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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-KSB/A

[X]      Annual Report pursuant to Section 13 or 15(d) of the Securities and
         Exchange Act of 1934
         For the fiscal year ended: March 31, 2004
                                    --------------
                                       or
[ ]      Transition report pursuant to Section 13 or 15(d) of the Securities
         and Exchange Act of 1934

         For the transition period from: ______________ to _______________

Commission file number:  0-33029
                         -------

                                 GFY FOODS, INC.
                                 ---------------
             (Exact name of registrant as specified in its charter)

            Nevada                                          87-0382438
-------------------------------                      ----------------------
(State or other jurisdiction of                         (I.R.S. Employer
 incorporation or organization)                      Identification Number)

        601 Deerfield Parkway
          Buffalo Grove, IL                                  60089
----------------------------------------             ----------------------
(Address of principal executive offices)                   (Zip Code)

Issuer's telephone number, including area code:  (847) 353-7554
                                                 --------------

Securities registered pursuant to Section 12(b) of the Act:

        Title of each class            Name of each exchange on which registered
       ---------------------           -----------------------------------------
                 None

Securities registered pursuant to Section 12(g) of the Act:
                         Common Stock, Par Value $0.001
                              (Title of Each Class)

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

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

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         The issuer's revenues for the year ended March 31, 2004, its most
recent fiscal year, were $26,806.

         The aggregate market value of voting and non-voting common equity held
by non-affiliates of the registrant was approximately $660,914 based on a
closing price of $0.013 on August 10, 2004. The number of shares of the
registrant's common stock outstanding as of August 10, 2004 was 215,999,537
after accounting for a two hundred and fifty to one reverse stock split that was
effective on July 12, 2004. Of the 215,999,537 shares outstanding on August 10,
2004, 165,160,004 shares were owned by Edward E. Schwalb, the sole affiliate of
the Company.

                       DOCUMENTS INCORPORATED BY REFERENCE

         See Exhibit List.

         Transitional Small Business Disclosure Format (check one):

                           Yes [ ]       No [X]


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                                      INDEX
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                                                                           Page
                                                                          Number
                                                                          ------

                                    PART I.

Item 1.  Description of Business                                            4

Item 2.  Description of Property                                            12

Item 3.  Legal Proceedings                                                  12

Item 4.  Submission of Matters to a Vote of Security Holders                13

                                    PART II.

Item 5.  Market for the Registrant's Common Stock and Related
         Stockholder Matters                                                14

Item 6.  Management's Discussion and Analysis or Plan of
         Operation                                                          18

Item 7.  Financial Statements                                               24

Item 8.  Changes in and Disagreements with Accountants on
         Accounting and Financial Disclosure                                25

Item 8A. Controls and Procedures                                            25

                                    PART III.

Item 9.  Directors, Executive Officers, Promoters and Control Persons;
         Compliance with Section 16(a) of the Exchange Act                  25

Item 10. Executive Compensation                                             27

Item 11. Security Ownership of Certain Beneficial Owners and
         Management And Related Stockholder Matters                         29

Item 12. Certain Relationships and Related Transactions                     30

                                    PART IV.

Item 13. Exhibits and Reports on Form 8-K                                   31

Item 14. Principal Accountant Fees and Services                             32


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                                     PART I.

Note Regarding Forward Looking Information

This Annual Report on Form 10-KSB ("10-KSB") contains forward-looking
statements. Such statements are not based on historical facts and are based on
current expectations, including, but not limited to, statements regarding the
company's plans for future development and the operation of its business. Words
such as "anticipates," "expects," "intends," "plans," "believes," "seeks,"
"estimates," and similar expressions identify such forward-looking statements.
These statements are not guarantees of future performance and are subject to
certain risks and uncertainties that could cause actual results to differ
materially from those expressed or forecast. Among the factors that could cause
actual results to differ materially are the following: a lack of sufficient
capital to finance the company's business plan on commercially acceptable terms;
changes in labor, equipment and capital costs; its inability to attract
strategic partners; general business and economic conditions; and the other risk
factors described from time to time in the company's reports filed with the
Securities and Exchange Commission ("SEC"). You should not rely on these
forward-looking statements, which reflect only GFY's opinion as of the date of
this 10-KSB. The company does not assume any obligation to revise
forward-looking statements. You should also carefully review the risk factors
set forth in other reports or documents the company files from time to time with
the SEC, particularly the quarterly reports on Form 10-QSB and any current
reports on Form 8-K.

ITEM 1.  DESCRIPTION OF BUSINESS
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THE COMPANY

GFY Foods, Inc. ("GFY" or the "Registrant") is a company that presently owns and
operates food and beverage restaurants in Buffalo Grove, Illinois, Willowbrook,
Illinois, and Elkhart, Indiana. The restaurants are Frullati Cafe franchises of
Kahala Corp. The Buffalo Grove restaurant is owned by GFY, Inc., a wholly owned
subsidiary of GFY Foods, Inc. GFY Foods Inc. has been in the Restaurant business
since January 12, 2004, when it obtained ownership of GFY, Inc., and its Buffalo
Grove Restaurant.

Until January 12, 2004, the Registrant had been focused on investing in oil and
natural gas exploration and oil and natural gas producing properties. With the
acquisition of GFY, Inc., the Registrant obtained new management and embarked on
a new plan for operations by the company in the food service industry. While GFY
continues to hold oil and gas joint venture interests, it now considers these
holdings as investments only, not the focus of the Company's operations. The net
income from these ventures is treated as investment income. The activity from
the oil and gas operations from April 1 through December 31, 2003 has been
included in discontinued operations in the current financial statements.

In April of 2004, GFY acquired its second Frullati franchise in Elkhart,
Indiana, which is operated by the Registrant. In May of 2004, GFY acquired its
third Frullati franchise in Willowbrook, Illinois. GFY plans to pursue the
acquisition of additional Frullati franchises and is making plans to acquire
other businesses involved in the food and beverage industry.

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BACKGROUND

The Registrant was originally organized in the State of Utah on May 13, 1981,
under the name Oro Rico, Ltd. On August 16, 1994, Oro Rico merged into Tierra
Rica, Ltd., a Nevada corporation organized on May 7, 1993 for the purpose of
changing its domicile to the State of Nevada. In September 1994, Tierra Rica
merged with Petrex Corporation, a newly formed Utah corporation, with Tierra
Rica being the surviving corporation. On October 24, 1994, the company changed
its name to Petrex Corporation. In November of 1998, the company changed its
name from Petrex Corporation to Institute of Cosmetic Surgery, Inc. In July of
2000, the company again amended its Articles of Incorporation and changed its
name back to Petrex Corporation. The Registrant was then involved in a merger in
which it changed its name to Force 10 Trading, Inc. On December 2, 2002, the
Registrant changed its name to F10 Oil & Gas Properties, Inc.

On January 12, 2004, the Registrant acquired GFY, Inc. and then changed its name
to GFY Foods, Inc. The shareholders of GFY, Inc. were issued 20,000,000 shares
of restricted common stock of the Registrant in exchange for 100% of the issued
and outstanding shares of GFY, Inc. As part of the January 12, 2004
transactions, the Registrant increased its number of authorized shares of $0.001
par value common stock from 75,000,000 to 2,000,000,000.

BUSINESS STRATEGY

Upon the acquisition of GFY, Inc. in January 2004, GFY began focusing its
efforts on the operation and acquisition of food and beverage restaurants. As of
March 31, 2004, GFY owned only one operating restaurant, a Frulatti franchise in
Buffalo Grove, Illinois, which was owned by its subsidiary, GFY, Inc. In April
of 2004, GFY acquired its second Frulatti franchise in Elkhart, Indiana. In May
of 2004, GFY acquired a third Frulatti franchise in Willowbrook, Illinois. GFY
is continuing to seek out additional acquisitions, including both Frulatti
franchises and other food and beverage restaurants.

The Frulatti concept is a fresh, home-style alternative to fast food. The menu
includes grilled sandwiches and signature paninis that are served on bread baked
at the cafe. With options for breakfast, lunch or dinner, GFY's Frulatti
franchises offer quiches, soups, salads and pastries. The cafes also offer a
variety of fruit smoothie drinks.

GFY believes in the importance of providing high quality foods at affordable
prices that are healthy alternatives to food that is now being sold to the
American public.

INDUSTRY AND COMPETITION

The business of operating juice bars serving blended fruit drinks and healthy
food cafes serving sandwiches, gourmet rolled sandwiches, soups, salads, and
other healthy snacks is highly competitive and fragmented. Other operators of
juice bars and healthy food cafes compete for market share on a multitude of

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factors, the primary ones of which include strategic retail store locations and
the variety and breadth of products offered. GFY believes that its main
competitors within its existing markets and as it expands are two chains, Jamba
Juice and Smoothie King. These national juice bar chains' outlets are primarily
located in strip centers and street locations. Currently, GFY's franchises are
located within health clubs. Consequently, GFY believes its store locations
provide access to a more diverse and concentrated traffic flow of potential
customers than do these national chains' strip centers and street locations.
There are numerous other smaller regional chains of juice bars serving blended
drinks and health food cafes serving both fresh sandwiches and rolled sandwiches
throughout the United States. They operate in both strip centers and street
locations and specialty locations within airports, hospitals, office complexes
and shopping malls. GFY's competitive strategy includes offering what GFY
believes is a better tasting, blended fruit drink, offering healthy foods and
snacks that utilize fresh ingredients, and locating its stores in health clubs
and high density traffic flow specialty retail locations that are convenient for
the customer.

There is no assurance that the Company will be successful in operating its
current businesses or any business, which it may acquire in the future.

GOVERNMENTAL REGULATIONS

The Company and its facilities are subject to normal government regulation at
the federal, state and local levels. The Company must comply with government
regulations regarding employment, wages, local health department requirements
and regulations, access for handicapped and disabled persons and other laws,
rules, regulations and ordinances. The FDA does not directly regulate the
Company's operations, but the manufacturers and suppliers of its food products
may be subject to FDA regulations. Although the Company does not foresee any
change in existing local, state, or federal regulations, if changes should
occur, the Company believes that it can adapt to such new regulations and that
those changes would not have any significant effect on revenues or current
operations of the Company. However, no assurance can be made that compliance or
failure to comply with future regulation will not have a materially adverse
effect on the business, operating results or financial condition of the Company.

Except for complying with state and local ordinances governing land use and the
health and safety of food service operations, GFY's principal products of fruit
smoothie drinks, sandwiches, and other healthy foods, snacks and supplements are
not subject to governmental approval, nor does management know of any other
existing or proposed regulations of its business that could have a material
effect on its operations.

EMPLOYEES

As of March 31, 2004, GFY and its wholly owned subsidiary, GFY, Inc., employed a
total of 11full-time and 2 part-time employees. The Buffalo Grove Restaurant
employs 5 full time employees, including the Company's Chairman and President,

                                       6
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Edward Schwalb. The Willowbrook Restaurant employs 4 full-time and 2 part-time
employees and the Elkhart Restaurant employs 2 full-time employees. If GFY
acquires additional franchises or other operations, it is anticipated that
additional employees will be required.

Management of GFY expects to use consultants, attorneys, and accountants as
necessary, but unless additional restaurants or operations are acquired by the
Company, it is not presently anticipated that additional employees will be
required.

During the last quarter of the current fiscal year ended March 31, 2004, GFY has
relied upon the issuance of S-8 shares to pay certain employees, attorneys, and
consultants. During this quarter GFY issued 403,000,000 shares of S-8 common
stock to Jorge Castro for consulting services rendered valued at $1,357,500, or
an average of $0.0034 per share. During this quarter GFY issued 9,150,000 shares
of S-8 common stock to Sunil Aghi for consulting services rendered, valued at
$23,925, or an average of $0.0021 per share. During this quarter GFY issued
5,500,000 shares of S-8 common stock to Lee Traupel for consulting services
rendered valued at $12,500, or an average of $0.0023 per share. During this
quarter GFY issued 12,150,000 shares of S-8 common stock to J.R. Marple (White
Rhino Consulting, Inc.) for consulting services rendered valued at $26,750, or
an average of $0.0022 per share. During this quarter GFY issued 6,500,000 shares
of S-8 common stock to Martin Wozniac for consulting services rendered, valued
at $12,000, or an average of $0.0018 per share. During this quarter GFY issued
3,000,000 shares of S-8 common stock to Paul Bilko for consulting services
rendered, valued at $6,000, or an average of $0.002 per share.

During the quarter ended March 31, 2004, GFY issued 26,250,000 shares of its
common stock to Edward E. Schwalb, an employee under its S-8 Registration
Statement for its Employee Benefit Plan. These shares were valued at $51,150, or
an average of $0.00195 per share.

During the quarter ended March 31, 2004, Edward T. Wells, an attorney retained
by the Company was issued 27,000,000 shares of S-8 stock as a non-refundable
retainer and as compensation for services rendered for the Company. The stock
was valued at $51,000, or an average of $0.0019 per share.

RESEARCH AND DEVELOPMENT

GFY has not expended any capital on research or development since its inception.

INTELLECTUAL PROPERTY

GFY does not directly own the rights to any intellectual property, including
patents or trademarks. It does own the franchise rights for a Frulatti franchise
in Buffalo Grove, Illinois.

                                       7
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RISK FACTORS

You should carefully consider the following risks before making an investment in
our Company. In addition, you should keep in mind that the risks described below
are not the only risks that GFY faces. The risks described below are all the
risks that GFY currently believes are material to our business. However,
additional risks not presently known to us, or risks that we currently believe
are not material, may also impair our business operations. You should also refer
to the other information set forth in this Annual Report on Form 10-KSB/A,
including the discussions set forth in "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Business," as well as our
financial statements and the related notes. GFY's business, financial condition,
or results of operations could be adversely affected by any of the following
risks. If we are adversely affected by such risks, then the trading of our
common stock could decline, and you could lose all or part of your investment.
GFY's auditor's report on our financial statements includes an explanatory
paragraph with respect to substantial doubt existing about our ability to
continue as a going concern. As of March 31, 2004, GFY had incurred a loss from
operations and had an accumulated deficit resulting from losses in prior years.
As a result, our financial statements include a note stating that these
conditions raise substantial doubt about our ability to continue as a going
concern, but the financial statements do not include any adjustments that might
result from this uncertainty.

GFY faces significant competition. There are numerous businesses, corporations,
individuals and firms that are engaged in the food service industry and carry on
the type of business activities in which GFY is presently engaged. Many of those
entities are more experienced and possess significantly greater financial and
personnel resources than are possessed by GFY. In almost all markets in which
the Company presently does business there has been a significant increase in
competition in the food and beverage business and management expects this trend
to continue. Although competition in the food and beverage market is currently
fragmented, a major competitor with substantially greater financial, marketing
and operating resources could enter this market at any time and compete directly
against the Company. The Company faces intense competition for suitable sites
for new stores and qualified personnel to operate both new and existing stores.
There can be no assurance that GFY will be able to continue to secure adequate
sites at acceptable rent levels or that the Company will be able to attract a
sufficient number of qualified workers. GFY also faces significant competition
from established food and beverage retailers, most of who have greater financial
and marketing resources than the Company. While GFY intends to be competitive
with those entities, there can be no assurance that such will be the case.

Due to the limited resources available to GFY, our ability to obtain other
restaurant locations or other business opportunities has been limited. GFY's
future success is dependent upon our ability to operate our existing restaurants
and obtain additional business opportunities with those limited resources.

                                       8
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GFY is subject to compliance with securities law, which exposes it to potential
liabilities, including potential rescission rights. GFY has periodically offered
and sold our common stock to investors pursuant to certain exemptions from the
registration requirements of the Securities Act of 1933, as well as those of
various state securities laws. The basis for relying on such exemptions is
factual; that is, the applicability of such exemptions depends upon GFY's
conduct and that of those persons contacting prospective investors and making
the offering. GFY has not received a legal opinion to the effect that any of our
prior offerings were exempt from registration under any federal or state law.
Instead, it has relied upon the operative facts as the basis for such
exemptions, including information provided by investors themselves. If any prior
offering did not qualify for such exemption, an investor would have the right to
rescind its purchase of the securities if it so desired. It is possible that if
an investor should seek rescission, such investor would succeed. A similar
situation exists under state law in those states where the securities may be
offered without registration in reliance on the partial exemption from the
registration or qualification provisions of such state statutes under the
National Securities Markets Improvement Act of 1996. If investors were
successful in seeking rescission, we would face severe financial demands that
could adversely affect our business and operations. Additionally, if we did not
in fact qualify for the exemptions upon which we have relied, the Company could
be found to have violated provisions of state and federal securities laws and
regulations and incur penalties for such violations which would adversely affect
the Company. As a result of any such violations which may have occurred, we
could possibly become subject to significant fines and penalties imposed by the
SEC and state securities agencies.

Additional capital may be necessary to implement GFY's business plans. GFY
believes that it may not have sufficient cash, cash equivalents and operating
income to carry out its business plan of acquiring additional restaurants or
other food service operations in the coming fiscal year ending March 31, 2005.
GFY may require significant new capital in order to execute its business plan
and believes that this capital may only be available through an offering of
shares of its common stock. GFY's success in raising this capital will depend
upon its ability to access equity capital markets and we may not be able to do
so or to do so on acceptable terms. If we fail to obtain funds on acceptable
terms, we will not be able to execute our business plan and would have to delay
or abandon some or all of our plans for growth. If we are able to obtain funds,
we believe that the terms of such arrangement will result in an offering that is
highly dilutive to existing holders of shares of our common stock because of the
price at which we would have to issue those shares and the large number of
shares we would have to issue at those prices.

Although GFY's management is committed to the business and continued development
and growth of the business, the addition of specialized key personnel and
persons to assist management in the expansion of GFY's operations will be
necessary. There can be no assurance that GFY will be able to locate and hire
such specialized personnel on acceptable terms.

The Company intends to pursue an aggressive growth strategy, the success of
which will depend in part upon its ability to obtain new stores and to operate
existing and new stores profitably. The Company has grown from one Company-owned
store, owned by its subsidiary, which was obtained when the subsidiary was

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acquired on January 12, 2004 to a total of three stores as of the date of the
filing of this report. One of the Company's stores is owned by its subsidiary,
GFY, Inc. The Company plans, at some future date, to open new stores in
Continental North America and hopes at some future date to operate stores
outside of the North American Continent. GFY's expansion will present numerous
operational and competitive challenges to the Company's management and employees
and will place significant pressure on the Company's operating systems. In
addition, consumer tastes vary from region to region, and there can be no
assurance that consumers located in the regions in which the Company intends to
expand its restaurant operations will be as receptive to the Company's products
as consumers in existing markets. The achievement of the Company's expansion
plans will depend in part upon its ability to (i) obtain additional restaurants;
(ii) select, and compete successfully in, new markets; (iii) obtain suitable
sites at acceptable costs; (iv) hire, train, and retain qualified personnel; (v)
integrate new stores into existing distribution, inventory control, and
information systems; (vi) expand distribution capabilities; and (vii) maintain
quality control. The Company may incur significant start-up costs in connection
with obtaining new locations, obtaining additional franchises, and entering new
markets. In addition, if the Company were to obtain additional stores in
proximity to current markets it could have the effect of cannibalizing sales at
some of the Company's existing stores. There can be no assurance that the
Company will achieve its planned expansion goals, manage its growth effectively,
or operate its existing or any new stores profitably, and the failure of the
Company in any of these areas could have an adverse effect on the Company's
business, financial condition and results of operations.

There is no established, stable market for GFY's common stock. GFY's common
stock is quoted on the Over-the-Counter Electronic Bulletin Board ("OTCBB") and
traded sporadically. A large number of shares of outstanding common stock are
restricted and are not freely tradeable. An established public trading market
for our common stock may never develop or, if developed, it may not be able to
be sustained. The OTCBB is an unorganized, inter-dealer, over-the-counter market
that provides significantly less liquidity than other markets. Purchasers of
GFY's common stock may therefore have difficulty selling their shares should
they desire to do so.

The trading price of GFY's Common Stock has in the past and may in the future be
subject to significant fluctuations. In addition, the stock market in general
has experienced extreme price and volume fluctuations that have affected the
market price for many companies in industries similar to or related to that of
GFY and which have been unrelated to the operating performance of these
companies. These market fluctuations may adversely affect the market price of
GFY's Common Stock. Penny stock regulations may impair GFY's shareholders'
ability to sell their stock. GFY's common stock is deemed a "penny stock." Penny
stocks generally are equity securities with a price of less than $5.00 per
share, other than securities registered on certain national securities
exchanges. Penny stocks are subject to rules and regulations that impose
additional sales practice requirements on broker-dealers who sell the securities
to persons other than established customers and accredited investors, and these
additional requirements may restrict the ability of broker-dealers to sell a
penny stock. Any acquisitions that GFY undertakes could be difficult to
integrate, disrupt its business, dilute shareholder value and significantly harm

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its operating results. GFY expects to review opportunities to buy other business
or technologies that would complement its current business, expand the breadth
of its markets, or that may otherwise offer growth opportunities. If we make any
future acquisitions, we could issue stock that would dilute existing
stockholders' percentage ownership, incur substantial debt or assume contingent
liabilities. Potential acquisitions also involve numerous risks, including:
problems assimilating the purchased operations, technologies or products;
unanticipated costs associated with the acquisition; diversion of management's
attention from our core business; adverse effects on existing business
relationships with suppliers and customers; risks associated with entering
markets in which we have no or limited prior experience; and potential loss of
the purchased organization's or our own key employees. GFY cannot assure that it
would be successful in overcoming problems encountered in connection with such
acquisitions and its inability to do so could significantly harm its business.

The Registrant's plan to continue to acquire additional Frullati franchises and
other restaurants will most likely be effectuated through the issuance of
substantial amounts of the Registrant's common stock. The Registrant also has a
history of issuing substantial amounts of shares of its common stock to its
officers, directors, attorneys and consultants. Either the consummation of any
future acquisitions for common stock or the continuation of the Company's
current practice of paying employees, attorneys and consultants with common
stock will continue to substantially dilute current shareholders' ownership
percentage in the Registrant.

Reports to Security Holders

The Company is not required to deliver an annual report to security holders and
will not voluntarily deliver a copy of the annual report to the security
holders. Should the Company choose to create an annual report, it will contain
audited financial statements. The Company will file all of its required
information with the Securities and Exchange Commission ("SEC"). The public may
read and copy any materials that are filed by the Company with the SEC at the
SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549.
The public may obtain information on the operation of the Public Reference Room
by calling the SEC at 1-800-SEC-0330. The statements and forms filed by the
Company with the SEC have been filed electronically and are available for
viewing or copy on the SEC maintained Internet site that contains reports,
proxy, and information statements, and other information regarding issuers that
file electronically with the SEC. The Internet address for this site can be
found at: http://www.sec.gov. Information is also available on the GFY website
located at: http://www.gfyfoodsinc.com.

ITEM 2.  DESCRIPTION OF PROPERTY
-------

GFY currently leases space for its cafe and bakery operations located in Buffalo
Grove, Illinois, Willowbrook, Illinois, and Elkhart, Indiana. The Buffalo Grove
Restaurant is also used for its corporate offices. The terms of the lease in
Buffalo Grove, Illinois call for payments of $220 per month through September
30, 2006. The terms of the lease in Willowbrook, Illinois call for payments of

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$1,000 per month through September 1, 2004, with an option to renew at this
price through September 1, 2005. The terms of the lease in Elkhart, Indiana call
for payments of $400 per month through May 31, 2008, at which time monthly
payments increase to $450 per month through the end of the lease on May 31,
2013. The Elkhart Indiana Lease has an option to renew at the expiration date on
May 31, 2013 for an additional 10-year period at $500.00 per month.

ITEM 3.  LEGAL PROCEEDINGS.
-------

GFY, Inc. acquired the Buffalo Grove, Illinois Frullati franchise from an
individual. GFY was required to make a balloon payment of $28,000 in December of
2003 under the terms of that agreement. GFY failed to make the requisite payment
and, as a result, the entire balance of the note then due of approximately
$61,000 was immediately payable. GFY has continued to make monthly payments on
the note and, although the note holder has threatened legal action, no formal
proceedings have occurred. GFY believes that as long as it continues to make
monthly payments to the note holder, legal action or collection of the note will
be avoided. The current balance on the note is $57,174 as of March 31, 2004.

SEC V. DAVID M. WOLFSON, UNITED STATES DISTRICT COURT, DISTRICT OF UTAH, CENTRAL
DIVISION, CASE NO. 2:03-CV-0914K.

On October 16, 2003, the Securities and Exchange Commission through its Salt
Lake City, Utah, office filed a complaint in the United States District Court
for the District of Utah against 21 defendants including F10 Oil & Gas
Properties, Inc., Jon H. Marple, the former Chief Executive Officer of F10, Mary
E. Blake, the former President of F10, Jon R. Marple, a consultant to F10 and
Grateful Internet Associates, LLC, a Colorado limited liability company owed by
Jon R. Marple. The complaint alleges that overseas investors were defrauded by a
scheme organized by defendants David Wolfson, Gino Carlucci and Sukumo Ltd. to
sell securities in five United States-based issuers including F10. F10, with its
former officers Jon H. Marple and Mary E. Blake, are alleged to have made false
or incomplete filings with the SEC and to have manipulated the price of F10's
securities in violation of the antifraud provisions of Section 17(a) of the
Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and
Rule 10b-5 promulgated thereunder, the issuer reporting provision of Section
13(a) of the Exchange Act, and Rules 12b-20, 13a-1 and 13a-13 promulgated under
the Exchange Act.

The complaint seeks the entry of a preliminary and permanent injunction against
all defendants including F10 and its former officers, Jon H. Marple and Mary E.
Blake, including the return of "ill gotten" gains, and seeks asset freezes
against 16 of the defendants including F10 and its former officers.

Management of GFY is currently in negotiations with the Commission to settle the
complaint. A GFY bank account with a balance of $60,102 was frozen as part of
the SEC proceedings and remains frozen. GFY anticipates that these funds will be
used to settle the SEC complaint.

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

On January 12, 2004, the Registrant changed its name to GFY Foods, Inc. and
increased its number of authorized shares of $0.001 par value common stock to
2,000,000,000 from 75,000,000. The Board of Directors and a majority of the
shareholders of the Registrant approved this matter. GFY did not file a Schedule
14C or 14A prior to taking this action. This neglect may have resulted in a
potential violation of Section 14 of the Securities Act of 1933. The Company did
file a Form 8-K, which disclosed this action.

On March 22, 2004, the Registrant amended its Articles of Incorporation by vote
of its majority shareholder and increased its number of authorized shares of
$0.001 par value common stock from 2,000,000,000 to 4,000,000,000. The Board of
Directors and the majority shareholder of the Registrant approved this matter.
GFY did not file a Schedule 14C prior to taking this action. Nevada law allows
such action to be taken by a majority shareholder without notice to
shareholders. This neglect may have resulted in a potential violation of Section
14 of the Securities Act of 1933. The Company did file a Form 8-K on March 30,
2004, which disclosed this action. The notice required by Rule 10b-17 was timely
given to the National Association of Securities Dealers.

On April 20, 2004, the Registrant amended its Articles of Incorporation by vote
of its majority shareholder and increased its number of authorized shares of
$0.001 par value common stock from 4,000,000,000 to 8,000,000,000. The Board of
Directors and the majority shareholder of the Registrant approved this matter.
GFY did not file a Schedule 14C prior to taking this action. Nevada law allows
such action to be taken by a majority shareholder without notice to
shareholders. This neglect may have resulted in a potential violation of Section
14 of the Securities Act of 1933. The Company did file a Form 8-K on April 21,
2004, which disclosed this action. The notice required by Rule 10b-17 was timely
given to the National Association of Securities Dealers.

The Company recognizes that it has failed to timely file required Forms 14C. The
Company is taking steps to remedy this problem so that it does not occur in the
future.

                                    PART II.

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
-------  MATTERS.

GFY's common stock is currently traded on the Over-the-Counter Bulletin Board
under the ticker symbol "GFYI." Between January 26, 2004 and July 13, 2004, the
stock traded under the ticker symbol "GFYF." From December 3, 2002 through
January 25, 2004, the common stock traded under the ticker symbol "FTOG." From
January 3, 2002 through December 2, 2002, the stock traded under the symbol
"FTTI". Prior to January 3, 2002, GFY's common stock traded under the symbol
APETR" on the Pink Sheets. The range of high and low bid information as set
forth below for the shares of the company's stock for the last two complete
fiscal years are approximations, as reported by Nasdaq.com. Such quotations

                                       13
<PAGE>

represent prices between dealers, do not include retail markup, markdown or
commission, and do not represent actual transactions. The information has been
adjusted for the twenty-for-one reverse stock split effectuated by the company
on January 2, 2002 and the three hundred-for-one reverse stock split effectuated
by the company on December 2, 2002. These numbers do not reflect the 1 for 250
reverse-split of the Company's common shares, which occurred on July 13, 2004.

Year Ended March 31, 2004                            High              Low
-------------------------                            ----              ---

Fourth Quarter B Jan. 1 to Mar. 31, 2004              $0.55            $0.0014
Third Quarter - Oct. 1 to Dec. 31, 2003                2.25             0.25
Second Quarter B July 1 to Sept. 30, 2003              2.25             1.50
First Quarter B April 1 to June 30, 2003               1.72             1.60

Year Ended March 31, 2003                            High              Low
-------------------------                            ----              ---

Fourth Quarter B Jan. 1 to Mar. 31, 2003             $ 1.60           $ 1.25
Third Quarter - Oct. 1 to Dec. 31, 2002               30.03             1.25
Second Quarter B July 1 to Sept. 30, 2002            180.18            27.03
First Quarter B April 1 to June 30, 2002             300.30            96.10

As of August 10, 2004, GFY had 836 shareholders of record, including nominees
and brokers holding street accounts. As of August 2004, following the 1 for 250
reverse-split of the Company's common shares which occurred on July 13, 2004,
the last sale price for GFY's common stock on the OTC Bulletin Board was $0.013
per share.

GFY has never paid cash dividends on its common stock and does not anticipate
that it will pay dividends in the foreseeable future. GFY intends to continue to
retain any earnings to expand and develop its business.

Limited Market for Common Shares

There is currently a limited trading market for our shares of common stock, and
there can be no assurance that a more substantial market will ever develop or be
maintained. Any market price for shares of common stock of GFY is likely to be
very volatile, and numerous factors beyond our control may have a significant
adverse effect. In addition, the stock markets generally have experienced, and
continue to experience, extreme price and volume fluctuations which have
affected the market price of many small capital companies and which have often
been unrelated to the operating performance of these companies. These broad
market fluctuations, as well as general economic and political conditions, may
also adversely affect the market price of our common stock. Further, there is no
correlation between the present limited market price of our common stock and our
revenues, book value, assets or other established criteria of value. The present
limited quotations of our common stock should not be considered indicative of
the actual value of GFY Foods, Inc. or our common stock.

                                       14
<PAGE>

Risks of "Penny Stock"

GFY Foods Inc.'s common stock (OTC BB: GFYI) is deemed to be "penny stock" as
that term is defined in Rule 3a51-1 of the Securities and Exchange Commission.
Penny stocks are stocks (i) with a price of less than $5.00 per share; (ii) that
are not traded on a "recognized" national exchange; (iii) whose prices are not
quoted on the NASDAQ automated quotation system (NASDAQ-listed stocks must still
meet requirement (i) above); or (iv) in issuers with net tangible assets less
than $2,000,000 (if the issuer has been in continuous operation for at least
three years) or $5,000,000 (if in continuous operation for less than three
years), or with average sales of less than $6,000,000 for the last three years.
While our stock has traded at an adjusted price between $300.30 and $$0.0014 per
share over the past two years, there is no assurance that this price level will
continue. Section 15(g) of the Securities Exchange Act of 1934, as amended, and
Rule 15g-2 of the Securities and Exchange Commission require broker/dealers
dealing in penny stocks to provide potential investors with a document
disclosing the risks of penny stocks and to obtain a manually signed and dated
written receipt of the document before effecting any transaction in a penny
stock for the investor's account. Potential investors in our common stock are
urged to obtain and read such disclosure carefully before purchasing any shares
that are deemed to be a "penny stock." Moreover, Rule 15g-9 of the Securities
and Exchange Commission requires broker/dealers in penny stocks to approve the
account of any investor for transactions in such stocks before selling any penny
stocks to that investor. This procedure requires the broker/dealer to (i) obtain
from the investor information concerning his or her financial situation,
investment experience and investment objectives; (ii) reasonably determine,
based on that information, that transactions in penny stocks are suitable for
the investor and that the investor has sufficient knowledge and experience as to
be reasonably capable of evaluating the risks of penny stock transactions; (iii)
provide the investor with a written statement setting forth the basis on which
the broker/dealer made the determination in (ii) above; and (iv) receive a
signed and dated copy of such statement from the investor, confirming that it
accurately reflects the investor's financial situation, investment experience
and investment objectives. Compliance with these requirements may make it more
difficult for investors in our common stock to resell their shares to third
parties or to otherwise dispose of them.

Registrar and Transfer Agent
----------------------------

The company's registrar and transfer agent is PublicEase Stock Transfer, located
at 3663 E. Sunset Road, Suite 104, Las Vegas, Nevada 89120; where its telephone
number is (702) 212-8797.

Recent Sales of Unregistered Securities
---------------------------------------

GFY made the following sales of unregistered securities during the fiscal year
ended March 31, 2004:

                                       15
<PAGE>

In January 2004, GFY issued 20,000,000 shares of restricted common stock to
Edward Schwalb in consideration for the acquisition of GFY, Inc. The total value
of the stock was booked at par value of $20,000, or $0.001 per share. The
Company issued the shares pursuant to section 4(2) of the Securities Act of 1933
in an isolated private transaction by the Company, which did not involve a
public offering. The Company made this offering based on the following factors:
(1) The issuance was an isolated private transaction by the Company which did
not involve a public offering, being made to a single entity; (2) there was only
one offeree who was issued stock; (3) the offeree acquired the stock with
investment intent; (4) there were no subsequent or contemporaneous public
offerings of the stock; (5) the stock was not broken down into smaller
denominations; and (6) the negotiations for the issuance of the stock took place
directly between the offeree and the Company.

In January 2004, GFY issued 250,000,000 shares of restricted common stock to
Edward Schwalb under the terms of his employment contract with GFY. The total
value of the stock was booked at par value of $2,500,000, or $0.001 per share.
The stock was issued as compensation for the services provided by Edward Schwalb
and was issued with a restrictive legend and pursuant to Section 4(2) of the
Securities Act of 1933.

In January 2004, GFY issued 28,000,000 shares of restricted common stock to
DeVerl Byington, a note holder, in settlement of his note with a principal
balance of $5,000. The payment included approximately $23,000 of interest
payments. The value of this settlement was booked at par value of $28,000, or
$0.001 per share. The Company issued the shares pursuant to section 4(2) of the
Securities Act of 1933 in an isolated private transaction by the Company, which
did not involve a public offering. The Company made this offering based on the
following factors: (1) The issuance was an isolated private transaction by the
Company which did not involve a public offering, being made to a single entity;
(2) there was only one offeree who was issued stock; (3) the offeree acquired
the stock with investment intent; (4) there were no subsequent or
contemporaneous public offerings of the stock; (5) the stock was not broken down
into smaller denominations; and (6) the negotiations for the issuance of the
stock took place directly between the offeree and the Company.

In January 2004, GFY issued 100,000,000 shares of restricted common stock to
Patricia Fish, a note holder, in settlement of her note with a principal balance
of $50,000. The payment included approximately $50,000 of interest payments. The
value of this settlement was booked at par value of $100,000, or $0.001 per
share. The Company issued the shares pursuant to section 4(2) of the Securities
Act of 1933 in an isolated private transaction by the Company, which did not
involve a public offering. The Company made this offering based on the following
factors: (1) The issuance was an isolated private transaction by the Company
which did not involve a public offering, being made to a single entity; (2)
there was only one offeree who was issued stock; (3) the offeree acquired the
stock with investment intent; (4) there were no subsequent or contemporaneous
public offerings of the stock; (5) the stock was not broken down into smaller
denominations; and (6) the negotiations for the issuance of the stock took place
directly between the offeree and the Company.

                                       16
<PAGE>

In March 2004, GFY issued 75,000,000 shares of restricted common stock to Lee
Traupel for consulting services rendered to the company. The term of the
consulting contract is for one year. The total value of the services was booked
at $75,000, or $0.001 per share. The shares were issued with a restrictive
legend and issued pursuant to Section 4(2) of the Securities Act of 1933 in a
private transaction by the Company, which did not involve a public offering. The
Company made this offering based on the following factors: (1) The issuance was
an isolated private transaction by the Company which did not involve a public
offering, being made to a single entity; (2) there was only one offeree who was
issued stock; (3) the offeree acquired the stock with investment intent; (4)
there were no subsequent or contemporaneous public offerings of the stock; (5)
the stock was not broken down into smaller denominations; and (6) the
negotiations for the issuance of the stock took place directly between the
offeree and the Company.

In March 2004, GFY issued 125,000,000 shares of restricted common stock to Tad
Gygi, a note holder, in settlement of his note with a principal balance of
$50,000. The payment included approximately $75,000 of interest payments. The
value of this settlement was booked at par value of $125,000, or $0.001 per
share. The Company issued the shares pursuant to section 4(2) of the Securities
Act of 1933 in an isolated private transaction by the Company, which did not
involve a public offering. The Company made this offering based on the following
factors: (1) The issuance was an isolated private transaction by the Company
which did not involve a public offering, being made to a single entity; (2)
there was only one offeree who was issued stock; (3) the offeree acquired the
stock with investment intent; (4) there were no subsequent or contemporaneous
public offerings of the stock; (5) the stock was not broken down into smaller
denominations; and (6) the negotiations for the issuance of the stock took place
directly between the offeree and the Company.

In March 2004, GFY issued 1,020,000,000 shares of restricted common stock to
Edward Schwalb under the terms of his employment contract with GFY. The total
value of the stock was booked at par value of $1,020,000, or $0.001 per share.
The stock was issued as compensation for the services provided by the Edward
Schwalb and was issued with a restrictive legend and pursuant to Section 4(2) of
the Securities Act of 1933 in an isolated private transaction by the Company,
which did not involve a public offering. The Company made this offering based on
the following factors: (1) The issuance was an isolated private transaction by
the Company which did not involve a public offering, being made to a single
entity; (2) there was only one offeree who was issued stock; (3) the offeree
acquired the stock with investment intent; (4) there were no subsequent or
contemporaneous public offerings of the stock; (5) the stock was not broken down
into smaller denominations; and (6) the negotiations for the issuance of the
stock took place directly between the offeree and the Company.

In March 2004, GFY issued 168,000,000 shares of restricted common stock to Jason
Thelin, a note holder, in settlement of his note with a principal balance of
$50,000. The payment included approximately $118,000 of interest payments. The
value of this settlement was booked at par value of $168,000, or $0.001 per
share. The Company issued the shares pursuant to section 4(2) of the Securities

                                       17
<PAGE>

Act of 1933 in an isolated private transaction by the Company, which did not
involve a public offering. The Company made this offering based on the following
factors: (1) The issuance was an isolated private transaction by the Company
which did not involve a public offering, being made to a single entity; (2)
there was only one offeree who was issued stock; (3) the offeree acquired the
stock with investment intent; (4) there were no subsequent or contemporaneous
public offerings of the stock; (5) the stock was not broken down into smaller
denominations; and (6) the negotiations for the issuance of the stock took place
directly between the offeree and the Company.

The above share numbers have not been adjusted to reflect the 1 for 250
reverse-stock split which occurred on July 13, 2004.

Notes and Warrants

From December 2003 through March 2004, the Registrant entered into note
agreements with several individuals. The notes carry interest rates of 15-25%
per annum and are convertible into shares of common stock at a discount to the
market price of the stock at a discount rate varying from 30-90% of the bid
price of the common stock at the time of conversion. Some of these notes were
issued by the Registrant prior to the acquisition by the Registrant of GFY,
Inc., on January 12, 2004 and the Registrant's change of management following
that acquisition. The total principal balance of these notes is $118,900. The
Registrant valued the conversion feature of these notes at an aggregate value of
$110,329. This amount was recorded as a discount and is being amortized over the
term of the notes. For the year ended March 31, 2004, GFY amortized $26,507 of
this discount and that amount is included in interest expense.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
-------

The following discussion should be read in conjunction with the financial
statements and accompanying notes included elsewhere in this Form 10-KSB.

The following information is presented for GFY operations for the year ended
March 31, 2004. Where noted, the operations of GFY in its prior line of business
are noted as discontinued operations. Comparisons to the prior year have only
been made on a limited basis since the Registrant has changed its line of
business as of January 12, 2004 with the acquisition of GFY, Inc. As a direct
result of the Company's discontinued oil and gas operations and its subsequent
entry in to the restaurant business, a meaningful gauge or comparison of its
current operations from March 31, 2004 to March 31, 2003 cannot be provided.

                                       18
<PAGE>

RESULTS OF OPERATIONS

REVENUES.

For the year ended March 31, 2004, GFY reported $26,806 in total revenues
compared to $526 in total revenues for the comparable period in 2003. The
revenues for the year ended March 31, 2004 only includes the revenues from the
restaurant operations of GFY, Inc. for the period from January 1, 2004 through
March 31, 2004. The revenues for the period ended March 31, 2003 includes the
revenues from oil and natural gas sales passed through from F10's joint venture
investment. In the financial statements for the year ended March 31, 2004 and
2003, these revenues have been reclassified as part of the discontinued
operations on the accompanying financial statements. The operations of the
Company are not comparable.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

GFY incurred total selling, general and administrative expenses ("SG&A") of
$847,774 from January 1, 2004 through March 31, 2004 in its current line of
business. During the entire fiscal year ended March 31, 2004, GFY incurred total
SG&A of $1,490,825, including expenses incurred in the discontinued line of
business.

During the fiscal year ended March 31, 2003, GFY incurred total SG&A of
$1,505,521, which includes an expense of $643,051 incurred in the discontinued
lines of business in the oil and gas industry and the sales of stock tutorials.
The current year's total SG&A expenses represent a decrease of $14,696 or 1%
from the prior year. The bulk of this decrease is attributable to consulting
expenses, which have primarily been paid through the issuance of common stock.

OTHER INCOME/EXPENSE.

For the year ended March 31, 2004,GFY recorded investment income of $4,393. This
amount represents the oil and gas joint venture interests purchased by GFY in
its previous line of business. GFY also recorded $27,040 in forgiveness of debt
income and incurred an expense of $34,702 in acquisition costs for the
acquisition of GFY, Inc. for the year ended March 31, 2004.

For the year ended March 31, 2003, GFY recorded gains from securities sales of
$5,733 and also recorded income from forgiveness of indebtedness of $8,363.

NET LOSS.

GFY recorded a net loss of $1,910,846 for the fiscal year ended March 31, 2004
compared to a net loss of $1,730,364 for the fiscal year ended March 31, 2003.
The increase in losses of $180,482 loss represents an increase in losses of
approximately 10%. The overall loss in the current year was higher primarily due
to the increase in interest expense from the settlement of certain notes through
the issuance of common stock.

                                       19
<PAGE>

DEPRECIATION AND AMORTIZATION.

Depreciation for the year ended March 31, 2004 was equal to $1,849, compared
with $3,851 of depreciation for the year ended March 31, 2003. GFY amortized the
discounts and original issue costs on certain notes payable during the year.
These amounts have been included in interest expense.

INTEREST EXPENSE.

GFY incurred interest expense of $434,807 for the year ended March 31, 2004; an
increase of 82% from the interest expense of $238,939 incurred in the fiscal
year ended March 31, 2003. A large amount of the interest expense in the current
fiscal year is attributable to notes settled with common stock, which was valued
much greater than the face value of the note. This excess was booked as
additional interest expense. As of March 31, 2004, GFY has settled a large
portion of its notes payable through the issuance of restricted common stock.
GFY has settled additional notes after the end of the fiscal year. GFY expects
to continue settling notes through the issuance of additional shares of common
stock.

INCOME TAX BENEFIT.

For the fiscal year ending March 31, 2004, GFY had a net operating loss
carryforward of approximately $3.054 million expiring beginning on March 31,
2017. GFY has not recognized any of this tax benefit as an asset due to
uncertainty of future income.

LOSS PER SHARE.

The weighted average number of shares outstanding for the year ended March 31,
2004 was 55,613,789. The loss for the current fiscal year represented a loss of
$0.03 per share. On June 15, 2004, the Registrant approved a reverse stock split
at a rate of 250 to 1. This reverse stock split took effect on or about July 12,
2004. If this reverse stock split were to have taken effect on March 31, 2004,
the weighed averaged number of shares outstanding would have been 222,455. The
loss per share would have been $8.59 per share. The weighted average number of
shares outstanding for the fiscal year ended March 31, 2003 was 1,440,549. The
weighted average loss in this period was $1.20 per share.

LIQUIDITY AND CAPITAL RESOURCES.

At March 31, 2004, GFY had current assets of $2,587,777 and total assets of
$5,397,514. GFY had working capital of $1,255,808 as of March 31, 2004. The
majority of GFY's current assets are prepaid expenses. Additionally, the
majority of GFY's current liabilities are payables related to the prepaid
expenses. Without respect to these two items, GFY had a working capital deficit
of $623,181 compared to a working capital deficit of $802,181 for the comparable
period in 2003.

                                       20
<PAGE>

The value of the prepaid expenses was based upon the market value of the
securities issued on the date of issue which in management's opinion is
equivalent to an arbitrary value based upon the wild fluctuations in the
Company's stock price and restricted nature of some of the shares used to pay
various professionals.

Net stockholders' equity in GFY was $4,051,745 as of March 31, 2004, compared to
a Net stockholders' deficit of $699,804 as of March 31, 2003.

Cash flow used in operations was $615,379 for the year ended March 31, 2004,
compared to cash flow used in operations of $676,954 for the year ended March
31, 2003. The decrease in cash flows used in operating activities for the year
ended March 31, 2004, is primarily attributable to the Registrant paying a
higher portion of its expenses through the issuance of its common stock. Since
the Registrant has changed its business from the oil and gas industry into the
food services industry, the year over year comparisons may not be reflective of
long-term changes in the cash flows used in operations.

Cash flow used by investing activities was $10,268 for the year ended March 31,
2004, compared to net cash provided by investing activities of $37,169for the
year ended March 31, 2003. The significant decrease in cash resulting from
investing activities for the year ended March 31, 2004 as, compared with 2003 is
primarily a result of the costs of the acquisition of GFY, Inc. that were
expensed in the current year. These expenses totaled $34,702 in the year ended
March 31, 2004.

Cash flow provided by financing activities was $573,847 for the year ended March
31, 2004, compared to net cash provided of $707,355 for the year ended March 31,
2003. GFY had negative financing cash flow for the year ended March 31, 2004, as
a result changes in the operations of the Registrant.

During the year ended March 31, 2004, GFY issued a total of 1,844,974,000 shares
for services rendered by employees and consultants. The Registrant is minimizing
its cash expenditures by paying, where possible, its consultants and employees
with common stock registered under GFY's S-8 Registration Statement and
unregistered shares issued pursuant to exemption under Section 4(2) of the
Securites Act.

CERTAIN INDEBTEDNESS.

From December 2003 through March 2004, GFY entered into note agreements with
several individuals. The notes carry interest rates of 15-25% per annum and are
convertible into shares of common stock at a discount to the market price of the
stock at a discount rate varying from 30-90% of the bid price of the common
stock at the time of conversion. Some of these notes were issued by GFY, Inc.
prior to the acquisition of GFY, Inc. The total principal balance of these notes
is $118,900.

                                       21
<PAGE>

Of the notes payable that GFY has issued, a total principal amount of $286,008
of the notes and $35,888 of accrued interest is overdue and payable as of March
31, 2004. GFY has successfully negotiated settlements of approximately $155,000
of the past due notes in exchange for restricted common stock. GFY is continuing
its efforts to negotiate settlements on the payment of the remaining delinquent
notes that would likely involve additional issuances of GFY's restricted common
stock.

GFY has approximately $60,000 cash in a bank account that has been frozen by the
SEC. These funds have not been included as current assets in the calculation of
GFY's working capital. GFY has reserved against the entire balance of these
funds and has not included any of the frozen funds in its assets reported in the
financial statements. GFY expects the $60,000 to cover most, if not all, of the
cost to settle the pending litigation with SEC, as more fully described under
the heading legal proceedings.

INFLATION.

GFY's management does not believe that inflation has had or is likely to have
any significant impact on GFY's operations.

PROFESSIONALS PAID WITH SHARES OF COMMON STOCK

GFY does not provide post-retirement or post-employment benefits requiring
charges under Statements of Financial Accounting Standards Nos. 106 and 112.

On January 16, 2004, GFY entered into an employment agreement with its
President, Edward Schwalb. This agreement was amended on May 5, 2004. Under the
terms of the agreement, as amended, GFY is to pay Mr. Schwalb a monthly salary
of $25,000. Mr. Schwalb is also due a bonus of $70,000 for each acquisition that
he initiates and the Registrant closes on during the term of the employment
agreement. Further, the agreement states that Mr. Schwalb shall maintain an
ownership position in GFY of no less than 70% of the outstanding shares of
common stock. As of August 10, 2004, Mr. Schwalb owned 165,160,004 post
reverse-split shares out of 215,999,537 post reverse-split shares outstanding,
or 76.5% of the outstanding common stock. The term of this employment agreement
is for five years ending on December 31, 2008.

The Registrant has engaged the services of various consultants to assist the
Registrant and perform various duties for the Registrant. The consultants have
been paid through the issuance of free-trading common stock of the Registrant.
Some of the consultants have retained the services of subcontractors. The
consultants may pay their subcontractors with some of their GFY stock, in cash
or other consideration. GFY has also made payments to its president in the form
of free trading common stock. Through March 31, 2004, the Registrant issued a
total of 499,800,000 shares of free-trading common stock that was registered
under an S-8 filing made on January 20, 2004. These shares were valued at the
bid price of the stock on the date of issuance. The total value of these shares
was recorded at $2,677,500. Of these shares, 26,250,000 shares were issued to

                                       22
<PAGE>

the Registrant's president at a value of $51,150. The remaining 473,550,000
shares were issued to consultants at a value of $2,626,350. The following
describes the services performed and compensation for each of the consultants
who received more than $5,000 in free-trading common stock of the Registrant
during the fiscal year ended March 31, 2004. The stock was registered under an
S-8 registration made on January 19, 2004. To the extent that the Registrant was
aware of subcontractors performing services for the consultants that is
disclosed below as well.

On January 28, 2004, the Registrant retained the services of Jorge Castro
("Castro") to act as a consultant to GFY Foods, Inc. Under the agreement with
Castro, Castro is to act as GFY's exclusive strategic advisor for business
combinations and is to arrange the introduction of strategic partners and supply
consulting services to GFY's management. GFY is to pay Castro a non-refundable
payment of $2,000,000 in common stock to compensate Consultant for time, fees
and expenses. Castro may hire subcontractors and negotiate contracts with them
to provide services to GFY under this Agreement. Castro is also due a payment of
$1,000,000 in cash or free-trading common stock of GFY if and when the Company
enters into an agreement to acquire, in any manner, any business, assets or
otherwise, introduced by Castro. Castro and GFY signed an addendum to their
agreement on the date of execution to expand Castro's duties to the development
of a coffee import/export strategy. As of March 31, 2004, the Registrant had
issued a total of 403,000,000 shares of its free-trading common stock to Castro.
The stock was valued at $1,357,500.

Jorge Castro has sub-contracted both Agennoria Continental, A.C., Ltd. and
Francisco Chacon as strategic partners to build our business internationally.
The company is unaware of the amount of the sub-contractors' compensation from
Castro.

The Registrant engaged the services of Sunil Aghi to provide the Registrant with
strategic planning and marketing consulting services. As of March 31, 2004, the
Registrant had issued a total of 9,150,000 shares of its free-trading common
stock to Aghi. The stock was valued at $23,925.

The Registrant engaged the services of White Rhino Consultants, Inc. to perform
various accounting services for the Registrant. White Rhino subcontracted these
services to J.R. Marple and directed the Registrant to pay Marple directly for
these services. As of March 31, 2004, the Registrant had issued a total of
12,150,000 shares of its free-trading common stock to Marple. The stock was
valued at $26,750.

The Registrant engaged the services of Paul Biko to perform acquisitions of
viaticals for the Registrant. As of March 31, 2004, the Registrant had issued a
total of 3,000,000 shares of its free-trading common stock to Biko. The stock
was valued at $6,000.

                                       23
<PAGE>

The Registrant engaged the services of Lee Traupel to design and develop the
Registrant's website as well as assist the Registrant in investor relations and
distribution of press releases. As of March 31, 2004, the Registrant had issued
a total of 5,500,000 shares of its free-trading common stock to Traupel. The
stock was valued at $12,500.

The Registrant engaged the services of Martin Wozniak to provide the Registrant
with consulting services relating to due diligence on potential acquisition
targets. As of March 31, 2004, the Registrant had issued a total of 6,500,000
shares of its free-trading common stock to Wozniak. The stock was valued at
$12,000.

The Registrant engaged the services of Ed Wells to perform legal services for
the Registrant. As of March 31, 2004, the Registrant had issued a total of
27,000,000 shares of its free-trading common stock to Wells. The stock was
valued at $51,000. The payment of the shares to Mr. Wells was made to compensate
him for services related to due diligence on acquisitions for the Registrant and
other legal services.

GOING CONCERN

The report of GFY's independent certified public accountants notes that GFY has
cash flow constraints, an accumulated deficit and has suffered recurring losses
from operations and these conditions raise substantial doubt about the company's
ability to continue as a going concern. GFY plans on continuing to raise capital
through various private placement offerings of its common stock and through the
offering of additional note agreements with prospective investors.

GFY believes that future equity sales or other financings can be achieved to
adequately finance its growth and retire its existing debts. Therefore, GFY's
continued operations, as well as the implementation of its business plan, will
depend upon its ability to raise additional funds through bank borrowings,
equity or debt financing. However, adequate funds may not be available when
needed or may not be available on favorable terms to GFY. The ability of GFY to
continue as a going concern is dependent on additional sources of capital and
the success of GFY's business plan. Regardless of whether GFY's cash assets
prove to be inadequate to meet GFY's operational needs, GFY might seek to
compensate providers of services by issuance of stock in lieu of cash.

If funding is insufficient at any time in the future, GFY may not be able to
take advantage of business opportunities or respond to competitive pressures,
any of which could have a negative impact on the business, operating results and
financial condition. In addition, if additional shares were issued to obtain
financing, or compensate service providers, existing shareholders may suffer a
dilutive effect on their percentage of stock ownership in GFY.

ITEM 7.  FINANCIAL STATEMENTS
-------

The Company's financial statements for the period ended March 31, 2004, are
attached hereto as pages F-1 through F-17.

                                       24
<PAGE>

                                 GFY FOODS, INC.

                        CONSOLIDATED FINANCIAL STATEMENTS

                                 MARCH 31, 2004


                                      F-1
<PAGE>

                                 C O N T E N T S


Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . F-3

Consolidated Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . F-4

Consolidated Statements of Operations. . . . . . . . . . . . . . . . . . F-5

Consolidated Statements of Changes in Stockholders' Equity. . . . . . .  F-6

Consolidated Statements of Cash Flows. . . . . . . . . . . . . . . . .   F-7

Notes to the Consolidated Financial Statements. . . . . . . . . . . . .  F-8


                                      F-2
<PAGE>

                                 Smith & Company
           A Professional Corporation of Certified Public Accountants

                          INDEPENDENT AUDITORS' REPORT

Officers and Directors
GFY Foods, Inc.
Buffalo Grove, Illinois

We have audited the accompanying consolidated balance sheet of GFY Foods, Inc.
(a Nevada corporation) as of March 31, 2004, and the related consolidated
statements of operations, changes in stockholders' equity, and cash flows for
the years ended March 31, 2004 and 2003. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of GFY Foods, Inc. as
of March 31, 2004, and the results of its operations, changes in stockholders'
equity, and its cash flows for the years ended March 31, 2004 and 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 2 to the
consolidated financial statements, the Company has cash flow constraints, and an
accumulated deficit, and has suffered losses from operations. These factors,
among others, raise substantial doubt about the Company's ability to continue as
a going concern. Management's plans in regard to these matters are also
described in Note 2. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

                                                 /s/ Smith & Company
                                                 Certified Public Accountants

    Salt Lake City, Utah
    June 12, 2004, except Note 13, which is dated July 22, 2004

         4764 South 900 East, Suite 1 o Salt Lake City, Utah 84117-4977
              Telephone: (801) 281-4700 o Facsimile: (801) 281-4701
                        E-mail: smithcocpa@earthlink.net
           Members: American Institute of Certified Public Accountants
                Utah Association of Certified Public Accountants

                                      F-3
<PAGE>

                                 GFY FOODS, INC.
                           CONSOLIDATED BALANCE SHEET
                                 MARCH 31, 2004

     ASSETS

                                                                    CONSOLIDATED
                                                                    ------------
CURRENT ASSETS:
Cash                                                                      1,496
Investment income receivable                                              2,892
Prepaid expenses (Note 8)                                             2,581,489
Inventory                                                                 1,900
Total current assets                                                  2,587,777
                                                                     -----------
Property & equipment, net (Note 3)                                       29,576

Franchise fee, net of amortization of $3,303                             26,697
Long-term portion of prepaid expenses (Note 8)                        2,677,964
Deposit on acquisition                                                      500
Oil & gas investments                                                    75,000
                                                                     -----------
Total assets                                                          5,397,514
                                                                     -----------

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable                                                        158,288
Accrued expenses                                                          3,590
Other payables (Note 8)                                                 702,500
Notes payable, net of discounts of $105,383 (Note 4)                    330,399
Accrued interest                                                         41,345
Payable to former officers                                               58,837
ayable to current officers                                              37,010
                                                                     -----------
Total current liabilities                                             1,331,969
                                                                     -----------

Long-term portion of notes (Note 4)                                      13,800
                                                                     -----------
Total liabilities                                                     1,345,769

Commitments and contingencies (Note 5)
Stockholders' equity:
Preferred stock, 50,000,000 shares
  authorized, none outstanding                                               --
Common stock, par value $0.001;
  8,000,000,000 shares authorized,
  2,298,265,161 shares outstanding                                    2,298,265
Additional paid-in capital                                            6,208,330
Accumulated deficit                                                  (4,454,850)
                                                                     -----------
Total stockholders' equity                                            4,051,745
                                                                     -----------
Total liabilities and shareholders' equity                            5,397,514
                                                                     ===========

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

                                      F-4
<PAGE>

                                 GFY FOODS, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                   FOR THE YEARS ENDED MARCH 31, 2004 AND 2003


                                                    YEAR ENDED       YEAR ENDED
                                                     MARCH 31,        MARCH 31,
                                                       2004             2003
                                                   ------------     ------------

Net Revenues                                            26,806               --

Cost of Sales
                                                         8,751               --
                                                   ------------     ------------

Gross Profit                                            18,055               --

General and administrative expenses                    847,774               --
                                                   ------------     ------------
Loss from operations                                  (829,719)              --

Investment Income                                        4,393            5,733
Forgiveness of Debt Income                              27,040            8,363
Acquisition Costs                                      (34,702)              --
Loss from Discontinued Operations                     (643,051)      (1,505,521)
Interest Expense                                      (434,807)        (238,939)
                                                   ------------     ------------
Loss before provision for income taxes              (1,910,846)      (1,730,364)
                                                   ------------     ------------

Provision for income taxes                                  --               --
                                                   ------------     ------------

Net Loss                                            (1,910,846)      (1,730,364)
                                                   ------------     ------------
Weighted average number of shares                   55,613,789        1,440,549

Loss per share from ordinary operations            $     (0.02)     $     (0.16)

Loss per share from discontinued operations        $     (0.01)     $     (1.04)

Net loss per share (Note 12)                       $     (0.03)     $     (1.20)
                                                   ============     ============

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

                                      F-5
<PAGE>
<TABLE>
<CAPTION>
                                                      GFY FOODS, INC.
                                 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                        FOR THE YEARS ENDED MARCH 31, 2004 and 2003


                               COMMON STOCK                PREFERRED STOCK          ADDITIONAL
                                                                                     PAID-IN      ACCUMULATED
                         SHARES         AMOUNT          SHARES          AMOUNT       CAPITAL        DEFICIT        TOTAL
                         ------         ------          ------          ------       -------        -------        -----
<S>     <C>
Balance at
  March 31, 2002       9,851,910    $     9,852             --             --        950,981       (813,640)   $   147,193

Value of Warrants
  issued in
  conjunction
  with notes
  payable                     --             --             --             --         86,559             --         86,559

Stock Issued in
  Private
  Placement               14,286             14             --             --             --          4,236          4,250

Stock sold under
  option
  agreements in
  quarter ended
  September 30,
  2002                   600,000            600             --             --           (600)            --             --

Stock Issued for
  Services
  from April 1,
  2002 through
  December 2,
  2002                 2,841,000          2,841             --             --        277,571             --        280,412

Preferred Stock
  issued in
  rescinded
  acquisition                 --             --      4,200,000      4,200,000     (4,200,000)            --             --

Preferred Stock
  cancelled
  upon rescission             --             --     (3,800,000)    (3,800,000)     3,800,000             --             --

Adjustment for
  300 to 1
  reverse stock
  split              (13,262,839)       (13,263)            --             --         13,263             --             --

Rounding for
  reverse stock
  split                      713              1             --             --             (1)            --             --

Stock subscription
  receivable          10,000,000         10,000             --             --             --             --         10,000

Stock issued for
  services from
  December 2002
  through
  March 31, 2003       1,369,400          1,369             --             --        159,406             --        160,775

Stock issued to
  officer in
  exchange for
  debt                 2,000,000          2,000             --             --         18,000             --         20,000

Stock issued in
  exchange for debt      360,000            360             --             --         62,640             --         63,000

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

                                                            F-6
<PAGE>

                                                      GFY FOODS, INC.
                                 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                        FOR THE YEARS ENDED MARCH 31, 2004 and 2003


                               COMMON STOCK                PREFERRED STOCK          ADDITIONAL
                                                                                     PAID-IN      ACCUMULATED
                         SHARES         AMOUNT          SHARES          AMOUNT       CAPITAL        DEFICIT        TOTAL
                         ------         ------          ------          ------       -------        -------        -----
Conversion of
  Preferred stock
  into common            600,000            600       (400,000)      (400,000)       399,400             --             --

Proceeds of Stock
  Subscription
  received            (2,110,000)            --             --             --        268,371             --        268,371
                       2,110,000             --             --             --         (2,110)            --         (2,110)

Net loss for period
  ended March 31, 2003        --             --             --             --             --     (1,730,364)    (1,730,364)
                     ------------   ------------   ------------   ------------   ------------   ------------   ------------

Balance at March
  31, 2003            14,374,470    $    14,374             --    $        --    $ 1,837,716    $(2,544,004)   $  (691,914)

Stock issued to
  retire options         500,000            500             --             --           (500)            --             --

Stock issued in
  exchange for debt  422,385,000        422,385             --             --        303,457             --        725,842

Stock issued for
  services in period
  ending March
  31, 2004         1,844,974,000      1,844,974             --             --      3,323,926             --      5,168,900

Stock issued to
  officer in
  exchange for debt    1,500,000          1,500             --             --        148,500             --        150,000

Proceeds of Stock
  Subscription
  received            (2,407,691)            --             --             --        505,466             --        505,466
                       2,407,691             --             --             --         (2,408)            --         (2,408)

Cancellation of
  remaining
  Regulation S
  Offering            (5,482,309)        (5,482)            --             --             --             --         (5,482)

Cancellation of
  stock                   (1,000)            (1)            --             --              1             --             --

Stock issued for
  Purchase Option         15,000             15             --             --          1,485             --          1,500

Value of conversion
  feature on debt
  issued                      --             --             --             --         90,686             --         90,686

Stock issued for
  acquisition of
  GFY, Inc.           20,000,000         20,000             --             --              1             --         20,001

Net loss for period
  ended March 31, 2004        --             --             --             --             --     (1,910,846)    (1,910,846)
                     ------------   ------------   ------------   ------------   ------------   ------------   ------------
Balance at
  March 31, 2004   2,298,265,161    $ 2,298,265             --    $        --    $ 6,208,330    $(4,454,850)   $ 4,051,745
                  ===============   ============   ============   ============   ============   ============   ============



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

                                                            F-7
</TABLE>

<PAGE>

                                GFY FOODS, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                  FOR THE YEARS ENDED MARCH 31, 2004 AND 2003


                                                     YEAR ENDED     YEAR ENDED
                                                      MARCH 31,      MARCH 31,
                                                        2004           2003
                                                    ------------   ------------

Cash flows from Operating Activities:
  Net loss                                           (1,910,846)    (1,730,364)

ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH
  PROVIDED BY OPERATING ACTIVITIES:

Depreciation and amortization                             2,912            584
Amortization of discounts on notes payable
   and deferred issuance costs                           94,713        135,143
Increase in receivables                                  (2,527)        13,465
Increase in prepaid expenses                         (4,965,037)       282,135
Deferred expenses                                         5,411         (4,990)
Increase in payables                                    683,607         74,829
Decrease in accrued expenses                            (30,462)        62,048
Items paid with common stock                          5,235,400        439,953
Interest paid with common stock                         252,736             --
Stock subscription receivable                                 0         43,486
Deposits                                                      0          6,757
Accrued interest paid with common stock                  18,714             --
                                                    ------------   ------------
  NET CASH USED IN OPERATING ACTIVITIES                (615,379)      (676,954)

CASH FLOWS FROM INVESTING ACTIVITIES:
Disposition of property and equipment                     3,150         23,374
Deposit on acquisition                                     (500)            --
Cash included in acquisition                              7,380             --
Acquisition costs                                        34,702             --
Payable on investments                                        0         10,000
Inventory                                                     0         23,795
Investment                                              (55,000)       (20,000)
                                                    ------------   ------------

  NET CASH PROVIDED BY INVESTING ACTIVITIES             (10,268)        37,169

CASH FLOWS FROM FINANCING ACTIVITIES:

Sale of common stock                                    505,466        272,621
Note repayment                                          (85,949)      (141,405)
Net proceeds from notes issued                          118,900        462,936
Payments on capital lease                                     0        (10,493)
Shareholder loans                                        46,946             --
Repayment of shareholder loans                          (11,516)       123,696
                                                    ------------   ------------

  NET CASH PROVIDED BY FINANCING ACTIVITIES             573,847        707,355
                                                    ------------   ------------

Net increase (decrease) in cash                         (51,800)        67,570

Cash, at beginning of period                             53,296        (14,274)
                                                    ------------   ------------

Cash, at end of period                                    1,496         53,296
                                                    ============   ============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Cash paid for interest                            $    10,084    $    19,899
  Cash paid for taxes                               $        --    $        --

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

                                       F-8
<PAGE>

                                 GFY FOODS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION

ORGANIZATION AND NATURE OF OPERATIONS

The Registrant was originally organized in the State of Utah on May 13, 1981,
under the name "Oro Rico, Ltd." ("Oro Rico"). On August 16, 1994, the Registrant
was merged into Tierra Rica, Ltd., a Nevada corporation organized on May 7th,
1993 ("Tierra Rica"), for the purpose of changing its domicile to the State of
Nevada. The surviving company was Tierra Rica and its Articles of Incorporation
are the same used by the Registrant today. On August 17, 1994, Petrex
Corporation was organized in the State of Utah and in September of 1994, Petrex
Corporation merged with Tierra Rica with Tierra Rica being the surviving
corporation. On October 24, 1994, the Registrant filed a Certificate of
Amendment with the Secretary of State of the State of Nevada, whereby it changed
its name to Petrex Corporation. In November of 1998, the Registrant amended its
Articles of Incorporation changing its name from Petrex Corporation to Institute
of Cosmetic Surgery, Inc. In July of 2000, the Registrant again amended its
Articles of Incorporation and changed its name back to Petrex Corporation.

In January of 2002, the Registrant effectuated a reverse twenty-for-one stock
split and merged with Force 10 Trading, Inc., a Nevada corporation ("Force 10"),
and issued a total of 6,400,000 shares of its $0.001 par value common stock to
the stockholders of Force 10. After the effective date of the merger, the
Registrant had 6,839,354 shares of common stock outstanding.

In November of 2002, the Registrant discontinued its business efforts in stock
trading offices and stock trading educational sales to pursue opportunities in
the oil and gas industry. On December 3, 2002, the Registrant changed its name
to "F10 Oil & Gas Properties, Inc." and effectuated a three hundred-for-one
reverse stock split. This left 45,070 shares outstanding.

In January of 2004, the Registrant acquired all of the outstanding stock of GFY,
Inc. The Registrant issued 20,000,000 shares of its common stock in
consideration for the acquisition. The Registrant discontinued its pursuit of
oil and gas opportunities in favor of owning and operating food and beverage
restaurants. On January 12, 2004, the Registrant changed its name to GFY Foods,
Inc. and increased is number of authorized shares of $0.001 par value common
stock from 75,000,000 to 2,000,000,000.

On March 22, 2004, the Registrant increased its number of authorized shares of
$0.001 par value common stock from 2,000,000,000 to 4,000,000,000.

On April 20, 2004, the Registrant amended its Articles of Incorporation to
increase its number of authorized shares of $0.001 par value common stock from
4,000,000,000 to 8,000,000,000.

On June 15, 2004, the Registrant authorized a reverse two hundred and
fifty-for-one split. This reverse stock split was effective on July 12, 2004 and
reduced the number of shares outstanding from 7,999,665,161 to approximately
31,998,661.

                                       F-9
<PAGE>

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accompanying financial statements have been prepared assuming that the
Registrant will continue as a going concern. The Registrant has incurred losses
from operations and requires funds for its operational activities. These factors
raise substantial doubt about the Registrant's ability to continue as a going
concern. Management is seeking financing through future collaborative
arrangements with third parties to meet its cash needs. There are no assurances
that funds will be available to execute the Registrant's operating plan or that
future collaborative arrangements will be consummated. The accompanying
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

From the period between March 1, 2003 and December 31, 2003, the Registrant was
involved pursuing financing as an oil and gas company. Upon the acquisition of
GFY, Inc. in January of 2004, the oil and gas pursuits were discontinued in
favor of operating and acquiring food and beverage restaurants. The oil and gas
activities for the period from April 1, 2003 through December 31, 2003 are
reported as discontinued operations in the Statement of Operations for the year
ended March 31, 2004. The oil and gas activities for the year ended March 31,
2003 have also been reclassified as discontinued operations in the financial
statements. From January 1, 2004 through March 31, 2004, the net profits
received from the oil and gas investments have been recorded as investment
income.

MANAGEMENT ESTIMATES

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

CASH AND CASH EQUIVALENTS

The Registrant considers all liquid investments with a remaining maturity of
three months or less to be cash equivalents. Balances in bank accounts may, from
time to time, exceed federally insured limits.

REVENUE RECOGNITION

The Registrant generates revenues from its oil and gas investments. Currently
the Registrant holds an investment in an oil and gas joint venture and the
revenues from this joint venture are recorded in the month that the oil and gas
is produced. This revenue is included as investment income. Oil and gas revenue
recorded prior to January 1, 2004 has been included in discontinued operations.
The Registrant records all revenues from the sale of food and beverages at its
restaurant at the time of sale. All revenues are from the direct sale of
products to customers at the point of sale.

PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost and are depreciated using the
straight-line method over the estimated useful lives of the related assets,
currently estimated at five years. Maintenance and repairs are charged to
expense as incurred. Significant renewals and betterments are capitalized. At
the time of retirement or other disposition of property and equipment, the cost
and accumulated depreciation are removed from the accounts and any resulting
gain or loss is reflected in operations.

The Registrant periodically reviews the value of its property and equipment for
impairment whenever events or changes in circumstances indicate that the book
value of an asset may not be recoverable. An impairment loss would be recognized
whenever the review demonstrates that the future undiscounted net cash flows
expected to be generated by an asset from its use and eventual deposition are
less than the carrying amount of the asset.

                                      F-10
<PAGE>

STOCK-BASED COMPENSATION

SFAS No. 123, "Accounting for Stock-Based Compensation," defines a fair value
based method of accounting for stock-based compensation. However, SFAS No. 123
allows an entity to continue to measure compensation cost related to stock and
stock options issued to employees using the intrinsic method of accounting
prescribed by Accounting Principles Board Opinion ("APB") No. 25, "Accounting
for Stock Issued to Employees." Entities electing to remain with the accounting
method of APB No. 25 must make pro forma disclosures of net income (loss) and
earnings (loss) per share, as if the fair value method of accounting defined in
SFAS No. 123 had been applied.

FISCAL YEAR-END

The Registrant has elected a March 31 year end for financial and income tax
reporting purposes.

ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Derivatives must be recognized in the balance sheet at their fair market value,
and the corresponding derivative gains or losses are either reported in the
statement of operations or as a component of other comprehensive income
depending on the type of hedge relationship that exists with respect to such
derivative. Currently, the Registrant has no derivatives.

PRINCIPALS OF CONSOLIDATION

The Registrant's wholly owned subsidiary, GFY, Inc, was acquired in January of
2004. All of the activities of GFY, Inc., after the date of acquisition, have
been consolidated in the financial statements. The retained deficit of GFY, Inc.
that existed on the date of the acquisition was expensed as a cost of
acquisition.

NET LOSS PER SHARE

Basic loss per share is computed by dividing net loss available to common
stockholders by the weighted average number of common shares outstanding during
the periods presented. No diluted loss per share amounts are disclosed, as their
effect is antidilutive.

On June 15, 2004, the Registrant approved a reverse stock split at a rate of 250
shares to 1. This reverse stock split is to take effect on or about July 12,
2004. If this reverse stock split were to have taken effect on March 31, 2004,
the weighted average number of shares outstanding would have been 222,455. The
loss per share would have been $8.59 per share.

FRANCHISE FEE

The Registrant acquired the rights to a franchise at a value of $30,000. The
cost is being amortized over a period of 109 months, which is the remaining term
of the franchise agreement.

NOTE 3 - PROPERTY AND EQUIPMENT

Property and equipment consist of the following as of March 31, 2004:

Food service equipment                      $ 36,970
Less accumulated depreciation                 (7,394)
                                            ---------

                                            $ 29,576
                                            =========


                                      F-11
<PAGE>

NOTE 4 - NOTES PAYABLE

The Registrant and its subsidiary have issued promissory notes to third parties.
As of March 31, 2004, the principal balance of these notes totals $449,582. Of
these notes, $118,900 in new notes was entered into from January 2004 through
March 31, 2004. All of these newly issued notes a fully convertible into common
stock at a discount to the market price of the stock. The notes entered into
before January of 2004 may also be converted into common stock at the option of
the holder. The notes bear interest at rates between 10-25% per annum and have
terms between 60 and 360 days from the date of issuance. Some of the notes
issued prior to March 31, 2003 were initially issued with a detachable stock
purchase warrant. Since the effectuation of the 300:1 reverse stock split in
December of 2002, these warrants have been left worthless.

As of March 31, 2004, notes with a total principal amount of $286,008 and
accrued interest of $35,888 were overdue and payable. The Registrant is
negotiating a settlement on some of these notes and contemplates paying off the
note balances through the issuance of restricted common stock. The Registrant
successfully negotiated the payment of $155,000 worth of notes by issuing common
stock from January 2004 through March 31, 2004.

An aggregate value of $110,329 was assigned to the convertibility feature of the
new notes entered into between January 2004 and March 31, 2004. This value was
recorded as a discount to the notes and is being amortized and expensed as
interest over the life of the note.

The long-term debt of $13,800 shown on the balance sheet as of March 31, 2004 is
all due and payable in the fiscal year ended March 31, 2006.

On April 3, 2003, in conjunction with the acquisition of the Frulatti franchise,
GFY, Inc., the wholly owned subsidiary of the Registrant, entered into a
Promissory Note in the amount of $70,000 with the seller of the franchise. The
note called for monthly payments of $1,166 and a balloon payment of $28,000 on
December 5, 2003. GFY, Inc. failed to make the balloon payment and as a result
the complete note is now due and payable. As of March 31, 2004, the principal
balance due on this note was $57,174. As per the terms of the Promissory Note,
upon default, an interest rate of 18% is applied to the balance of the note. The
Registrant is continuing to make monthly payments on this note. The note is
secured by the inventory and equipment at the restaurant.

As of March 31, 2004, the Registrant owes its President $37,010. This amount is
for expenses paid directly on behalf of the Registrant and for accrued salary.
The Registrant still owes former officers $58,837.

NOTE 5 - LEASES AND COMMITMENTS:

On March 15, 2004, the Registrant signed a lease agreement for its site for a
term of eight years and two months. The lease payment from April 1, 2004 through
May 31, 2008 is $400 per month and for the remainder of the term is $450 per
month. The lease expires on May 31, 2013.

Future annual minimum lease payments for all non-cancelable operating leases as
of December 31, 2003, are as follows:

                                    Operating
                                      Lease
     Year ending March 31,           ------
            2005                     4,800
            2006                     4,800
            2007                     4,800
            2008                     4,800
            2009                     5,300
            2010 and beyond         22,500
                                    -------
Total lease payments under
  Operating lease                  $47,000
                                   ========

                                      F-12
<PAGE>

Rent expense was $670 and $16,378 for the years ended March 31, 2004 and March
31, 2003, respectively.

NOTE 6 - STOCKHOLDERS' EQUITY

On January 12, 2004, the Registrant issued 20,000,000 shares in consideration of
the acquisition of GFY, Inc. These shares were issued to Edward Schwalb, the
sole shareholder of GFY, Inc. and now the President of the Registrant.

NOTE 7 - INCOME TAXES:

The components of the provision for income taxes at March 31, 2004 are as
follows:

     Current- Federal                       $          0
     Deferred- Federal                                 0
                                            -------------
     Income tax provision                   $          0
                                            =============

A reconciliation of the consolidated income tax provision for the Company and to
the amount expected using the U.S. Federal statutory rate follows:

     Expected amount using
     U.S. Federal statutory rate            $   (649,688)
     Change in valuation
       allowance                                 649,688
                                            -------------
     Effective tax                          $          0
                                            =============

Deferred tax assets (liabilities) consisted of the following at March 31, 2004.

     Deferred tax assets

     Net operating loss
       carryforwards                        $  1,038,000
     Deferred tax liability                            0
                                            -------------
                                               1,038,000

     Valuation allowance                      (1,038,000)
                                            -------------

     Net asset                              $          0
                                            =============

At March 31, 2004, the Company has net operating loss (NOL) carryforwards
totaling approximately $3.054 million. The carryforwards begin to expire in the
fiscal year 2017. Deferred tax assets have been reduced by a valuation allowance
because of uncertainties as to future recognition of taxable income to assure
realization. The net change in the valuation allowance for the year ended March
31, 2004 was $649,688.

NOTE 8 - PREPAID EXPENSES/OTHER PAYABLES

The Registrant has entered into several consulting agreements with various
individuals and entities. Some of these consulting fees have been paid. The
Registrant has recorded these agreements as a liability to the extent that the
obligation remained unpaid as of March 31, 2004. The total value of the

                                      F-13
<PAGE>

agreements was recorded as a prepaid expense at their gross value at the time
the agreements were entered into and this value has been amortized over the term
of the agreement. Some payments under the agreements have been made, primarily
through the issuance of shares of common stock of the Registrant. The payable
associated with these consulting agreements at March 31, 2004 was $702,500. The
prepaid expenses are summarized below:

Prepaid Expense Type   Current          Long-term         Unpaid liability
--------------------   -------          ---------         ----------------

Interest            $    3,422          $      835          $        0
Salary                 704,000           2,677,129                   0
Consulting           1,749,067                   0             642,500
Legal                  125,000                   0              60,000
                    -----------         -----------         -----------
                    $2,581,489          $2,677,964          $  702,500
                    ===========         ===========         ===========

The total amounts of prepaid consulting fees, as of March 31, 2004 was
$1,749,067. All of these prepaid expenses will be amortized over the fiscal year
ended March 31, 2005.

NOTE 9 - EMPLOYMENT AGREEMENT WITH COMPANY PRESIDENT

On January 16, 2004, the Registrant entered into an employment agreement with
its President, Edward Schwalb. This agreement was amended on May 5, 2004. Under
the terms of the agreement, as amended, GFY is to pay Mr. Schwalb a monthly
salary of $25,000. Mr. Schwalb is also due a bonus of $70,000 for each
acquisition that he initiates and the Registrant closes on during the term of
the employment agreement. Further, the agreement states that Mr. Schwalb shall
maintain an ownership position in GFY of no less than 70% of the outstanding
shares of common stock. As a result of this clause, in the fiscal year ended
March 31, 2004 GFY issued to Mr. Schwalb a total of 1,270,000,000 shares of its
restricted common stock. This stock was valued at $3,520,000 and is being
amortized over the 60-month term of the employment agreement. As of March 31,
2004, $138,871 of this amount was included in officer's salary and $3,381,129
has been included in prepaid expenses, $704,000 of this prepaid expense is
recorded as a current prepaid expense and $2,677,129 is included in the
long-term portion of prepaid expenses.

As of August 3, 2004, Mr. Schwalb owned 165,170,004 shares out of 215,999,537
post-reverse split shares outstanding, or 76.5% of the outstanding common stock.
The term of this employment agreement is for five years ending on December 31,
2008.

NOTE 10 - COMPLAINT OF THE SECURITIES AND EXCHANGE COMMISSION AND FROZEN CASH

On October 16, 2003, the Securities and Exchange Commission through its Salt
Lake City, Utah, office filed a complaint in the United States District Court
for the District of Utah against 21 defendants including F10 Oil & Gas
Properties, Inc., Jon H. Marple, the former Chief Executive Officer of F10, Mary
E. Blake, the former President of F10, Jon R. Marple, a consultant to F10 and
Grateful Internet Associates, LLC, a Colorado limited liability company owed by
Jon R. Marple. The complaint alleges that overseas investors were defrauded by a
scheme organized by defendants David Wolfson, Gino Carlucci and Sukumo Ltd. to
sell securities in five United States-based issuers including F10. F10, with its
former officers Jon H. Marple and Mary E. Blake, are alleged to have made false
or incomplete filings with the SEC and to have manipulated the price of F10's
securities in violation of the antifraud provisions of Section 17(a) of the
Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and
Rule 10b-5 promulgated thereunder, the issuer reporting provision of Section
13(a) of the Exchange Act, and Rules 12b-20, 13a-1 and 13a-13 promulgated under
the Exchange Act.

The complaint seeks the entry of a preliminary and permanent injunction against
all defendants including F10 and its former officers, Jon H. Marple and Mary E.
Blake, including the return of "ill gotten" gains, and seeks asset freezes
against 16 of the defendants including F10 and its former officers.

GFY's bank account with a balance of $60,102 is currently frozen. This amount
has been reserved against on the balance sheet as of March 31, 2004 and is no
longer considered a Company asset.

                                      F-14
<PAGE>

The Registrant may have significant financial exposure to this action. No
adjustments as to the potential financial disgorgement or civil penalties that
may be imposed in this action have been recorded in the financial statements.

NOTE 11 - STOCK OPTION PLAN

On January 20, 2004, GFY registered 750,000,000 shares of its common stock to be
issued under its 2004 Benefit Plan. This plan was amended in April of 2004 for
the registration of an additional 1,000,000,000 shares. As of March 31, 2004,
499,800,000 shares had been issued under this plan and an additional 250,200,000
shares were still available for issuance under this plan.

NOTE 12 - SUBSEQUENT EVENTS:

On April 20, 2004, the Registrant amended its Articles of Incorporation to
increase its number of authorized shares of $0.001 par value common stock from
4,000,000,000 to 8,000,000,000.

On June 15, 2004, the Registrant approved a reverse stock split at a rate of 250
shares to 1. This reverse stock split is to take effect on or about July 12,
2004. If this reverse stock split were to have taken effect on March 31, 2004,
the total number of shares outstanding would have been 222,455. The loss per
share would have been $8.59 per share.

Under the terms of the employment agreement that GFY entered into with its
President, Edward Schwalb, Mr. Schwalb shall maintain an ownership position in
GFY of no less than 70% of the outstanding shares of common stock. As a result
of this clause, GFY issued to Mr. Schwalb 2,500,000,000 shares in May of 2004.
As a result of this stock issuance, Mr. Schwalb owned 165,170,004 shares out of
215,999,537 post-reverse split shares outstanding, or 76.5% of the outstanding
common stock.

The Registrant amended its benefit plan in April of 2004 to increase the number
of shares authorized to be issued under this plan from 750,000,000 to
1,750,000,000.

From April through June of 2004, the Registrant settled note balances with two
note holders. The notes settled had principal balances of $110,000. The
Registrant issued 795,000,000 shares of its restricted common stock to settle
these notes.

In April of 2004, the Registrant completed an acquisition of a second Frullati
franchise in Elkhart, Indiana. The acquisition was considered closed on May 1,
2004. Under the terms of the acquisition, the Registrant is to pay a sum of
Thirty-five thousand dollars ($35,000) payable as twenty thousand dollars
($20,000) in cash over a four-month term with the balance due through the
issuance of fifteen thousand dollars ($15,000) worth of shares of restricted
common stock. The first payment of the cash portion of the purchase price was
due and payable on April 15, 2004. The Registrant has issued 6,000,000 shares of
its restricted common stock as part of its obligation under the agreement, but
has yet to make any of the requisite cash payments.

In May of 2004, the Registrant entered into an agreement to acquire a third
Frullati franchise in Willowbrook, Illinois.

NOTE 13 - CORRECTION OF ERRORS

The Registrant originally recorded a consulting agreement between its President
and a consultant as an obligation of the Registrant. The agreement has been
cancelled and should not have been recorded as an obligation of the Registrant.
The Registrant originally recorded net prepaid expense of $3,958,333, consulting
expense of $976,267 and an accrued expense of $4,934,600. The Registrant has
corrected the errors by removing the prepaid expense, consulting expense and
accrued expense from its accounting records in the amounts listed above.

                                      F-15
<PAGE>

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
-------  FINANCIAL DISCLOSURES

None.


ITEM 8A. CONTROLS AND PROCEDURES.
--------

The Chief Executive Officer and the Chief Financial Officer have within 90 days
of the filing date of this annual report made an evaluation of the company's
disclosure controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c)
under the Securities Act of 1934, as amended). In his opinion, the disclosure
controls and procedures are adequate because the systems of controls and
procedures are designed to assure, among other items, that 1) recorded
transactions are valid; 2) valid transactions are recorded; and 3) transactions
are recorded in the proper period in a timely manner to produce financial
statements which present fairly the financial condition, results of operations
and cash flows for the respective periods being presented. The primary weakness
in GFY's disclosure controls and procedures is the fact that the CEO and CFO has
no accounting or financial experience. Nonetheless, GFY has hired outside
accountants, attorneys and consultants to assist in minimizing the effect of
this weakness.

There have been no significant changes in GFY's internal controls. However, in
light of the fact that GFY originally recorded a consulting agreement between
its President and a consultant as an obligation of GFY, when the agreement
should not have been recorded as an obligation of GFY, GFY is evaluating how to
improve its controls and procedures, which may include hiring an experienced
chief financial officer to avoid such errors in the future.

GFY originally recorded net prepaid expense of $3,958,333, consulting expense of
$976,267 and an accrued expense of $4,934,600. GFY has corrected the errors by
removing the prepaid expense, consulting expense and accrued expense from its
accounting records in the amounts listed above.

Due to the Certifying Officer's dual role as chief executive officer and chief
financial officer, the Company has no segregation of duties related to internal
controls.


                                    PART III.

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

Officers and Directors.

The names, ages, and respective positions of the directors, executive officers,
and key employees of GFY are set forth below; there are no other promoters or
control persons of GFY. The directors named below will serve until the next
annual meeting of GFY's stockholders or until their successors are duly elected

                                       25
<PAGE>

and have qualified. Directors are elected for a one-year term at the annual
stockholders' meeting. It should be noted that the Company has not held an
annual meeting within the past two or more years and no annual meeting is
presently scheduled. Officers will hold their positions at the will of the board
of directors, absent any employment agreement. There are no arrangements,
agreements or understandings between non-management shareholders and management
under which non-management shareholders may directly or indirectly participate
in or influence the management of GFY's affairs. Within the past five years,
Edward E. Schwalb, the sole director and executive officer of GFY has not been a
party to any material pending legal proceedings and, to the best of his
knowledge, no such action by or against him has been threatened.

                                    POSITION                   DATES
NAME                     AGE        WITH COMPANY               OF SERVICE
----                     ---        ------------               ----------

Edward E. Schwalb        35         President, Secretary,      1/04 to present
                                    Treasurer & Director

Edward E. Schwalb, President/Director

Mr. Schwalb, age 35, has spent the past 19 years involved in every aspect of the
restaurant industry. During the past five years he has primarily been a
restaurant manager and owner/operator. Mr. Schwalb graduated with a degree in
Psychology from Loyola University in Chicago in 1992. His restaurant experience
in combination with his study of personal behavior has given him a strong base
to manage employees and implement profitable growth strategies. In April 2003,
he and his wife jointly formed GFY, Inc. They acquired a Frullati Cafe and
Bakery franchise in Buffalo Grove, Illinois and increased the sales six-fold in
their first three months of ownership. After the acquisition of GFY, Inc. by the
Registrant, Mr. Schwalb has engineered the acquisition of two additional
Frullati franchises. Mr. Schwalb was appointed to the Board and elected as the
President of the Registrant on January 12, 2004. He remains the sole officer and
director of the Registrant.

Code of Ethics

The Company has adopted a code of ethics that applies to the Company's chief
executive officer, chief financial officer, principal accounting officer and
controller, or persons performing similar functions. The "Code of Ethics" is
attached hereto as Exhibit 14. The Code of Ethics is being designed with the
intent to deter wrongdoing, and to promote the following: 1. Honest and ethical
conduct, including the ethical handling of actual or apparent conflicts of
interest between personal and professional relationships. 2. Full, fair,
accurate, timely and understandable disclosure in reports and documents that a
small business issuer files with, or submits to, the Securities and Exchange
Commission and in other public communications made by the Company. 3. Compliance
with applicable governmental laws, rules and regulations. 4. The prompt internal
reporting of violations of the Code of Ethics to an appropriate person or
persons identified in the code. 5. Accountability for adherence to the Code of
Ethics.

                                       26
<PAGE>

SECTION 16(a) - Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires GFY's executive
officers and directors, and persons who beneficially own more than 10% of GFY's
stock, to file initial reports of ownership and reports of changes in ownership
with the Securities and Exchange Commission. Executive officers, directors and
greater than 10% beneficial owners are required by applicable regulations to
furnish GFY with copies of all Section 16(a) forms they file.

Based solely upon a review of the copies of the forms furnished to GFY and
information involving securities transactions of which GFY is aware, GFY
believes that during the fiscal year ending March 31, 2004, that it has advised
the appropriate parties and entities of the compliance with all Section 16(a)
filing requirements applicable to its executive officers, directors and greater
than 10% beneficial stockholders. For the year ended March 31, 2004, GFY is
aware of one individual, Edward E. Schwalb, who failed to timely file reports
under Section 16(a).

Mr. Schwalb failed to timely file form 3 following his receipt of 20,000,000
shares of the Company's common stock pursuant to the Company's January 12, 2004
acquisition of GFY, Inc. Mr. Schwalb filed Form 3 late on April 9, 2004. During
the fiscal year ended March 31, 2004, Edward Schwalb was involved in 19
transactions involving the acquisition or sale of shares of GFY Foods, Inc. None
of these transactions was reported on Form 3 or Form 4 on a timely basis.

Mr. Schwalb made late filings on Form 4 on April 9, 2004, May 7, 2004, July 6,
2004, and July 22, 2004.

The Form 4 filings of Edward E. Schwalb disclose numerous sales of shares of GFY
by Mr. Schwalb. While Mr. Schwalb believes that such sales are allowed due to
the registration of the shares pursuant to a current S-8 Registration Statement
being on file with the Securities and Exchange Commission. Mr. Schwalb has been
advised that if such is not the case, a claim might arise that such sales were
in violation of Federal Securities Laws or the Rules and Regulations adopted
pursuant thereto.

The Registrant believes that Mr. Schwalb has currently made all required filings
required under Section 16(a), although his filings to date have all been
delinquent.

ITEM 10. EXECUTIVE COMPENSATION.
--------

         Except as set forth below, no compensation in excess of $100,000 was
         awarded to, earned by, or paid to any executive officer of the Company
         during the years 2003, 2002, and 2001. The following table and the
         accompanying notes provide summary information for each of the last
         three fiscal years concerning cash and non-cash compensation paid or
         accrued by current and former Presidents and Chief Executive Officers.

                                       27
<PAGE>
<TABLE>
                                                   Summary Compensation Table
<CAPTION>

                                         Annual Compensation                                     Long-term Compensation

    Name and           Fiscal                                Other         Restricted       Securities                  All
    principal          Year                                  annual          stock          underlying     LTIP        other
    position           Ended          Salary       Bonus  compensation       awards        options/SARs   payouts   compensation
       (a)              (b)            (c)          (d)        (e)             (f)             (g)          (h)         (i)
<S>                   <C>           <C>              <C>        <C>        <C>             <C>               <C>         <C>
Edward Schwalb,       3/31/2004      62,500 (1)      0          0          138,871 (2)          0            0           0
President & Director

Michael Meservy,      3/31/2004       7,500          0          0                0              0            0           0
Former President

Charles Blake         3/31/2004       4,500          0          0                0              0            0           0
Former President

Jon H. Marple,        3/31/2004      60,000 (3)      0          0                0              0            0           0
Former CEO            3/31/2003     120,000 (3)      0          0                0              0            0           0
                      3/31/2002      86,000 (4)      0          0                0         36,667 (5)        0           0

Mary E. Blake,        3/31/2004      60,000 (3)      0          0                0              0            0           0
Former President      3/31/2003     120,000 (3)      0          0                0              0            0           0
                      3/31/2002      30,000          0          0                0         36,667 (5)        0           0
</TABLE>
-------------------
(1)      Includes $11,350 of compensation accrued and not paid as of March 31,
         2004.
(2)      On January 16, 2004, Edward Schwalb entered into an employment
         agreement with GFY, which included a clause to ensure that Mr. Schwalb
         maintained an ownership percentage in GFY of 70%. As a result of this
         clause, GFY issued to Mr. Schwalb a total of 1,270,000,000 shares of
         its restricted common stock. This stock was valued at $3,520,000 and is
         being amortized over the 60-month term of the employment agreement. The
         amount shown above represents the amortization of this value through
         March 31, 2004. In May of 2004, an additional 2,500,000,000 shares were
         issued to Mr. Schwalb. This stock was valued at par value of $2.5m and
         will be amortized over the remainder of Mr. Schwalb's employment
         contract.
(3)      Jon H. Marple and Mary E. Blake, husband and wife, have accrued and
         unpaid salaries of $24,509 as of March 31, 2004. Ms. Blake received
         1,500,000 shares of restricted stock in lieu of back pay of $150,000
         due to her and Mr. Marple in June of 2003.
(4)      Includes $25,990 of compensation that was not paid and was treated as a
         contribution to capital of F10.

                                       28
<PAGE>

(5)      Both Mr. Marple and Ms. Blake received 1,000,000 options at a price of
         $.25 per share as part of their employment contracts dated January 1,
         2002. After the effect of the three hundred for one reverse split on
         December 2, 2002, these options were adjusted to purchase 3,334 shares
         of new common stock at a price of $75.00 per share, and became
         virtually worthless and were cancelled. 1/3 of these options, or 1,111
         reverse split adjusted optons , vested on June 30, 2002. The value of
         the options, which vested on June 30, 2002, was calculated at the
         current value of the stock at March 31, 2002 of $0.36 less the option
         price of $0.25. After the reverse stock split effectuated by F10 in
         December of 2002, the outstanding options were cancelled.

Employment Agreements.

On January 16, 2004, the Registrant entered into an employment agreement with
its President, Edward Schwalb. This agreement was amended on May 5, 2004. Under
the terms of the agreement, as amended, GFY is to pay Mr. Schwalb a monthly
salary of $25,000. Mr. Schwalb is also due a bonus of $70,000 for each
acquisition that he initiates and the Registrant closes on during the term of
the employment agreement. Further, the agreement states that Mr. Schwalb shall
maintain an ownership position in GFY of no less than 70% of the outstanding
shares of common stock. As a result of this clause, in the fiscal year ended
March 31, 2004 GFY issued to Mr. Schwalb a total of 1,270,000,000 shares of its
restricted common stock. This stock was valued at $3,520,000 and is being
amortized over the 60-month term of the employment agreement. As of March 31,
2004, $138,871 of this amount was included in officer's salary and $3,381,129
has been included in prepaid expenses, $704,000 of this prepaid expense is
recorded as a current prepaid expense and $2,677,129 is included in the
long-term portion of prepaid expenses.

As of August 3, 2004, Mr. Schwalb owned 165,170,004 shares out of 215,999,537
post-reverse split shares outstanding, or 76.5% of the outstanding common stock.
The term of this employment agreement is for five years ending on December 31,
2008.

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

The following table sets forth certain information regarding the beneficial
ownership of GFY's common stock by each person or group that is known by GFY to
be the beneficial owner of more than five percent of its outstanding common
stock, each director and officer of GFY and all directors and executive officers
of GFY as a group as of August 10, 2004 after accounting for a two hundred and
fifty to one reverse stock split that was effective on July 12, 2004. Unless
otherwise indicated, GFY believes that the person named in the table below,
based on information furnished by such owner, has sole voting and investment
power with respect to the common stock beneficially owned by him, where
applicable.

                                       29
<PAGE>

Title of        Name and Address of            Amount and Nature        Percent
 Class            Beneficial Owner          of Beneficial Ownership    of Class

Common          Edward E. Schwalb                 165,170,004           76.47%
                497 LaSalle Lane
                Buffalo Grove, IL 60089

All Directors and Officers as a Group             165,170,004           76.47%
(1 Person)

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
--------

On December 15, 2003, GFY, Inc. entered into a note agreement in the amount of
$5,000 with Eric Schwalb, the brother of the President and sole director of the
Registrant. The note carried an interest rate of 15% and was due and payable on
February 15, 2004. The note, including accrued interest, is convertible into
common stock of the Registrant at a 50% discount to the bid price at the date of
conversion. As of the date of this filing, the note has not been paid and is
delinquent. Discussions regarding the conversion of the note to stock as payment
for the debt are ongoing between Edward Schwalb and the Company.

On January 9, 2004, GFY, Inc. entered into a note agreement in the amount of
$2,500 with Manuel Rosiles, the father-in-law of the President and sole director
of the Registrant. The note carries an interest rate of 15% and is due and
payable on January 9, 2005. The note, including accrued interest, is convertible
into common stock of the Registrant at a 50% discount to the bid price at the
date of conversion.

Upon the acquisition of GFY, Inc., the Registrant acquired, as part of the GFY,
Inc. assets and liabilities, a note payable to Edward Schwalb in the amount of
$48,526. This amount was attributable to expenses paid, including acquisition
costs, of the Frullati Cafe and Bakery franchise owned by GFY, Inc. As of March
31, 2004, GFY owed a balance of $37,460 on this loan.

                                       30
<PAGE>

                                     PART IV

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

(a)      EXHIBITS

(3)(i)   Articles of Incorporation and amendments thereto. (1)
(3)(ii)  By-laws. (1)
(10.1)   Agreement and Plan of Reorganization by and among F10 Oil & Gas
         Properties, Inc., a Nevada corporation, and GFY, Inc., an Illinois
         corporation, dated as of January 12, 2004. (2)
(10.2)   Escrow Agreement by and among F10 Trading, Inc., Petrex Corporation and
         Weed & Co., L.P. (3)
(10.3)   Employment Agreement by and between GFY Foods, Inc. and Edward Schwalb
         dated January 16, 2004 and the Amendment thereto dated May 5, 2004 (4)
(10.4)   Franchise Agreement between Kalaha Franchise Corp. and GFY, Inc.
(10.5)   Agreement between GFY Foods, Inc. and Jorge Castro, Consultant dated
         January 28, 2004
(10.6)   Consulting Agreement between GFY Foods, Inc. and Sunil Aghi dated
         January 16, 2004
(10.7)   Consulting Agreement between GFY Foods, Inc. and White Rhino
         Consulting, Inc. dated January 12, 2004
(10.8)   Consulting Agreement between GFY Foods, Inc. and Lee Traupel dated
         January 28, 2004
(10.9)   Consulting Agreement between GFY Foods, Inc. and Martin Wozniak dated
         February 25, 2004
14       CODE OF ETHICS FOR SENIOR FINANCIAL OFFICERS
31.1     CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of
         2002
31.2     CFO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of
         2002
32.1     CEO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of
         2002
32.2     CFO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of
         2002

---------------
   (1)   Previously filed as an exhibit to the company's Form 10-SB and
         amendments thereto, filed July 31, 2001 (File No. 000-33029) and
         incorporated herein by reference.
   (2)   Previously filed as an exhibit to the Registrant's filing of a Form 8-K
         (File No. 000-33029) and incorporated herein by reference.
   (3)   Previously filed with the Registrant's filing of a Form 8-K on November
         7, 2001 (File No. 000-33029) and incorporated herein by reference.
   (4)   Previously filed with the Registrant's filing of a Form 8-K on May 5,
         2004 (File No. 000-33029) and incorporated herein by reference.

                                       31
<PAGE>

(b)      REPORTS ON FORM 8-K

         On January 14, 2004, an 8-K was filed disclosing the acquisition of
         GFY, Inc. The Registrant also disclosed its name change to GFY Foods,
         Inc. and that it had increased its number of authorized shares of
         common stock from 75 million to 2 billion.

         On March 30, 2004, an 8-K was filed disclosing that the Registrant had
         increased its number of authorized shares from 2 billion to 4 billion.
         The Registrant also disclosed the issuance of one billion shares of
         common stock to Edward Schwalb, the President of GFY, under the terms
         of his employment agreement.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
--------

AUDIT FEES

The aggregate fees billed by our auditors for the fiscal years ended March 31,
2004 and 2003 for professional services rendered in connection with the audit of
our annual consolidated financial statements and review of the financial
statements included in our Form 10-QSB or services that are normally provided by
the auditor in connection with statutory and regulatory filings or engagements
for those fiscal years were $14,775 and $14,050 respectively. Additional fees
are yet to be billed for the audit for the year ended March 31, 2004.

AUDIT-RELATED FEES

Our auditors did not bill any additional fees for assurance and related services
that are reasonably related to the performance of the audit or review of our
financial statements.

TAX FEES

The aggregate fees billed by our auditors for professional services for tax
compliance, tax advice, and tax planning were $0 and $0 for the fiscal years
ended March 31, 2004 and 2003.

ALL OTHER FEES

The aggregate fees billed by our auditors for all other non-audit services, such
as attending meetings and other miscellaneous financial consulting, for the
fiscal years ended March 31, 2004 and 2003 were $0 and $0 respectively.

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<PAGE>

                                   SIGNATURES

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

                                             GFY Foods, Inc.


                                             By: /S/ EDWARD E. SCHWALB
                                                 ---------------------
                                             Name: EDWARD E. SCHWALB
                                             TITLE: PRESIDENT

                                             DATE: AUGUST 23, 2004


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

Name                                     Title                              Date
----                                     -----                              ----

/s/ EDWARD E. SCHWALB        President, and Sole Director       August 23, 2004
Edward E. Schwalb            (CEO and CFO)


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