PORTAGE PARTNERS, LTD.
                                    NOTES
NOTE 1   HISTORY AND ORGANIZATION OF THE COMPANY

The Company was organized August 18, 1999 (Date of Inception) under the laws
of the State of Nevada, as Portage Partners, Ltd.

The Company has not commenced significant operations and, in accordance with
SFAS #7, the Company is considered a development stage company.

NOTE 2   ACCOUNTING POLICIES AND PROCEDURES

              Cash and cash equivalents
      The Company maintains a cash balance in a
      non-interest-bearing account that currently does not
      exceed federally insured limits.  For the purpose of the
      statements of cash flows, all highly liquid investments
      with an original maturity of three months or less are
      considered to be cash equivalents.  There are no cash
      equivalents as of June 30, 2004.

    Revenue recognition
      The Company recognizes revenue as it invoices its
      customers. Costs are recognized upon completion of each
      sale in order to match expenses to revenue generated. For
      the year ended June 30, 2004, the Company had not
      commenced planned operations.

              Advertising costs
      The Company expenses all costs of advertising as incurred.
       There were no advertising costs included in general and
      administrative expenses as of June 30, 2004.

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

              Fair value of financial instruments
      Fair value estimates discussed herein are based upon
      certain market assumptions and pertinent information
      available to management as of June 30, 2004.  The
      respective carrying value of certain on-balance-sheet
      financial instruments approximated their fair values.
      These financial instruments include cash and accounts
      payable.  Fair values were assumed to approximate carrying
      values for cash and payables because they are short term
      in nature and their carrying amounts approximate fair

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      values or they are payable on demand.

              Impairment of long-lived assets
      Long-lived assets held and used by the Company are
      reviewed for possible impairment whenever events or
      circumstances indicate the carrying amount of an asset may
      not be recoverable or is impaired.  No such impairments
      have been identified by management at June 30, 2004.

    Reporting on the costs of start-up activities
      Statement of Position 98-5 (SOP 98-5), "Reporting on the
      Costs of Start-Up Activities," which provides guidance on
      the financial reporting of start-up costs and
      organizational costs, requires most costs of start-up
      activities and organizational costs to be expensed as
      incurred.  SOP 98-5 is effective for fiscal years
      beginning after December 15, 1998.  With the adoption of
      SOP 98-5, there has been little or no effect on the
      Company's financial statements.

              Loss per share
      Net loss per share is provided in accordance with
      Statement of Financial Accounting Standards No. 128 (SFAS
      #128) "Earnings Per Share".  Basic loss per share is
      computed by dividing losses available to common
      stockholders by the weighted average number of common
      shares outstanding during the period.  As of June 30,
      2004, the Company had no dilutive common stock
      equivalents, such as stock options or warrants.


              Dividends
      The Company has not yet adopted any policy regarding
      payment of dividends.  No dividends have been paid or
      declared since inception.

              Segment reporting
      The Company follows Statement of Financial Accounting
      Standards No. 130, "Disclosures about Segments of an
      Enterprise and Related Information."  The Company operates
      as a single segment and will evaluate additional segment
      disclosure requirements as it expands its operations.

    Income taxes
    The Company follows Statement of Financial Accounting Standard
    No. 109, "Accounting for Income Taxes" ("SFAS No. 109") for
    recording the provision for income taxes.  Deferred tax assets
    and liabilities are computed based upon the difference between
    the financial statement and income tax basis of assets and
    liabilities using the enacted marginal tax rate applicable
    when the related asset or liability is expected to be realized
    or settled.  Deferred income tax expenses or benefits are

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    based on the changes in the asset or liability each period.
    If available evidence suggests that it is more likely than not
    that some portion or all of the deferred tax assets will not
    be realized, a valuation allowance is required to reduce the
    deferred tax assets to the amount that is more likely than not
    to be realized.  Future changes in such valuation allowance
    are included in the provision for deferred income taxes in the
    period of change.

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

  Recent pronouncements
        In July 2002, the FASB issued SFAS No. 146, "Accounting
        for Costs Associated with Exit or Disposal Activities",
        which addresses financial accounting and reporting for
        costs associated with exit or disposal activities and
        supersedes EITF No. 94-3, "Liability Recognition for
        Certain Employee Termination Benefits and Other Costs to
        Exit an Activity (including Certain Costs Incurred in a
        Restructuring)." SFAS No. 146 requires that a liability
        for a cost associated with an exit or disposal activity
        be recognized when the liability is incurred. Under EITF
        No. 94-3, a liability for an exit cost was recognized at
        the date of an entity's commitment to an exit plan. SFAS
        No. 146 also establishes that the liability should
        initially be measured and recorded at fair value. The
        provisions of SFAS No. 146 will be adopted for exit or
        disposal activities that are initiated after December
        31, 2002.

        In December 2002, the FASB issued SFAS No. 148,
        "Accounting for Stock-Based Compensation Transition and
        Disclosure an amendment of SFAS No. 123." This Statement
        amends SFAS No. 123, "Accounting for Stock-Based
        Compensation", to provide alternative methods of
        transition for a voluntary change to the fair value
        based method of accounting for stock-based employee
        compensation. In addition, this statement amends the
        disclosure requirements of SFAS No. 123 to require
        prominent disclosures in both annual and interim
        financial statements about the method of accounting for
        stock-based employee compensation and the effect of the
        method used on reported results. The adoption of SFAS
        No. 148 is not expected to have a material impact on the

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        company's financial position or results of operations.

        In November 2002, the FASB issued FASB Interpretation
        ("FIN") No. 45, "Guarantors Accounting and Disclosure
        Requirements for Guarantees, Including Indirect
        Guarantees and Indebtedness of Others", an
        interpretation of FIN No. 5, 57 and 107, and rescission
        of FIN No. 34, "Disclosure of Indirect Guarantees of
        Indebtedness of Others". FIN 45 elaborates on the
        disclosures to be made by the guarantor in its interim
        and annual financial statements about its obligations
        under certain guarantees that it has issued. It also
        requires that a guarantor recognize, at the inception of
        a guarantee, a liability for the fair value of the
        obligation undertaken in issuing the guarantee. The
        initial recognition and measurement provisions of this
        interpretation are applicable on a prospective basis to
        guarantees issued or modified after December 31, 2002;
        while, the provisions of the disclosure requirements are
        effective for financial statements of interim or annual
        periods ending after December 15, 2002. The company
        believes that the adoption of such interpretation will
        not have a material impact on its financial position or
        results of operations and will adopt such interpretation
        during fiscal year 2004, as required.

    In January 2003, the FASB issued FIN No. 46, "Consolidation of
    Variable Interest Entities", an interpretation of Accounting
    Research Bulletin No. 51. FIN No. 46 requires that variable
    interest entities be consolidated by a company if that company
    is subject to a majority of the risk of loss from the variable
    interest entity's activities or is entitled to receive a
    majority of the entity's residual returns or both. FIN No. 46
    also requires disclosures about variable interest entities
    that companies are not required to consolidate but in which a
    company has a significant variable interest. The consolidation
    requirements of FIN No. 46 will apply immediately to variable
    interest entities created after January 31, 2003. The
    consolidation requirements will apply to entities established
    prior to January 31, 2003 in the first fiscal year or interim
    period beginning after June 15, 2003. The disclosure
    requirements will apply in all financial statements issued
    after January 31, 2003. The company adopted the provisions of
    FIN No. 46 during the first quarter of fiscal 2003.

  Stock-Based Compensation
    The Company accounts for stock-based awards to employees in
    accordance with Accounting Principles Board Opinion No. 25,
    "Accounting for Stock Issued to Employees" and related
    interpretations and has adopted the disclosure-only
    alternative of SFAS No. 123, "Accounting for Stock-Based
    Compensation."

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    Options granted to consultants, independent representatives
    and other non-employees are accounted for using the fair value
    method as prescribed by SFAS No. 123.

  Year end
    The Company has adopted June 30 as its fiscal year end.

  NOTE 3   GOING CONCERN

  The accompanying financial statements have been prepared
  assuming that the Company will continue as a going concern,
  which contemplates the recoverability of assets and the
  satisfaction of liabilities in the normal course of business. As
  noted above, the Company is in the development stage and,
  accordingly, has not yet generated revenues from operations.
  Since its inception, the Company has been engaged substantially
  in financing activities and developing its product line, setting
  up its e-commerce website, and incurring substantial costs and
  expenses. As a result, the Company incurred accumulated net
  losses from August 18, 1999 (inception) through the period ended
  June 30, 2004 of $7,727. In addition, the Company's development
  activities since inception have been financially sustained
  through equity financing.

  The ability of the Company to continue as a going concern is
  dependent upon its ability to raise additional capital from the
  sale of common stock and, ultimately, the achievement of
  significant operating revenues.  The accompanying financial
  statements do not include any adjustments that might be required
  should the Company be unable to recover the value of its assets
  or satisfy its liabilities.

    NOTE 4   INCOME TAXES

    The Company accounts for income taxes under Statement of
    Financial Accounting Standards No. 109, "Accounting for
    Income Taxes"  ("SFAS No. 109"), which requires use of the
    liability method.   SFAS No.  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.







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    NOTE 4   INCOME TAXES (CONTINUED)

    The provision for income taxes differs from the amount
    computed by applying the statutory federal income tax rate
    to income before provision for income taxes.  The sources
    and tax effects of the differences are as follows:

                         U.S federal statutory rate      (34.0%)

                         Valuation reserve                    34.0%

                         Total
                                -%

    NOTE 5   STOCKHOLDER'S EQUITY (RELATED PARTY)

    The Company is authorized to issue 25,000,000 shares of
    $0.001 par value common stock.

    On August 20, 1999, the Company issued 2,500,000 shares of
    its $0.001 par value common stock to individuals who are
    directors of the Company in exchange for cash of $2,575.

    On August 20, 1999, the Company issued 2,000,000 shares of
    its $0.001 par value common stock to an entity managed and
    owned by the spouse of an officer and director of the
    Company as a stock dividend.

    There have been no other issuances of common stock.


    NOTE 6   WARRANTS AND OPTIONS

    As of June 30, 2004, there are no warrants or options
    outstanding to acquire any additional shares of common stock.


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