to continue as a going concern.

F-8

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
  YEARS ENDED DECEMBER 31, 2003 AND 2002

2. Summary of significant accounting policies:

Use of estimates:

The preparation of financial statements in conformity with
  accounting principles generally accepted in the United States of America 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 revenue
  and expenses during the reporting period. Actual results could differ from those
  estimates.

Cash and cash equivalents:

The Company considers all highly liquid investments with an
  original maturity of three months or less to be cash equivalents.

Accounts receivable:

Accounts receivable are uncollateralized and consist primarily
  of receivables from patients, insurers and others for patient services rendered.
  Management reviews accounts receivable periodically for collectibility and establishes
  an allowance for doubtful accounts and records bad debt expense when deemed
  necessary.

During the fourth quarter 2003, in connection with managements
  evaluation of the collectability of accounts receivable, management determined
  that there was a decline in the net realizable value of accounts receivable.
  As a result of this determination, the Company recorded an adjustment of approximately
  $280,000 to decrease accounts receivable.

Furniture, fixtures and equipment:

Furniture, fixtures and equipment are stated at cost. Depreciation
  is provided by use of accelerated methods over the estimated useful lives of
  the assets, ranging from 3 to 7 years.

F-9

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
  YEARS ENDED DECEMBER 31, 2003 AND 2002

2. Summary of significant accounting policies (continued):

Goodwill:

Goodwill, arising from the acquisition of the Chiropractic
  USA development plan, represents the purchase price in excess of the fair value
  of assets acquired. In June 2001, the Financial Accounting Standards Board (FASB)
  issued Statement of Financial and Accounting Standards (SFAS) No.
  142, Goodwill and Other Intangible Assets. Effective January 1, 2002,
  SFAS No. 142 no longer allows the amortization of goodwill and intangible assets
  with indefinite useful lives. SFAS No. 142 requires that these assets be reviewed
  for impairment at least annually, or whenever there is an indication of impairment.
  Intangible assets with finite lives will continue to be amortized over their
  estimated useful lives and reviewed for impairment in accordance with SFAS No.
  144, Accounting for the Impairment or Disposal of Long-Lived Assets.

SFAS No. 142 requires companies to allocate goodwill to identifiable
  reporting units, which are then tested for impairment using a two-step process
  detailed in the statement. The first step requires comparing the fair value
  of each reporting unit with its carrying amount, including goodwill. If the
  fair value exceeds the carrying amount, goodwill of the reporting unit is considered
  not impaired, and the second step of the impairment test is not necessary. If
  the fair value of the reporting unit does not exceed the carrying amount, the
  second step of the goodwill impairment test must be performed to measure the
  amount of impairment loss, if any. This step requires the allocation of the
  fair value of the reporting unit to the reporting units assets and liabilities
  (including any unrecognized intangible assets) as if the reporting unit had
  been acquired in a business combination and the fair value of the reporting
  unit was the price paid to acquire the reporting unit. The excess of the fair
  value of the reporting unit over its reevaluated net assets would be the new
  basis for the reporting units goodwill, and any necessary goodwill write
  down to this new value would be recognized as an impairment expense. The Company
  performed its annual goodwill impairment test in the fourth quarter of 2003
  and determined that goodwill was impaired as of that testing date. As a result,
  the Company recorded an impairment loss of $52,000 for the year ended December
  31, 2003.

F-10

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
  YEARS ENDED DECEMBER 31, 2003 AND 2002

2. Summary of significant accounting policies (continued):

Revenue recognition:

Fees from franchised clinics include initial fees and continuing
  fees. Initial fees are recognized upon opening of a clinic, which is when the
  Company has performed substantially all initial services required by the franchise
  arrangement. Continuing fees are recognized in the period earned.

Net patient revenues from Company owned clinics represent
  the estimated realizable amounts to be received from patients, third-party payers
  and others for services rendered as the services are performed. Revenues are
  reported at established rates reduced by contracted amounts based on agreements
  with patients, third party payers and others obligated to pay for services rendered.

Comprehensive income:

SFAS No. 130, Reporting Comprehensive Income,establishes
  accounting and reporting requirements for comprehensive income. During the years
  ended December 31, 2003 and 2002, the Company had no components of comprehensive
  income to report.

Stock-based compensation:

SFAS No. 123, Accounting for Stock-Based Compensationallows
  companies to choose whether to account for employee stock-based compensation
  on a fair value method, or to continue accounting for such compensation under
  the intrinsic value method prescribed in Accounting Principles Board Opinion
  No. 25, Accounting for Stock Issued to Employees (APB 25).
  The Company has chosen to continue to account for employee stock based compensation
  using APB 25. Accordingly, no compensation expense has been recognized for options
  granted at fair value. Had compensation cost for the Companys stock options
  plan been determined based on the fair value at the grant dates for awards under
  the plans consistent with the fair-value based method of accounting prescribed
  by SFAS No. 123, the Companys results would have been changed to the pro
  forma amounts indicated below:

F-11

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
  YEARS ENDED DECEMBER 31, 2003 AND 2002

2. Summary of significant accounting policies (continued):

Stock based compensation (continued):

|                                             |   | 2003       |   |   | 2002     |  
|-------------------------------------------- | - | ---------- | - | - | -------- | -
|Net loss, as reported                        | $ | (3,919,373 | ) | $ | (465,331 | )
|Add: Stock-based employee compensation       |   |            |   |   |          |  
|expense included
      in reported net loss  |   |            |   |   |          |  
|loss                                         |   | -          |   |   | -        |  
|Deduct: Total stock-based employee           |   |            |   |   |          |  
|compensation expense
      determined under  |   |            |   |   |          |  
|fair value based
      method for all awards |   | (375,500   | ) |   | (182,300 | )
|Net loss, pro forma                          | $ | (4,294,873 | ) | $ | (647,631 | )
|Basic and diluted loss                       |   |            |   |   |          |  
|per share, as reported                       | $ | (0.08      | ) | $ | (0.08    | )
|Basic and diluted loss                       |   |            |   |   |          |  
|per
      share, pro forma                   | $ | (0.09      | ) | $ | (0.11    | )

The fair value of each option and grant is estimated on the
  date of the grant using the Black-Scholes option-pricing model with the following
  weighted-average assumptions used for grants in the years ended December 31,
  2003 and 2002: dividend yield of zero; expected volatility ranging from 197%
  to 181%; risk-free interest rates ranging from 1.36% to 1.68%; and an expected
  term of 18-36 months.

F-12

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
  YEARS ENDED DECEMBER 31, 2003 AND 2002

2. Summary of significant accounting
  policies (continued):

Income taxes:

The Company provides for income taxes under the provisions
  of SFAS No. 109, Accounting for Income Taxes. SFAS No. 109 requires an
  asset and liability based approach in accounting for income taxes.

Deferred income tax assets and liabilities are recorded to
  reflect the tax consequences on future years of temporary differences of revenue
  and expense items for financial statement and income tax purposes. Valuation
  allowances are established against assets, which are not likely to be realized.

Impairment of long-lived assets:

Management reviews long-lived assets for impairment whenever
  events or changes in circumstances indicate that the carrying amount of an asset
  may not be recoverable. Recoverability of assets to be held and used is measured
  by a comparison of the carrying amount of an asset to future net cash flows
  expected to be generated by that asset. If such assets are considered impaired,
  the impairment to be recognized is measured by the amount by which the carrying
  amount of the assts exceeds the fair value of the assets. Based on its review,
  management does not believe that any impairment of long-lived assets exists
  at December 31, 2003.

Net loss per share:

Basic net loss per share is computed by dividing the net loss
  applicable to common stockholders by the weighted-average number of shares of
  common stock outstanding for the year. Diluted net loss per share reflects the
  potential dilution that could occur if dilutive securities were exercised or
  converted into common stock or resulted in the issuance of common stock that
  then shared in the earnings of the Company, unless the effect of such inclusion
  would reduce a loss or increase earnings per share. In August 2003, the Company
  issued 1,428,571 shares of Class A common stock under a stock-based consulting
  agreement, which is to be earned through August 2004. Until they are earned,
  or canceled, these shares are considered options for the purpose of computing
  basic and diluted earnings per share. For the years ended December 31, 2003
  and 2002, the effect of the inclusion of dilutive shares would have resulted
  in a decrease in loss per share. Accordingly, the weighted average shares outstanding
  have not been adjusted for dilutive shares.

Advertising:

Advertising costs are expensed as incurred. For the years
  ended December 31, 2003 and 2002, advertising costs were approximately $90,000
  and $39,300, respectively.

F-13

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
  YEARS ENDED DECEMBER 31, 2003 AND 2002

2. Summary of significant accounting policies
  (continued):

Business segments:

The Company has adopted SFAS No. 131, Disclosures About
  Segments of an Enterprise and Related Information, which establishes reporting
  and disclosure standards for an enterprises operating segments. Operating
  segments are defined as components of an enterprise for which separate financial
  information is available and regularly reviewed by the Companys senior
  management. Prior to 2003, the Company's francise operations were not significant
  and the Company reported operations in only one business segment, chiropractic
  services. During 2003, the Company operated in two business segments, chiropractic
  services and franchising chiropractic clinics, and the information in Note 15
  has been restated for 2002 to conform to the 2003 presentation.

Recently issued accounting pronouncements:

In November 2002, the FASB issued Interpretation No. 45, Guarantors
  Accounting and Disclosure Requirements for Guarantees, including Indirect Guarantees
  of Indebtedness of Others.FIN No. 45 elaborates on the disclosures to be
  made by the guarantor in its interim and annual financial statements about its
  obligations under certain guarantees that it has issued. It also requires that
  a guarantor recognize, at the inception of a guarantee, a liability for the
  fair value of the obligation undertaken in issuing the guaranty. The initial
  recognition and measurement provisions of this interpretation are applicable
  on a prospective basis to guarantees issued or modified after December 31, 2002,
  while the provisions of disclosure requirements are effective for financial
  statements of interim and annual reports ending after December 15, 2002. The
  adoption of FIN No. 45 had no impact on the consolidated financial condition
  or results of operations of the Company.

In May 2003, the FASB issued SFAS No. 150, Accounting for
  Certain Financial Instruments with Characteristics of both Liabilities and Equity.
  SFAS No. 150 establishes new standards on how an issuer classifies and measures
  certain financial instruments with characteristics of both liabilities and equity.
  The provisions of SFAS No. 150 are generally effective for all financial instruments
  entered into or modified after May 31, 2003, except for those provisions relating
  to mandatory redeemable non-controlling interests, which have been deferred.
  The adoption of SFAS No. 150 did not have a material impact on the financial
  position or results of the Company. If the deferred provisions of SFAS No. 150
  are finalized in their current form, management does not expect adoption to
  have a material effect on the consolidated financial position or results of
  operations of the Company.

In December 2002, the FASB issued SFAS No. 148, Accounting
  for Stock-Based Compensation Transition and Disclosure. This statement amends
  SFAS No. 123, Accounting for Stock-Based Compensation, and establishes
  two alternative methods of transition from the intrinsic value method to the
  fair value method of accounting for stock-based employee compensation. In addition,
  SFAS No. 148 requires prominent disclosure about the effects on reported net
  income (loss) and requires disclosure for these effects in interim financial
  information. The provisions for the alternative transition methods are effective
  for fiscal years ending after December 15, 2002, and the amended disclosure
  requirements are effective for interim periods beginning after December 15,
  2002. The Company adopted the disclosure only provisions of SFAS No. 148 in
  2003 and plants to continue accounting for stock-based compensation under APB
  25.

In January 2003, the FASB issued SFAS Interpretation No. 46,
  Consolidation of Variable Interest Entities ("FIN 46"), which changes
  the criteria by which one company includes another entity in its consolidated
  financial statements. FIN 46 requires a variable interest entity ("VIE")
  to be consolidated by a company if that company is subject to a majority of
  the risk of loss from the variable interest entity's activities or entitles
  to receive a majority of the entity's residual returns or both. In December
  2003, the FASB approved a partial deferral of FIN 46 along with various other
  amendments. The effective date for this interpretation has been extended until
  the first fiscal period ending after December 15, 2004. However, prior to the
  required application of this interpretation, a public entity that is a small
  business issuer shall apply this interpretation to those entities that are considered
  to be special purpose entities no later than as of the end of the first reporting
  period after December 15, 2003. As the Company does not currently have an interest
  in a VIE or special purpose entity, management does not expect that the adoption
  of FIN 46 will have a material effect on the financial condition or results
  of operations of the Company.

F-14

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
  YEARS ENDED DECEMBER 31, 2003 AND 2002

3. Business acquisitions and dispositions:

In September 2001, the Company, entered into an agreement
  with Advanced Health Center, Inc. (Advanced) of Lake Charles, Louisiana
  to purchase three chiropractic clinics and their operating assets for $1,150,000.
  On June 26, 2002, the Companys wholly-owned subsidiary, Chiropractic USA,
  Inc. assigned its right to acquire the clinics to Southern Health Care, Inc.,
  (Southern) a newly formed Colorado holding company with no other
  assets, in exchange for a management agreement and franchise agreements. Southern
  is wholly owned by Michael and Cory Gelmon, who are also the Companys
  chief executive and chief financial officer, respectively. This assignment was
  undertaken at the request of the financial institution funding the acquisition
  to accommodate their desired organizational structure for the transaction. On
  July 29, 2002, Southern completed the acquisition of Advanced. Southern acquired
  accounts receivable of $973,469 and furniture, fixtures and equipment of $176,531
  in exchange for $900,000 cash, notes payable of $200,000 and the Company issued
  277,778 shares of its Class A common stock valued at $50,000, ($0.18 per share)
  which was equal to the market price on the agreement date. As part of the agreement
  to purchase Advanced, the Company agreed to issue an aggregate of 2,300,000
  shares of its Class A common stock, valued at $345,000 ($0.15 per share), which
  was equal to the market price on the agreement date, to eight individuals, as
  guarantee and loan fees on the financial institution debt of Southern. Included
  in the eight individuals were the Companys chief executive officer and
  its chief financial officer, who each received 600,000 shares as guarantors
  and indemnifiers of the other guarantors of the loan. The guarantee and loan
  fees are being amortized over the three-year term of the loan. Amortization
  expense was approximately $115,000 and $47,000 for the year ended December 31,
  2003 and 2002, respectively.

On October 10, 2002, the Companys board of directors
  initiated a plan to sell the Companys wholly-owned subsidiary, DoubleCase
  Corporation. On October 30, 2002, the Company sold all of the common shares
  of its wholly-owned subsidiary DoubleCase Corporation (DoubleCase)
  to Global Case Corporation for cash consideration of $1. At the date of the
  disposition, the liabilities exceeded the fair value of the assets of DoubleCase
  by approximately $656,000. During the period ended October 30, 2002 and the
  year ended December 31, 2001, DoubleCase had revenues of approximately $212,800
  and $409,400, respectively, and net losses of approximately $188,800 and $210,800,
  respectively

On May 7, 2001, the Company made an offer to purchase all
  of the issued and outstanding shares of Franchise Support Network, Inc. (FSN)
  in exchange for 34,047,666 shares of the Companys Class A common stock.
  The Company issued an aggregate of 24,000,000 shares of its Class A common stock
  to the shareholders of FSN, Michael and Cory Gelmon, on November 30, 2002. The
  transaction has been accounted for by the Company under guidance provided by
  SAB No. 48 (Topic 5-G), Transfers of Nonmonetary Assets by Promoters or Shareholders.
  Accordingly, the assets of FSN have been recorded at the transferors historical
  cost basis, which is zero, as FSN had no assets as of the acquisition date,
  had not commenced operations and expenses since inception are not material.
  At December 31, 2003, Michael and Cory Gelmon hold 21,740,000 shares of the
  Companys Class A common stock, or approximately 41% of the issued and
  outstanding Class A common stock. At December 31, 2003, there were 10,047,666
  shares to be issued to Michael and Cory Gelmon for the acquisition of FSN, when
  they become available for issue.

4. Franchise Operations:

During 2003, the Companys subsidiary, Chiropractic USA
  Inc., entered into 30 franchise agreements. These franchise agreements are for
  five and ten year terms. Chiropractic USA Inc., under the terms of the agreements
  is responsible for offering operational support, shared information, training
  support and

F-15

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
  YEARS ENDED DECEMBER 31, 2003 AND 2002

4. Franchise**Operations (Continued):**

marketing services to the franchisees. In return for these
  services, Chiropractic USA Inc. is to recognize royalties in the amount of 6%
  of collections on a weekly basis plus an additional 3% of collections for national
  and local advertising campaigns. Collections are defined as monies received
  as payment for services rendered. The Company also has the right to audit the
  franchisees accounting records to determine compliance. The royalties
  recognized appear on financial statements as revenues from franchised
  clinics. General and administration expenses associated with these revenues
  will be included in the selling, general and administrative expenses on the
  statement of operations. Prior to the execution of these franchise agreements,
  Chiropractic USA Inc. will charge a $20,000 initial franchise fee for startup
  clinics and a $1 fee for existing clinics that convert to its franchise program.
  The Company agrees to provide marketing, site selection, office processes, financing
  aid and other services to start up practices. Initial franchise fees will be
  recognized when substantially all significant services to be provided by Chiropractic
  USA Inc. have been performed.

During 2003, the Companys subsidiary, Chiropractic USA
  Inc., entered into 10 area development agreements with individuals. The agreements
  are designed for the individuals to develop the franchise market for Chiropractic
  USA and deliver a minimum of 10 conversions or start-up franchisees per year
  per agreement. The term of the agreements is 10 years. The Company will offer
  marketing support and remunerate the area developers 16.67% of royalties recognized
  from each franchisee within their territory. The royalties paid to the area
  developers will be recorded as a reduction in revenues from franchised
  clinics in the Companys statement of operations.

5. Furniture, fixtures and equipment:

Furniture, fixtures and equipment consisted of the following
  at December 31, 2003:

|Furniture, fixtures and equipment | $ | 179,632 | 
|--------------------------------- | - | ------- | 
|Leasehold improvements            |   | 2,118   | 
|                                  |   |         | 
|                                  |   | 181,750 | 
|Less accumulated depreciation     |   | 62,855  | 
|                                  |   |         | 
|                                  | $ | 118,895 | 

6. Lease commitments:

The Company leases its chiropractic clinics under non-cancelable
  operating leases expiring in July 2012. The Company also leases office space
  in Los Angeles, California under a month-to-month lease for $250 per month.
  Rent expense incurred for the years ended December 31, 2003 and 2002 was approximately
  $128,000 and $59,000, respectively. Future minimum future rental commitments
  under non-cancelable operating leases are approximately as follows:

|Years ending |  |   |           | 
|------------ |  | - | --------- | 
|December 31, |  |   |           | 
|             |  |   |           | 
|2004         |  | $ | 114,000   | 
|2005         |  |   | 114,000   | 
|2006         |  |   | 114,000   | 
|2007         |  |   | 119,200   | 
|2008         |  |   | 126,500   | 
|Thereafter   |  |   | 453,400   | 
|             |  | $ | 1,041,100 | 

F-16

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
  YEARS ENDED DECEMBER 31, 2003 AND 2002

7. Income taxes:

The Company did not incur income tax expense for the years
  ended December 31, 2003 and 2002. The difference between the expected tax benefit
  computed at the federal statutory income tax rate of 34% and the effective tax
  rate for the years ended December 31, 2003 and 2002 was due primarily to the
  tax effect of the change in the valuation allowance.

The Company recognizes deferred tax liabilities and assets
  for the expected future tax consequences of events that have been recognized
  in the financial statements or tax returns. Under this method, deferred tax
  liabilities and assets are determined based on the difference between the financial
  statement carrying amounts and tax bases of assets and liabilities using enacted
  tax rates in effect in the years in which the differences are expected to reverse.

The following is a summary of the Companys deferred
  tax assets and liabilities arising from differences in financial statement and
  income tax bases for the following assets at December 31, 2003:

|Accounts receivable                      | $ | (270,600   | ) | 
|---------------------------------------- | - | ---------- | - | 
|                                         |   |            |   | 
|Accounts payable and accrued liabilities |   | 204,200    |   | 
|                                         |   |            |   | 
|Allowance for doubtful accounts          |   | 16,300     |   | 
|                                         |   |            |   | 
|Net operating loss carry forwards        |   | 3,175,000  |   | 
|                                         |   |            |   | 
|Deferred tax asset valuation allowance   |   | (3,124,900 | ) | 
|                                         |   |            |   | 
|                                         | $ | –          |   | 

At December 31, 2003 the Company has approximately $9,337,000
  of unused federal net operating loss carry forwards, which expire from 2005
  through 2023. A valuation allowance has been provided to reduce the deferred
  tax assets to zero, as realization is not assured. In addition, due to the change
  in control of the Company in 2002, the net operating loss carry forwards may
  be limited.

8. Line of credit:

The Company has a $25,000 revolving line of credit with a
  bank. Interest is charged at 1.25% above the banks prime rate (5.25% at
  December 31, 2003) and is payable monthly. At December 31, 2003, borrowings
  under the line of credit were $25,000. The line of credit is collateralized
  by the Companys deposit accounts held with the bank and is personally
  guaranteed by both the Chief Financial and Chief Executive Officers of the Company
  and is due on demand.

F-17

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
  YEARS ENDED DECEMBER 31, 2003 AND 2002

9. Long-term debt:

The Company has a note payable of $746,645 to a financial
  institution. The note has a term of three years, accrues interest at the one-month
  LIBOR rate plus 3.40%, which was 4.52% at December 31, 2003, and is due in monthly
  installments of $16,667 plus accrued interest until the final payment in August
  2005, at which time all remaining accrued interest and principal amounts are
  due. The note is collateralized by all of the assets of Southern Health Care,
  Inc. In addition, Southern Health Care, Inc. must maintain a fixed charge coverage
  ratio (as defined) of 1.1 to 1. At December 31, 2003, management believes it
  is in compliance with the covenant. Aggregate long-term term debt maturities
  are approximately as follows:

|Years ending |  |   |         |  | 
|------------ |  | - | ------- |  | 
|December 31, |  |   | Amount  |  | 
|             |  |   |         |  | 
|2004         |  | $ | 200,000 |  | 
|2005         |  |   | 546,645 |  | 
|             |  | $ | 746,645 |  | 

F-18

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
  YEARS ENDED DECEMBER 31, 2003 AND 2002

Summary of significant accounting policies (continued):

10. Notes payable:

At December 31, 2003 notes payable consist of the following:

|Related Parties:                                                                              |   |         | 
|--------------------------------------------------------------------------------------------- | - | ------- | 
|Note payable, former chief executive officer / director;
      unsecured;                     |   |         | 
|interest
      at 8%; due December 2002, past due                                             | $ | 15,000  | 
|                                                                                              |   |         | 
|Note payable, former director; unsecured;                                                     |   |         | 
|interest
      at 10%; due April 1, 2001; past due                                            |   | 33,840  | 
|                                                                                              |   |         | 
|Note payable, family member of a principal stockholder; unsecured;                            |   |         | 
|interest
      at 9%; due November 1, 2001; past due                                          |   | 16,300  | 
|                                                                                              |   |         | 
|Note payable, family member of a principal stockholder; unsecured;                            |   |         | 
|interest
      at 9%; due November 1, 2001; past due                                          |   | 12,200  | 
|                                                                                              |   |         | 
|Note payable, Company's former president unsecured;                                           |   |         | 
|interest
      at 10%; due November 2001, past due                                            |   | 8,595   | 
|                                                                                              |   |         | 
|Notes payable, family member of a principal stockholder;
      unsecured;                     |   |         | 
|interest
      at 10%, due March 31, 2001; past due                                           |   | 130,640 | 
|                                                                                              |   |         | 
|Notes payable, family member of a principal stockholder /
      officer;                      |   |         | 
|unsecured;
      interest at 12%; due on demand                                               |   | 32,500  | 
|                                                                                              |   |         | 
|Note payable, former subsidiarys president; unsecured;
      interest at                     |   |         | 
|8%;
      principal payments of $4,000 due monthly; due March 2003;                           |   |         | 
|past
      due                                                                                |   | 52,000  | 
|                                                                                              |   |         | 
|Note payable, entity controlled by chief executive and chief
      financial                  |   |         | 
|officers;
      unsecured; interest at 10%; due on demand                                     |   | 73,580  | 
|                                                                                              |   |         | 
|                                                                                              | $ | 374,655 | 
|Other:                                                                                        |   |         | 
|Note payable, unrelated entity, unsecured; interest at 10%,
      due June 2002, past due     | $ | 5,000   | 
|Note payable, unrelated entity; unsecured; interest at 10%;
      due January, 2003; past due |   | 50,000  | 
|Note payable, unrelated party; unsecured; interest at 10%;
      due on demand                |   | 45,000  | 
|                                                                                              | $ | 100,000 | 

F-19

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
  YEARS ENDED DECEMBER 31, 2003 AND 2002

11. Stockholders deficit: Preferred stock:

The Company has 10,000,000 shares of no par value preferred
  stock authorized, and has designated 500,000 shares of Class A convertible preferred
  stock and 500,000 shares of Class B preferred stock. No Class B preferred stock
  is issued or outstanding.

At December 31, 2003 and 2002, there were 187,190 shares of
  no par value, Class A convertible preferred stock issued and outstanding. The
  Company may call the shares at $2.75 per share at any time. Each share of Class
  A convertible preferred stock is convertible at any time into one share of the
  Companys Class A common stock.

Common stock:

In September 2003, the Board of Directors re-designated 10,000,000
  shares of no par value, Class B common stock as no par value, Class A common
  stock thereby increasing the number of authorized shares of Class A common stock
  from 50,000,000 to 60,000,000. There are no longer any shares of Class B common
  stock authorized.

The Company has 60,000,000 shares of no par value, common
  stock authorized. At December 31, 2003 there were 53,440,917 shares of Class
  A common stock issued and outstanding. Subsequent to year end the Company has
  issued 2,343,097 shares of its Class A common stock for cash proceeds of $277,556.
  In addition, the Company has outstanding options of 13,115,000, outstanding
  warrants of 4,910,000, outstanding preferred stock of 187,190, 10,047,666 shares
  to be issued to Michael and Cory Gelmon in connection with the FSN transaction,
  and 50,000 shares to be issued in connection with the issuance of a note payable
  in 2001, which are convertible into Class A common shares which would, if converted,
  cause the Company to exceed its authorized Class A common shares. This is prohibited
  by the laws of the State of Oregon and therefore until the Company is able to
  convene a special meeting of the shareholders pursuant to the proxy solicitation
  requirements of Section 14 of the Securities Exchange Act of 1934, and the laws
  of the State of Oregon, it cannot permit such conversions, which means the Company
  is or will be in default of certain terms and conditions of such instruments.

The Company intends to prepare and file proxy solicitation
  materials to convene a meeting of shareholders to among other things, increase
  its authorized shares in an amount sufficient to permit the conversion of its
  authorized and/or outstanding convertible securities.

F-20

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
  YEARS ENDED DECEMBER 31, 2003 AND 2002

11. Stockholders deficit (continued): Stock Transactions

During the year ended December 31, 2003, the Company sold
  an aggregate of 750,000 shares of its Class A common stock, at less than the
  market value on the date of sale, and 4,910,000 units consisting of one share
  of its Class A common stock and a warrant to purchase one share of its Class
  A common stock, at less than the market value of the common stock and fair value
  of the warrant on the date of sale, in exchange for cash of $596,000 to franchisees
  and area developers as incentives to convert their chiropractic clinics to franchised
  clinics. As the cash consideration for the stock sales was less than the market
  values on the sales dates, the Company recorded expense of $407,350 for the
  effect of these discounts. The warrants are immediately exercisable and may
  be exercised for a period of 18 months from the sale date. The Company valued
  the warrants based upon the Black-Scholes pricing model, resulting in recognition
  of compensation expense of $990,240.

In February 2003, the Company issued 202,000 shares of Class
  A common stock, valued at $0.10 per share, which was equal to the market price
  on the agreement date, to consultants for accounting and Internet services.

In May 2003, the Company issued 20,000 shares of Class A common
  stock, valued at $0.14 per share, which was equal to the market price on the
  agreement date, to a consultant for marketing services.

In August 2003, the Company issued 1,428,571 shares of Class
  A common stock, valued at $0.14 per share, which was equal to the market price
  on the agreement date, to a consultant for marketing services under a twelve
  month marketing service agreement.

In July 2003, the Company issued 150,000 shares of Class A
  common stock at $0.12 per share, which was equal to the market price on the
  agreement date, to an employee for services.

In October 2003, the Company issued 50,000 shares of Class
  A common stock, valued at $0.49 per share, which was equal to the market price
  on the agreement date, to a consultant for marketing services.

In December 2003, the Company issued 198,000 shares of its
  Class A common stock, valued at $35,500, to a former president of the Company
  in exchange for $35,500 reduction in debt.

During the year ended December 31, 2003, the Company issued
  an aggregate of 1,930,500 shares of its Class A common stock at an average price
  of approximately $0.13 per share, for total cash consideration of $259,115.

In March 2002, the Company issued 60,000 shares of its Class
  A common stock, at $0.20 per share, which was equal to the market price on the
  agreement date, to a consultant for accounting services.

In May 2002, the Company issued 250,000 shares of its Class
  A common stock, at $0.23 per share, which was equal to the market price on the
  agreement date, to a consultant for future services to be performed during the
  second and third quarters of 2002. Subsequently, the Company and the consultant
  agreed to cancel the agreement and the shares were returned to the Company.

F-21

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
  YEARS ENDED DECEMBER 31, 2003 AND 2002

11. Stockholders deficit (continued): Stock Transactions (continued):

In June 2002, the Company issued 750,000 shares of its Class
  A common stock, at $0.18 per share, which was equal to the market price on the
  agreement date, to a consultant for future services to be performed over a twelve
  month period beginning July 2002. Accordingly, $135,000 was recorded as deferred
  compensation cost to be amortized over the one-year term of the agreement. During
  the three months ended September 30, 2002, the Company and the consultant agreed
  to cancel the agreement and the shares were returned to the Company, and the
  deferred compensation was reversed.

In July 2002, the Companys chief executive officer and
  chief financial officer each transferred 100,000 shares of the Companys
  Class A common stock held in their names, to a consultant for services. The
  Company accounted for the transfer as a capital contribution by the chief executive
  officer and chief financial officer aggregating $26,000, or $0.13 per share,
  which was equal to the market price of the Class A common stock on the agreement
  date, and the Company recorded consulting expense of $26,000.

In July 2002, the Company issued 20,000 shares of its Class
  A common stock, at $0.15 per share, which was equal to the market price on the
  agreement date, to settle a threatened claim.

In July 2002, the Company issued 60,000 shares of its Class
  A common stock, at $0.17 per share, which was equal to the market price on the
  agreement date, to employees.

In October 2002, the Company issued 650,000 shares of its
  Class A common stock, at $0.09 per share, which was equal to the market price
  on the agreement date, to a consultant for services.

In November and December 2002, the Company issued 50,000 shares,
  respectively, of its Class A common stock, at $0.09 and per share, which was
  equal to the market price on the agreement dates, to a consultant for services.

In December 2002, the Company received $32,500, which is net
  of $2,500 of offering costs, in exchange for 350,000 shares of the Company’s
  Class A common stock and 350,000 warrants to purchase Class A common stock.
  The warrants are exercisable for one year from their date of issuance at $0.10
  per share.

In December 2002, options to purchase 700,000 shares of the
  Company’s Class A common stock at $0.10 were exercised in exchange for
  a $70,000 reduction in accounts payable and notes payable.

F-22



---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
  YEARS ENDED DECEMBER 31, 2003 AND 2002

During the year ended December 31, 2002, the Company issued
  an aggregate of 700,000 shares of its Class A common stock at an average price
  of approximately $0.09 per share, for total cash consideration of $60,560.

F-23

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
  YEARS ENDED DECEMBER 31, 2003 AND 2002

11. Stockholders deficit (continued): Stock Options:

The Company has adopted two incentive stock option plans:
  the 1996 Incentive Stock Option Plan (the “1996 Plan”) and the 2000
  Incentive Stock Option Plan (the “2000 Plan”). The Company reserved
  an aggregate of 105,345 shares of Class A common stock for issuance under the
  1996 Plan and 500,000 shares of Class A common stock for issuance under the
  2000 Plan.

Stock options granted under the 1996 Plan vest at a rate of
  20% per year and are exercisable up to 10 years from the date of grant at 95%
  of the fair value of the Class A common stock on the date of grant. If the option
  holder owns 10% or more of the Company’s Class A common stock, the options
  are exercisable over 5 years from the date of grant. There were no options outstanding
  under the 1996 Plan as of December 31, 2003 and 2002.

Stock options granted under the 2000 Plan vest at a rate of
  34% in the first year and 33% per year for the next two years and are exercisable
  up to 5 years from the date of grant at the fair value of the Class A common
  stock on the date of grant. There were no options outstanding under the 2000
  Plan at December 31, 2003 and 2002.

During the year ended December 31, 2003, the Company granted
  options to purchase 3,270,000 shares of the Company’s Class A common stock
  at an average price of $0.24 per share to franchisees and area developers, as
  incentives to convert their chiropractic clinics to franchised clinics. The
  Company valued the options based upon the Black-Scholes pricing model, resulting
  in recognition of compensation expense of approximately $765,600.

In July 2002, the Company committed to grant options to purchase
  685,000 shares of the Company’s stock in July 2004, to an employee and
  to consultants for services, at the weighted average closing price of the Company’s
  Class A common stock for the preceding 30 days, if the employee remains in the
  service of the Company through that date. The Company accounts for these options
  as variable awards. At 2003, the total estimated value of these options was
  approximately $195,000. For the year ended December 31, 2003, the Company recorded
  approximately $137,400 of consulting and compensation.

In July 2002, the Company granted options to purchase 650,000
  shares of the Company’s common stock at $0.18 per share to consultants
  for services provided to the Company. These options are exercisable through
  September 2007. The options vested immediately and were valued at $0.15 per
  share based upon the Black-Scholes option-pricing model, resulting in recognition
  of compensation expense of $101,600.

F-24

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
  YEARS ENDED DECEMBER 31, 2003 AND 2002

11. Stockholders deficit (continued): Stock Options (continued):

In July 2002, the Company granted options to purchase 35,000
  shares of the Company’s common stock at $0.18 per share, which was greater
  than the market value at the date of commitment, to an employee for services
  provided to the Company. The options vested immediately and are exercisable
  through September 2007.

In September 2002, the Company granted options to purchase
  1,000,000 shares of the Company’s common stock at $0.10 per share to consultants
  for services provided to the Company. The options are exercisable through September
  2007. The options vested immediately and were valued at $0.056 per share based
  upon the Black-Scholes option-pricing model, resulting in recognition of compensation
  expense of $56,000.

In October 2002, the Company granted options to purchase 1,000,000
  shares of the Company’s common stock at $0.10 per share, which was greater
  than the market value at the date of commitment, to each of the chief executive
  officer and chief financial officer, respectively. The options are exercisable
  through October 2007 and vested immediately.

F-25

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
  YEARS ENDED DECEMBER 31, 2003 AND 2002

11. Stockholders deficit (continued): Stock Options (continued):

A summary of option activity for the periods ended December
  31, 2003 and 2002 is as follows:

|                  |            |  | Weighted | 
|----------------- | ---------- |  | -------- | 
|                  |            |  | average  | 
|                  |            |  | exercise | 
|                  | Shares     |  | price    | 
|                  |            |  |          | 
|January 1, 2002   | 4,495,000  |  | $0.11    | 
|Granted           | 3,685,000  |  | $0.11    | 
|Exercised         | (700,000)  |  | $0.10    | 
|Expired           |            |  |          | 
|                  |            |  |          | 
|                  |            |  |          | 
|December 31, 2002 | 7,480,000  |  | $0.11    | 
|Granted           | 5,970,000  |  | $0.20    | 
|Exercised         | -          |  |          | 
|Expired           | (335,000)  |  | $0.08    | 
|                  |            |  |          | 
|                  |            |  |          | 
|December 31,2003  | 13,115,000 |  | $0.15    | 

F-26

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
  YEARS ENDED DECEMBER 31, 2003 AND 2002

The following table summarized information about stock options
  outstanding at December 31, 2003.

|               |  |             |  | Weighted         |  | Weighted       |  |             |  | Weighted       | 
|-------------- |  | ----------- |  | ---------------- |  | -------------- |  | ----------- |  | -------------- | 
|Range of       |  | Number      |  | average          |  | average        |  | Number      |  | average        | 
|Exercise price |  | outstanding |  | contractual life |  | exercise price |  | exercisable |  | exercise price | 
|               |  |             |  |                  |  |                |  |             |  |                | 
|$ 0.05-0.10    |  | 4,450,000   |  | 3 years          |  | $0.09          |  | 4,450,000   |  | $0.09          | 
|$ 0.11-0.29    |  | 7,545,000   |  | 3 years          |  | $0.16          |  | 6,795,000   |  | $0.16          | 
|$ 0.30-0.60    |  | 1,120,000   |  | 3 years          |  | $0.41          |  | 1,120,000   |  | $0.41          | 
|               |  | 13,115,000  |  |                  |  |                |  | 12,365,000  |  |                | 

F-27

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
  YEARS ENDED DECEMBER 31, 2003 AND 2002

12. Related party transactions:

In January 2003, the Company entered into an agreement with
  Britannia Law Office (Britannia) located in Calgary, Canada for
  Britannia to represent the Company in legal matters. The Company pays Britannia
  a monthly retainer of $12,000. During 2003, the Company paid approximately $158,100
  to Britannia for these services. Britannia is owned by the president and chief
  executive officer of the Company.

In August 2003, the chief executive officer of the Company
  loaned 1,000,000 shares of Class A common stock held in his name to the Company.
  In September 2003, the Company issued 1,000,000 shares of Class A common stock
  to the chief executive officer as repayment. The loan was non-interest bearing.
  The loan was made in connection with the Companys execution of a consulting
  agreement for marketing services.

In August 2003, the Company granted options to purchase an
  aggregate of 2,000,000 shares of the Companys Class A common stock at
  $0.18 per share, which was equal to the market price on the agreement date to
  the chief executive officer and the chief financial officer of the Company.
  The options are exercisable through August 2006 and vested immediately.

During the year ended December 31, 2003, the Company received
  $73,591 in exchange for notes payable issued to an entity in which the Companys
  president and chief executive officers are minority shareholders. The notes
  are non-interest bearing and due on demand. During the same period, $35,000
  was repaid on these related party notes.

In June 2003, the Company granted options to purchase 500,000
  shares of the Companys Class A common stock at $0.12 per share, which
  was equal to the market price on the agreement date, and options to purchase
  200,000 shares of the Companys Class A common stock at $0.16 per share,
  which was greater than the market price on the agreement date, to an employee
  for services. The options vest over three years.

In April 2003, the Companys chief executive officer
  and chief financial officer transferred an aggregate of 4,800,000 shares of
  the Companys Class A common stock held in their names, to a shareholder
  and former director of the Company and another shareholder (the Parties)
  of the Company. In May 2001, the Companys chief executive officer and
  chief financial officer entered into an agreement to each transfer 10% of the
  shares they received upon the closing of the Franchise Support Network, Inc.
  acquisition to allay the concerns of the Parties about dilution upon closing.
  Since no services were provided by the former director or the shareholder, the
  Company has not recorded expense for the transfer of the Class A common stock.

In January of 2002, the Company issued a note payable in exchange
  for cash of $6,250 to a family member of the Companys chief executive
  officer. The note was repaid in July 2002.

In March 2002, the Company issued 300,000 shares of its Class
  A common stock, at $0.20 per share, which was equal to the market price on the
  agreement date, to an employee for compensation. Accordingly, the Company recorded
  compensation expense of $60,000.

F-28

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
  YEARS ENDED DECEMBER 31, 2003 AND 2002

13. Commitments and contingencies:

A former president and chief executive officer of the Company
  was convicted in 1999 in U.S. District Court, Southern District of New York
  of securities violations occurring in 1996. No allegations have been made against
  the Company. The eventual affect of these proceedings, if any, on the Company's
  business undertakings is unknown at the present time. However, the Company has
  indemnified the former president against all expenses, fees, fines and judgments
  as they relate to the criminal charges, conviction and appeal of his conviction.
  During the year ended December 31, 2002 the Company has spent approximately
  $60,000 on behalf of the former president. During the year ended December 31,
  2003, the Company did not incur any legal expenses on behalf of the former president.

In September 2000, the Company entered into an agreement with
  an unrelated entity under which the Company borrowed 50,000 shares of Inform
  World Wide Holdings, Inc. (IWWH) registered common stock, valued
  at the quoted market price at the date of receipt of $162,500. In exchange,
  under the terms of the agreement, the Company agreed to return 50,000 shares
  IWWH registered common stock, plus 2,000 shares representing interest, for each
  month the borrowing was outstanding until January 31, 2001. In July 2001, the
  Company reached a settlement for repayment of 70,500 shares owed as of July
  1, 2001. The Company paid $10,016 cash in lieu of shares, and was to pay $5,000
  cash in December 2001, and return 37,500 shares of IWWH stock in December 2001.
  During September 2002, the Company paid $10,625 to settle the amount due.

In July 2000, the Company, through mediation, settled litigation
  for $140,000 brought by a brokerage firm in October 1999, alleging negligence.
  The Company executed a settlement agreement and deposited with the court 15,000
  shares of Class A preferred stock of IWWH accompanied by an executed stock powers.
  The brokerage firm may liquidate the shares in the event the Company defaults
  under the terms of the agreement. The Company has paid approximately $27,000
  of the settlement amount. In January 2001, the Company defaulted and a stipulated
  money judgment was filed with the court. The shares of IWWH Class A preferred
  stock were transferred to the brokerage firm. The brokerage firm has not notified
  the Company if the shares have been liquidated and applied to amounts owed by
  the Company. During 2002, the Company wrote off the value of the IWWH Class
  A preferred stock recorded on its books, since the Company is unable to determine
  what the disposition of the IWWH Class A preferred stock was, if any. The amount
  due of approximately $153,900 is included in other liabilities and at December
  31, 2003 interest at 9% per annum is being accrued on the unpaid balance. The
  Company is evaluating options to resolve the matter with the brokerage firm.

On January 8, 2004, a former employee of the former subsidiary
  DoubleCase, filed suit against the Company seeking unspecified money damages
  for breach of an alleged employment contract. The Company and its officers deny
  any liability and intend to vigorously defend the suit.

F-29

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
  YEARS ENDED DECEMBER 31, 2003 AND 2002

14. Fair value of financial instruments:

The fair value of a financial instrument is the current amount
  that would be exchanged between willing parties, other than in a forced liquidation.
  Fair value is best determined based upon quoted market prices. However, in many
  instances, there are no quoted market prices for the Companys various
  financial instruments. In cases where quoted market prices are not available,
  fair values are based on estimates using present value or other valuation techniques.
  Those techniques are significantly affected by the assumptions used, including
  the discount rate and estimates of future cash flows. Accordingly, the fair
  value estimates may not be realized in an immediate settlement of the instrument.
  Accordingly, the aggregate fair value amounts presented may not necessarily
  represent the underlying fair value of the Company.

The fair value of cash and cash equivalents, accounts receivable,
  accounts payable approximate their carrying amounts because of the short maturities
  of these instruments. The fair values of the long-term note payable and line
  of credit approximates their fair values because of the adjustable interest
  rate on the notes. Notes payable to non-related parties are impractical to approximate
  because of their past due status. The fair values of notes payable to related
  parties are not practicable to estimate, based upon the related party nature
  of the underlying transactions and the past due status. The fair value of other
  liabilities is impractical to estimate based because of the Companys default
  on the agreements.

15. Segment Information:

The Company operates in two business segments: Company owned
  operation of Chiropractic clinics (Southern Health Care) and franchised chiropractic
  clinics. The accounting policies of the segments are the same as those described
  in the summary of significant accounting policies. The Company evaluates performance
  based on operating earnings of the respective business units.

As of and during the years ended December 31, 2003 and 2002,
  the segment results are as follows:

|                                  |   | 2003         |  
|--------------------------------- | - | ------------ | -
|                                  |   |              |  
|                                  |   | Chiropractic |  
|                                  |   | Services     |  
|                                  |   |              |  
|Revenues                          | $ | 1,698,861    |  
|Segment operating                 |   |              |  
|loss                              |   | (2,651,707   | )
|Total assets                      |   | 7,247        |  
|Capital expenditures              |   | 3,100        |  
|Depreciation and                  |   |              |  
|amortization                      |   | 149,629      |  
|Non-cash Stock compensation       |   | 137,411      |  
|Impairment loss                   |   | -            |  
|Write-down of accounts receivable |   | 280,000      |  
|Amortization of deferred          |   |              |  
|compensation                      |   |              |  
|Interest expense                  |   | 43,140       |  
|                                  |   |              |  
|                                  |   | 2002         |  
|                                  |   |              |  
|                                  |   | Chiropractic |  
|                                  |   | Services     |  
|                                  |   |              |  
|Revenues                          | $ | 798,128      |  
|Non-cash Stock Compensation       |   | 336,300      |  
|Segment operating loss            |   | (147,717     | )
|Total assets                      |   | 1,502,830    |  
|Capital expenditures              |   | 900,000      |  
|Depreciation and                  |   |              |  
|amortization                      |   | 77,794       |  
|Amortization of deferred          |   |              |  
|compensation                      |   |              |  
|Interest expense                  |   | 26,279       |  

F-30

---

BANYAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
  YEARS ENDED DECEMBER 31, 2003 AND 2002

16. Fourth quarter adjustments:

Warrants:

During the forth quarter 2003, the Company recognized expense
  for warrants issued in the amount of $990,240. These warrants were issued to
  franchisees and area developers of the Company franchise program. Approximately
  $578,000 and $412,000 of this expense was from warrants issued during the first
  and third quarters of 2003, respectively.

Stock Options:

During the fourth quarter 2003, the Company recognized expense
  for stock options issued in the amount of $765,600. Approximately $414,000 of
  this expense was from stock options issued during the third quarter of 2003.

17. Subsidiary stock transaction:

In January 2003, the Company agreed to transfer 100,000 shares
  of common stock it owns in the Companys subsidiary, Chiropractic USA,
  Inc. to a consultant for services. The 100,000 shares represent a 10% minority
  interest in the subsidiary and were valued at $6,000, which the Company believes
  was the fair value of the common stock on the agreement date, as Chiropractic
  USA, Inc. had not yet generated any revenues as of the date of transfer. The
  Company is currently negotiating the terms of an agreement with the consultant,
  whereby he can acquire an additional 39% interest in Chiropractic USA, Inc.
  in exchange for his services to promote Chiropractic USA and assist the Company
  with franchisee development and training. The consultant was appointed to the
  board of directors of Chiropractic USA, Inc.

F-31

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

There were no changes in and disagreements with accountants
  on accounting and financial disclosure during the fiscal year ended December
  31, 2003.

Item 8A. Controls and Procedures.

Disclosure controls and procedures are designed to ensure
  that information required to be disclosed in the reports filed or submitted
  under the Exchange Act is recorded, processed, summarized and reported, within
  the time periods specified in the SEC's rules and forms. Disclosure controls
  and procedures include, without limitation, controls and procedures designed
  to ensure that information required to be disclosed in the reports filed under
  the Exchange Act is accumulated and communicated to management, including the
  President and Chief Executive Officer and the Chief Financial Officer, as appropriate,
  to allow timely decisions regarding required disclosure. Within the 90 days
  prior to the filing of this report, the Company carried out an evaluation, under
  the supervision and with the participation of the Company's management, including
  the Company's President and Chief Executive Officer and its Chief Financial
  Officer, of the effectiveness of the design and operation of the Company's disclosure
  controls and procedures. Based upon and as of the date of that evaluation, the
  President and Chief Executive Officer and the Chief Financial Officer concluded
  that the Company's disclosure controls and procedures were not effective to
  ensure that information required to be disclosed in the reports the Company
  files and submits under the Exchange Act is recorded, processed, summarized
  and reported as and when required. A reporting structure with required notification
  of equity changes has been established to correct the issue. During 2003, expenses
  for options and warrants issued were not reported on a timely basis. The omissions
  occurred during the first and third quarters 2003 and was reported for the period
  ending December 31, 2003.

There were no other changes in the Company's internal controls
  or in other factors that could have significantly affected those controls subsequent
  to the date of the Company's most recent evaluation.

PART III

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

|Name              | Age | Positions                                      
|----------------- | --- | -----------------------------------------------
|                  |     |                                                
|Michael J. Gelmon | 39  | Chief Executive Officer and Director           
|Cory H. Gelmon    | 44  | President, Chief Financial Officer and Director

The board of directors of the Company is comprised of two
  directors of one class. Each director is elected to hold office until the next
  annual meeting of shareholders and until his successor has been elected and
  qualified. Officers are elected annually by the board of directors and hold
  office until successors are duly elected and qualified.

14

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The following is a brief account of the business experience
  of each director and executive officer of the Company.

Michael J. Gelmon is currently chief executive officer and
  a Director of Banyan Corporation. Previously Mr. Gelmon was a founding shareholder,
  Director, as well as Head of Acquisitions and Real Estate for Domino's Pizza
  of Canada Ltd., the Dominos Pizza Master Franchisor in Canada. Michael Gelmon
  was an integral part of the team that was responsible for growing the Domino's
  chain to 200 stores located in every region of Canada, with system wide sales
  of approximately CAD $80,000,000 per annum. Mr. Gelmon's past experience includes
  consulting for Proteus Capital Corp., a Mutual Fund specializing in the Inter-Bank
  Foreign Exchange markets. Previously, Michael Gelmon was a founding partner
  in Gelmon Brothers, a lease consulting and commercial property development Partnership.
  Mr. Gelmon started his career practicing real estate law and is still a member
  in good standing with The Law Society of Alberta. He received his Bachelor of
  Laws (LL.B.) with Honors from the University of London (England) in 1988, and
  a Bachelor of Arts (B.A.) from the University of Calgary (Canada) in 1988.

Cory H. Gelmon is currently president, chief financial officer
  and a director of Banyan Corporation. Previously Mr. Gelmon was a founding shareholder,
  director, as well as chief operating officer and general counsel of Domino's
  Pizza of Canada Ltd., the Dominos Pizza Master Franchisor in Canada. Mr. Gelmon
  was largely responsible for growing the Domino's chain to 200 stores located
  in every region of Canada, with system wide sales of approximately CAD $80,000,000
  per annum. While running Domino's, Mr. Gelmon oversaw the computerization of
  all the stores in the system, creation of new store designs as well as the introduction
  of various new products. In addition, the director of marketing reported directly
  to Mr. Gelmon while introducing innovative and very successful new marketing
  programs on a national, regional as well as on a local store basis. Mr. Gelmon
  has been a consultant for Proteus Capital Corp., a Mutual Fund specializing
  in the Inter-Bank Foreign Exchange markets. Additionally, Mr. Gelmon was director
  of finance of Talisman Asset Management Limited, London England, a Securities
  and Futures Authority authorized company in the United Kingdom. Mr. Gelmon started
  his career as a corporate/commercial and franchise lawyer. Mr. Gelmon is a member
  in good standing with The Law Society of Alberta. He received his Bachelor of
  Laws (LL.B.) with Honors from the University of London (England) in 1987, and
  a Bachelor of Arts (B.A.) from the University of Calgary (Canada) in 1984.

Michael Gelmon and Cory Gelmon are brothers.

The entire Board of Directors is acting as our audit committee.
  There is no separately designated standing audit committee of the Board of Directors
  or a committee performing similar functions and accordingly, there is audit
  committee financial expert. We have adopted an Audit Committee Charter that
  provides for an audit committee to be appointed on or before July 31, 2005.
  The audit committee will be independent and shall be directly responsible for
  the appointment, compensation, and oversight of the work of our independent
  public accountants in preparing audit reports, receiving and treatment of accounting
  complaints, along with other responsibilities. As a small business issuer, we
  are exempt from the standards for an audit committee until then. We intend to
  recruit audit committee members promptly.

15

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The entire Board of Directors is acting as our nominating
  and compensation committees. There are no standing nominating and compensation
  committees of the Board of Directors or committees performing similar functions.
  The basis for the review of the board of directors that it is appropriate for
  us not to have a nominating committee is that we are a small business issuer
  that is not seeking nominees for directors to expand beyond the present Board
  of Directors. Accordingly, there is no policy with regard to the consideration
  of any director candidates recommended by security holders. The entire Board
  of Directors in their discretion will identify and evaluate any nominees for
  new directorships resulting from the standards for an audit committee or otherwise.

There were no formal meetings of the Board of Directors or
  committees of thereof during the last full fiscal year. The Board of Directors
  acted by unanimous written consent as necessary.

Shareholders may send communications addressed to the Board
  of Directors or to specified individual directors by mail, fax or by e-mail
  through our website. All security holder communications are sent directly to
  board members.

We have adopted a policy is that all directors must attend
  the annual meeting.

During 2004, we have adopted a Code of Business Conduct and
  Ethics that addresses, among other things, conflicts of interest, corporate
  opportunities, confidentiality, fair dealing, protection and use of company
  assets, compliance with laws (including insider trading laws), and reporting
  of unethical behavior. The Code of Business Conduct and Ethics is applicable
  to our directors, officers and all employees.

In addition, we have adopted a Finance Code of Ethics that
  requires honest and ethical business conduct; full, accurate and timely financial
  disclosures; compliance with all laws, rules and regulations governing our business;
  and, prompt internal reporting of any violations of the code. The Finance Code
  of Ethics is applicable to our Chief Executive, Chief Financial Officer and
  all finance employees. We intend to satisfy the disclosure requirements under
  Item 10 of Form 8-K regarding any amendment to or waiver of the Code of Ethics
  with respect to our CEO, Chief Financial Officer, and persons performing similar
  functions, by posting such information on our website.

Our directors and executive officers failed to file on a timely
  basis reports required by Section 16(a), including Forms 3, 4 and 5 during the
  three most recent fiscal years. With respect to Michael Gelmon there were seven
  late reports covering nine transactions that were not reported on a timely basis.
  With respect to Cory Gelmon, there were eight late reports covering ten transactions
  that were not reported on a timely basis. As of the date hereof, all reports
  required by Section 16(a) have been filed and are available on our website.

16

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Item 10. Executive Compensation.

The following table sets forth the compensation paid during
  the fiscal year ended December 31, 2003 to the Company's chief executive officer,
  president and each of the Company's officers and directors. No other person
  received compensation equal to or exceeding $100,000 in fiscal 2003 and no bonuses
  were awarded during fiscal 2003

|                        | Annual
      Compensation |  | Awards   |  | Payouts     
|----------------------- | ------------------------- |  | -------- |  | ------------
|                        |                           |  |          |  | Annual      
|Name & principle        |                           |  |          |  | other       
|position                | Year                      |  | Salary   |  | compensation
|                        |                           |  |          |  |             
|Michael Gelmon          | 2003                      |  | $120,000 |  | $120,000    
|Chief executive         | 2002                      |  | $109,000 |  | $12,000     
|officer and Director    | 2001                      |  | $60,000  |  |             
|                        |                           |  |          |  |             
|Cory Gelmon             | 2003                      |  | $120,000 |  | $120,000    
|President, Chief        | 2002                      |  | $109,000 |  | $12,000     
|financial officer,      | 2001                      |  | $60,000  |  |             
|Secretary and Director  |                           |  |          |  |             
|                        |                           |  |          |  |             
|Lawrence Stanley        | 2003                      |  |          |  |             
|(Former Chief executive | 2002                      |  |          |  |             
|officer, Secretary,     | 2001                      |  | $4,623   |  |             
|and Director)           |                           |  |          |  |             
|                        |                           |  |          |  |             
|Cameron Yost            | 2003                      |  |          |  |             
|(Former Chief executive | 2002                      |  |          |  |             
|officer, President      | 2001                      |  | $31,850  |  |             
|and Director)           |                           |  |          |  |             

Our Management Agreements with the Gelmons, as amended, provide
  for payment of a salary of $120,000 per year, 500,000 options to purchase Class
  A Common Stock of the Company exercisable at $.05 which expire on July 29, 2007
  and a payment of $1,000 per month to share office space leased by the Gelmons
  in Calgary, Alberta which is used by the Company. The Management Agreements
  expired on August 31, 2004.

At the date of commitment, the total compensation cost was
  calculated to be approximately $30,000, which was recognized in October 2002,
  as the performance criteria were satisfied.

17

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STOCK OPTIONS

The Company has adopted two incentive stock option plans:
  the 1996 Incentive Stock Option Plan (the "1996 Plan") and the 2000 Incentive
  Stock Option Plan (the "2000 Plan"). The Company reserved an aggregate of 105,345
  shares of Class A common stock for issuance under the 1996 Plan and 500,000
  shares of Class A common stock for issuance under the 2000 Plan. The Board of
  Directors administers both plans.

Stock options granted under the 1996 Plan vest at a rate of
  20% per year and are exercisable up to 10 years from the date of grant at 95%
  of the fair value of the Class A common stock on the date of grant. If the option
  holder owns 10% or more of the Company's Class A common stock, the options are
  exercisable over 5 years from the date of grant.

Stock options granted under the 2000 Plan vest at a rate of
  34% in the first year and 33% per year for the next two years and are exercisable
  up to 5 years from the date of grant at the fair value of the Class A common
  stock on the date of grant.

In addition, the Board of Directors may, at its sole discretion,
  from time to time, issue options, which are not subject to either the 1996 Plan
  or the 2000 Plan.

Option Grants in Last Fiscal Year

The following table sets forth grants of stock options granted
  during the year ended December 31, 2003 to the Named Officers who are listed
  in the Summary Compensation Table above. Such options were not granted pursuant
  to any of the Company's stock option plans:

|                              |  | Number of    |  | Percent               |  |          |  |           
|----------------------------- |  | ------------ |  | --------------------- |  | -------- |  | ----------
|                              |  | Securities   |  | of Total              |  |          |  |           
|                              |  | Underlying   |  | Options/SARs          |  | Exercise |  |           
|                              |  | Options/SARs |  | Granted to            |  | or Base  |  |           
|                              |  | Granted      |  | Employees in          |  | Price    |  | Expiration
|Name                          |  | (#)          |  | Fiscal
      Year (1) |  | ($/Sh)   |  | Date      
|                              |  |              |  |                       |  |          |  |           
|Michael Gelmon                |  | 1,000,000    |  | 37%                   |  | $0.18    |  | 8/10/2008 
|Chief
      Executive Officer |  |              |  |                       |  |          |  |           
|and
      Director            |  |              |  |                       |  |          |  |           
|                              |  |              |  |                       |  |          |  |           
|Cory Gelmon                   |  | 1,000,000    |  | 37%                   |  | $0.18    |  | 8/10/2008 
|President,
      Chief        |  |              |  |                       |  |          |  |           
|Financial                     |  |              |  |                       |  |          |  |           
|Officer,
      Secretary, and |  |              |  |                       |  |          |  |           
|Director                      |  |              |  |                       |  |          |  |           

18

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(1) Represents all options granted to individual during 2003
  as a percentage of all options granted to employees during 2003.

Option Exercises and Year-End Values

The following table sets forth information with respect to
  options to purchase the Company's common stock granted under the Company's stock
  option plans to the Named Officers who are listed in the Summary Compensation
  Table above, including (i) the number of shares of common stock purchased upon
  exercise of options in the fiscal year ended December 31, 2003; (ii) the net
  value realized upon such exercise; (iii) the number of unexercised options outstanding
  at December 31, 2003; and (iv) the value of such unexercised options at December
  31, 2003:

|                   |  |             |  |          |  | Number of     |  |               | 
|------------------ |  | ----------- |  | -------- |  | ------------- |  | ------------- | 
|                   |  |             |  |          |  | Securities    |  | Value of      | 
|                   |  |             |  |          |  | Underlying    |  | Unexercised   | 
|                   |  |             |  |          |  | Unexercised   |  | In-the-Money  | 
|                   |  | Shares      |  |          |  | Options/SAR's |  | Options/SAR's | 
|                   |  | Acquired on |  |          |  | at FY-end(#)  |  | at FY-end ($) | 
|                   |  | Exercise    |  | Value    |  | Exercisable/  |  | Exercisable/  | 
|Name               |  | (#)         |  | Realized |  | Unexercisable |  | Unexercisable | 
|                   |  |             |  |          |  |               |  |               | 
|Michael Gelmon     |  |             |  |          |  | 2,500,000/ 0  |  | 622,240/ 0    | 
|Chief Executive    |  |             |  |          |  |               |  |               | 
|Officer            |  |             |  |          |  |               |  |               | 
|and Director       |  |             |  |          |  |               |  |               | 
|                   |  |             |  |          |  |               |  |               | 
|Cory Gelmon        |  |             |  |          |  | 2,500,000/ 0  |  | 622,240/ 0    | 
|President, Chief   |  |             |  |          |  |               |  |               | 
|Financial          |  |             |  |          |  |               |  |               | 
|Officer, Secretary |  |             |  |          |  |               |  |               | 
|and Director       |  |             |  |          |  |               |  |               | 
|                   |  |             |  |          |  |               |  |               | 
|Lawrence Stanley   |  |             |  |          |  |               |  |               | 
|(Former Chief      |  |             |  |          |  |               |  |               | 
|Executive          |  |             |  |          |  |               |  |               | 
|Officer, Secretary |  |             |  |          |  |               |  |               | 
|and                |  |             |  |          |  |               |  |               | 
|Director           |  |             |  |          |  |               |  |               | 

19

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

The following table sets forth certain information regarding
  the beneficial ownership of the Company's Class A common stock as of December
  31, 2003, of each officer or director of the Company, by each person or firm
  who owns more than 5% of the Company's outstanding shares and by all officers
  and directors of the Company as a group.

|Directors and Executive Officers                                                      | Shares Held | Percentage
      Owned
|------------------------------------------------------------------------------------- | ----------- | ----------------------
|Cory Gelmon
      3019 Roxboro Glen Road S.W.
      Calgary, Alberta, Canada T2S IT9  | 13,640,000* | 23%                   
|Michael Gelmon
      7008 Kootenay Street S.W.
      Calgary, Alberta, Canada T2V 2M3 | 13,100,000* | 22%                   
|All current directors and executive
      officers as a group (2 persons)             | 26,740,000  | 45%                   

1)
  Includes 2,500,000 immediately exercisable options.

Item 12. Certain Relationships and Related Transactions.

Chiropractic USA Acquisition

In May 2001, the Company issued 2,000,000 shares, at $0.03
  per share, which was equal to the closing market prise on the agreement date,
  of its Class A common stock for the purchase of the Chiropractic USA development
  plan. The $60,000 purchase prise was allocated to goodwill. The Company formed
  Chiropractic USA, Inc., a wholly-owned subsidiary, to implement the development
  and consolidation plan.

Franchise Support Network Acquisition

On May 7, 2001, the Company made an offer to purchase all
  of the issued and outstanding shares of Franchise Support Network, Inc. (FSN)
  in exchange for 34,047,666 shares of the Companys Class A common stock.
  The Company issued an aggregate of 24,000,000 shares of its Class A common stock
  to the shareholders of FSN, Michael and Cory Gelmon, on November 30, 2002. The
  transaction has been accounted for by the Company under guidance provided by
  SAB No. 48 (Topic 5-G), Transfers of Nonmonetary Assets by Promoters or Shareholders.
  Accordingly, the assets of FSN have been recorded at the transferors historical
  cost basis, which is zero, as FSN had no assets as of the acquisition date,
  had not commenced operations and expenses since inception are not material.
  At December 31, 2003, Michael and Cory Gelmon hold 21,740,000 shares of the
  Companys Class A common stock, or approximately 41% of the issued and
  outstanding Class A common stock. At December 31, 2003, there were 10,047,666
  shares to be issued to Michael and Cory Gelmon for the acquisition of FSN, when
  they become available for issue.

Acquisition of Corporate Clinics

In September 2001, the Company, entered into an agreement with
  Advanced Health Center, Inc. (Advanced) of Lake Charles, Louisiana
  to purchase three chiropractic clinics and their operating assets for $1,150,000.
  On June 26, 2002, the Companys wholly-owned subsidiary, Chiropractic USA,
  Inc. assigned its right to acquire the clinics to Southern Health Care, Inc.,
  (Southern) a newly formed Colorado holding company with no other
  assets, in exchange for a management agreement and franchise agreements. Southern
  is wholly owned by Michael and Cory Gelmon, who are also the Companys
  chief executive and chief financial officer, respectively. This assignment was
  undertaken at the request of the financial institution funding the acquisition
  to accommodate their desired organizational structure for the transaction. On
  July 29, 2002, Southern completed the acquisition of Advanced. Southern acquired
  accounts receivable of $973,469 and furniture, fixtures and equipment of $176,531
  in exchange for $900,000 cash, notes payable of $200,000 and the Company issued
  277,778 shares of its Class A common stock valued at $50,000, ($0.18 per share)
  which was equal to the market price on the agreement date. As part of the agreement
  to purchase Advanced, the Company agreed to issue an aggregate of 2,300,000
  shares of its Class A common stock, valued at $345,000 ($0.15 per share), which
  was equal to the market price on the agreement date, to eight individuals, as
  guarantee and loan fees on the financial institution debt of Southern. Included
  in the eight individuals were the Companys chief executive officer and
  its chief financial officer, who each received 600,000 shares as guarantors
  and indemnifiers of the other guarantors of the loan. The guarantee and loan
  fees are being amortized over the three-year term of the loan. Amortization
  expense was approximately $115,000 and $47,000 for the year ended December 31,
  2003 and 2002, respectively.

20

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Loans

Lloyd Parrish was a director who resigned in July 2002. As
  recently as April 9, 2003 he was also the beneficial owner of more than 5% of
  our Class A Common Stock. In 2001 and prior fiscal years, Mr. Parrish loaned
  us $28,200 and we issued several promissory notes to him. The notes are all
  unsecured and bear simple interest at 10% per annum. Payment of the notes to
  Mr. Parrish is past due. As of December 31, 2003, we owed Mr. Parrish $33,840
  pursuant to these notes.

During 2001, Eva Gelmon, the mother of Michael and
  Cory Gelmon loaned us $37,500.We issued two promissory notes to her.
  The notes are unsecured and bear simple interest at 10% per annum. Payment of
  the notes is past due. As of December 31, 2003, we owed Eva Gelmon $32,500 pursuant
  to these notes.

During 2002, 860532 Alberta Corp., which is owned and controlled
  by Michael and Cory Gelmon, loaned us $35,000. We issued several promissory
  notes to Alberta Corp. The notes are unsecured and bear simple interest at 10%
  per annum. The notes are payable on demand. As of December 31, 2003, we owed
  860532 Alberta Corp. $73,580 pursuant to these notes.

Item 13. Exhibits, Financial Statements Schedules and Reports
  on Form 8-K.

|(a) | 31.1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Certification under Section 906 of the Sarbanes-Oxley
      Act of 2002
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------
|    | 31.2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Certification under Section 906 of the Sarbanes-Oxley
      Act of 2002
|    | 32.1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Certification pursuant to 18 U.S.C. section
      1350                 
|    | 32.2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Certification pursuant to 18 U.S.C. section
      1350                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                        
|(b) | Reports on Form 8-K during the last quarter
        of the Companys fiscal year ended December 31, 2003:
      The Company issued an 8-K on 10/27/03 disclosing franchise agreements
        in place in the State of Arizona. 000-26065
      The Company issued an 8-K on 10/27/03 disclosing franchise agreements
        in place in the State of Minnesota. 000-26065
      The Company issued a 8-K on 10/06/2003 disclosing the status of current
        operations. 000-26065

21

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|(c ) | Material Contracts:
|---- | -------------------
|     |                    
|     | 10.1               
|     |                    
|     | 10.2               
|     |                    
|     | 10.3               
|     |                    
|     | 10.4               
|     |                    
|     | 10.7               
|     |                    
|     | 10.8               
|     |                    
|     | 10.9               
|     |                    
|     | 10.10              
|     |                    
|     | 14.1               
|     |                    
|     | 14.2               

Item 14. Principal Accountant Fees and Services.

The following table presents fees for professional services
  rendered by Gelfond Hochstadt Pangburn, P.C. (GHP)for Banyan Corporation for
  2003 and 2002:

22

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|               | Year ended December |  | Year ended December | 
|-------------- | ------------------- |  | ------------------- | 
|Type of Fees   | 31,
      2003      |  | 31,
      2002      | 
|               |                     |  |                     | 
|Audit fees(a)  | $75,735             |  | $34,658             | 
|               |                     |  |                     | 
|Tax fees(b)    | $915                |  | $140                | 
|               |                     |  |                     | 
|Other fees( c) | $0                  |  | $0                  | 

|(a) | Audit Fees billed by GHP for audit and
        review services rendered for each of the years ended December 31, 2003
        and 2002, respectively.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                      
|(b) | Tax Fees billed by GHP for tax compliance
        services.                                                                                          
|    |                                                                                                                                                      
|(c) | All Other Fees are fees billed by GHP
        for any services not included in the first two categories.                                             

To safeguard the continued independence of the independent
  auditors, the Board has adopted a policy that expands Banyans existing
  policy preventing the Companys independent auditors from providing services
  to Banyan that are prohibited under Section 10A(g) of the Securities Exchange
  Act of 1934, as amended. This policy also provides that independent auditors
  are only permitted to provide services to the Company that have been pre-approved
  by the Board. Pursuant to the policy, all audit services require advance approval
  by the Board. All other services by the independent auditors that fall within
  certain designated dollar thresholds, both per engagement as well as annual
  aggregate, have been pre-approved under the policy. Different dollar thresholds
  apply to the three categories of pre-approved services specified in the policy
  (Audit Related services, Tax services and Other services). All services that
  exceed the dollar thresholds must be approved in advance by the Board.

23

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Signatures

Pursuant to the requirements of Section 13 or 15(d) of the
  Securities Exchange Act of 1934, the registrant has duly caused this report
  to be signed on its behalf by the undersigned, thereunto duly authorized.

|Dated: April 14, 2004 |  | BANYAN CORPORATION                
|--------------------- |  | ----------------------------------
|                      |  |                                   
|                      |  | By:
      /s/ MICHAEL J. GELMON   
|                      |  | Michael J. Gelmon, Chief Executive
|                      |  | Officer and Director              




Pursuant to the requirements of the Securities Exchange Act of 1934, this
  report has been signed below by the following persons on behalf of the registrant
  and in the capacities and dates indicated.

|Dated: April 14, 2004              |  | By: /s/ Michael J. Gelmon
|---------------------------------- |  | -------------------------
|Michael Gelmon                     |  |                          
|Chief Executive Officer and        |  |                          
|Director                           |  |                          
|                                   |  |                          
|Dated: April 14, 2004              |  | By: /s/ Cory S. Gelmon   
|Cory Gelmon                        |  |                          
|President, Chief Financial Officer |  |                          
|Secretary and Director (Principal  |  |                          
|Accounting and Financial Officer)  |  |                          

24

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