U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

For the Fiscal Year Ended:                               Commission File Number:
   December 31, 2003                                             000-30554


                                FUTURE CARZ, INC.
           (Name of Small Business Issuer As Specified In Its Charter)

          Nevada                                                  88-0413029
(State or Other Jurisdiction of                                (I.R.S. Employer
Incorporation or Organization)                               Identification No.)

                            717 Union Street, Suite K
                              San Diego, CA, 92101
                    (Address of Principal Executive Offices)


                                 (619) 696-3690
                Issuer's telephone number, including area code:


                 8930 E Raintree, Ste. 300, Scottsdale, AZ 85260
                                (Former Address)

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

        Securities registered pursuant to Section 12(g) of the Act:
   Units consisting of one Share of Common Stock and one Warrant to purchase
                          Common Stock (Title of Class)

Indicate by check mark whether the Issuer (1) has filed all reports required to
be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-B is not contained in this Form, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ ]

Issuer's revenue for the most recent fiscal year: $84,073

The aggregate market value of the voting stock held by nonaffiliates of the
Issuer: $3,081,414 as of December 31, 2003.

The number of shares outstanding of each of the Issuer's class of common stock,
as of the close of the period covered by this report: Common Stock, $0.001 par
value 52,856,900 shares outstanding at December 31, 2003:

                   Documents Incorporated by Reference: None.
<PAGE>
                                TABLE OF CONTENTS


                                     PART I

Item 1.  Description of Business                                           1

Item 2.  Description of Property                                           4

Item 3.  Legal Proceedings                                                 4

Item 4.  Submission of Matters to a Vote of Security Holders               5


PART II

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

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

Item 7.  Financial Statements                                              9

Item 8.  Changes In and Disagreements with Accountants on Accounting
         and Financial Disclosure                                          9

Item 8A.  Controls and Procedures                                         10


PART III

Item 9.  Directors, Executive Officers, Promoters and Control
         Persons; Compliance with Section 16(a) of the Exchange Act       10

Item 10. Executive Compensation                                           11

Item 11. Security Ownership of Certain Beneficial Owners and
         Management and Related Stockholder Matters                       12

Item 12. Certain Relationships and Related Transactions                   13

Item 13. Exhibits and Reports on Form 8-K                                 14

Item 14. Principal Accountant Fees and Services                           14
<PAGE>

                                     PART I

                                ITEM 1. BUSINESS

BUSINESS DEVELOPMENT AND SUMMARY

Business Development, Organization and Acquisition Activities

     Future Carz, Inc. ("Future Carz" or the "Company") was organized by the
filing of articles of incorporation with the Secretary of State of the State of
Nevada on July 13, 1999, under the name Future Carz.com, Inc. Subsequently, on
February 5, 2001, the Company filed an amendment to its articles of
incorporation, whereby it changed its name to Future Carz, Inc. The Company has
never been the subject of any bankruptcy or receivership action.

     On October 28, 2002, the Company executed a stock purchase agreement with
The Jack Watters Group (the "Group"). In accordance with the Agreement, the
Company exchanged an aggregate of 43,290,934 newly issued shares of the
Company's shares of common stock. In consideration for the purchased shares, the
Group paid to FCRZ an aggregate of $432,909 consisting of cash and assumed
accounts payable, and which the Company acknowledged as fair, just and
reasonable compensation. The shares exchanged in this transaction were
considered restricted securities, as that term is defined in Paragraph (a)(3) of
Rule 144, under the Securities Act of 1933, as amended (the "Securities Act").

     There has been no other material reclassification, merger, consolidation,
or purchase or sale of a significant amount of assets outside the ordinary
course of business.

BUSINESS OF THE ISSUER

Principal Services and Principal Markets

     Future Carz, Inc. was founded to capitalize on two significant emerging
trends transforming the automobile financing market: a dramatic rise in the
number of sub-prime consumers and a marked increase in used car leasing.
Sub-prime consumers are individuals with limited credit histories, low incomes,
or past credit issues that prevent them from accessing traditional (conforming)
financing. This group now accounts for roughly 45% of the credit population
nationwide. Through a predecessor company, Future Carz management identified a
unique opportunity for high-yield profits with comparatively low exposure to
risk in the sub-prime segment of the automobile financing market. The innovation
behind the opportunity was an unconventional approach to leasing rather than
selling used vehicles.

     Future Carz dealerships provide consistent quality late model used cars to
consumers in the sub-prime credit category. Customers can expect a reliable,
reconditioned vehicle for a relatively low acquisition fee and low monthly costs
with flexible terms. Importantly, it also offers the opportunity for consumers
from all walks of life to re-establish their credit worthiness.

     The reasons for consumers' distressed credit are as varied as the people
who buy cars. A previous bankruptcy, change in marital status, new employment or
change in living situation can all leave an otherwise credit-worthy individual
without the means to meet consumer lending guidelines.

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     Future Carz' service offering is designed to meet the needs of the growing
sub-prime credit sector seeking quality used automobiles. Future Carz, Inc.
offers an attractive alternative to buying a used car or leasing a new one. The
concept is to provide closed-end leases on used vehicles in a format that is
acceptable to the sub-prime consumer, yet reduces risk of default for the
company.

     The Future Carz leasing system incorporates both new and used cars. Lessees
have an option to take out a warranty for $10 a week, which covers the vehicle's
major components. The lease requires the lessee to return the vehicle to an
approved service location for a checkup every three months. The general lease
offering includes an acquisition fee of $500, a credit check fee of $20 both in
cash with an average weekly payment of $60. These payments are due each Friday
without fail. If the lessee fails to make the payment on Friday, the lessee will
receive a phone call on Saturday. If no response occurs prior to Monday, a
collection agency is contacted and takes a more aggressive approach to receive
payment or, as a last resort, the vehicle. The leased vehicle title remains in
Future Carz' name during the entire period it is provided to a customer. The
lessee is required to maintain liability, comprehensive and collision insurance
on the vehicle with no more than a $500 deductible naming the Company as the
loss payee.

     Customers view the opportunity to drive a quality vehicle as a luxury and
in many cases; Future Carz may be their last resort to obtain reliable
transportation. The added benefit of building good credit is an unexpected
bonus. For this reason, the company commands a sense of loyalty with its
customers. Many of these individuals will eventually improve their credit rating
and look for newer vehicles or upgraded transportation. Through its approach,
Future Carz can produce strong repeat customer and referral business.

Distribution Methods of Services

     Future Carz, Inc.'s goal is to transform the automobile financing services
offering and become the national leader in providing leases to sub-prime
consumers within five years. The essence of Future Carz business model is to
launch a sound infrastructure and replicate the formula in a nationwide system.
Future Carz' mission will be achieved by building a profitable new service
company that delivers quality leasing services and support. The service will
enable sub-prime consumers the access to quality transportation in a manner that
is accessible, convenient and affordable.

     The Company will develop Future Carz brand locations in regions across the
country, beginning in its home region in the southwestern United States. These
locations will act as a pilot for the company's system. Once firmly established
and producing revenue, the company will begin the immediate expansion of its
dealer network.

     Future Carz, Inc.'s strategy for growth is based on regional development of
locations, culminating in a national dealer network, expected to be realized by
2008. The Company is exploring the viability of Company owned and franchised
leasing center dealerships as methods of realizing its national dealer network.

INDUSTRY BACKGROUND

     Future Carz intends to operate solely in the sub-prime finance segment of
the used automobile market. Since the Future Carz concept deals expressly in
leasing used vehicles, as opposed to new autos, to sub-prime consumers, as
opposed to prime consumers, there is no national data and only scattered
regional data available on the market niche addressed by the company. The

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company believes that its unique proposition of offering leases on used
automobiles will give it a significant lead into the growing sub-prime market.

Sub-prime Market

Sub-prime is the sector which serves customers with limited credit histories,
low incomes, or past credit problems who cannot access traditional financing;
including buy here-pay here dealerships that typically provide their own finance
contracts. Sub-prime consumers generally have the following attributes;
bankruptcy, first time buyer, judgments, tax liens, collections, slow payment
history, no payment history, divorce, repossessions, or a new job. Lenders often
grade them based on the severity of past credit problems, with categories
ranging from "A-" on down to "D" or lower. Financing these individuals is
considered to have a higher risk of default and hence usually carries a higher
interest rate, and potential for higher returns to the lender than conforming
financing.

Used Vehicle Leasing

     Thanks to the efforts of the automobile industry, most consumers now
believe that a lease is a meaningful way to obtain a car with a small amount of
capital outlay. However, credit guidelines governing leasing are stringent and
require either near perfect credit or a sizeable down payment to qualify. Used
cars, such as those offered through Future Carz dealerships, comprise a large
and growing segment of the automobile market.

     While used vehicles represent a large and growing segment of overall sales,
only a very few franchised dealerships offer leases on used vehicles. This is
likely due to the fact that franchised dealerships have focused mainly on their
core competency: selling new and used vehicles or leasing new cars. Of those
that do lease, nearly all dealers lease only new cars or pre-owned cars that
fall in the luxury automobile category. Both of these options require prime
credit worthiness in order to qualify and are generally beyond the means of the
sub-prime consumer.

     It is not likely that the national franchised car dealerships will enter
the sub-prime market with leasing service offerings for used vehicles. This is
due partly to economics, but also because of the exposure to increased credit
risk inherent in the market. The automobile financial services market does not
currently support a national dealership network or regional group offering used
vehicle leases to sub-prime consumers.

Increased Consumer Debt

     Consumer debt has reached an all-time high in the United States. Americans
are finding it harder to climb the mountain of debt that they have built up over
the past decade. Mortgage delinquencies and write-offs by credit card companies
are rising. Personal bankruptcy filings have the potential to hit a record high
this year. All of these factors point to an economic climate that is and will
continue to be heavily burdened by consumer debt for the foreseeable future.

REGULATION

     In recent periods, several major used car finance companies have announced
major downward adjustments to their financial statements, violations of loan
covenants, related litigation, and other events. In addition, certain of these
companies have filed for bankruptcy protection. These announcements have had a
disruptive effect on the market for securities of sub-prime automobile finance
companies, have resulted in a tightening of credit to the sub-prime markets, and

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<PAGE>
could lead to enhanced regulatory oversight. Furthermore, companies in the used
vehicle financing market have been named as defendants in an increasing number
of class action lawsuits brought by customers alleging violations of various
federal and state consumer credit and similar laws and regulations. Although the
Company is not currently a named defendant in any such lawsuits, no assurance
can be given that such claims will not be asserted against the Company in the
future or that the Company's operations will not be subject to enhanced
regulatory oversight.

EFFECT OF EXISTING OR PROBABLE GOVERNMENT REGULATIONS

     The Company's operations are subject to ongoing regulation, supervision,
and licensing under various federal, state, and local statutes, ordinances, and
regulations. Among other things, these laws require that the Company obtain and
maintain certain licenses and qualifications limit or prescribe terms of the
contracts that the Company originates and/or purchases require specified
disclosures to customers, limit the Company's right to repossess and sell
collateral, and prohibit the Company from discriminating against certain
customers. The Company is also subject to federal and state franchising and
insurance laws.

     The Company believes that it is currently in substantial compliance with
all applicable material federal, state, and local laws and regulations. There
can be no assurance, however, that the Company will be able to remain in
compliance with such laws, and such failure could result in fines or
interruption or cessation of certain of the business activities of the Company
and could have a material adverse effect on the operations of the Company. In
addition, the adoption of additional statutes and regulations changes in the
interpretation of existing statutes and regulations, or the Company's entrance
into jurisdictions with more stringent regulatory requirements could have a
material adverse effect on the Company.

EMPLOYEES

     The Company currently has no employees and is managed by its officers and
directors.

             ITEM 2. DESCRIPTION OF PROPERTY DESCRIPTION OF PROPERTY

     The address of the principal office is: 717 Union Street, Suite K, San
Diego, CA 92101. A related party provides approximately 750 square feet to the
Company at no charge. The Company rents three parking spaces in the garage of
the building as the pick-up location for its leased vehicles. The Company also
maintains an office of 400 square feet located at 6508 Indianapolis Blvd.,
Hammond, IN 46320 used as a leasing center, which is provided to the Company at
no charge by a related party.

     Management believes that these locations are currently suitable for the
Company's needs for the next 12 months.

                            ITEM 3. LEGAL PROCEEDINGS

     In 2001, the Company and its officers and directors were named as
defendants in a lawsuit in the State of Arizona brought by investors and
creditors of American Automotive Group relating to allegations of securities
fraud by certain shareholders of American Automotive Group. The Company was
named in the lawsuit due to its asset purchase of American Automotive Group's
auto lease assets during the 2001 for common stock of the Company. The claim is
for remediation of $162,000, including attorney's fees. As of January 28, 2004,
this litigation was settled and dismissed with prejudice. The Company has

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executed a $10,000 non-interest bearing note due January 28, 2005 and will issue
650,000 shares of common stock, valued at the closing price of the common stock
on January 28, 2004 of $0.01 per share, or $6,500, in settlement of this
litigation.

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

     None.

                                    PART II

        ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market information

     The Company's common stock is currently traded on the Over-the-Counter
Bulletin Board under the stock ticker symbol "FCRZ." The following table sets
forth the high and low bid quotations for the Common Stock for the periods
indicated. These quotations reflect prices between dealers do not include retail
mark-ups, markdowns, and commissions and may not necessarily represent actual
transactions.

                                                        Common Stock
     PERIOD                                       HIGH               LOW
     ------                                       ----               ---
Calendar Year 2003
First Quarter ended 3/31/03                       $0.06             $0.01
Second Quarter ended 6/30/03                      $0.03             $0.01
Third Quarter ended 9/30/03                       $0.02             $0.01
Fourth Quarter ended 12/31/03                     $0.02             $0.01

Calendar Year 2002
First Quarter ended 3/31/02                       $0.50             $0.08
Second Quarter ended 6/30/02                      $0.35             $0.05
Third Quarter ended 9/30/02                       $0.10             $0.04
Fourth Quarter ended 12/31/02                     $0.13             $0.04

     During the year ended December 31, 2000, 421,333 warrants to purchase
common stock of the Company were issued, and still outstanding as of December
31, 2003. Each option contains 1 share of restricted common stock is currently
exercisable at $1.50 per share. There is no fixed redemption price and no
expiration date.

     There are approximately 48,506,675 shares of restricted common Stock of the
Company. These restricted shares, when they are more than two years old, could
be sold under Rule 144 under the Securities Act of 1933, as amended.

     There is currently no common equity that is being or is proposed to be
publicly offered by the Company, the offering of which could have a material
effect on the market price of the issuer's common equity.

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<PAGE>
HOLDERS

     As of December 31, 2003, the Company had approximately 177 stockholders of
record.

DIVIDEND POLICY

     The Company has not paid any dividends to date. In addition, it does not
anticipate paying dividends in the immediate foreseeable future. The Board of
Directors of the Company will review its dividend policy from time to time to
determine the desirability and feasibility of paying dividends after giving
consideration to the Company's earnings, financial condition, capital
requirements and such other factors as the board may deem relevant.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The Company has no equity compensation plans previously approved by security
holders or any such plans not previously approved by security holders:

RECENT SALES OF UNREGISTERED SECURITIES

     On March 28, 2003, the Company issued 1,500,000 shares of common stock to a
consultant pursuant to a Form S-8 Registration Statement for consulting
services. This consultant arranged for the transfer of 1,360,000 shares to
certain note holders of the Company in satisfaction of the Company's stock
subscriptions. The issuance of these registered common shares to the consultant
and subsequent transfer to the former note holders was not permissible under
Form S-8. Should the Company not be in compliance with Regulations SB and SX,
its ability to register additional shares may be restricted.

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

     The Company was organized in July 13, 1999, as a developmental stage
company in the used automobile leasing industry with a principal business
objective to offer financial alternatives to qualified individuals who do not
meet traditional financing terms. The result is a new type of leasing
organization capable of building highly profitable brand-name stores in a
largely untapped market within the used automobile industry. The Company
immediately moved to acquire the assets of two companies already operating in
the business. On February 23, 2001, the company completed the acquisition of
certain assets of Auto Central Discount, Inc. of San Diego, CA and in July 2001,
the Company completed the acquisition of certain assets of American Automotive
Group, Inc. Through these acquisitions, the Company had operations in San Diego,
California, and Glendale, Mesa, Phoenix, and Scottsdale, Arizona. Although the
business model is profitable over time, the Company found it to be very capital
intensive in the beginning stages.

     In October, 2002, the Company entered into a stock purchase agreement with
the Jack Watters Group to obtain necessary capital to satisfy its debt
obligations and to reconfigure its operations to achieve profitability and
increase revenue generating capabilities. In this agreement, the Jack Watters
Group acquired 43,290,934 shares of the Company's common stock in exchange for
net cash proceeds of $422,909.

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<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

REVENUE FROM SERVICES PROVIDED

The Company's revenue from services provided was $84,073, for the year ended
December 31, 2003. For the prior year ended December 31, 2002, revenue from
services provided was $5,300. The sharp increase in revenue is attributable to
the Company temporarily closing its auto leasing business in 2002 as a result of
a lack of operating capital needed to provide its services in a
capital-intensive industry, as well as management's decision to remove the
Company from the auto leasing business during the first quarter of 2002.
Following the Jack Watters Group transaction in October 2002, the Company
reestablished its auto leasing business.

OPERATING EXPENSES

     Operating expenses totaled to $166,910 and $1,282,793 for the years ended
December 31, 2003 and 2002, respectively. The decrease in expenses is
attributable to the tighter fiscal controls implemented by the new management
and the curtailing of non-cash stock compensation. Generally, all of the
Company's expenses in 2003 were reduced significantly in comparison with the
prior year with the exception of depreciation. Non-cash stock compensation for
the years ended December 31, 2003 and 2002 was $12,375 and $1,050,968,
respectively. This decrease was due primarily to the consulting agreements
entered into during the year 2002 as management sought new, potentially more
profitable, business models for the Company to pursue.

     The Company incurred net other income of $4,032 for the year ended December
31, 2003, and net other expense of $30,611 in the prior year. The Company's
other expenses were significantly lower during 2003 due to forgiveness of
accounts payable.

NET LOSS

     The Company incurred a net loss of $78,805 for the year ended December 31,
2003. This represents a decrease of $1,238,299 over the net loss for the prior
year 2002 of $1,308.104. The decrease in the Company's net loss compared to the
prior year is primarily attributable to the resumption of leasing activity and
the severe cost cutting program implemented.

RECENT PRONOUNCEMENTS

     In May 2003, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 150, "Accounting for Certain Financial Instruments with Characteristics of
Both Liabilities and Equities," which establishes standards for how an issuer
classifies and measures certain financial instruments with characteristics of
both liabilities and equities. SFAS No. 150 applies specifically to a number of
financial instruments that issuers have historically presented in their
financial statements as equity, or between the liabilities and equity sections
of the balance sheet, rather than as liabilities. Generally, SFAS No. 150 is
effective for financial instruments issued or modified after May 31, 2003 and is
otherwise effective for interim periods beginning after June 15, 2003. The
adoption of SFAS No. 150 did not have an effect on the Company's financial
statements.

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     In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities." SFAS 149 amends SFAS 133 to
clarify the definition of a derivative and incorporate many of the
implementation issues cleared as a result of the Derivatives Implementation
Group process. This statement is effective for contracts entered into or
modified after June 30, 2003, and should be applied prospectively after that
date. The adoption of SFAS 149 did not have a material effect on the financial
statements.

     In December 2002, the FASB issued SFAS 148 "Accounting for Stock-Based
Compensation--Transition and Disclosure--an amendment of SFAS 123." SFAS 148
provides alternative methods of transition for a voluntary change to the fair
value based method of accounting for stock-based employee compensation from the
intrinsic value-based method of accounting prescribed by APB 25. As allowed by
SFAS 123, the Company has elected to continue to apply the intrinsic value-based
method of accounting, and has adopted the disclosure requirements of SFAS 123.
The Company currently does not anticipate adopting the provisions of SFAS 148.

     In July 2002, the FASB issued SFAS 146, "Accounting for Costs Associated
with Exit or Disposal Activities." SFAS 146 provides new guidance on the
recognition of costs associated with exit or disposal activities. The standard
requires companies to recognize costs associated with exit or disposal
activities when they are incurred rather than at the date of commitment to an
exit or disposal plan. SFAS 146 supercedes previous accounting guidance provided
by the Emerging Issues Task Force (EITF) Issue No. 94-3 "Liability Recognition
for Certain Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring)." EITF Issue No. 94-3
required recognition of costs at the date of commitment to an exit or disposal
plan. SFAS 146 is to be applied prospectively to exit or disposal activities
initiated after December 31, 2002. Early application is permitted. The adoption
of SFAS 146 by the Company did not have a material impact on the Company's
financial position, results of operations, or cash flows.

     In April 2002, the FASB issued SFAS 145, "Rescission of FASB Statements No.
4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections."
Among other things, this statement rescinds FASB Statement No. 4, "Reporting
Gains and Losses from Extinguishment of Debt" which required all gains and
losses from extinguishment of debt to be aggregated and, if material, classified
as an extraordinary item, net of related income tax effect. As a result, the
criteria in APB Opinion No. 30, "Reporting the Results of Operations --
Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary,
Unusual and Infrequently Occurring Events and Transactions," will now be used to
classify those gains and losses. The provisions of SFAS 145 related to the
classification of debt extinguishment are effective for years beginning after
May 15, 2002. The adoption of SFAS 145 by the Company did not have a material
impact on the Company's financial position, results of operations, or cash
flows.

LIQUIDITY AND CAPITAL RESOURCES

     The Company experienced a net decrease of $52,658 in our cash position
during the year ended December 31, 2003, as compared to a net increase of
$53,663 during the year ended December 31, 2002. The Company used $38,788 of
cash for operating activities for the year ended December 31, 2003, as compared
to $188,382, for the year ended December 31, 2002. The Company purchased lease
vehicles with cash in the amount of $519,530, during the year ended December 31,
2003, which contributed to net cash used of $413,870 for 2003. Additionally, the
Company used $140,340 in cash to purchase lease vehicles in 2002. The Company
obtained net financing in the amount of $400,000 from Hoosier State Building and

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Loan, Ltd on a note payable due April 30, 2004. Consequently, the Company
experienced a net cash inflow of $400,000 from financing activities, for the
year ended December 31, 2003. In the prior year, the Company obtained $455,318,
from financing activities, attributable mainly to the issuances of common stock.

CASH NEEDS FOR THE NEXT TWELVE MONTHS

     The Company's financial resources during the year 2003 were insufficient to
support the Company's operating infrastructure. For the year 2004, the Company
expects to incur greater overhead that may be attributable to hiring additional
employees, as necessary, and higher related office expenses. The Company also
expects to increase investments in vehicles, which may strain its cash position.
The Company does not have sufficient financial resources to support an increased
level of operations for the next 12 months if it does not generate sufficient
revenues and/or if it fails to raise equity capital as appropriate. Based on
current information on hand and the Company's latest expectation of its
operations for the next 12 months, there may be a going concern issue.

     The Company cannot give assurance that it can generate the cash it needs
for the next 12 months. There may be a shortfall in our cash if the Company
fails to do so. The Company may need to obtain additional financing in the event
that it is unable to realize sufficient revenue or collect accounts receivable.
Furthermore, the Company's ability to satisfy the redemption of future debt
obligations that it may enter into will be primarily dependent upon the future
financial and operating performance of the Company. Such performance is
dependent upon financial, business and other general economic factors, many of
which are beyond the Company's control. If the Company is unable to generate
sufficient cash flow to meet its future debt service obligations or provide
adequate long-term liquidity, the Company will have to pursue one or more
alternatives, such as reducing or delaying capital expenditures, refinancing
debt, selling assets or operations or raising equity capital. There can be no
assurance that such alternatives can be accomplished on satisfactory terms, if
at all, or in a timely manner. If the Company does not have sufficient cash
resources when needed, the Company will not be able to continue operations as a
going concern.

                          ITEM 7. FINANCIAL STATEMENTS

The following documents form part of the report on the Financial Statements:

                                                                        PAGE
Independent Auditors' Report                                             F-1
Consolidated Balance Sheet                                               F-2
Consolidated Statements of Operations                                    F-3
Consolidated Statement of Stockholders' (Deficit)                        F-4
Consolidated Statements of Cash Flows                                    F-5
Notes to Consolidated Financial Statements                               F-6

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

     None - Not Applicable.

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                        ITEM 8A. CONTROLS AND PROCEDURES

     An evaluation was performed under the supervision and with the
participation of the Company's management, including the Chief Executive Officer
and Chief Financial Officer of the effectiveness of the design and operation of
the Company's disclosure controls and procedures within 90 days before the
filing date of this annual report. Based on that evaluation, the Company's
management, including the CEO and CFO, concluded that the Company's disclosure
controls and procedures were effective. There have been no significant changes
in the Company's internal controls or in other factors that could significantly
affect internal controls subject to their evaluation.

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

The names, ages and positions of the company's directors and executive officers
are as follows:

          Name                   Age                           Position
          ----                   ---                           --------
    M. David Fesko               56                    Chairman of the Board
    Ethel Merriman               49                    President and Director

FAMILY RELATIONSHIPS

     None - not applicable.

WORK EXPERIENCE

     M. DAVID FESKO, CHAIRMAN OF THE BOARD OF DIRECTORS, is a principal of
Retail Leasing, Inc., an owner and developer of commercial real estate,
including urban redevelopment. Previously he operated Orange Julius franchises
and founded Sunshine Ice Cream Company which produced ice cream and frozen
yogurts that were distributed to ice cream shops in five states. Mr. Fesko has
vast knowledge of the franchise industry and in 1972 worked with the Indiana
Secretary of State's office in implementing Indiana's franchise disclosure law.

     ETHEL MERRIMAN, PRESIDENT AND DIRECTOR, since 1999 has been self-employed
in the Mortgage and Real Estate industry. From 1995-1998, she was employed with
Advanta as a Mortgage Division Sales Manager, where she started the Refinance
Division in California. From 1985-1995, she was employed with Associates
Financial Services, with varying levels of responsibility. While there, Ms.
Merriman held the positions of Branch Manager, District Manager, AVP in charge
of one division's Credit and Compliance Department, Vice President of Training
responsible for employee training of a 12 state area.

     The Company currently does not have an audit committee. The board of
directors is performing the functions of the audit committee until an audit
committee is established.

                                       10
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.

     During 2003, the following directors, officers, and shareholders owning
more than 10% of any class of equity securities of the company failed to report
on a timely basis, as required by section 16 (a) of the Exchange Act, the number
of reports as follows:

                                                 Form 3       Form 4     Form 5
                                                 ------       ------     ------
     Reporting Person                               (No. of Transactions)
     M. David Fesko, Director, Chairman            1             4         1
     Ethel Merriman, Director, President           1            --         1
     Jack Watters, Director (1)                    1            --         1
     Ramajax Corporation                           1            --         1

----------
(1)  Resigned position as director on May 31, 2003

INVOLVEMENT ON CERTAIN MATERIAL LEGAL PROCEEDINGS DURING THE LAST FIVE YEARS

(1) No director, officer, significant employee or consultant has been convicted
in a criminal proceeding, exclusive of traffic violations.

(2) No bankruptcy petitions have been filed by or against any business or
property of any director, officer, significant employee or consultant of the
Company nor has any bankruptcy petition been filed against a partnership or
business association where these persons were general partners or executive
officers.

(3) No director, officer, significant employee or consultant has been
permanently or temporarily enjoined, barred, suspended or otherwise limited from
involvement in any type of business, securities or banking activities.

(4) No director, officer or significant employee has been convicted of violating
a federal or state securities or commodities law.

CODE OF ETHICS

In January 2004, the Company adopted a Code of Ethics. The Company does not
currently have a website. Therefore, the Company will provide a copy, free of
charge, to those writing to the corporate office located at 717 Union Street,
Suite K, San Diego, CA, 92101.

                         ITEM 10. EXECUTIVE COMPENSATION

REMUNERATION OF DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES

     We do not have employment agreements with our executive officers. We have
yet to determine the appropriate terms needed for the creation of employment
agreements for our officers. There has been no discussion with any of our
officers regarding any potential terms of these agreements, nor have such terms
been determined with any specificity. We plan to have these agreements completed
by the beginning of the next year. We have no proposal, understanding or
arrangement concerning accrued earnings to be paid in the future. In the

                                       11
<PAGE>
meanwhile, none of our executive officers has been drawing salaries since they
were appointed to their positions.

                           Summary Compensation Table

     For the calendar year 2003
     Name &                               Ethel Merriman         M. David Fesko
     principle position                     President              Treasurer
     ------------------                     ---------              ---------
     Annual Salary ($)                          0                       0
     Bonus ($)                                  0                       0
     Other Annual Compensation ($)              0                       0

     Long Term
     Restricted stock awards ($)                0                       0
     Securities underlying options              0                       0
     LTIP Payouts                               0                       0
     All other compensation                     0                       0

DIRECTORS' COMPENSATION

     We have no formal or informal arrangements or agreements to compensate our
directors for services they provide as directors of our company.

EMPLOYMENT CONTRACTS AND OFFICERS' COMPENSATION

     Since our incorporation, we have not paid any compensation to our officers.
We do not have employment agreements with any of our officers, directors of
employees. Any future compensation to be paid to these individuals will be
determined by our Board of Directors, and employment agreements will be
executed. We do not currently have plans to pay any compensation to our officers
or directors until such time as we are cash flow positive.

STOCK OPTION PLAN AND OTHER LONG-TERM INCENTIVE PLAN

     We currently do not have existing or proposed option/SAR grants

     ITEM 11. SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY HOLDERS

SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS

     The following table sets forth as of December 31, 2003 certain information
regarding the beneficial ownership of our common stock by:

     1.   Each person who is known us to be the beneficial owner of more than 5%
          of the common stock,
     2.   Each of our directors and executive officers and
     3.   All of our directors and executive officers as a group.

Except as otherwise indicated, the persons or entities listed below have sole
voting and investment power with respect to all shares of common stock
beneficially owned by them, except to the extent such power may be shared with a
spouse. No change in control is currently being contemplated.

                                       12
<PAGE>
                     Name and Address                  Amount and Nature of
Title of Class      of Beneficial Owner                    % of Class
--------------      -------------------             ------------------------
Common Stock      Jack Watters Group (1)            43,290,934           82%
                  M. David Fesko (2)                20,070,000           38%
                  Ramajax Corporation (3)           12,000,000           23%
                  Jack Watters (4)                  11,290,934           21%
                  Ethel Merriman                       120,000            0%

Officers and Directors, as a Group                  43,480,934

----------
(1)  Shares held by the Jack Watters Group. The Jack Watters Group holds shares
     for the benefit of the M. David Fesko Trust UWO Jack Fesko, the M. David
     Fesko Exempt Trust UTO Helen Fesko, the Ramajax Corporation and Jack
     Watters Realty LLC.
(2)  Includes 10,000,000 shares held by the Jack Watters Group for the benefit
     of the M. David Fesko Trust UWO Jack Fesko, and 10,000,000 shares held by
     the Jack Watters Group for the benefit of the M. David Fesko Exempt Trust
     UTO Helen Fesko, plus 70,000 shares in the name of M. David Fesko's IRA
(3)  Includes 12,000,000 shares held by the Jack Watters Group for the benefit
     of the Ramajax Corporation. Jack Watters beneficially owns the shares of
     Ramajax Corporation.
(4)  Includes 11,290,934 shares owned by the Jack Watters Group for the benefit
     of Jack Watters Realty, LLC. Jack Watters beneficially owns the shares of
     Jack Watters Realty LLC.


NON-VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

     The Company has not issued any non-voting securities.

OPTIONS, WARRANTS AND RIGHTS

     The Company has warrants outstanding to purchase up to 421,333 underlying
shares of common stock at an exercise price of $1.50 per share and are currently
redeemable by the Company. The warrants have no fixed redemption price and no
expiration date.

             ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     None. - Not Applicable.

                                       13
<PAGE>
                    ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibit Index

Exhibit Number                    Name and/or Identification of Exhibit
--------------                    -------------------------------------
     3         Articles of Incorporation & By-Laws
               (a) Articles of Incorporation of the Company filed July 13, 1999.
               Incorporated  by  reference  to the  exhibits  to  the  Company's
               General Form For  Registration  Of Securities  Of Small  Business
               Issuers on Form 10-SB, previously filed with the Commission.
               (b) By-Laws of the Company adopted July 16, 1999. Incorporated by
               reference  to the  exhibits  to the  Company's  General  Form For
               Registration  Of  Securities  Of Small  Business  Issuers on Form
               10-SB, previously filed with the Commission.
    14         Code of Ethics
    31         Section 302 Certification
    32         Certification Pursuant to Section 906 of the Sarbanes-Oxley Act
               of 2002

(b) Reports on Form 8-K

     During the fourth quarter of the year ended December 31, 2003, the Company
filed no reports on Form 8-K.

                ITEM 14. PRINCIPAL ACCOUNTANTS FEES AND SERVICES

     The Company's board of directors reviews and approves audit and permissible
non-audit services performed by its independent accountants, as well as the fees
charged for such services. In its review of non-audit service fees and its
appointment of Stark Winter Schenkein & Co., LLP as the Company's independent
accountants, the board of directors considered whether the provision of such
services is compatible with maintaining independence. All of the services
provided and fees charged by Stark Winter Schenkein & Co., LLP, in 2003, were
approved by the board of directors.

Audit Fees

     The aggregate fees billed by Stark Winter Schenkein & Co., LLP for
professional services for the audit of the annual financial statements of the
Company and the reviews of the financial statements included in the Company's
quarterly reports on Form 10-QSB for 2003 and 2002 were $19,195 and $29,260,
respectively, net of expenses.

                                       14
<PAGE>
Audit-Related Fees

     There were $9,107 in fees billed by Stark Winter Schenkein & Co., LLP
during the last two fiscal years for assurance and related services that were
reasonably related to the performance of the audit or review of the Company's
financial statements and not reported under "Audit Fees" above.

Tax Fees

     The aggregate fees billed during the last two fiscal years for professional
services rendered for tax compliance for 2003 and 2002 were $1,000 and $2,000,
respectively.

All Other Fees

     There were no fees billed by Stark Winter Schenkein & Co., LLP during the
last two fiscal years for products and services provided.

                                       15
<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.

                                FUTURE CARZ, INC.
                                  (Registrant)

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


/s/ M. David Fesko          Chief Executive Officer, Treasurer,    April 2, 2004
-------------------------   Director and Chief Financial Officer
    M. David Fesko

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

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


/s/ M. David Fesko          Chief Executive Officer,               April 2, 2004
-------------------------   Treasurer, Director, and
    M. David Fesko          Chief Financial Officer


/s/ Ethel Merriman          President and                          April 2, 2004
-------------------------   Director
    Ethel Merriman

                                       16
<PAGE>
                         REPORT OF INDEPENDENT AUDITORS


Shareholders and Board of Directors
Future Carz, Inc.

We have audited the accompanying consolidated balance sheet of Future Carz, Inc.
as of December 31, 2003, and the related consolidated  statements of operations,
stockholders'  (deficit),  and cash flows for the years ended  December 31, 2003
and 2002. These consolidated  financial statements are the responsibility of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audits to obtain  reasonable  assurance  about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant estimates 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 Future Carz, Inc. as
of December 31, 2003, and the results of its operations,  and its cash flows for
the years  ended  December  31, 2003 and 2002,  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 suffered recurring losses and
has working capital and stockholders' deficits.  These factors raise substantial
doubt about the Company's  ability to continue as a going concern.  Management's
plans in regard to these matters are also discussed in Note 2. The  consolidated
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.


/s/ Stark Winter Schenkein & Co., LLP

Denver, Colorado
March 26, 2004

                                      F-1
<PAGE>
                                Future Carz, Inc.
                           Consolidated Balance Sheet
                               December 31, 2003

                                     ASSETS

CURRENT ASSETS
  Cash                                                              $     1,005
  Accounts receivable                                                     5,010
                                                                    -----------
      Total current assets                                                6,015
                                                                    -----------

LEASE ASSETS
  Net investment in operating lease vehicles                            347,438
  Vehicles held for lease                                               281,300
                                                                    -----------
                                                                        628,738
                                                                    -----------

                                                                    $   634,753
                                                                    ===========

                     LIABILITIES AND STOCKHOLDERS' (DEFICIT)

CURRENT LIABILITIES
  Accounts payable and accrued expenses                             $   174,160
  Accrued interest                                                        4,000
  Operating advances, related party                                       2,500
  Notes payable                                                         400,000
                                                                    -----------
      Total current liabilities                                         580,660
                                                                    -----------

NOTES PAYABLE, RELATED PARTY - NONCURRENT,  NET
 OF UNAMORTIZED DISCOUNT                                                120,000
                                                                    -----------

CONTINGENCIES

STOCKHOLDERS' (DEFICIT)
  Preferred stock, $0.001 par value, 5,000,000 shares
   authorized, no shares issued and outstanding                              --
  Common stock, $0.001 par value, 100,000,000 shares
   authorized, 52,856,900 shares issued and outstanding                  52,857
  Additional paid-in capital                                          6,657,217
  Deferred compensation                                                 (20,625)
  Accumulated (deficit)                                              (6,755,356)
                                                                    -----------
                                                                        (65,907)
                                                                    -----------

                                                                    $   634,753
                                                                    ===========

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

                                      F-2
<PAGE>
                                Future Carz, Inc.
                      Consolidated Statements of Operations


                                                For the years ended December 31,
                                                  2003                 2002
                                              ------------         ------------

REVENUE                                       $     84,073         $      5,300
                                              ------------         ------------

EXPENSES
  Non-cash stock compensation                       12,375            1,050,968
  General and administrative                       128,752              229,500
  Depreciation and amortization                     25,783                2,325
                                              ------------         ------------
                                                   166,910            1,282,793
                                              ------------         ------------

NET OPERATING (LOSS)                               (82,837)          (1,277,493)

OTHER INCOME (EXPENSE)
  (Loss) on disposal of assets                          --               (8,662)
  Interest expense                                 (26,917)             (21,949)
  Forgiveness of  accounts payable                  30,949                   --
                                              ------------         ------------
                                                     4,032              (30,611)
                                              ------------         ------------

NET (LOSS)                                    $    (78,805)        $ (1,308,104)
                                              ============         ============

WEIGHTED AVERAGE SHARES OUTSTANDING -
 BASIC AND DILUTED                              52,503,475           14,265,994
                                              ============         ============

NET (LOSS) PER COMMON SHARE -
 BASIC AND DILUTED                            $      (0.00)        $      (0.09)
                                              ============         ============

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

                                      F-3
<PAGE>
                                Future Carz, Inc.
                Consolidated Statement of Stockholders' (Deficit)
                                December 31, 2003
<TABLE>
<CAPTION>
                                                             Common Stock         Additional
                                                         --------------------      Paid-in         Stock
                                                         Shares        Amount      Capital     Subscriptions
                                                         ------        ------      -------     -------------
<S>                                                    <C>           <C>         <C>            <C>
Balance, December 31, 2001                              5,543,032     $ 5,543     $5,727,146     $      --

  Amortization of deferred compensation                        --          --             --            --
  Shares issued in exchange for debt                    2,362,438       2,363        426,012            --
  Stock subscriptions issued for debt                          --          --         18,100       136,000
  Shares issued for cash, net of offering costs        43,290,934      43,291        379,618            --
  Shares issued in exchange for services                  160,496         160         17,493            --
  Capital contributions from shareholders                      --          --         32,348            --
  Net (loss)                                                   --          --             --            --
                                                       ----------     -------     ----------     ---------
Balance, December 31, 2002                             51,356,900      51,357      6,600,717       136,000

  Conversion of stock subscription to note payable             --          --         25,000      (136,000)
  Shares issued in exchange for services                1,500,000       1,500         31,500            --
  Amortization of deferred compensation                        --          --             --            --
  Net( loss)                                                   --          --             --            --
                                                       ----------     -------     ----------     ---------

Balance, December 31, 2003                             52,856,900     $52,857     $6,657,217     $      --
                                                       ==========     =======     ==========     =========

                                                                                           Total
                                                         Deferred     Accumulated       Stockholders'
                                                       Compensation     (Deficit)        (Deficit)
                                                       ------------     ---------        ---------
Balance, December 31, 2001                              $(996,144)     $(5,368,447)     $  (631,902)

  Amortization of deferred compensation                   996,144               --          996,144
  Shares issued in exchange for debt                           --               --          428,375
  Stock subscriptions issued for debt                          --               --          154,100
  Shares issued for cash, net of offering costs                --               --          422,909
  Shares issued in exchange for services                       --               --           17,653
  Capital contributions from shareholders                      --               --           32,348
  Net (loss)                                                   --       (1,308,104)      (1,308,104)
                                                        ---------      -----------      -----------
Balance, December 31, 2002                                     --       (6,676,551)         111,523

  Conversion of stock subscription to note payable             --               --         (111,000)
  Shares issued in exchange for services                  (33,000)              --               --
  Amortization of deferred compensation                    12,375               --           12,375
  Net( loss)                                                   --          (78,805)         (78,805)
                                                        ---------      -----------      -----------

Balance, December 31, 2003                              $ (20,625)     $(6,755,356)     $   (65,907)
                                                        =========      ===========      ===========
</TABLE>
   The accompanying notes are an integral part of these financial statements.

                                      F-4
<PAGE>
                                Future Carz, Inc.
                      Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
                                                                     For the years ended December 31,
                                                                         2003                2002
                                                                     -----------         -----------
<S>                                                                  <C>                 <C>
CASH FLOW FROM OPERATING ACTIVITIES
  Net (loss)                                                         $   (78,805)        $(1,308,104)
  Adjustments to reconcile net (loss) to net cash
   (used in) operating activities:
    Non-cash stock compensation                                           12,375           1,050,968
    Depreciation and amortization                                         25,783               2,325
    (Loss) on disposal of assets                                              --               8,662
    Forgiveness of accounts payable                                       30,949                  --
    Amortization of discount on notes payable, related party               9,000
  Changes in:
    Prepaid expenses                                                         177                (177)
    Accounts receivable                                                   (5,010)              7,541
    Note receivable                                                           --               1,000
    Bank overdraft                                                            --                (814)
    Accounts payable and accrued expenses                                (37,257)             62,337
    Operating advances,  related party                                        --             (34,069)
    Accrued interest                                                       4,000                 144
    Accrued interest - related parties                                        --              21,805
                                                                     -----------         -----------
Net cash (used in) operating activities                                  (38,788)           (188,382)
                                                                     -----------         -----------
CASH FLOW FROM INVESTING ACTIVITIES
  Proceeds from assets held for sale                                       6,000              26,727
  Purchase of lease vehicles                                            (519,530)           (140,340)
  Increase (decrease) in vehicle deposits                                 99,660             (99,660)
                                                                     -----------         -----------
Net cash (used in) investing activities                                 (413,870)           (213,273)
                                                                     -----------         -----------
CASH FLOW FROM FINANCING ACTIVITIES
  Proceeds from operating advances - related parties                          --              85,069
  Payments on operating advances - related parties                            --             (51,660)
  Proceeds from note payable - related parties                                --               2,475
  Payments on notes payable - related parties                                 --              (3,475)
  Issuance of common stock, net of offering costs                             --             422,909
  Proceeds from notes payable                                            400,000                  --
                                                                     -----------         -----------
Net cash provided by investing activities                                400,000             455,318
                                                                     -----------         -----------

Net increase (decrease) in cash                                          (52,658)             53,663
Cash - beginning of year                                                  53,663                  --

                                                                     -----------         -----------
Cash - end of year                                                   $     1,005         $    53,663
                                                                     ===========         ===========

SUPPLEMENTAL DISCLOSURE
  Interest paid                                                      $    13,900         $        --
                                                                     ===========         ===========
  Income taxes paid                                                  $        --         $        --
                                                                     ===========         ===========
NON-CASH FINANCING AND INVESTING ACTIVITIES
    Common stock issued in exchange for debt                         $        --         $   428,375
                                                                     ===========         ===========
  Advance from shareholder converted to capital                      $        --         $    20,707
                                                                     ===========         ===========
  Conversion of accounts payable into note payable                   $        --         $   110,624
                                                                     ===========         ===========
  Common stock issued for deferred compensation                      $    33,000         $        --
                                                                     ===========         ===========
  Issuance of note payable in exchange for stock subscription        $   136,000         $        --
                                                                     ===========         ===========
</TABLE>
   The accompanying notes are an integral part of these financial statements.

                                      F-5
<PAGE>
                                Future Carz, Inc.
                   Notes to Consolidated Financial Statements
                                December 31, 2003


NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION

The Company was organized on July 13, 1999 under the laws of the State of Nevada
as Future  Carz.com,  Inc. On February 5, 2001 the name of the  corporation  was
changed to Future Carz, Inc. The Company's  principal  business  objective is to
operate  leasing  centers that provide quality late model used cars to consumers
in the sub-prime credit  category.  As of December 31, 2003 the Company operates
two leasing centers, one is located in San Diego, California and the other is in
Hammond, Indiana, a suburb of Chicago, Illinois.

PRINCIPLES OF CONSOLIDATION

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

RECLASSIFICATION

Certain amounts from prior year's financial statements have been reclassified to
conform to the current year presentation.

ACCOUNTS RECEIVABLE

The Company's  business is leasing vehicles to sub-prime  customers.  Due to the
nature  of  the  Company's  business,  the  Company  does  not  record  accounts
receivable  for lease  payments due unless the  collection of the  receivable is
reasonably  assured.  An  allowance  for doubtful  accounts is recorded  when an
amount  recorded is  determined to be  uncollectible.  There is no allowance for
doubtful  accounts  recorded  as of  December  31,  2003.  Included  in accounts
receivable are $2,400 from related parties for vehicle leases (see Note 3.)

REVENUE RECOGNITION

Rental  revenue for leases  classified  as operating  leases is  recognized on a
straight-line basis as earned during the rental contract period.

USE OF ESTIMATES

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

                                      F-6
<PAGE>
                                Future Carz, Inc.
                   Notes to Consolidated Financial Statements
                                December 31, 2003


CASH AND CASH EQUIVALENTS

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

EQUIPMENT AND LEASE VEHICLES

Vehicles  purchased  by the  Company are  recorded at cost.  Once the vehicle is
leased,   it  is  depreciated   over  its  estimated   service  life  using  the
straight-line  method.  The range of service lives  estimated by management  for
automobiles  is 60 to 72  months.  Ordinary  maintenance  and  repair  costs are
charged to operations as incurred. Expenditures that extend the useful life of a
vehicle are capitalized.

Office  equipment  is  stated  at  cost  and  is  being  depreciated  using  the
straight-line  method over the estimated  economic  life of 5 years.  The office
equipment is fully depreciated as of December 31, 2003.

Depreciation  expense for the years ended December 31, 2003 and 2002 was $25,783
and $2,325, respectively.

ADVERTISING COSTS

The Company  expenses all costs of  advertising as incurred.  Advertising  costs
included in general and administrative  expenses were $9,235 and $20,257 for the
years ended December 31, 2003 and 2002, respectively.

FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value estimates  discussed herein are based upon certain market assumptions
and pertinent  information  available to management as of December 31, 2003. The
respective  carrying  value of certain  on-balance-sheet  financial  instruments
approximated  their fair values.  These financial  instruments  include cash and
cash equivalents, accounts payable and accrued expenses, operating advances, and
notes payable. Fair values were assumed to approximate carrying values for these
financial  instruments  because  they are short term in nature,  their  carrying
amounts  approximate  fair values,  or they are receivable or payable on demand.
The book value of long-term debt has been discounted in order for long term-debt
to approximate fair value.

IMPAIRMENT OF LONG-LIVED ASSETS

The  Company   periodically   reviews  the  carrying  amount  of  equipment  and
automobiles  to  determine  whether  current  events  or  circumstances  warrant
adjustments  to such carrying  amounts.  If an  impairment  adjustment is deemed
necessary,  such loss is measured by the amount that the carrying  value of such
assets exceeds their fair value.  Considerable  management judgment is necessary
to estimate the fair value of assets and accordingly,  actual results could vary
significantly  from such estimates.  Assets to be disposed of are carried at the

                                      F-7
<PAGE>
                                Future Carz, Inc.
                   Notes to Consolidated Financial Statements
                                December 31, 2003


lower of their financial  statement  carrying amount or fair value less costs to
sell.  As of  December  31,  2003,  management  believes  that there is no asset
impairment on long-lived assets.

NET (LOSS) PER COMMON SHARE

The Company follows  Statement of Financial  Accounting  Standard  ("SFAS") 128,
"Earnings Per Share".  Basic earnings (loss) per common share  calculations  are
determined  by dividing net income by the weighted  average  number of shares of
common  stock  outstanding  during the year.  Diluted  earnings per common share
calculations  are  determined  by dividing  net income by the  weighted  average
number of common  shares and  dilutive  common  share  equivalents  outstanding.
During the periods when they are  anti-dilutive,  common stock  equivalents,  if
any, are not considered in the computation.

SEGMENT REPORTING

The Company  follows SFAS 131,  "Disclosure  about Segments of an Enterprise and
Related Information". The Company operates in one industry segment consisting of
the  rental of  automobiles  and will  evaluate  additional  segment  disclosure
requirements as it expands operations.

STOCK-BASED COMPENSATION

The Company  accounts for equity  instruments  issued to employees  for services
based on the fair value of the equity instruments issued and accounts for equity
instruments  issued  to other  than  employees  based  on the fair  value of the
consideration received or the fair value of the equity instruments, whichever is
more reliably measurable.

The Company  accounts for stock based  compensation in accordance with SFAS 123,
"Accounting  for  Stock-Based  Compensation."  The  provisions of SFAS 123 allow
companies  to either  expense the  estimated  fair value of stock  options or to
continue to follow the intrinsic value method set forth in Accounting Principles
Board  Opinion 25,  "Accounting  for Stock Issued to  Employees"  ("APB 25") but
disclose  the pro forma  effects on net income  (loss) had the fair value of the
options  been  expensed.  The Company has elected to continue to apply APB 25 in
accounting for its stock option incentive plans.

CONCENTRATIONS

The Company's  target market is consumers who are classified as sub-prime due to
meeting certain  specified  credit risk factors.  Financing such  individuals is
considered  to have a higher risk of default.  The  Company  mitigates  customer
credit risk through credit approvals, credit limits, and monitoring procedures.

The Company's  operations are subject to ongoing  regulation,  supervision,  and
licensing under federal, state, and local statutes, ordinances, and regulations.
Among other  things,  these laws  require  that the Company  obtain and maintain
certain  licenses and  qualifications,  limit or prescribe terms of the contract

                                      F-8
<PAGE>
                                Future Carz, Inc.
                   Notes to Consolidated Financial Statements
                                December 31, 2003


that the Company originates,  require specified  disclosure to customers,  limit
the Company's right to repossess and sell  collateral,  and prohibit the Company
from discriminating against certain customers.

RECENT PRONOUNCEMENTS

In May 2003, the Financial  Accounting  Standards Board ("FASB") issued SFAS No.
150, "Accounting for Certain Financial  Instruments with Characteristics of Both
Liabilities  and  Equities,"  which  establishes  standards  for  how an  issuer
classifies and measures certain financial  instruments with  characteristics  of
both liabilities and equities.  SFAS No. 150 applies specifically to a number of
financial  instruments  that  issuers  have  historically   presented  in  their
financial  statements as equity,  or between the liabilities and equity sections
of the balance sheet,  rather than as  liabilities.  Generally,  SFAS No. 150 is
effective for financial instruments issued or modified after May 31, 2003 and is
otherwise  effective  for interim  periods  beginning  after June 15, 2003.  The
adoption  of SFAS No.  150 did not have an  effect  on the  Company's  financial
statements.

In April 2003,  the FASB issued SFAS No. 149,  "Amendment  of  Statement  133 on
Derivative  Instruments  and  Hedging  Activities".  SFAS 149 amends SFAS 133 to
clarify  the   definition  of  a  derivative   and   incorporate   many  of  the
implementation  issues  cleared  as a result of the  Derivatives  Implementation
Group  process.  This  statement  is  effective  for  contracts  entered into or
modified  after June 30, 2003,  and should be applied  prospectively  after that
date.  The adoption of SFAS 149 did not have a material  effect on the financial
statements.

In December 2002, the Financial  Accounting Standards Board ("FASB") issued SFAS
148  "Accounting  for Stock-Based  Compensation--Transition  and  Disclosure--an
amendment of SFAS 123." SFAS 148 provides  alternative methods of transition for
a voluntary  change to the fair value based method of accounting for stock-based
employee  compensation  from the  intrinsic  value-based  method  of  accounting
prescribed  by APB 25. As  allowed  by SFAS 123,  the  Company  has  elected  to
continue  to apply  the  intrinsic  value-based  method of  accounting,  and has
adopted the disclosure  requirements of SFAS 123. The Company currently does not
anticipate adopting the provisions of SFAS 148.

In July 2002, the FASB issued SFAS 146,  "Accounting  for Costs  Associated with
Exit or Disposal  Activities." SFAS 146 provides new guidance on the recognition
of costs  associated  with exit or disposal  activities.  The standard  requires
companies to recognize costs  associated  with exit or disposal  activities when
they are incurred  rather than at the date of  commitment to an exit or disposal
plan.  SFAS 146 supercedes  previous  accounting  guidance  provided by the EITF
Issue No. 94-3 "Liability  Recognition for Certain Employee Termination Benefits
and Other  Costs to Exit an  Activity  (including  Certain  Costs  Incurred in a
Restructuring)."  EITF Issue No. 94-3 required  recognition of costs at the date
of  commitment  to an  exit  or  disposal  plan.  SFAS  146  is  to  be  applied
prospectively to exit or disposal activities  initiated after December 31, 2002.
Early application is permitted.  The adoption of SFAS 146 by the Company did not
have  a  material  impact  on  the  Company's  financial  position,  results  of
operations, or cash flows.

                                      F-9
<PAGE>
                                Future Carz, Inc.
                   Notes to Consolidated Financial Statements
                                December 31, 2003


In April 2002, the FASB issued SFAS 145,  "Rescission of FASB  Statements No. 4,
44, and 64,  Amendment of FASB  Statement  No. 13, and  Technical  Corrections."
Among other things,  this statement  rescinds FASB  Statement No. 4,  "Reporting
Gains and Losses  from  Extinguishment  of Debt"  which  required  all gains and
losses from extinguishment of debt to be aggregated and, if material, classified
as an  extraordinary  item, net of related income tax effect.  As a result,  the
criteria  in APB  Opinion  No.  30,  "Reporting  the  Results of  Operations  --
Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary,
Unusual and Infrequently Occurring Events and Transactions," will now be used to
classify  those  gains and  losses.  The  provisions  of SFAS 145 related to the
classification  of debt  extinguishment  are effective for years beginning after
May 15,  2002.  The  adoption of SFAS 145 by the Company did not have a material
impact on the  Company's  financial  position,  results of  operations,  or cash
flows.

NOTE 2. GOING CONCERN

The  accompanying  financial  statements  have been prepared in conformity  with
accounting principles generally accepted in the United States of America,  which
contemplates  continuation  of the Company as a going  concern.  The Company has
incurred losses since inception of $6,755,356,  has a working capital deficit of
$574,645,  a stockholders'  deficit of $65,907 and is reliant on raising capital
to initiate its business plan.

The  Company's  ability to continue as a going  concern is  contingent  upon its
ability to secure financing and attain  profitable  operations.  The Company has
experienced  a change of  control  effective  November  1, 2002 and is under new
management.  The Company is pursuing  financing for its  operations  and working
towards increasing their fleet of vehicles available for lease.

The financial  statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts
and classification of liabilities that may result from the possible inability of
the Company to continue as a going concern.

NOTE 3. LEASE VEHICLES

As of December 31, 2003, the Company has operating leases on 33 vehicles,  three
of which are leased to related parties who are shareholders  and/or officers and
directors. Following is a summary of automobile inventory, at cost:

     Vehicles on lease                                           $ 372,571
     Vehicles held for lease                                       281,300
                                                                 ---------
                                                                   653,871
     Less accumulated depreciation                                 (25,133)
                                                                 ---------

       Vehicle inventory                                         $ 628,738
                                                                 =========

                                      F-10
<PAGE>
                                Future Carz, Inc.
                   Notes to Consolidated Financial Statements
                                December 31, 2003


The  vehicles on lease with  related  parties have a cost of $68,990 and related
accumulated depreciation of $9,699 for a net amount of $59,291.

NOTE 4. NOTES PAYABLE

On March 28,  2003,  amounts  due under a  subscription  for common  stock as of
December 31, 2002, in the amount of $136,000 were  transferred to a note payable
to a  shareholder.  The face amount of the note payable is $136,000 and the note
bears no  interest.  Therefore,  the  Company  recorded a discount  of  $25,000,
representing  interest  at  10%  per  annum.  Interest  expense  of  $9,000  was
recognized  for the year ended  December 31, 2003.  The note is due on March 28,
2005.

The Company has a line of credit with a bank in the amount of $400,000,  secured
by liens on the vehicles and the vehicle leases.  Interest is payable monthly at
the rate of 1% per month.  Principal  and any unpaid  interest are due April 30,
2004.

NOTE 5. STOCKHOLDERS' (DEFICIT)

COMMON STOCK

On January 5, 2002,  the Company  effected a 1 for 3 reverse  stock split of its
common stock. All share and per share amounts have been  retroactively  adjusted
to reflect the effect of the split.

During the year ended  December 31, 2002 the Company  recognized  non-cash stock
compensation  expense  of  $996,144  related  to the  amortization  of  deferred
compensation related to stock issued during 2001 for future services.

On March 19, 2002 the Company  issued  190,698 shares of common stock at a price
of $0.50 per share,  which approximates the fair value of the shares, to satisfy
amounts owed by the Company of $76,279.  As a result, the Company recorded stock
compensation of $19,070.

On April 4, 2002 the Company  issued 401,740 share of common stock at a price of
$0.29 per share,  which  approximates  the fair value of the shares,  to satisfy
amounts owed by the Company of $178,887.  As a result,  the Company  recorded an
increase in additional paid-in capital of $62,382.

On August 18,  2002 the Company  issued  1,770,000  shares of common  stock at a
price of $0.05 per share,  which  approximates the fair value of the shares,  to
satisfy  amounts  owed by the  Company of  $154,139.  As a result,  the  Company
recorded an increase in additional paid-in capital of $65,639.

On September 26, 2002 the Company issued 6,650 shares of common stock at a price
of $0.11 per share,  which  approximates the fair market value of the shares, in
exchange for services performed.

                                      F-11
<PAGE>
                                Future Carz, Inc.
                   Notes to Consolidated Financial Statements
                                December 31, 2003


On October 28, 2002 the Company  entered into a stock  purchase  agreement.  The
agreement  calls for the Company to issue  43,290,934  shares of common stock in
exchange for net proceeds of $422,909.

On October 28, 2002 the Company issued 153,846 shares of common stock at a price
of $0.11 per share,  which  approximates the fair market value of the shares, in
exchange for services performed.

During  November 2002 the Company  entered into  agreements with promissory note
holders to convert debt with a value of $136,000 into 1,360,000 shares of common
stock. The Company recorded stock  subscriptions at the fair market value of the
stock to be issued as of the date the agreements were reached.  As a result, the
Company recorded stock compensation expense of $18,100 (see Note 8).

During the year ended December 31, 2002 various  shareholders forgave amount due
from the Company.  As a result,  the Company  recorded an increase in additional
paid-in capital of $32,348.

On March 28, 2003 the Company issued 1,500,000 shares of common stock at a price
of $0.022 per share, for a total of $33,000,  which approximates the fair market
value of the shares,  in exchange for  services to be performed  over a two year
period ending March 28, 2005.

STOCK WARRANTS

During the year ended  December 31, 2000,  421,333  warrants to purchase  common
stock of the Company were issued, and still outstanding as of December 31, 2003.
Each  warrant  contains  1  share  of  restricted   common  stock  is  currently
exercisable  at $1.50  per  share.  There is no fixed  redemption  price  and no
expiration date.

NOTE 6. INCOME TAXES

The Company  accounts  for income taxes under SFAS 109,  "Accounting  for Income
Taxes",  which  requires use of the  liability  method.  SFAS 109 provides  that
deferred  tax assets  and  liabilities  are  recorded  based on the  differences
between the tax bases of assets and liabilities  and their carrying  amounts for
financial reporting purposes, referred to as temporary differences. Deferred tax
assets  and  liabilities  at the end of each  period  are  determined  using the
currently  enacted tax rates  applied to taxable  income in the periods in which
the deferred tax assets and liabilities are expected to be settled or realized.

                                      F-12
<PAGE>
                                Future Carz, Inc.
                   Notes to Consolidated Financial Statements
                                December 31, 2003


The tax effects of temporary differences and net operating losses that give rise
to significant portions of deferred tax assets and liabilities  consisted of the
following:

                                                                    2003
                                                                 ---------
     Deferred tax assets (liabilities)
       Net operating loss carry forward                          $ 561,073

     Less valuation allowance                                     (561,073)
                                                                 ---------

                     Net deferred tax asset                      $      --
                                                                 =========

The net operating loss  carryforward will expire through 2023. Also, the Company
may be limited in their use of the net operating loss due to a change in control
experienced on November 1, 2002.

The  deferred tax asset has been fully  reserved as of December  31,  2002.  The
change in the  valuation  allowance  for the  deferred tax asset during the year
ended December 31, 2003 was $19,000.

NOTE 7. CONTINGENCIES

In 2001,  the Company and its officers and directors were named as defendants in
a lawsuit in the State of Arizona brought by investors and creditors of American
Automotive  Group  relating  to  allegations  of  securities  fraud  by  certain
shareholders of American  Automotive Group. The Company was named in the lawsuit
due to its asset  purchase  of American  Automotive  Group's  auto lease  assets
during the 2001 for common stock of the Company. The claim is for remediation of
$162,000,  including attorney's fees. As of January 28, 2004 this litigation was
settled  and  dismissed  with  prejudice.  The  Company  has  executed a $10,000
non-interest  bearing note due January 28, 2005 and will issue 650,000 shares of
common  stock,  valued at the closing  price of the common  stock on January 28,
2004 of $0.01 per share, or $6,500, in settlement of this litigation.

NOTE 8.  RELATED PARTY TRANSACTIONS

During the years ended December 31, 2003 and 2002,  certain vehicles were leased
to shareholders and/or officers and directors of the Company. As of December 31,
2003 and 2002,  amounts  included  in  accounts  receivable  from these  parties
relative to the vehicle leases were $2,400 and $-0-, respectively. The vehicles'
aggregate cost was $68,990 as of December 31, 2003 and 2002.  Income received on
the leases  totaled  $17,900 for the year ended December 31, 2003 and $5,300 for
the year ended December 31, 2002.

                                      F-13