U.S. SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB


(Mark One)
 [X]      ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                      For Fiscal Year Ended: March 31, 2003

                                       or

 [  ]       TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

For the transition period from                       To
                              -----------------------    -----------------------


Commission file number         000-29535
                       ---------------------------------------------------------

                          Vapor Fuel Technologies, Inc.
                 (Name of small business issuer in its charter)

          Nevada                                                86-0972560
------------------------------                              --------------------
State or other jurisdiction of                                (I.R.S. Employer
incorporation or organization                                Identification No.)


                 25023 S. Beeson Road, Beavercreek, Oregon 97004
                 -----------------------------------------------
               (Address of principal executive offices) (zip code)


Issuer's telephone number                               (503) 632-1570
                                                       ---------------


Securities registered under Section 12(b) of the Act: NONE Securities registered
under Section 12(g) of the Act:

                          Common Stock Par Value $0.005
                                (Title of class)




<PAGE>



         Check whether the issuer (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 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
    ------     ---------

                                                                 Total pages: 19
                                                                            ----
                                                          Exhibit Index Page: 17
                                                                           -----

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

     State issuer's revenues for its most recent fiscal year.        $0
                                                                     ---

         The aggregate market value of Common Stock held by non-affiliates is $0
as of January 1, 2004. As of January 1, 2004,  700,000 shares of $.005 par value
Common Stock were issued and outstanding.


                       DOCUMENTS INCORPORATED BY REFERENCE

         If the following  documents  are  incorporated  by  reference,  briefly
describe them and identify the part of the Form 10-KSB  (e.g.,  Part I, Part II,
etc.) into which the document is incorporated: (1) any annual report to security
holders;  (2) any proxy or information  statement;  and (3) any prospectus filed
pursuant to Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act"):
NONE

         Transitional  Small Business  Disclosure Format (check one): Yes ; No X
















                                        2

<PAGE>


                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

Item Number and Caption                                                                                       Page
PART I

<S>         <C>                                                                                               <C>
Item 1.     Description of Business 4

Item 2.     Description of Property                                                                               6

Item 3.     Legal Proceedings                                                                                     6

Item 4.     Submission of Matters to a Vote of Security Holders                                                   7


PART II

Item 5.     Market for Common Equity and Related Stockholder Matters                                              7

Item 6.     Management's Discussion and Analysis or Plan of Operations                                            7

Item 7.     Financial Statements                                                                                 13

Item 8.     Changes in and Disagreements With Accountants on Accounting and
                 Financial Disclosure                                                                            13

PART III

Item 9.    Directors, Executive Officers, Promoters and Control Persons;
                Compliance with Section 16(a) of the Exchange Act                                                13

Item 10.   Executive Compensation                                                                                14

Item 11.   Security Ownership of Certain Beneficial Owners and Management                                        15

Item 12.   Certain Relationships and Related Transactions                                                        16

Item 13.   Exhibits and Reports on Form 8-K                                                                      17

Item 14.   Controls and Procedures                                                                               18
</TABLE>



                                        3

<PAGE>



                                     PART I



                         ITEM 1 DESCRIPTION OF BUSINESS


Summary of Our Business Prior to the Merger

         Unless the context requires  otherwise,  all references to "we," "our,"
or "us" or the  "Company"  are to  Vapor  Fuel  Technologies,  Inc.,  originally
incorporated in the State of Nevada in 1997 as Achievement Investments.

         Since our  incorporation  and until our recent  merger  with VFT,  Inc.
("VFT"), we had not engaged in any operations other than organizational matters.
We were  formed  specifically  to be a "blank  check"  or "clean  public  shell"
corporation  with the purpose of either  merging  with or acquiring an operating
company  with  operations.   We  were  an  inactive  publicly  registered  shell
corporation  and had no  significant  assets or operations  until we merged with
VFT. We have not been involved in any  litigation nor have we had any regulatory
problems or business  failures.  We are not traded on any public market and have
never paid dividends. As of January 1, 2004, we had 31 shareholders of record.

         Since our formation, our board of directors sought and reviewed various
acquisition and merger  candidates to implement our principal  business purpose,
which  was to  acquire  assets or shares  of an  entity  actively  engaged  in a
business that generated revenues in exchange for our securities.

         In  evaluating  the merger when it was  proposed to us, our  management
considered criteria such as the current and potential future value of the assets
of VFT and the anticipated future business  operations of VFT in comparison with
our current lack of operations and other opportunities presented to us. Based on
these  criteria,  our  management  determined  that the  merger  was in the best
interest of our shareholders,  who subsequently  approved the merger by majority
consent.

         VFT  merged  into us and  ceased its  corporate  existence.  Up to that
point,  we were a company  with a class of  common  stock  registered  under the
Securities  Exchange Act of 1934 and had no  operations,  except  organizational
matters. Our principal offices are located at 25023 S. Beeson Road, Beavercreek,
Oregon 97004, and our phone number is (503) 632-1570.

         On the effective date of the merger,  we issued each shareholder of VFT
approximately  45.454  shares of our post  reverse  stock split common stock for
each  share of VFT  common  stock  that the  shareholder  owned,  for a total of
500,000 shares. The merger was recorded as a recapitalization. After the merger,
our original  shareholders  own 29 percent of us and the former VFT shareholders
own 71 percent of our issued and outstanding common stock. In connection with

                                        4

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the merger, we changed our name to Vapor Fuel Technologies, Inc.

Summary of Our Business After the Merger

         We are engaged  primarily in the business of design and  development of
high efficiency  gasoline fuel  conversion  systems for both OEM and aftermarket
installations.  VFT, which merged into us, was incorporated in 1998 and formally
began this  business in March 2001.  Currently,  we are in the startup phase and
have no products or employees.

         Products. Our sole product currently under development is a fuel saving
device called the "Vaporcarb" that is designed to replace current fuel injection
and carburetion units on gas combustion automobiles.

         The original custom device burning gasoline vapor was designed by Bruce
Langston, a major shareholder and former director of VFT. Bushnell  Engineering,
Inc., a company wholly owned by one of our directors,  Raymond B. Bushnell, then
redesigned  the  product  and ran  controlled  laboratory  testing  on the newly
engineered device.

         If our product  testing is  successful,  we will seek out customers and
distribution  channels for the  Vaporcarb  and hope to sell the  Vaporcarb for a
price to be  established,  however,  our  manufacturing  costs of production are
estimated at between $60 - $90 per unit in volume.  We hope to have a production
model of the Vaporcarb available by the end of 2004.  However,  when we complete
our research and begin production  depends  significantly  upon our test results
and our ability to continue to fund testing, both of which are unpredictable.

         Competition.  We expect the fuel saving  technology in the Vaporcarb to
compete directly with existing products in the rapidly expanding  alternate fuel
industry.  Currently, the primary competition to the Vaporcarb is the compressed
natural  gas  engine.  Most  alternate  fuel  vehicles  being  used today run on
compressed  natural gas. Some of these  converted  automobiles  contain both the
customary gas and the pressurized  compressed natural gas tanks. We believe that
although compressed natural gas engines have an advantage as an already accepted
alternate  fuel  engine  by  the  automobile  industry,  the  conversion  of  an
automobile to the Vaporcarb  will be less  expensive and less  complicated  than
conversion to natural gas. We also believe that drivers would be more  receptive
to the Vaporcarb as an alternate fuel device  because the Vaporcarb  engine uses
regular pump gasoline, eliminating the hassle of locating the limited compressed
natural gas pumps.

         Another  potential  source of competition is new technology in gasoline
vapor created by automobile  makers. The automobile makers are larger and better
funded than we are.  They are in a better  position to exploit and market  their
alternate fuel products.

         Customers and  Marketing.  The focus of our business is developing  the
Vaporcarb.  We have  devoted  substantially  all of our  limited  assets to fund
research.  We have not engaged in extensive  customer  research or marketing and
will not do so until the  Vaporcarb has  successfully  completed all its product
tests. We plan to begin sales of the Vaporcarb as retrofit packages available to
customers through retail automotive shops. Ultimately, we plan to pursue license
agreements with

                                        5

<PAGE>



auto manufacturers.

         Suppliers.  Because we have not yet begun  production of the Vaporcarb,
we currently have no suppliers. All of the parts needed for the Vaporcarb in its
current design are available from multiple suppliers.

         IP and other assets. On November 6, 2001 we filed a patent  application
for Vaporcarb  with the United States  Patent and Trademark  Office.  The United
States Patent and Trademark Office has issued a notice of allowance.  We filed a
second patent  application  in August of 2003. We estimate we will be responding
to inquiries from a United States Patent and Trademark  Office  examiner for the
next 24 to 30 months before a patent is issued, if at all.

         Facilities.  We  were  previously  working  out of the  offices  of our
director and chief executive officer C. Thomas Davis. We recently moved to a new
2,500 square foot location at 25023 Beeson,  Beaver Creek,  Oregon 97004. We pay
$2,500 per month for this space.  This property is owned by our director Raymond
B. Bushnell. There is no written agreement memorializing this agreement.

         Employees.  As of March 31, 2003, we had no employees.  All services in
developing and testing the Vaporcarb  have been either paid through  issuance of
our common stock to Bushnell Engineering,  Inc., a company owned by our director
Raymond Bushnell, or conducted by Bushnell Engineering, Inc. on a contract basis
for a monthly fee of $7,500 per month.

         Regulatory  Compliance.  The U.S.  Department of Transportation and the
National  Transportation  Safety  Board  regulate  the design of engines used in
commercial  automobiles.  We anticipate  that we will need to provide design and
test  result  data to these  two  federal  agencies  before  we can  market  the
Vaporcarb.  This  approval  process can be long;  this will be the first time we
have been  through the  process.  We intend to begin the  approval  process upon
completion of the production version of Vaporcarb.


                         ITEM 2 DESCRIPTION OF PROPERTY


         Our  principal  corporate  offices are at 25023  Beeson,  Beaver Creek,
Oregon  97004.  We pay $2,500 per month for  approximately  2,500 square feet of
space.  This property is owned by our director Raymond B. Bushnell.  There is no
written agreement memorializing this agreement.



                            ITEM 3 LEGAL PROCEEDINGS


         There are no pending legal proceedings to which we are a party.


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<PAGE>





                        ITEM 4 SUBMISSION OF MATTERS TO A
                            VOTE OF SECURITY HOLDERS


         There were no matters submitted to a vote of shareholders.


                                     PART II



                       ITEM 5 MARKET FOR COMMON EQUITY AND
                           RELATED STOCKHOLDER MATTERS


Market Information

         There is no public trading  market for our common stock.  Our valuation
of our per share price is an estimation based on private  placements to insiders
in March of 2001.

Holders

         As of  January  1,  2004,  700,000  shares of common  stock  were by 31
persons of record.

Dividends

         Holders of common stock are  entitled to receive such  dividends as may
be  declared  by our  Board of  Directors.  We have not  declared  or paid  cash
dividends  on our common  stock and we do not  anticipate  that we will pay such
dividends in the foreseeable future.  Rather, we intend to apply any earnings to
the development of our business.  Any payment of future  dividends on our common
stock  and the  amount  of any  dividends  will be  determined  by our  Board of
Directors and will depend,  among other  factors,  upon our earnings,  financial
condition  and cash  requirements,  and any other factors the Board of Directors
may deem relevant.



                   ITEM 6 MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


         The  following  discussion  should  be read  in  conjunction  with  the
Company's  Financial  Statements and notes thereto  appearing  elsewhere in this
registration statement. The following

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<PAGE>



discussion contains forward-looking  statements,  including, but not limited to,
statements  concerning  our  plans,  anticipated  expenditures,   the  need  for
additional capital and other events and circumstances  described in terms of our
expectations  and intentions.  You are urged to review the information set forth
under the captions for factors that may cause actual events or results to differ
materially from those discussed below.

General

         The Registrant was formerly known as Achievement Investments and is now
known as Vapor Fuel Technologies, Inc., a Nevada corporation (the "Company"), as
the result of a name change on February 12, 2002. On July 24, 2001,  the Company
entered  into  a  Merger   Agreement,   which  was  subsequently   amended  (the
"Agreement"),  with VFT, Inc., an Oregon corporation  ("VFT"), to merge VFT into
the Company (the "merger").  As a result of the merger, the Company entered into
a  five-to-one   reverse  stock  split  and  issued  to  each  VFT   shareholder
approximately  45.454  shares of newly  issued,  post reverse stock split common
stock of the  Company  for each share of VFT common  stock that the  shareholder
owned,  for a total of 500,000  shares.  The former  shareholders of VFT now own
500,000  shares  out of the  700,000  shares  issued and  outstanding  after the
merger. The merger became effective on February 12, 2002.

         Prior to the merger, 80 percent of the Company's common stock was owned
by one person,  Daniel Hodges.  After the  effectiveness  of the merger,  no one
shareholder owns a majority of the outstanding  stock.  However,  the former VFT
shareholders collectively own approximately 71 percent of the Company.

         Immediately  prior to the  effectiveness  of the merger,  the Company's
sole director and sole officer,  Daniel  Hodges,  appointed C. Thomas Davis as a
director and the new chief executive officer of the Company, Raymond B. Bushnell
as a  director  and new  president  of the  Company,  Floyd  Hambelton  as a new
director of the Company and Larry Chace as the  secretary  and  treasurer of the
Company.  Mr. Hodges resigned from his position as director and from all officer
positions as of the effectiveness of the merger.

         Before our acquisition of VFT we were an inactive  publicly  registered
shell corporation and had no significant assets or operations.

         Overview.  Effective  as of the merger with VFT on February  12,  2002,
Vapor Fuel  Technologies,  Inc. became a startup company engaged in research and
development of its product,  Vaporcarb.  Currently,  we have no employees and no
products on the market.

         Revenues.  Our product is still in the research and  development  phase
and not yet ready for sale.  We have no sales  revenue and do not expect to earn
any sales revenue until we begin marketing  Vaporcarb,  which may take a year or
longer.

         Expenses  and Net Loss.  The  Company has no  employees  and leases its
space from one of the members of its Board of Directors.  To date, the Company's
primary operations have been the

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research and development of its product, Vaporcarb. Therefore, substantially all
of our  expenses are related to the  purchase of product  materials  and cost of
testing the Vaporcarb.  The Company  classifies all expenses related to research
and development as "Research and Development Expenses" and all other expenses as
"General and  Administrative  Expenses." Our research and  development  expenses
rose from  approximately  $124,000 in fiscal 2002 to $127,000 in fiscal 2003. At
the same time, our administrative  expenses rose from  approximately  $47,000 to
$56,000 in connection with the subsequent  legal and accounting costs related to
regular  public  reporting  requirements  and the  registration  of our  shares.
Interest expense increased from approximately  $12,000 in fiscal 2002 to $29,000
in fiscal 2003. This increase is due to increased borrowing. We have funded most
of our increased expenses through additional  borrowing from our directors.  See
"-Liquidity and Capital Resources."

         For  the  fiscal  year  ended  March  31,   2003,   our  net  loss  was
approximately  $212,000,  a rise  from  $184,000  in fiscal  2002.  The net loss
reflects the costs  associated  with  research and  development,  administrative
costs  associated  with  compliance  with public  company  reporting and imputed
interest expense on the demand notes owed to directors.

         Liquidity and Capital  Resources.  As of March 31, 2003, we had no cash
for operations and had outstanding  $368,189 in demand  promissory  notes to our
directors.  To date,  the lack of cash has not  prevented  the Company  from its
research and development of the Vaporcarb. Bushnell Engineering, Inc., a company
owned by one of our directors, provided initial research and testing services to
us in  exchange  for shares of our  common  stock and has  continued  to provide
research and  development  services for a monthly fee of $7,500.  At the current
level of funding through borrowings from affiliates and if Bushnell continues to
provide  research and testing services on the same basis, we expect that it will
take at least another six months  before the Vaporcarb has completed  laboratory
testing.  We also expect to need to hire  consultants to assist it in regulatory
issues, sales and marketing Vaporcarb.

         We will need to raise funds through either private or public placements
of equity in the next 12 months to complete the  development  of  Vaporcarb  and
successfully  introduce Vaporcarb to the market. We believe that if we were able
to raise $2,000,000,  we would be able to run multiple engine tests of Vaporcarb
concurrently  and  hire  the  appropriate  consultants  necessary  to  make  the
Vaporcarb ready for sale to the public.

         The Company  currently  has no offers by  investors to invest in it and
the  Company has not sought a line of credit  with any  lending  agency.  If the
Company  does not raise funds  through the sale of equity,  it will  continue to
fund its operations  through borrowed funds from its directors,  however,  there
are no  guarantees  from any of the  directors  that they will  continue to lend
funds to the Company or lend funds on such  favorable  terms in the  future.  If
such funds are  unavailable,  we will be unable to continue  operations and will
ultimately be required to default on our notes and cease business.

Risk Factors


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The Company currently has no business operations except research and development
of a single product.

         Vapor Fuel  Technologies,  Inc. has no business  operations.  It has no
employees.  Its sole  activity is to research  and develop a more gas  efficient
combustible  engine which is currently being tested by the Company's  director's
engineering  company.  There  is  no  assurance  whether  the  product  will  be
successful.  If this current project is not successful or is not accepted by the
industry, the Company will continue to have no business operations indefinitely.
The  Company has no sales and  supports  its  research  and  development  by the
issuance of equity,  donations and  borrowing  from its  directors.  The Company
currently has no other projects in development.

The Company may not be successful in the development of products.

         The Company's  technologies  are new and its sole product  candidate to
date,  Vaporcarb,  is in an early  stage of  development.  The  Company  may not
develop the  Vaporcarb or other  products  that prove to be safe and  effective,
meet  applicable  regulatory  standards,  are capable of being  manufactured  at
reasonable  costs,  or can be marketed  successfully.  Successful  products will
require   significant   development  and  investment,   including  testing,   to
demonstrate  their safety and  efficacy  prior to their  commercialization.  The
Company  has not proven its ability to develop and  commercialize  products.  It
must  continue  additional  research  and  development  before the  Vaporcarb is
marketable.

The Company is in debt and currently has no means to raise  additional  funds to
continue its operations.

         The Company has funded its operations  strictly through the issuance of
privately placed equity and borrowings from its directors. As of March 31, 2003,
the Company  owed its  directors  and  shareholders  an aggregate of $368,189 in
demand  notes.  The  Company  has  operated  at a loss since its  inception.  It
currently has no means to repay the notes. If the  noteholders  were to call the
notes,  the  Company  would be  required  to raise  funds from third  parties or
liquidate its operations.  Currently,  the Company has no line of credit and has
received no  assurances  from third parties that such funds will be available if
needed.

The Company's product,  even if it successfully passes current testing,  may not
be accepted by the industry or the public.

         The Company has not yet  explored  the  market's  receptiveness  of its
product.  As  with  all new  products,  there  may be  hesitation  by  potential
customers to try the product.  The Company currently has no marketing department
and no relationship  with marketing  consultants.  Further,  it may not have the
funds  necessary  to  successfully  market its  product  or  compete  with other
products available to customers.

Our product in development is subject to an uncertain regulatory process. If our
product is not approved, we may not be able to sell our product.

                                       10

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         The U.S.  Department of Transportation and the National  Transportation
Safety Board  regulate the design of engines used in  commercial  vehicles.  The
Company  anticipates it will need to obtain approval from these federal agencies
before we can begin  selling the  Vaporcarb.  The Company has never been through
this process and expects it will be expensive and time  consuming.  In addition,
the Company may be further delayed by changes in regulatory  policy for approval
during the period of product development.

The market in which the Company operates is intensely competitive and actions by
its competitors could harm its business.

         The Company must compete with other alternative fuel companies and auto
manufacturers,  many of whom are larger,  better  capitalized,  better connected
with   institutional   purchasers  of   alternative   fuels  products  and  more
experienced. Barriers to entry in the alternative fuel industry are moderate and
increased  competition  could occur. As the Company seeks to market its product,
it  will  face a  greater  number  of  competitors,  many  of  whom  will  be in
well-established  markets  the  Company  seeks to  penetrate.  Accordingly,  the
Company  may not be able to  successfully  compete  against  them or any  future
competitors.  Moreover,  competitors may be able to respond more quickly to take
advantage  of  new  or  changing   opportunities,   technologies   and  customer
preferences and requirements.

Any inability to protect the  Company's  proprietary  technology  would harm the
Company's competitive position and its ability to commence operations.

         Although the Company has filed a patent  application  covering  certain
technology  related to  Vaporcarb,  there can be no  guarantee  a patent will be
issued or, if issued,  that it will not be  challenged by another  company.  The
Company's  future success and competitive  edge against bigger and better funded
competitors depends on the ability of the Company to obtain and protect a patent
on the  Vaporcarb  technology.  If the Company does not  adequately  protect its
intellectual  property,  our competitive  edge will be eroded and our ability to
commence operations in the future will be harmed.

Because we are a  development-stage  company focused on a single product that is
not ready for sale, we have no revenue and may not for a long time, if ever.

         The Company has had no earnings and no  operations  except the research
and  development of its single  product.  The Company's  financial  results rely
entirely  on the  Company's  ability to  successfully  develop  and market  this
product.  In addition,  the following  factors  influence  the Company's  future
revenues and net earnings, if any:

o        the  ability  of  the  Company  to  continue   funding   research   and
         development;

o        competing products and competition from better funded companies;

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o        managing production of the product, if sales occur; and

o        the overall demand for alternate fuels products.

         These and other  factors may make it difficult to predict the Company's
future results of operations.

There is no market for your shares and you may not be able to sell them.

         Even if a market for our shares eventually  develops,  the market price
of our common stock may fluctuate significantly due to a number of factors, some
of which may be beyond our control, including:

o        the  potential   absence  of  securities   analysts   covering  us  and
         distributing research and recommendations about us;

o        we expect our  operating  losses to continue  during our  research  and
         development phase and that we will need additional  funding to continue
         research;

o        we will  have a low  trading  volume  because  so much of our  stock is
         closely held;

o        overall stock market fluctuations; and

o        economic conditions  generally and in the alternative fuels industry in
         particular.

         Any of these factors could have a significant and adverse impact on the
market price of our common stock.  In addition,  the stock market in general has
experienced  extreme  volatility and rapid decline that has often been unrelated
or disproportionate to the operating performance of particular companies.  These
broad market  fluctuations  may adversely affect the trading price of our common
stock, regardless of our actual operating performance.

We are a closely-held  company.  Coalitions of a few of our larger  stockholders
have sufficient voting power to make corporate  governance  decisions that could
have significant effect on us and the other shareholders.

         Our officers,  directors and  principal  stockholders  (greater that 5%
stockholders)  together  control  approximately  94% of our  outstanding  common
stock. As a result,  these stockholders,  if they act together,  will be able to
exert a significant degree of influence over our management and affairs and over
matters requiring stockholder approval,  including the election of directors and
approval of significant corporate transactions.  In addition, this concentration
of ownership may delay or prevent a change in control of us and might affect the
market price of common  stock,  even when a change in control may be in the best
interest of all stockholders.  Furthermore,  the interests of this concentration
of ownership  may not always  coincide  with our  interests or the  interests of
other

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stockholders and accordingly,  these  stockholders  could cause us to enter into
transactions or agreements which we would not otherwise consider.


                           ITEM 7 FINANCIAL STATEMENTS


         The  financial  statements  of the Company and  supplementary  data are
included beginning  immediately following the signature page to this report. See
Item 13 for a list of the financial statements and financial statement schedules
included.



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


         There are not and have not been any  disagreements  between the Company
and its  accountants  on any  matter  of  accounting  principles,  practices  or
financial statements disclosure.


                                    PART III


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


Section 16(a) Beneficial Ownership Reporting Compliance

         The following  directors and officers  failed to make a timely  initial
Form 3 filing upon entering into their  respective  positions:  C. Thomas Davis,
Raymond B. Bushnell, Floyd Hambelton and Larry Chace.

Executive Officers and Directors

         The  following  table sets forth the names,  positions  and ages of our
directors and  executive  officers.  Our directors  were elected by the majority
written  consent of our  shareholders  in lieu of a meeting.  Our  directors are
typically  elected at each annual meeting and serve for one year and until their
successors  are  elected  and  qualify.  Officers  are  elected  by our Board of
Directors and their terms of office are at the discretion of our Board.


                                       13

<PAGE>




Director's   Name                Age                           Position


C. Thomas Davis                   51                         Director/CEO
Raymond B. Bushnell               45                         Director/President
Floyd Hambelton                   75                         Director
Larry Chace                       66                         Secretary/Treasurer

         Messrs.  Davis,  Bushnell,  Hambelton and Chace became  officers and/or
directors of the Company on February 12, 2002 following the effectiveness of the
merger of VFT into the Company.

C.  Thomas  Davis - Mr.  Davis  has been a  practicing  attorney  with a general
practice  since 1982.  Mr. Davis earned his juris  doctorate  from  Northwestern
School of Law in 1981 and a Master of  Education  in 1975.  Prior to  practicing
law, Mr. Davis was a secondary  school  teacher.  He has been a director and the
chief  executive  officer of Vapor Fuel  Technologies,  Inc.  since February 12,
2002.

Raymond B.  Bushnell - Mr.  Bushnell  is the  president  and chief  designer  of
Bushnell  Engineering,  Inc.,  a company that  designs  industrial  and consumer
products.  Mr. Bushnell has served in that capacity since 1991. Prior to working
at Bushnell  Engineering,  Inc.,  Mr.  Bushnell was the director of research and
development  for Southern Steel Company,  a subsidiary of Phelps  Tionton,  from
1988 to 1991,  during which he oversaw the design and engineering of electronic,
electro-mechanical, hydraulic and pneumatic engineered devices. Mr. Bushnell has
been a  director  and the  president  of Vapor  Fuel  Technologies,  Inc.  since
February 12, 2002.

Floyd  Hambelton - Mr.  Hambelton  is a major  shareholder  and the  operator of
Hambelton  Bros.  Lumber  Co.,  a  lumber  manufacturer  located  in  Washougal,
Washington.  Mr. Hambelton has served in that capacity since 1971. Mr. Hambelton
served as a director and as the  secretary and treasurer of VFT, Inc. from March
1, 2001 to February 12, 2002, when it merged into Vapor Fuel Technologies,  Inc.
Following  the  merger,  Mr.  Hambelton  has served as a director  of Vapor Fuel
Technologies, Inc.

Larry Chace - Mr. Chace is the Director of sales and marketing at Chemtek,  Inc.
and has served in that capacity since 1996.  Prior to working at Chemtek,  Inc.,
Mr. Chace was a self-employed  investment  relations consultant who worked as an
independent  contractor to Canadian  corporations  from 1985 through  1996.  Mr.
Chace served as a director of VFT, Inc. from March 1, 2001 until its merger with
Vapor Fuel  Technologies,  Inc. on February 12, 2002.  Following the merger, Mr.
Chace has served as the secretary and treasurer of Vapor Fuel Technologies, Inc.



                         ITEM 10 EXECUTIVE COMPENSATION


         For the three year periods ended March 31, 2003, 2002 and 2001, none of
the directors or

                                       14

<PAGE>



officers  received any  compensation for their services as directors or officers
of the Company.  The Company does not pay director fees nor reimburse  directors
for out-of-pocket expenses related to their services as directors.

         None of the officers have written or oral employment contracts with the
Company.



                 ITEM 11 SECURITY OWNERSHIP OF BENEFICIAL OWNERS
                                 AND MANAGEMENT


Principal Shareholders

         The following  table sets forth,  as of January 1, 2004, the number and
percentage of the 700,000  outstanding shares of common stock beneficially owned
by (a) each person known by us to  beneficially  own more than 5% of such stock,
(b) each  director  of the  Company,  and (c) all our  directors  and  executive
officers as a group.

                                       # of
Name and Address                     Shares
of Beneficial Owners                  Owned                      Percent
Directors

Principal Shareholders

Raymond B. Bushnell (1)                45,454                             6.5%

Bruce Langston (1)                    250,000                            35.7%

Suki Family Trust (1)(2)               45,454                             6.5%

Daniel Hodges
Lloyd Craig, LLC.
11601 E. Lusitano Place
Tucson, AZ 85748                      160,000                            22.9%


Floyd Hambelton (1)                   113,638                            16.2%

Gary Van Norman (1)                    45,454                             6.5%

All Executive Officers and

                                       15

<PAGE>



Directors as a Group (4
persons)                              159,092                             22.7%


(1)      The  shareholder  listed has sole  voting and  investment  powers  with
         respect  to the  shares  indicated.  The  addresses  of  all  of  these
         shareholders is 25023 S. Beeson Road, Beavercreek, Oregon

(2)      The  beneficiaries  of the Suki Family Trust are the family  members of
         Robert Reid,  who is a  non-voting  advisor to the  Company's  Board of
         Directors.




             ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


         Our  business  operations  to date have been  solely the  research  and
development of our product,  the Vaporcarb.  We have no other operations and, in
particular,  no revenue from operations to support our research.  We have funded
all of our research by the payment of common stock for research services and the
borrowing of funds from our shareholders and directors.

         As of March 31,  2003,  we had  borrowed  $368,189  from the  following
directors and shareholders in non-interest bearing demand notes:

         Floyd Hambelton                    $234,069
         Suki Family Trust                  $130,538
         Gary Van Norman                    $    3,582

         We are  renting  our  current  office  space at 25023 S.  Beeson  Road,
Beavercreek,  Oregon  97004  from  Raymond  B.  Bushnell,  our  president  and a
director,  for $2,500 per month. Bushnell  Engineering,  Inc., which is owned by
Mr.  Bushnell,  completed  initial testing of our product in  consideration  for
shares of VFT, Inc.  common stock.  On March 1, 2001, we issued Mr. Bushnell the
shares of VFT,  Inc.  that,  upon our February 12, 2002 merger,  converted  into
45,454 shares of our $.005 Common Stock. Since March 2001, Bushnell Engineering,
Inc. has continued  testing and  development  of our product for a fee of $7,500
per month.








                                       16

<PAGE>





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


      (a) The following documents are filed as part of this report.

1.     Financial Statements
<TABLE>
<CAPTION>
                                                                                                               Page

<S>                                                                                                            <C>
Report of Robison, Hill & Co., Independent Certified Public Accountants.........................................F-1
Balance Sheets
  March 31, 2003, and 2002......................................................................................F-2
Statements of Loss
  For the Years Ended March 31, 2003, and 2002..................................................................F-3
Statement of Stockholders' Equity
  From August 4, 1998 (inception) to March 31, 2003.............................................................F-4
Statements of Cash Flows
  For the Years Ended March 31, 2003, and 2002..................................................................F-6
Notes to Financial Statements
  March 31, 2003, and 2002......................................................................................F-8
</TABLE>


2.     Financial Statement Schedules

     All schedules are omitted  because they are not  applicable or the required
information is shown in the financial statements or notes thereto.

3.     Exhibits

         The following exhibits are included as part of this report:

Exhibit
Number           Title of Document

2.1      Merger Agreement among  Registrant,  VFT, Inc., an Oregon  Corporation,
         and its shareholders. (1)

3.1      Amended and Restated  Articles of Incorporation  of Registrant,  ,dated
         February 12, 2002 (1)

3.2      Amended and Restated By-laws of Registrant (1)

31.1     Certification  Pursuant  to Section  302 of the  Sarbanes-Oxley  Act of
         2002.


                                       17

<PAGE>



31.2     Certification  Pursuant  to Section  302 of the  Sarbanes-Oxley  Act of
         2002.

32.1     Certification  Pursuant  to Section  906 of the  Sarbanes-Oxley  Act of
         2002.

32.2     Certification  Pursuant  to Section  906 of the  Sarbanes-Oxley  Act of
         2002.

         (1)      Incorporated  herein by reference from  Registrant's Form 8-K,
                  dated February 19, 2002.


         There were no reports filed on Form 8-K during the year ended March 31,
2003.



                        ITEM 14. CONTROLS AND PROCEDURES


         The Company's Chief Executive  Officer and Chief Financial Officer have
concluded,  based on an evaluation  conducted within 90 days prior to the filing
date of this  annual  report  on Form 10- KSB,  that  the  Company's  disclosure
controls and  procedures  have  functioned  effectively  so as to provide  those
officers the information necessary whether:

                  (i) this  annual  report on Form  10-KSB  contains  any untrue
                  statement of a material fact or omits to state a material fact
                  necessary  to  make  the  statements  made,  in  light  of the
                  circumstances  under  which such  statements  were  made,  not
                  misleading  with respect to the period  covered by this annual
                  report on Form 10-KSB, and

                  (ii) the financial statements, and other financial information
                  included in this annual report on Form 10-KSB,  fairly present
                  in all material respects the financial  condition,  results of
                  operations  and cash flows of the Company as of, and for,  the
                  periods presented in this annual report on Form 10-KSB.

         There  have  been no  significant  changes  in the  Company's  internal
controls or in other factors since the date of the Chief Executive Officer's and
Chief  Financial  Officer's  evaluation  that could  significantly  affect these
internal controls,  including any corrective actions with regards to significant
deficiencies and material weaknesses.









                                       18

<PAGE>






                                   SIGNATURES


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

                          VAPOR FUEL TECHNOLOGIES, INC.

Dated: January 13, 2004                 By  /S/     C. Thomas Davis
                                        ----------------------------------------
                                        C. Thomas Davis
                                        Chief Executive Officer
                                        (Principal Executive Officer)

         Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf of
the Registrant and in the capacities indicated on this 13th day of January 2004.

Signatures                               Title

/S/     C. Thomas Davis
-----------------------------
C. Thomas Davis                          C.E.O., Director
                                         (Principal Executive Officer)


/S/     Raymond B. Bushnell
-----------------------------
Raymond B. Bushnell                      President, Director


/S/     Floyd Hambelton
Floyd Hambelton                          Director


/S/     Larry Chace
Larry Chace                         Secretary, Treasurer
                                    (Principal Financial and Accounting Officer)





                                       19

                          VAPOR FUEL TECHNOLOGIES, INC.
                          (A Development Stage Company)

                                       -:-

                          INDEPENDENT AUDITOR'S REPORT

                             MARCH 31, 2003 AND 2002






<PAGE>






                                    CONTENTS
<TABLE>
<CAPTION>

                                                                                                          Page

<S>                                                                                                       <C>
Independent Auditor's Report...............................................................................F - 1

Balance Sheets
  March 31, 2003 and 2002..................................................................................F - 2

Statements of Operations
  For the Years Ended March 31, 2003 and 2002..............................................................F - 3

Statement of Stockholders' Equity
  Since August 4, 1998 (inception) to March 31, 2003.......................................................F - 4

Statements of Cash Flows
  For the Years Ended March 31, 2003 and 2002..............................................................F - 6

Notes to Financial Statements..............................................................................F - 8
</TABLE>
























<PAGE>



                          INDEPENDENT AUDITOR'S REPORT



Vapor Fuel Technologies, Inc.
(A Development Stage Company)

         We  have  audited  the  accompanying   balance  sheets  of  Vapor  Fuel
Technologies  (a  development  stage company) as of March 31, 2003 and 2002, and
the  related  statements  of  operations  and cash flows for the two years ended
March 31, 2003,  and the statement of  stockholders'  equity for the period from
August 4, 1998 (inception) to March 31, 2003. These financial statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

         We conducted our audits in accordance with auditing standards generally
accepted in the United States of America.  Those standards  require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  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  financial  statements  referred to above  present
fairly,  in  all  material  respects,  the  financial  position  of  Vapor  Fuel
Technologies  (a  development  stage company) as of March 31, 2003 and 2002, and
the results of its  operations  and its cash flows for the two years ended March
31, 2003, and its statement of  stockholders'  equity for the period from August
4, 1998 (inception) to March 31, 2003, in conformity with accounting  principles
generally accepted in the United States of America.

         The accompanying  financial statements have been prepared assuming that
the Company  will  continue as a going  concern.  As  discussed in Note 1 to the
financial statements,  the Company has suffered recurring losses from operations
and has a net capital  deficiency that raise substantial doubt about its ability
to continue as a going  concern.  Management's  plans in regard to these matters
are also  described  in Note 1. The  financial  statements  do not  include  any
adjustments that might result from the outcome of this uncertainty.

                                                    Respectfully submitted


                                                    /s/ Robison, Hill & Co.
                                                    Certified Public Accountants

Salt Lake City, Utah
November 21, 2003

                                      F - 1

<PAGE>



                          VAPOR FUEL TECHNOLOGIES, INC.
                          (A Development Stage Company)
                                 BALANCE SHEETS
<TABLE>
<CAPTION>



                                                                      March 31,           March 31,
                                                                 -------------------  ------------------
                                                                        2003                 2002
                                                                 -------------------  ------------------

ASSETS:
Fixed Assets
<S>                                                              <C>                  <C>
   Equipment                                                     $            14,156  $            8,500
   Leasehold Improvements                                                     22,000              22,000
   Accumulated Depreciation                                                   (5,859)             (1,016)
                                                                 -------------------  ------------------
      Net Fixed Assets                                                        30,297              29,484
                                                                 -------------------  ------------------

        Total Assets                                             $            30,297  $           29,484
                                                                 ===================  ==================

LIABILITIES:
  Related Party Payable                                          $           368,189  $          216,978
  Accounts Payable                                                            66,899              34,634
                                                                 -------------------  ------------------

        Total Liabilities                                                    435,088             251,612
                                                                 -------------------  ------------------

STOCKHOLDERS' EQUITY:
  Preferred Stock, par value $.001,
    Authorized 10,000,000 shares,
    -0- Shares Issued at March 31, 2003 and 2002                                   -                   -
  Common Stock, par value $.005,
    Authorized 20,000,000 shares,
    700,000 Shares Issued at March 31, 2003,
    and 500,000 at March 31, 2002                                              3,500               3,500
  Additional Paid-In Capital                                                  57,562              28,158
  Deficit Accumulated During the
      Development Stage                                                     (465,853)           (253,786)
                                                                 -------------------  ------------------

        Total Stockholders' Equity                                          (404,791)           (222,128)
                                                                 -------------------  ------------------

        Total Liabilities and
          Stockholders' Equity                                   $            30,297  $           29,484
                                                                 ===================  ==================
</TABLE>

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


                                      F - 2

<PAGE>



                          VAPOR FUEL TECHNOLOGIES, INC.
                          (A Development Stage Company)
                            STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>




                                                                                   Cumulative
                                                                                  since August
                                                                                     4, 1998
                                                 For the year ended               inception of
                                                      March 31,                    development
                                        -------------------------------------
                                               2003               2002                stage
                                        ------------------  -----------------   -----------------
<S>                                     <C>                 <C>                 <C>
Revenues:                               $                -  $               -   $               -

Expenses:
  Research & Development                           126,884            124,494             295,830
  General & Administrative                          55,779             47,172             119,573
                                        ------------------  -----------------   -----------------

Operating Income (Loss)                           (182,663)          (171,666)           (415,403)
                                        ------------------  -----------------   -----------------

Other Income (Expense)
  Interest                                         (29,404)           (12,050)            (50,450)
                                        ------------------  -----------------   -----------------

  Net Income (Loss)                     $         (212,067) $        (183,716)  $        (465,853)
                                        ==================  =================   =================

Basic & Diluted loss per share          $           (0.30)  $          (0.35)
                                        ==================  =================

Weighted Average Shares                            700,000            526,301
                                        ==================  =================
</TABLE>












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

                                      F - 3

<PAGE>



                          VAPOR FUEL TECHNOLOGIES, INC.
                          (A Development Stage Company)
                        STATEMENT OF STOCKHOLDERS' EQUITY
               SINCE AUGUST 4, 1998 (INCEPTION) TO MARCH 31, 2003
<TABLE>
<CAPTION>

                                                                                                                          Deficit
                                                                                                                        Accumulated
                                                                                                                          Since
                                                                                                                         August 4,
                                                                                                                            1998
                                                                                                         Additional     Inception of
                                                     Preferred Stock              Common Stock             Paid-In       Development
                                                   Shares        Value         Shares         Value        Capital         Stage
                                                 -----------   -----------   -----------   -----------   -----------    -----------
<S>                                              <C>           <C>           <C>           <C>           <C>            <C>
Balance at August 4, 1998 (inception)                   --     $      --            --     $      --     $      --      $      --

Net Loss                                                --            --            --            --            --             --
                                                 -----------   -----------   -----------   -----------   -----------    -----------
Balance at March 31, 1999                               --            --            --            --            --             --

Net Loss                                                --            --            --            --            --          (35,101)
                                                 -----------   -----------   -----------   -----------   -----------    -----------
Balance at March 31, 2000                               --            --            --            --            --          (35,101)

March 1, 2001 Shares Granted for
    Payment of Accounts Payable and
    Payment for Patent                                  --            --         340,000         1,700          (700)          --

March 31, 2001 Shares Issued for
    Research & Development Expense                      --            --          45,000           225         3,775           --

March 31, 2001 Shares Granted for
   Payment of Interest on Note Payable                  --            --         115,000           575         8,421           --
</TABLE>


                                      F - 4

<PAGE>



                          VAPOR FUEL TECHNOLOGIES, INC.
                          (A Development Stage Company)
                        STATEMENT OF STOCKHOLDERS' EQUITY
               SINCE AUGUST 4, 1998 (INCEPTION) TO MARCH 31, 2003
                                   (Continued)
<TABLE>
<CAPTION>

                                                                                                                          Deficit
                                                                                                                        Accumulated
                                                                                                                          Since
                                                                                                                         August 4,
                                                                                                                            1998
                                                                                                         Additional     Inception of
                                                     Preferred Stock              Common Stock             Paid-In       Development
                                                   Shares        Value         Shares         Value        Capital         Stage
                                                 -----------   -----------   -----------   -----------   -----------    -----------
<S>                                              <C>           <C>           <C>           <C>           <C>            <C>
Net Loss                                                 --     $      --            --     $      --     $      --     $   (34,969)
                                                  -----------   -----------   -----------   -----------   -----------   -----------

Balance at March 31, 2001                                --            --         500,000         2,500        11,496       (70,070)

February 12, 2002 Shares Issued
     In Merger                                           --            --         200,000         1,000        16,662          --
Net Loss                                                 --            --            --            --            --        (183,716)
                                                  -----------   -----------   -----------   -----------   -----------   -----------

Balance at March 31, 2002                                --            --         700,000         3,500        28,158      (253,786)

Interest Expense Converted to
   Paid-In Capital                                       --            --            --            --          29,404          --
Net Loss                                                 --            --            --            --            --        (212,067)
                                                  -----------   -----------   -----------   -----------   -----------   -----------

Balance at March 31, 2003                                --     $      --         700,000   $     3,500   $    57,562   $  (465,853)
                                                  ===========   ===========   ===========   ===========   ===========   ===========
</TABLE>

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

                                      F - 5

<PAGE>



                          VAPOR FUEL TECHNOLOGIES, INC.
                          (A Development Stage Company)
                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                                                       Cumulative
                                                                                                      Since August
                                                                                                         4, 1998
                                                                      For the years ended             Inception of
                                                                           March 31,                   Development
                                                              ------------------------------------
                                                                     2003              2002               Stage
                                                              ------------------ ----------------- -------------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
<S>                                                           <C>                <C>               <C>
Net Loss                                                      $         (212,067)$        (183,716)$          (465,853)
Adjustments to reconcile net loss to net
cash used in operating activities:
    Depreciation Expense                                                   4,843             1,016               5,859
    Issuance of Stock for Expenses                                             -                 -               4,999
    Issuance of Stock for Interest on Note Payable                             -                 -               8,996
    Interest Expense on Related Party Payables
          Converted to Contributed Capital                                29,404            17,662              47,067
Change in operating assets and liabilities:
    Increase (Decrease) in Accounts Payable                               32,265            34,560              66,899
    Accrued Interest on Notes Payable                                          -                 -                   -
                                                              ------------------ ----------------- -------------------

Net Cash Used in Operating Activities                                   (145,555)         (130,478)           (332,033)
                                                              ------------------ ----------------- -------------------

CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of Fixed Assets                                                  (5,656)          (30,500)            (36,156)
                                                              ------------------ ----------------- -------------------
Net cash provided by Investing Activities                                 (5,656)          (30,500)            (36,156)
                                                              ------------------ ----------------- -------------------

CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from Related Party Payables                                     151,211           160,978             368,189
                                                              ------------------ ----------------- -------------------
Net Cash Provided by Financing Activities                                151,211           160,978             368,189
                                                              ------------------ ----------------- -------------------

Net (Decrease) Increase in
  Cash and Cash Equivalents                                                    -                 -                   -
Cash and Cash Equivalents
  at Beginning of Period                                                       -                 -                   -
                                                              ------------------ ----------------- -------------------
Cash and Cash Equivalents
  at End of Period                                            $                - $               - $                 -
                                                              ================== ================= ===================

</TABLE>
                                     F - 6
<PAGE>

                          VAPOR FUEL TECHNOLOGIES, INC.
                          (A Development Stage Company)
                            STATEMENTS OF CASH FLOWS
                                   (Continued)
<TABLE>
<CAPTION>

                                                                                                       Cumulative
                                                                                                      Since August
                                                                                                         4, 1998
                                                                      For the years ended             Inception of
                                                                           March 31,                   Development
                                                              ------------------------------------
                                                                    2003               2002               Stage
                                                              -----------------  ----------------- -------------------

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
------------------------------------------------
Cash paid during the year for:
<S>                                                           <C>                <C>               <C>
  Interest                                                    $                - $               - $                 -
  Franchise and income taxes                                  $                - $               - $                 -

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES:
Stock Issued for Patent                                       $                - $               1 $                 1
</TABLE>






















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

                                      F - 7

<PAGE>



                          VAPOR FUEL TECHNOLOGIES, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED MARCH 31, 2003 AND 2002

NOTE 1 - NATURE OF OPERATIONS AND GOING CONCERN

         The accompanying  financial  statements have been prepared on the basis
of accounting principles applicable to a "going concern",  which assume that the
Company  will  continue in  operation  for at least one year and will be able to
realize  its assets  and  discharge  its  liabilities  in the  normal  course of
operations.

         Several conditions and events cast doubt about the Company's ability to
continue  as  a  "going  concern".  The  Company  has  incurred  net  losses  of
approximately  $212,000 for the year ended March 31, 2003, $184,000 for the year
ended March 31, 2002, and $466,000 since the inception of development stage. The
Company  also has a  working  capital  deficit  of  approximately  $435,000  and
$252,000 as of March 31, 2003 and 2002,  respectively.  The Company will require
additional  financing in order to finance its business  activities on an ongoing
basis.  The  Company is  actively  pursuing  alternative  financing  and has had
discussions  with various third parties,  although no firm commitments have been
obtained. In the interim,  shareholders of the Company have committed to meeting
its minimal operating expenses.

         The  Company's  future  capital  requirements  will  depend on numerous
factors  including,  but not limited to,  continued  progress in developing  its
products, and market penetration.

         These  financial  statements do not reflect  adjustments  that would be
necessary  if the Company  were unable to continue as a "going  concern".  While
management believes that the actions already taken or planned, will mitigate the
adverse conditions and events which raise doubt about the validity of the "going
concern" assumption used in preparing these financial  statements,  there can be
no assurance that these actions will be successful.

         If the  Company  were unable to  continue  as a "going  concern",  then
substantial adjustments would be necessary to the carrying values of assets, the
reported amounts of its liabilities, the reported revenues and expenses, and the
balance sheet classifications used.

Organization and Basis of Presentation

         The Company was  incorporated  under the laws of the State of Oregon on
August 4, 1998.  Since August 4, 1998, the Company is in the development  stage,
and has not commenced planned principal operations.





                                      F - 8

<PAGE>



                          VAPOR FUEL TECHNOLOGIES, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED MARCH 31, 2003 AND 2002
                                   (Continued)

NOTE 1 - NATURE OF OPERATIONS AND GOING CONCERN (continued)

         On February 12, 2002, the Company merged with  Achievement  Investments
(Achievement),  a Nevada corporation.  The merger was accounted for as a reverse
merger,  with the Company being  treated as the  acquiring  entity for financial
reporting purposes.  In connection with this merger,  Achievement issued 500,000
shares of  common  stock in  exchange  for the  assets  and  liabilities  of the
Company. As a result of the merger, the Company became a Nevada corporation, and
changed its name to Vapor Fuel Technologies, Inc.

         The merger was recorded as a recapitalization.  In connection with this
recapitalization, the number of shares outstanding prior to the merger have been
restated  to their post merger  equivalents  (increased  from  11,000  shares to
500,000).  All references in the accompanying financial statements to the number
of Common shares and  per-share  amounts for 2003 and 2002 have been restated to
reflect the equivalent number of post merger shares.

Nature of Business

         The Company has no  products  or  services  as of March 31,  2003.  The
Company was  organized  as a vehicle to research  and develop  alternative  fuel
systems and fuel  efficiency  enhancement  systems for the  internal  combustion
engine.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         This summary of accounting  policies for Vapor Fuel Technologies,  Inc.
(a  development  stage  company) is  presented  to assist in  understanding  the
Company's  financial  statements.  The accounting  policies conform to generally
accepted  accounting  principles  and  have  been  consistently  applied  in the
preparation of the financial statements.

Cash and Cash Equivalents

         For purposes of the statement of cash flows, the Company  considers all
highly liquid debt instruments purchased with a maturity of three months or less
to be cash equivalents to the extent the funds are not being held for investment
purposes.

Pervasiveness of Estimates

         The  preparation of financial  statements in conformity  with generally
accepted accounting


                                      F - 9

<PAGE>



                          VAPOR FUEL TECHNOLOGIES, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED MARCH 31, 2003 AND 2002
                                   (Continued)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

principles required management to make estimates and assumptions that affect the
reported  amounts of assets and liabilities and disclosure of contingent  assets
and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses  during the  reporting  period.  Actual  results  could
differ from those estimates.

Reclassifications

         Certain   reclassifications  have  been  made  in  the  2002  financial
statements to conform with the 2003 presentation.

Stock Compensation for Non-Employees

         The  Company  accounts  for the fair  value of its  stock  compensation
grants for  non-employees  in accordance with FASB Statement 123. The fair value
of each grant is equal to the market price of the Company's stock on the date of
grant if an active  market  exists or at a value  determined  in an arms  length
negotiation between the Company and the non-employee.

Loss per Share

         The  reconciliations  of the numerators and  denominators  of the basic
loss per share computations are as follows:
<TABLE>
<CAPTION>
                                                                                                     Per-Share
                                                              Income              Shares               Amount
                                                              ------              ------               ------
                                                           (Numerator)         (Denominator)

                                                                     For the year ended March 31, 2003
Basic Loss per Share
<S>                                                     <C>                             <C>      <C>
Loss to common shareholders                             $         (212,067)             700,000  $           (0.30)
                                                        ==================  ===================  ==================

                                                                     For the year ended March 31, 2002
Basic Loss per Share
Loss to common shareholders                             $         (183,716)             526,301  $           (0.35)
                                                        ==================  ===================  ==================
</TABLE>



                                     F - 10

<PAGE>



                          VAPOR FUEL TECHNOLOGIES, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED MARCH 31, 2003 AND 2002
                                   (Continued)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

         There were no  outstanding  common stock  equivalents at March 31, 2003
and 2002.

Concentration of Credit Risk

         The  Company has no  significant  off-balance-sheet  concentrations  of
credit  risk such as foreign  exchange  contracts,  options  contracts  or other
foreign hedging arrangements.

Depreciation

         Office furniture,  equipment and leasehold improvements,  are stated at
cost.  Depreciation and amortization are computed using the straight-line method
over the estimated economic useful lives of the related assets as follows:

                  Equipment                                   5-  7 years
                  Leasehold improvements                      8-15 years

         Maintenance  and  repairs are charged to  operations;  betterments  are
capitalized.  The  cost  of  property  sold  or  otherwise  disposed  of and the
accumulated depreciation thereon are eliminated from

the property and related accumulated  depreciation  accounts,  and any resulting
gain or loss is credited or charged to income.

NOTE 3 - INCOME TAXES

         As of March 31, 2003, the Company had a net operating loss carryforward
for income tax reporting  purposes of approximately  $466,000 that may be offset
against future taxable income through 2023. Current tax laws limit the amount of
loss  available to be offset  against  future  taxable income when a substantial
change in ownership  occurs.  Therefore,  the amount  available to offset future
taxable income may be limited. No tax benefit has been reported in the financial
statements,  because the Company  believes  there is a 50% or greater chance the
carryforwards will expire unused. Accordingly, the potential tax benefits of the
loss carryforwards are offset by a valuation allowance of the same amount.





                                     F - 11

<PAGE>


                          VAPOR FUEL TECHNOLOGIES, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED MARCH 31, 2003 AND 2002
                                   (Continued)

NOTE 4 - DEVELOPMENT STAGE COMPANY

         The Company has not begun principal  operations and as is common with a
development  stage  company,  the Company has had  recurring  losses  during its
development stage.

NOTE 5 - COMMITMENTS

         As of March 31, 2003 all  activities of the Company have been conducted
by corporate  officers from either their homes or business  offices.  Currently,
there  are no  outstanding  debts  owed by the  company  for  the  use of  these
facilities and there are no commitments for future use of the facilities.

NOTE 6- RELATED PARTY PAYABLES

         The  Company  has  borrowed  money  from  shareholders  in order to pay
various  expenses.  Per the promissory note,  amounts due to the shareholder are
non-interest bearing,  unsecured and payable at anytime the shareholder desires.
For purposes of these  financial  statements  interest has been calculated at an
imputed  interest  rate of 10 percent  for the years  ending  March 31, 2003 and
2002. As of March 31, 2003, the Company owes $368,189 relating to these notes.

NOTE 7 - RELATED PARTY TRANSACTIONS

         The Company pays an officer  $10,000 per month for rent of research and
development facilities and research and development consulting.

NOTE 8 - PATENTS PENDING

         During the year ended March 31, 2001, the Company  acquired a patent in
exchange for 5,500 shares of common stock.  This patent is for a vapor system of
fuel efficiency in an internal combustion engine.

         During  the year  ended  March  31,  2002,  the  Company  filed  patent
applications covering certain technology related to "Vaporcarb".  Vaporcarb is a
fuel  saving  device  that is designed to replace  current  fuel  injection  and
carburetion  units on gas combustion  automobiles.  Vaporcarb is currently under
development.  The total cost of the patent  applications as of March 31, 2002 is
$8,614. The cost of these patent applications has been recorded as an expense in
the accompanying Statement of Operations as of March 31, 2002.

                                     F - 12