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<SEC-DOCUMENT>0001019687-04-000820.txt : 20040415
<SEC-HEADER>0001019687-04-000820.hdr.sgml : 20040415
<ACCEPTANCE-DATETIME>20040415142235
ACCESSION NUMBER:		0001019687-04-000820
CONFORMED SUBMISSION TYPE:	10KSB/A
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20031231
FILED AS OF DATE:		20040415

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			HOUSTON OPERATING CO
		CENTRAL INDEX KEY:			0001083220
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-BUSINESS SERVICES, NEC [7389]
		IRS NUMBER:				760307819
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0630

	FILING VALUES:
		FORM TYPE:		10KSB/A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-31553
		FILM NUMBER:		04735515

	BUSINESS ADDRESS:	
		STREET 1:		11145 W ROCKLAND DRIVE
		CITY:			LITTLETON
		STATE:			CO
		ZIP:			80127
		BUSINESS PHONE:		5188997393

	MAIL ADDRESS:	
		STREET 1:		11145 W ROCKLAND DRIVE
		CITY:			LITTLETON
		STATE:			CO
		ZIP:			80127
</SEC-HEADER>
<DOCUMENT>
<TYPE>10KSB/A
<SEQUENCE>1
<FILENAME>houston_10ka1-123103.txt
<TEXT>
<PAGE>

                                   FORM 10-KSB/A

                     U.S. SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

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

                1934 For the fiscal year ended: December 31, 2003

                        COMMISSION FILE NUMBER 000-31553

                            HOUSTON OPERATING COMPANY

            Delaware                                        76-0307819
- --------------------------------                        -------------------
    (State of incorporation)                             (I.R.S. Employer
                                                         Identification No.)

610 Newport Center Dr., Suite 1400, Newport Beach, CA 92660
- -----------------------------------------------------------
(Address of principal executive offices)

Issuer's telephone number:             (949) 760-6832
                                      -----------------

       Securities registered under Section 12(b) of the Exchange Act: None
  Securities registered under Section 12(g) of the Exchange Act: Common Stock,
                                  $0.001 par value
                                (Title of class)

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 issuer was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
- --------------------------------------------------------------------------------

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of issuer'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 ---

As of December 31, 2003, 765,172 shares of the Company's Common Stock, were held
by non-affiliates. There is a limited trading market for the Company's Common
Stock, and the market value of the non affiliate owned shares was $153,034 based
on a bid price as of April, 2004 of $.20 per share The number of shares of
Common Stock of the registrant outstanding as of December 31, 2003, were
7,795,172

                                       1




<PAGE>

                                TABLE OF CONTENTS

PART I                                                                     PAGE

     Item 1.   Description of Business                                         3
     Item 2.   Description of Property                                        16
     Item 3.   Legal Proceedings                                              17
     Item 4.   Submission of Matters to a Vote of Security Holders            17

PART II

     Item 5.   Market for Common Equity and Related Stockholder Matters       17
     Item 6.   Management's Discussion and Analysis or Plan of Operation      18
     Item 7.   Financial Statements                                           19
     Item 8.   Changes in and Disagreements With Accountants on Accounting    19
               and Financial Disclosure
     Item 8A.  Controls and Procedures                                        19

PART III

     Item 9.   Directors, Executive Officers, Promoters and Control Persons;
               Compliance with Section 16(a) of the Exchange Act              20
     Item 10.  Executive Compensation                                         24
     Item 11.  Security Ownership of Certain Beneficial Owners and Management 24
     Item 12.  Certain Relationships and Related Transactions                 25
     Item 13.  Exhibits and Reports on Form 8-K                               26
     Item 14.  Principal Fees and Services                                    26

SIGNATURES                                                                    27

                                       2




<PAGE>

                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS.

GENERAL
- -------

The Company was formed in Delaware on August 31, 1989 as a wholly owned
subsidiary of Normandy Oil & Gas Company, Inc. Pursuant to a Plan of
Reorganization for Cambridge Oil Company ("Cambridge") in Bankruptcy Case No.
88-01859-H5-11 (Chapter 11) in the U.S. District Court, Southern District of
Texas, Houston Division, the Bankruptcy Court entered an Order on April 19, 1990
which approved the Plan. Houston Oil Company was specifically formed to effect
the transactions of the Plan.

The aggregate number of authorized shares Houston Operating Company has
authority to issue is 60,000,000, of which 50,000,000 shares are common stock
having a par value of $.001 per share, 5,000,000 shares are preferred stock
having a par value of $.001 per share and 5,000,000 shares are preference stock
having a par value of $.001 per share. At August 31, 1989, Houston Operating
Company had not engaged in any business operations other than organizational
activities after failing at an initial attempt to finance oil and gas operations
after emerging as part of a Chapter 11 Bankruptcy Plan. At year end, Houston
Operating Company had no assets or liabilities, and no income had been received
and no costs had been incurred, except services of President and administrative
costs for 2000.

Under the Plan, Houston issued approximately two million eight hundred thousand
shares to shareholders and creditors of the Bankrupt debtor, Cambridge Oil
Company. Although the Company was formed under the Plan, the Company could not
continue operations without significant capital funding and when such funding
was not achieved, the Company operations were suspended. No operations were
conducted after 1990 until 1998.

In 1998 a large shareholder, Richard W. Morrell, of 35 Caroline Corporation (a
New York corporation) purchased control of the Company to complete a share

exchange with shareholders of 35 Caroline Corporation. The Company business was
proposed to be engaging in recovery and return of leased automobiles for auto
leasing companies. An SB-2 Registration was filed with the SEC but was
abandoned. Due to accounting problems in consolidating the financial statements
and difficulties in completing the purchase agreement and share exchange, the
Share Exchange was rescinded in 1999, with the result that 35 Caroline
Corporation was no longer a subsidiary.

The Company has no operations and has had no operations in the last two years.
35 Caroline Corporation was intended to be a subsidiary and had operations, but
due to the rescission of the share exchange, no operations occurred in Houston
Operating Company.

As of April 28, 2003, J.R. Nelson, a majority shareholder, officer and director
of the Company sold 7,030,000 shares of common stock of the Company to Speed
Action Limited, a British Virgin Islands corporation pursuant to the Share
Purchase Agreement, dated as of April 25, 2003, by and among J.R. Nelson, the
Company and Speed Action Limited (the "Closing"). There are 7,795,172 shares of
the Company's common stock issued and outstanding as of the date hereof. As a
result of the stock sale, Speed Action Limited became the majority shareholder
of the Company holding approximately 90% of the Company's common stock.

Upon the Closing J.R. Nelson resigned as the President of the Company and Chin
Sin Low has been appointed as a director and President and Chief Financial
Officer of the Company. Florence Mei Fong Choong has been appointed as a
director and Secretary of the Company effective 10 days after compliance with
Section 14f of the Securities Exchange Act of 1934, upon resignation of Mr.
Nelson as the director of the Company.

The Company is an inactive company and its only current business plan is to
seek, investigate, and, if warranted, acquire one or more properties or
businesses, and to pursue other related activities intended to enhance
shareholder value. The acquisition of a business opportunity may be made by
purchase, merger, exchange of stock, or otherwise, and may encompass assets or a
business entity, such as a corporation, joint venture, or partnership. The
Company has no capital, and it is unlikely that the Company will be able to take
advantage of more than one such business opportunity. The Company intends to
seek opportunities demonstrating the potential of long-term growth as opposed to
short-term earnings.

                                       3





<PAGE>

At the present time the Company has not identified any business opportunity that
it plans to pursue, nor has the Company reached any agreement or definitive
understanding with any person concerning an acquisition.

It is anticipated that the Company's officers and directors will contact
broker-dealers and other persons with whom they are acquainted who are involved
in corporate finance matters to advise them of the Company's existence and to
determine if any companies or businesses they represent have an interest in
considering a merger or acquisition with the Company. No assurance can be given
that the Company will be successful in finding or acquiring a desirable business
opportunity, given that no funds that are available for acquisitions, or that
any acquisition that occurs will be on terms that are favorable to the Company
or its stockholders.

The Company's search will be directed toward small and medium-sized enterprises
which have a desire to become public corporations and which are able to satisfy,
or anticipate in the reasonably near future being able to satisfy, the minimum
asset requirements in order to qualify shares for trading on NASDAQ or a stock
exchange (See "Investigation and Selection of Business Opportunities"). The
Company anticipates that the business opportunities presented to it will (i) be
recently organized with no operating history, or a history of losses
attributable to under-capitalization or other factors; (ii) be experiencing
financial or operating difficulties; (iii) be in need of funds to develop a new
product or service or to expand into a new market; (iv) be relying upon an
untested product or marketing concept; or (v) have a combination of the
characteristics mentioned in (i) through (iv). The Company intends to
concentrate its acquisition efforts on properties or businesses that it believes
to be undervalued. Given the above factors, investors should expect that any
acquisition candidate may have a history of losses or low profitability.

The Company does not propose to restrict its search for investment opportunities
to any particular geographical area or industry, and may, therefore, engage in
essentially any business, to the extent of its limited resources. This includes
industries such as service, finance, natural resources, manufacturing, high
technology, product development, medical, communications and others. The
Company's discretion in the selection of business opportunities is unrestricted,
subject to the availability of such opportunities, economic conditions, and
other factors.

                                       4




<PAGE>

Depending upon the nature of the transaction, the current officers and directors
of the Company may resign management positions with the Company in connection
with the Company's acquisition of a business opportunity. See "Form of
Acquisition," below, and "Risk Factors - The Company - Lack of Continuity in
Management." In the event of such a resignation, the Company's current
management would not have any control over the conduct of the Company's business
following the Company's combination with a business opportunity.

It is anticipated that business opportunities will come to the Company's
attention from various sources, including its officer and director, its other
stockholders, professional advisors such as attorneys and accountants,
securities broker-dealers, venture capitalists, members of the financial
community, and others who may present unsolicited proposals. The Company has no
plans, understandings, agreements, or commitments with any individual for such
person to act as a finder of opportunities for the Company.

The Company does not foresee that it would enter into a merger or acquisition
transaction with any business with which its officers or directors are currently
affiliated. Should the Company determine in the future, contrary to foregoing
expectations, that a transaction with an affiliate would be in the best
interests of the Company and its stockholders, the Company is in general
permitted by Delaware law to enter into such a transaction if certain
requirements are met under the Delaware law.

INVESTIGATION AND SELECTION OF BUSINESS OPPORTUNITIES
- -----------------------------------------------------

To a large extent, a decision to participate in a specific business opportunity
may be made upon management's analysis of the quality of the other company's
management and personnel, the anticipated acceptability of new products or
marketing concepts, the merit of technological changes, the perceived benefit
the Company will derive from becoming a publicly held entity, and numerous other
factors which are difficult, if not impossible, to analyze through the
application of any objective criteria. In many instances, it is anticipated that
the historical operations of a specific business opportunity may not necessarily
be indicative of the potential for the future because of the possible need to
shift marketing approaches substantially, expand significantly, change product
emphasis, change or substantially augment management, or make other changes. The
Company will be dependent upon the owners of a business opportunity to identify
any such problems which may exist and to implement, or be primarily responsible
for the implementation of, required changes. Because the Company may participate
in a business opportunity with a newly organized firm or with a firm which is
entering a new phase of growth, it should be emphasized that the Company will
incur further risks, because management in many instances will not have proved
its abilities or effectiveness, the eventual market for such company's products
or services will likely not be established, and such company may not be
profitable when acquired.

It is anticipated that the Company will not be able to diversify, but will
essentially be limited to one such venture because of the Company's limited
financing. This lack of diversification will not permit the Company to offset
potential losses from one business opportunity against profits from another, and
should be considered an adverse factor affecting any decision to purchase the
Company's securities.

                                       5





<PAGE>

It is emphasized that management of the Company may effect transactions having a
potentially adverse impact upon the Company's shareholders pursuant to the
authority and discretion of the Company's management to complete acquisitions
without submitting any proposal to the stockholders for their consideration.
Holders of the Company's securities should not anticipate that the Company
necessarily will furnish such holders, prior to any merger or acquisition, with
financial statements, or any other documentation, concerning a target company or
its business. In some instances, however, the proposed participation in a
business opportunity may be submitted to the stockholders for their
consideration, either voluntarily by such directors to seek the stockholders'
advice and consent or because state law so requires.

The analysis of business opportunities will be undertaken by or under the
supervision of the Company's President, who is not a professional business
analyst. See "Management." Although there are no current plans to do so, Company
management might hire an outside consultant to assist in the investigation and
selection of business opportunities, and might pay a finder's fee. Since Company
management has no current plans to use any outside consultants or advisors to
assist in the investigation and selection of business opportunities, no policies
have been adopted regarding use of such consultants or advisors, the criteria to
be used in selecting such consultants or advisors, the services to be provided,
the term of service, or regarding the total amount of fees that may be paid.
However, because of the limited resources of the Company, it is likely that any
such fee the Company agrees to pay would be paid in stock and not in cash.
Otherwise, the Company anticipates that it will consider, among other things,
the following factors:

1. Potential for growth and profitability, indicated by new technology,
anticipated market expansion, or new products;

2. The Company's perception of how any particular business opportunity will be
received by the investment community and by the Company's stockholders;

3. Whether, following the business combination, the financial condition of the
business opportunity would be, or would have a significant prospect in the
foreseeable future of becoming sufficient to enable the securities of the
Company to qualify for listing on an exchange or on a national automated
securities quotation system, such as NASDAQ, so as to permit the trading of such
securities to be exempt from the requirements of Rule 15c2-6 recently adopted by
the Securities and Exchange Commission. See "Risk Factors - The Company -
Regulation of Penny Stocks."

4. Capital requirements and anticipated availability of required funds, to be
provided by the Company or from operations, through the sale of additional
securities, through joint ventures or similar arrangements, or from other
sources;

5. The extent to which the business opportunity can be advanced;

6. Competitive position as compared to other companies of similar size and
experience within the industry segment as well as within the industry as a
whole;

7. Strength and diversity of existing management, or management prospects that
are scheduled for recruitment;

8. The cost of participation by the Company as compared to the perceived
tangible and intangible values and potential; and

9. The accessibility of required management expertise, personnel, raw materials,
services, professional assistance, and other required items.

In regard to the possibility that the shares of the Company would qualify for
listing on NASDAQ, the current standards include the requirements that the
issuer of the securities that are sought to be listed have total assets of at
least $4,000,000 and total capital and surplus of at least $2,000,000. Many, and
perhaps most, of the business opportunities that might be potential candidates
for a combination with the Company would not satisfy the NASDAQ listing
criteria.

                                       6





<PAGE>

No one of the factors described above will be controlling in the selection of a
business opportunity, and management will attempt to analyze all factors
appropriate to each opportunity and make a determination based upon reasonable
investigative measures and available data. Potentially available business
opportunities may occur in many different industries and at various stages of
development, all of which will make the task of comparative investigation and
analysis of such business opportunities extremely difficult and complex.
Potential investors must recognize that, because of the Company's limited
capital available for investigation and management's limited experience in
business analysis, the Company may not discover or adequately evaluate adverse
facts about the opportunity to be acquired.

The Company is unable to predict when it may participate in a business
opportunity. It expects, however, that the analysis of specific proposals and
the selection of a business opportunity may take several months or more.

Prior to making a decision to participate in a business opportunity, the Company
will generally request that it be provided with written materials regarding the
business opportunity containing such items as a description of products,
services and company history; management resumes; financial information;
available projections, with related assumptions upon which they are based; an
explanation of proprietary products and services; evidence of existing patents,
trademarks, or services marks, or rights thereto; present and proposed forms of
compensation to management; a description of transactions between such company
and its affiliates during relevant periods; a description of present and
required facilities; an analysis of risks and competitive conditions; a
financial plan of operation and estimated capital requirements; audited
financial statements, or if they are not available, unaudited financial
statements, together with reasonable assurances that audited financial
statements would be able to be produced within a reasonable period of time not
to exceed 60 days following completion of a merger transaction; and other
information deemed relevant.

As part of the Company's investigation, the Company's executive officers and
directors may meet personally with management and key personnel, may visit and
inspect material facilities, obtain independent analysis or verification of
certain information provided, check references of management and key personnel,
and take other reasonable investigative measures, to the extent of the Company's
limited financial resources and management expertise.

It is possible that the range of business opportunities that might be available
for consideration by the Company could be limited by the impact of Securities
and Exchange Commission regulations regarding purchase and sale of "penny
stocks." The regulations would affect, and possibly impair, any market that
might develop in the Company's securities until such time as they qualify for
listing on NASDAQ or on another exchange which would make them exempt from
applicability of the "penny stock" regulations. See "Risk Factors - - Regulation
of Penny Stocks."

Company management believes that various types of potential merger or
acquisition candidates might find a business combination with the Company to be
attractive. These include acquisition candidates desiring to create a public
market for their shares in order to enhance liquidity for current shareholders,
acquisition candidates which have long-term plans for raising capital through
the public sale of securities and believe that the possible prior existence of a
public market for their securities would be beneficial, and acquisition
candidates which plan to acquire additional assets through issuance of
securities rather than for cash, and believe that the possibility of development
of a public market for their securities will be of assistance in that process.
Acquisition candidates which have a need for an immediate cash infusion are not
likely to find a potential business combination with the Company to be an
attractive alternative.

                                       7

<PAGE>

There are no loan arrangements or arrangements for any financing whatsoever
relating to any business opportunities.

FORM OF ACQUISITION
- -------------------

It is impossible to predict the manner in which the Company may participate in a
business opportunity. Specific business opportunities will be reviewed as well
as the respective needs and desires of the Company and the promoters of the
opportunity and, upon the basis of that review and the relative negotiating
strength of the Company and such promoters, the legal structure or method deemed
by management to be suitable will be selected. Such structure may include, but
is not limited to leases, purchase and sale agreements, licenses, joint ventures
and other contractual arrangements. The Company may act directly or indirectly
through an interest in a partnership, corporation or other form of organization.
Implementing such structure may require the merger, consolidation or
reorganization of the Company with other corporations or forms of business
organization, and although it is likely, there is no assurance that the Company
would be the surviving entity. In addition, the present management and
stockholders of the Company most likely will not have control of a majority of
the voting shares of the Company following a reorganization transaction. As part
of such a transaction, the Company's existing directors may resign and new
directors may be appointed without any vote by stockholders.

It is likely that the Company will acquire its participation in a business
opportunity through the issuance of common stock or other securities of the
Company. Although the terms of any such transaction cannot be predicted, it
should be noted that in certain circumstances the criteria for determining
whether or not an acquisition is a so-called "tax free" reorganization under the
Internal Revenue Code of 1986, depends upon the issuance to the stockholders of
the acquired company of a controlling interest (i.e. 80% or more) of the common
stock of the combined entities immediately following the reorganization. If a
transaction were structured to take advantage of these provisions rather than
other "tax free" provisions provided under the Internal Revenue Code, the
Company's current stockholders would retain in the aggregate 20% or less of the
total issued and outstanding shares. This could result in substantial additional
dilution in the equity of those who were stockholders of the Company prior to
such reorganization. Any such issuance of additional shares might also be done
simultaneously with a sale or transfer of shares representing a controlling
interest in the Company by the current officers, directors and principal
shareholders. (See "Description of Business - General").

It is anticipated that any new securities issued in any reorganization would be
issued in reliance upon exemptions, if any are available, from registration
under applicable federal and state securities laws. In some circumstances,
however, as a negotiated element of the transaction, the Company may agree to
register such securities either at the time the transaction is consummated, or
under certain conditions or at specified times thereafter. The issuance of
substantial additional securities and their potential sale into any trading
market that might develop in the Company's securities may have a depressive
effect upon such market.

The Company will participate in a business opportunity only after the
negotiation and execution of a written agreement. Although the terms of such
agreement cannot be predicted, generally such an agreement would require
specific representations and warranties by all of the parties thereto, specify
certain events of default, detail the terms of closing and the conditions which
must be satisfied by each of the parties thereto prior to such closing, outline
the manner of bearing costs if the transaction is not closed, set forth remedies
upon default, and include miscellaneous other terms.

                                       8




<PAGE>

As a general matter, the Company anticipates that it, and/or its officers and
principal shareholders will enter into a letter of intent with the management,
principals or owners of a prospective business opportunity prior to signing a
binding agreement. Such a letter of intent will set forth the terms of the
proposed acquisition but will not bind any of the parties to consummate the
transaction. Execution of a letter of intent will by no means indicate that
consummation of an acquisition is probable. Neither the Company nor any of the
other parties to the letter of intent will be bound to consummate the
acquisition unless and until a definitive agreement concerning the acquisition
as described in the preceding paragraph is executed. Even after a definitive
agreement is executed, it is possible that the acquisition would not be
consummated should any party elect to exercise any right provided in the
agreement to terminate it on specified grounds.

It is anticipated that the investigation of specific business opportunities and
the negotiation, drafting and execution of relevant agreements, disclosure
documents and other instruments will require substantial management time and
attention and substantial costs for accountants, attorneys and others. If a
decision is made not to participate in a specific business opportunity, the
costs theretofore incurred in the related investigation would not be
recoverable. Moreover, because many providers of goods and services require
compensation at the time or soon after the goods and services are provided, the
inability of the Company to pay until an indeterminate future time may make it
impossible to procure goods and services.

In all probability, upon completion of an acquisition or merger, there will be a
change in control through issuance of substantially more shares of common stock.
Further, in conjunction with an acquisition or merger, it is likely that
management may offer to sell a controlling interest at a price not relative to
or reflective of any value of the shares sold by management, and at a price
which could not be achieved by individual shareholders at the time.

INVESTMENT COMPANY ACT AND OTHER REGULATION
- -------------------------------------------

The Company may participate in a business opportunity by purchasing, trading or
selling the securities of such business. The Company does not, however, intend
to engage primarily in such activities. Specifically, the Company intends to
conduct its activities so as to avoid being classified as an "investment
company" under the Investment Company Act of 1940 (the "Investment Act"), and
therefore to avoid application of the costly and restrictive registration and
other provisions of the Investment Act, and the regulations promulgated
thereunder.

Section 3(a) of the Investment Act contains the definition of an "investment
company," and it excludes any entity that does not engage primarily in the
business of investing, reinvesting or trading in securities, or that does not
engage in the business of investing, owning, holding or trading "investment
securities" (defined as "all securities other than government securities or
securities of majority-owned subsidiaries") the value of which exceeds 40% of
the value of its total assets (excluding government securities, cash or cash
items). The Company intends to implement its business plan in a manner which
will result in the availability of this exception from the definition of
"investment company." Consequently, the Company's participation in a business or
opportunity through the purchase and sale of investment securities will be
limited.

The Company's plan of business may involve changes in its capital structure,
management, control and business, especially if it consummates a reorganization
as discussed above. Each of these areas is regulated by the Investment Act, in
order to protect purchasers of investment company securities. Since the Company
will not register as an investment company, stockholders will not be afforded
these protections.

                                       9




<PAGE>

Any securities which the Company might acquire in exchange for its common stock
are expected to be "restricted securities" within the meaning of the Securities
Act of 1933, as amended (the "Act"). If the Company elects to resell such
securities, such sale cannot proceed unless a registration statement has been
declared effective by the Securities and Exchange Commission or an exemption
from registration is available. Section 4(1) of the Act, which exempts sales of
securities not involving a distribution, would in all likelihood be available to
permit a private sale. Although the plan of operation does not contemplate
resale of securities acquired, if such a sale were to be necessary, the Company
would be required to comply with the provisions of the Act to effect such
resale.

An acquisition made by the Company may be in an industry which is regulated or
licensed by federal, state or local authorities. Compliance with such
regulations can be expected to be a time-consuming and expensive process.

COMPETITION
- -----------

The Company expects to encounter substantial competition in its efforts to
locate attractive opportunities, primarily from business development companies,
venture capital partnerships and corporations, venture capital affiliates of
large industrial and financial companies, small investment companies, and
wealthy individuals. Many of these entities will have significantly greater
experience, resources and managerial capabilities than the Company and will
therefore be in a better position than the Company to obtain access to
attractive business opportunities. The Company also will possibly experience
competition from other public "blank check" companies, some of which may have
more funds available than does the Company.

NO RIGHTS OF DISSENTING SHAREHOLDERS
- ------------------------------------

The Company does not intend to provide Company shareholders with complete
disclosure documentation including audited financial statements, concerning a
possible target company prior to acquisition, because Colorado Business
Corporation Act vests authority in the Board of Directors to decide and approve
matters involving acquisitions within certain restrictions. Any transaction
would be structured as an acquisition, not a merger, with the Registrant being
the parent company and the acquiree being merged into a wholly owned subsidiary.
Therefore, a shareholder will have no right of dissent under Delaware law.

NO TARGET CANDIDATES FOR ACQUISITION
- ------------------------------------

None of the Company's Officers, Directors, promoters, affiliates, or associates
have had any preliminary contact or discussion with any specific candidate for
acquisition. There are no present plans, proposals, arrangements, or
understandings with any representatives of the owners of any business or company
regarding the possibility of an acquisition transaction.

                                       10




<PAGE>

EMPLOYEES
- ---------

The Company is an inactive company and currently has no employees. Management of
the Company expects to use consultants, attorneys and accountants as necessary,
and does not anticipate a need to engage any full-time employees so long as it
is seeking and evaluating business opportunities. The need for employees and
their availability will be addressed in connection with the decision whether or
not to acquire or participate in specific business opportunities. There is no
current plan under which, remuneration may be paid to or accrued for the benefit
of, the Company's officers prior to, or in conjunction with, the completion of a
business acquisition for services actually rendered, and the Company has adopted
a resolution and policy which precludes payment of any compensation or finder's
fees to officers or directors. See "Executive Compensation" and under "Certain
Relationships and Related Transactions."

RISK FACTORS
- ------------

1. Conflicts of Interest. Certain conflicts of interest may exist between the
Company and its officers and directors. They have other business interests to
which they devote their attention, and may be expected to continue to do so
although management time should be devoted to the business of the Company. As a
result, conflicts of interest may arise that can be resolved only through
exercise of such judgment as is consistent with fiduciary duties to the Company.
See "Management," and "Conflicts of Interest."

It is anticipated that Company's officers and directors may actively negotiate
or otherwise consent to the purchase of a portion of his common stock as a
condition to, or in connection with, a proposed merger or acquisition
transaction. In this process, the Company's officers may consider his own
personal pecuniary benefit rather than the best interests of other Company
shareholders, and the other Company shareholders are not expected to be afforded
the opportunity to approve or consent to any particular stock buy-out
transaction. See "Conflicts of Interest."

2. Need For Additional Financing. The Company has very limited funds, and such
funds may not be adequate to take advantage of any available business
opportunities. Even if the Company's funds prove to be sufficient to acquire an
interest in, or complete a transaction with, a business opportunity, the Company
may not have enough capital to exploit the opportunity. The ultimate success of
the Company may depend upon its ability to raise additional capital. The Company
has not investigated the availability, source, or terms that might govern the
acquisition of additional capital and will not do so until it determines a need
for additional financing. If additional capital is needed, there is no assurance
that funds will be available from any source or, if available, that they can be
obtained on terms acceptable to the Company. If not available, the Company's
operations will be limited to those that can be financed with its modest
capital.

3. Regulation of Penny Stocks. The Company's securities, will be subject to a
Securities and Exchange Commission rule that imposes special sales practice
requirements upon broker-dealers who sell such securities to persons other than
established customers or accredited investors. For purposes of the rule, the
phrase "accredited investors" means, in general terms, institutions with assets
in excess of $5,000,000, or individuals having a net worth in excess of
$1,000,000 or having an annual income that exceeds $200,000 (or that, when
combined with a spouse's income, exceeds $300,000). For transactions covered by
the rule, the broker-dealer must make a special suitability determination for
the purchaser and receive the purchaser's written agreement to the transaction
prior to the sale. Consequently, the rule may affect the ability of
broker-dealers to sell the Company's securities and also may affect the ability
of purchasers in this offering to sell their securities in any market that might
develop therefore.

                                       11




<PAGE>

In addition, the Securities and Exchange Commission has adopted a number of
rules to regulate "penny stocks." Such rules include Rules 3a51-1, 15g-1, 15g-2,
15g-3, 15g-4, 15g-5, 15g-6, 15g-7, and 15g-9 under the Securities Exchange Act
of 1934, as amended. Because the securities of the Company may constitute "penny
stocks" within the meaning of the rules, the rules would apply to the Company
and to its securities. The rules may further affect the ability of owners of
Shares to sell the securities of the Company in any market that might develop
for them.

Shareholders should be aware that, according to Securities and Exchange
Commission, the market for penny stocks has suffered in recent years from
patterns of fraud and abuse. Such patterns include (i) control of the market for
the security by one or a few broker-dealers that are often related to the
promoter or issuer; (ii) manipulation of prices through prearranged matching of
purchases and sales and false and misleading press releases; (iii) "boiler room"
practices involving high-pressure sales tactics and unrealistic price
projections by inexperienced sales persons; (iv) excessive and undisclosed
bid-ask differentials and markups by selling broker-dealers; and (v) the
wholesale dumping of the same securities by promoters and broker-dealers after
prices have been manipulated to a desired level, along with the resulting
inevitable collapse of those prices and with consequent investor losses. The
Company's management is aware of the abuses that have occurred historically in
the penny stock market. Although the Company does not expect to be in a position
to dictate the behavior of the market or of broker-dealers who participate in
the market, management will strive within the confines of practical limitations
to prevent the described patterns from being established with respect to the
Company's securities.

4.Lack of Operating History. The Company was formed in August 1989 as a wholly
owned subsidiary of Normandy Oil & Gas Company, Inc. Pursuant to a Plan of
Reorganization for Cambridge Oil Company in Bankruptcy Case No. 88-01859-H5-11
(Chapter 11) in the U.S. District Court, Southern District of Texas, Houston
Division, the Bankruptcy Court entered an Order on April 19, 1990 which approved
the Plan. Houston Oil Company was specifically formed to effect the transactions
of the Plan. The Company never had any substantial operations because of a lack
of capital. Due to the special risks inherent in the investigation, acquisition,
or involvement in a new business opportunity, the Company must be regarded as a
new or start-up venture with all of the unforeseen costs, expenses, problems,
and difficulties to which such ventures are subject.

5. No Assurance of Success or Profitability. There is no assurance that the
Company will acquire a favorable business opportunity. Even if the Company
should become involved in a business opportunity, there is no assurance that it
will generate revenues or profits, or that the market price of the Company's
common stock will be increased thereby.

6. Possible Business - Not Identified and Highly Risky. The Company has not
identified and has no commitments to enter into or acquire a specific business
opportunity and therefore can disclose the risks and hazards of a business or
opportunity that it may enter into in only a general manner, and cannot disclose
the risks and hazards of any specific business or opportunity that it may enter
into. An investor can expect a potential business opportunity to be quite risky.
The Company's acquisition of or participation in a business opportunity will
likely be highly illiquid and could result in a total loss to the Company and
its stockholders if the business or opportunity proves to be unsuccessful. See
Item 1 "Description of Business."

7. Type of Business Acquired. The type of business to be acquired may be one
that desires to avoid effecting its own public offering and the accompanying
expense, delays, uncertainties, and federal and state requirements which purport
to protect investors. Because of the Company's limited capital, it is more
likely than not that any acquisition by the Company will involve other parties
whose primary interest is the acquisition of control of a publicly traded
company. Moreover, any business opportunity acquired may be currently
unprofitable or present other negative factors.

                                       12




<PAGE>

8. Impracticability of Exhaustive Investigation. The Company's limited funds and
the lack of full-time management will likely make it impracticable to conduct a
complete and exhaustive investigation and analysis of a business opportunity
before the Company commits its capital or other resources thereto. Management
decisions, therefore, will likely be made without detailed feasibility studies,
independent analysis, market surveys and the like which, if the Company had more
funds available to it, would be desirable. The Company will be particularly
dependent in making decisions upon information provided by the promoter, owner,
sponsor, or others associated with the business opportunity seeking the
Company's participation. A significant portion of the Company's available funds
may be expended for investigative expenses and other expenses related to
preliminary aspects of completing an acquisition transaction, whether or not any
business opportunity investigated is eventually acquired.

9. Lack of Diversification. Because of the limited financial resources that the
Company has, it is unlikely that the Company will be able to diversify its
acquisitions or operations. The Company's probable inability to diversify its
activities into more than one area will subject the Company to economic
fluctuations within a particular business or industry and therefore increase the
risks associated with the Company's operations.

10. Reliance upon Financial Statements. The Company generally will require
audited financial statements from companies that it proposes to acquire. Given
cases where audited financials are not available, the Company will have to rely
upon interim period unaudited information received from target companies'
management that has not been verified by outside auditors. The lack of the type
of independent verification which audited financial statements would provide,
increases the risk that the Company, in evaluating an acquisition with such a
target company, will not have the benefit of full and accurate information about
the financial condition and recent interim operating history of the target
company. This risk increases the prospect that the acquisition of such a company
might prove to be an unfavorable one for the Company or the holders of the
Company's securities.

Moreover, the Company will be subject to the reporting provisions of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and thus will
be required to furnish certain information about significant acquisitions,
including audited financial statements for any business that it acquires.
Consequently, acquisition prospects that do not have, or are unable to provide
reasonable assurances that they will be able to obtain, the required audited
statements would not be considered by the Company to be appropriate for
acquisition so long as the reporting requirements of the Exchange Act are
applicable. Should the Company, during the time it remains subject to the
reporting provisions of the Exchange Act, complete an acquisition of an entity
for which audited financial statements prove to be unobtainable, the Company
would be exposed to enforcement actions by the Securities and Exchange
Commission (the "Commission") and to corresponding administrative sanctions,
including permanent injunctions against the Company and its management. The
legal and other costs of defending a Commission enforcement action would have
material, adverse consequences for the Company and its business. The imposition
of administrative sanctions would subject the Company to further adverse
consequences.

In addition, the lack of audited financial statements would prevent the
securities of the Company from becoming eligible for listing on NASDAQ, or on
any existing stock exchange. Moreover, the lack of such financial statements is
likely to discourage broker-dealers from becoming or continuing to serve as
market makers in the securities of the Company. Without audited financial
statements, the Company would almost certainly be unable to offer securities
under a registration statement pursuant to the Securities Act of 1933, and the
ability of the Company to raise capital would be significantly limited until
such financial statements were to become available.

                                       13




<PAGE>

11. Other Regulation. An acquisition made by the Company may be of a business
that is subject to regulation or licensing by federal, state, or local
authorities. Compliance with such regulations and licensing can be expected to
be a time-consuming, expensive process and may limit other investment
opportunities of the Company.

12. Dependence upon Management; Limited Participation of Management. The Company
currently has only one individual is are serving as its sole officer and
director on a part time basis. The Company will be heavily dependent upon his
skills, talents, and abilities to implement its business plan, and may, from
time to time, find that the inability of the officers and directors to devote
their full time attention to the business of the Company results in a delay in
progress toward implementing its business plan. See "Management." Because
investors will not be able to evaluate the merits of possible business
acquisitions by the Company, they should critically assess the information
concerning the Company's officers and directors.

13. Lack of Continuity in Management. The Company does not have an employment
agreement with its officers and directors, and as a result, there is no
assurance they will continue to manage the Company in the future. In connection
with acquisition of a business opportunity, it is likely the current officers
and directors of the Company may resign subject to compliance with Section 14f
of the Securities Exchange Act of 1934. A decision to resign will be based upon
the identity of the business opportunity and the nature of the transaction, and
is likely to occur without the vote or consent of the stockholders of the
Company.

14. Indemnification of Officers and Directors. Delaware Revised Statutes provide
for the indemnification of its directors, officers, employees, and agents, under
certain circumstances, against attorney's fees and other expenses incurred by
them in any litigation to which they become a party arising from their
association with or activities on behalf of the Company. The Company will also
bear the expenses of such litigation for any of its directors, officers,
employees, or agents, upon such person's promise to repay the Company therefor
if it is ultimately determined that any such person shall not have been entitled
to indemnification. This indemnification policy could result in substantial
expenditures by the Company which it will be unable to recoup.

15. Director's Liability Limited. Delaware Statutes exclude personal liability
of its directors to the Company and its stockholders for monetary damages for
breach of fiduciary duty except in certain specified circumstances. Accordingly,
the Company will have a much more limited right of action against its directors
than otherwise would be the case. This provision does not affect the liability
of any director under federal or applicable state securities laws.

16. Dependence upon Outside Advisors. To supplement the business experience of
its officers and directors, the Company may be required to employ accountants,
technical experts, appraisers, attorneys, or other consultants or advisors. The
selection of any such advisors will be made by the Company's President without
any input from stockholders. Furthermore, it is anticipated that such persons
may be engaged on an "as needed" basis without a continuing fiduciary or other
obligation to the Company. In the event the President of the Company considers
it necessary to hire outside advisors, he may elect to hire persons who are
affiliates, if they are able to provide the required services.

                                       14




<PAGE>

17. Leveraged Transactions. There is a possibility that any acquisition of a
business opportunity by the Company may be leveraged, i.e., the Company may
finance the acquisition of the business opportunity by borrowing against the
assets of the business opportunity to be acquired, or against the projected
future revenues or profits of the business opportunity. This could increase the
Company's exposure to larger losses. A business opportunity acquired through a
leveraged transaction is profitable only if it generates enough revenues to
cover the related debt and expenses. Failure to make payments on the debt
incurred to purchase the business opportunity could result in the loss of a
portion or all of the assets acquired. There is no assurance that any business
opportunity acquired through a leveraged transaction will generate sufficient
revenues to cover the related debt and expenses.

18. Competition. The search for potentially profitable business opportunities is
intensely competitive. The Company expects to be at a disadvantage when
competing with many firms that have substantially greater financial and
management resources and capabilities than the Company. These competitive
conditions will exist in any industry in which the Company may become
interested.

19. No Foreseeable Dividends. The Company has not paid dividends on its common
stock and does not anticipate paying such dividends in the foreseeable future.

20. Loss of Control by Present Management and Stockholders. The Company may
consider an acquisition in which the Company would issue as consideration for
the business opportunity to be acquired an amount of the Company's authorized
but unissued common stock that would, upon issuance, represent the great
majority of the voting power and equity of the Company. The result of such an
acquisition would be that the acquired company's stockholders and management
would control the Company, and the Company's management could be replaced by
persons unknown at this time. Such a merger would result in a greatly reduced
percentage of ownership of the Company by its current shareholders. In addition,
the Company's major shareholders could sell control blocks of stock at a premium
price to the acquired company's stockholders.

21. No Public Market Exists. There was at year end no active public market for
the Company's common stock, although it was quoted on the OTCBB under the symbol
"HOOC" and no assurance can be given that a market will develop or that a
shareholder ever will be able to liquidate his investment without considerable
delay, if at all. If a market should develop, the price may be highly volatile.
Factors such as those discussed in this "Risk Factors" section may have a
significant impact upon the market price of the securities offered hereby. Owing
to the low price of the securities, many brokerage firms may not be willing to
effect transactions in the securities. Even if a purchaser finds a broker
willing to effect a transaction in these securities, the combination of
brokerage commissions, state transfer taxes, if any, and any other selling costs
may exceed the selling price. Further, many lending institutions will not permit
the use of such securities as collateral for any loans.

                                       15





<PAGE>

22. Rule 144 Sales. All of the outstanding shares of common stock held by
present officers and directors are "restricted securities" within the meaning of
Rule 144 under the Securities Act of 1933, as amended. As restricted shares,
these shares may be resold only pursuant to an effective registration statement
or under the requirements of Rule 144 or other applicable exemptions from
registration under the Act and as required under applicable state securities
laws. Rule 144 provides in essence that a person who has held restricted
securities for one year may, under certain conditions, sell every three months,
in brokerage transactions, a number of shares that does not exceed the greater
of 1.0% of a company's outstanding common stock or the average weekly trading
volume during the four calendar weeks prior to the sale. There is no limit on
the amount of restricted securities that may be sold by a nonaffiliate after the
restricted securities have been held by the owner for a period of two years. A
sale under Rule 144 or under any other exemption from the Act, if available, or
pursuant to subsequent registration of shares of common stock of present
stockholders, may have a depressive effect upon the price of the common stock in
any market that may develop.

23. Blue Sky Considerations. Because the securities registered hereunder have
not been registered for resale under the blue sky laws of any state, the holders
of such shares and persons who desire to purchase them in any trading market
that might develop in the future, should be aware that there may be significant
state blue-sky law restrictions upon the ability of investors to sell the
securities and of purchasers to purchase the securities. Some jurisdictions may
not under any circumstances allow the trading or resale of blind-pool or
"blank-check" securities. Accordingly, investors should consider the secondary
market for the Company's securities to be a limited one.

24. Blue Sky Restrictions. Many states have enacted statutes or rules which
restrict or prohibit the sale or resale of securities of "blank check" companies
to residents so long as they remain without specific business. To the extent any
current shareholders or subsequent purchaser from a shareholder may reside in a
state which restricts or prohibits resale of shares in a "blank check" company,
warning is hereby given that the shares may be "restricted" from resale as long
as the company is a shell company.

In the event of a violation of state laws regarding resale of "blank check"
shares the Company could be liable for civil and criminal penalties which would
be a substantial impairment to the Company. At date of this registration
statement, all shareholders' shares bear a "restrictive legend," and the Company
will examine each shareholders' resident state laws at the time of any proposed
resale of shares now outstanding to attempt to avoid any inadvertent breach of
state laws.

ITEM 2 - DESCRIPTION OF PROPERTY.

The Company has no property. The Company currently maintains a mailing address
at 610 Newport Center Dr., Suite 1400, Newport Beach, California 92660 which is
the office address of its legal counsel.

Other than this mailing address, the Company does not currently maintain any
other office facilities, and does not anticipate the need for maintaining office
facilities at any time in the foreseeable future. The Company pays no rent or
other fees for the use of this mailing address.

The Company does not believe that it will need to maintain an office at any time
in the foreseeable future in order to carry out its plan of operations described
herein.

                                       16





<PAGE>

ITEM 3 - LEGAL PROCEEDINGS

The Company is not a party to any pending legal proceedings, and no such
proceedings are known to be contemplated.

No director, officer or affiliate of the Company, and no owner of record or
beneficial owner of more than 5.0% of the securities of the Company, or any
associate of any such director, officer or security holder is a party adverse to
the Company or has a material interest adverse to the Company in reference to
any litigation.

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

No matters were submitted by the Company to a vote of the Company's shareholders
through the solicitation of proxies or otherwise, during the fourth quarter of
the fiscal year covered by this report.

                                     PART II

ITEM 5 - MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

(a) The Registrant's common stock is traded in the over-the- counter market
under the symbol HOOC (OTC Bulletin Board Symbol) effective in 2001. The table
below sets forth the high and low bid prices of the Registrant's common stock
for the periods indicated. Such prices are inter-dealer prices, without mark-up,
mark-down or commissions and do not necessarily represent actual sales. Year
Ended December 31, 2003:

                                                   High Bid      Low Bid
                                                   --------      -------
         1st quarter                               .35           .35
         2nd quarter                               .35           .35
         3rd quarter                               .30           .25
         4th quarter                               .20           .20

Year Ended December 31, 2002
                                                   High Bid      Low Bid
                                                   --------      -------
          1st quarter                              .51            .51
          2nd quarter                              .51            .51
          3rd quarter                              .40            .35
          4th quarter                              .35            .35

                                       17




<PAGE>

The above quotations reflect inter-dealer prices, without retail mark-up,
mark-down, or commission and may not necessarily represent actual transactions
and are based on average high and low prices for each quarter as provided by
Commodity Systems, Inc.

The Company has not declared or paid any cash dividends on its common stock and
does not anticipate paying dividends for the foreseeable future.

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

RESULTS OF OPERATIONS YEAR ENDED DECEMBER 31, 2003 COMPARED TO 2002
- -------------------------------------------------------------------

The Company had no revenues in 2003 or 2002. The Company had no operating
business in the year. The Company incurred $24,827 in general and administration
expenses in 2003 as compared to $9,226 in expenses in 2002.

The net loss in 2003 was ($6,313) as compared to ($9,226) in 2002. The losses in
2003 and 2002 were as a result of miscellaneous expenses. The net loss per share
each year was less than ($.01) per share. The expenses was attributable to
general and administrative expenses including accounting transfer agent, and
Edgar Filing costs.

For the current fiscal year, the Company anticipates incurring a loss as a
result of general and administrative accounting expenses, and expenses
associated with reporting under the Securities Exchange Act of 1934, and
expenses associated with locating and evaluating acquisition candidates. The
Company anticipates that until a business combination is completed with an
acquisition candidate, it will not generate revenues and may continue to operate
at a loss after completing a business combination, depending upon the
performance of the acquired business.

LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------

The Company remains in an inactive stage and, since inception, has experienced
significant liquidity problems and has no capital resources or stockholder's
equity. The Company has $139 current assets in the form of cash and total assets
of $4,048 but has current liabilities totaling $29,346.

The Company will carry out its plan of business as discussed above. The Company
cannot predict to what extent its lack of liquidity and capital resources will
impair the consummation of a business combination or whether it will incur
further operating losses through any business entity which the Company may
eventually acquire.

During the period from August 31, 1989 (inception) through December 31, 2003 the
Company has engaged in no significant operations other than organizational
activities, acquisition of capital and preparation for registration of its
securities under the Securities Act of 1933, as amended. An attempt was made to
merge with 35 Caroline Corp. in 1999, which was rescinded. No revenues were
received by the Company during this period. The Company has incurred losses
since inception and no revenues. The net cumulative loss is from inception to
year ended December 31, 2003. Such losses will continue unless revenues and
business can be acquired by the Company. There is no assurance that revenues or
profitability will ever be achieved by the Company.

                                       18




<PAGE>

NEED FOR ADDITIONAL FINANCING
- -----------------------------

The Company does not have capital sufficient to meet the Company's cash needs,
including the costs of compliance with the continuing reporting requirements of
the Securities Exchange Act of 1934. The Company will have to seek loans or
equity placements to cover such cash needs. In the event the Company is able to
complete a business combination during this period, lack of its existing capital
may be a sufficient impediment to prevent it from accomplishing the goal of
completing a business combination. There is no assurance, however, that without
funds it will ultimately allow registrant to complete a business combination.
Once a business combination is completed, the Company's needs for additional
financing are likely to increase substantially.

No commitments to provide additional funds have been made by management or other
stockholders. Accordingly, there can be no assurance that any additional funds
will be available to the Company to allow it to cover its expenses as they may
be incurred.

Irrespective of whether the Company's cash assets prove to be inadequate to meet
the Company's operational needs, the Company might seek to compensate providers
of services by issuances of stock in lieu of cash.

ITEM 7 - FINANCIAL STATEMENTS

         See the Financial Statements and related Independent Auditors' Report
included herewith as pages F-1 through F-7.




<PAGE>

                         HOUSTON OPERATING COMPANY, INC.

                              Financial Statements
                     Years Ended December 31, 2003 and 2002




<PAGE>

                          INDEPENDENT AUDITOR'S REPORT

To the Board of Directors
Houston Operating Company, Inc.

We have audited the accompanying balance sheets of Houston Operating Company,
Inc. as of December 31, 2003 and 2002, and the related statement of operations,
cash flows, and changes in stockholders' equity for the years then ended. 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. 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 Houston Operating Company, Inc.
at December 31, 2003 and 2002, and the results of their operations and their
cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States.

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, conditions exist which raise substantial doubt about the
Company's ability to continue as a going concern unless it is able to generate
sufficient cash flows to meet its obligations and sustain its operations.
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.

/s/ Michael Johnson & Co., LLC

Denver, Colorado
March 18, 2004

                                      F-1




<PAGE>
                        HOUSTON OPERATING COMPANY, INC.
                                 BALANCE SHEETS
                           DECEMBE 31, 2003 AND 2002

                                                           2003           2002
                                                         ---------     ---------
ASSETS:
CURRENT ASSETS:
  Cash                                                   $    149      $    313
  Prepaid expenses                                          3,899            --
                                                         ---------     ---------
     Total Current Assets                                   4,048           313
                                                         ---------     ---------

TOTAL ASSETS                                             $  4,048      $    313
                                                         =========     =========

LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
  Accounts payable and accrued expenses                  $  9,733      $ 13,402
  Advances from shareholders'                              19,613         5,896
                                                         ---------     ---------
    Total Current Liabilities                              29,346        19,298
                                                         ---------     ---------

STOCKHOLDERS' DEFICIT:
  Common stock, $.001 par value; 50,000,000
    shares authorized; 7,795,171 shares issued
     and outstanding, respectively                          7,795         7,795
  Additional paid-in capital                               38,350        38,350
  Retained deficit                                        (71,443)      (65,130)
                                                         ---------     ---------

TOTAL STOCKHOLDERS' DEFICIT                               (25,298)      (18,985)
                                                         ---------     ---------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT              $  4,048      $    313
                                                         =========     =========

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

                                      F-2




<PAGE>
                        HOUSTON OPERATING COMPANY, INC.
                            STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

                                                       2003             2002
                                                   ------------     ------------

REVENUES:                                          $        --      $        --

OPERATING EXPENSES:
  General and administrative                            24,827            9,226
                                                   ------------     ------------
Total Operating Expenses                                24,827            9,226
                                                   ------------     ------------

Net Loss from Operations                               (24,827)          (9,226)
                                                   ------------     ------------

Other Income and expenses:
  Interest expense                                        (784)              --
  Other income                                          19,298               --
                                                   ------------     ------------
                                                        18,514               --
                                                   ------------     ------------

NET LOSS                                           $    (6,313)     $    (9,226)
                                                   ============     ============

Weighted average number of
  shares outstanding                                 7,795,171        7,795,171
                                                   ============     ============

Basic and diluted net loss per share               $    (0.001)     $    (0.001)
                                                   ============     ============

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

                                      F-3




<PAGE>

                        HOUSTON OPERATING COMPANY, INC.
                            STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

                                                           2003           2002
                                                         ---------     ---------

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net (Loss)                                             $ (6,313)     $ (9,226)
  Debt forgiveness                                        (19,298)           --
  Adjustments to reconcile net loss to net cash
    used in operating activities:
   Changes in assets and liabilities:
     Increase in prepaid expenses                          (3,899)           --
     Increase in accounts payables                          9,733         7,110
                                                         ---------     ---------
                                                            5,834         7,110
                                                         ---------     ---------
Net Cash Used in Operating Activities                     (19,777)       (2,116)
                                                         ---------     ---------

CASH FLOW FROM FINANCING ACTIVITIES:
   Sale of stock                                               --            --
   Advances from shareholders                              19,613         2,000
                                                         ---------     ---------
Net Cash Provided By Financing Activities                  19,613         2,000
                                                         ---------     ---------

Increase (Decrease) in Cash                                  (164)         (116)

Cash and Cash Equivalents - Beginning of period               313           429
                                                         ---------     ---------

CASH AND CASH EQUIVALENTS - END OF PERIOD                $    149      $    313
                                                         =========     =========

Supplemental Cash Flow Information:
 Cash paid during period for:
  Interest paid                                          $     --      $     --
                                                         =========     =========
  Taxes paid                                             $     --      $     --
                                                         =========     =========

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

                                      F-5




<PAGE>
<TABLE>

                                    HOUSTON OPERATING COMPANY, INC.
                             STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
<CAPTION>

                                                Common Stock       Additional
                                           ----------------------   Paid-In   Accumulated
                                             Shares      Amount     Capital      Deficit      Totals
                                           ----------  ----------  ----------  ----------   ----------

<S>                                        <C>         <C>         <C>         <C>          <C>
Balance -  December 31, 1997               2,795,171   $   2,795   $  28,820   $ (38,874)   $  (7,259)

Net loss for period                               --          --          --      (1,725)      (1,725)
                                           ----------  ----------  ----------  ----------   ----------
Balance - December 31, 1998                2,795,171       2,795      28,820     (40,599)      (8,984)
                                           ----------  ----------  ----------  ----------   ----------

Conversion of loan payable to additional
  paid-in capital                                 --          --       9,530          --        9,530
Net loss for year                                 --          --          --      (1,000)      (1,000)
                                           ----------  ----------  ----------  ----------   ----------
Balance - December 31, 1999                2,795,171       2,795      38,350     (41,599)        (454)
                                           ----------  ----------  ----------  ----------   ----------

Stock issuance for cash                    1,000,000       1,000          --          --        1,000
Stock issued for services                  4,000,000       4,000          --          --        4,000
Net loss for year                                 --          --          --      (7,254)      (7,254)
                                           ----------  ----------  ----------  ----------   ----------
Balance - December 31, 2000                7,795,171       7,795      38,350     (48,853)      (2,708)
                                           ----------  ----------  ----------  ----------   ----------

Net loss for year                                 --          --          --      (7,051)      (7,051)
                                           ----------  ----------  ----------  ----------   ----------
Balance - December 31, 2001                7,795,171       7,795      38,350     (55,904)      (9,759)
                                           ----------  ----------  ----------  ----------   ----------

Net loss for year                                 --          --          --      (9,226)      (9,226)
                                           ----------  ----------  ----------  ----------   ----------
Balance - December 31, 2002                7,795,171       7,795      38,350     (65,130)     (18,985)
                                           ----------  ----------  ----------  ----------   ----------

Net loss for year                                 --          --          --      (6,313)      (6,313)
                                           ----------  ----------  ----------  ----------   ----------
Balance - December 31, 2003                7,795,171   $   7,795   $  38,350   $ (71,443)   $ (25,298)
                                           ==========  ==========  ==========  ==========   ==========

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

                                                 F-4
</TABLE>




<PAGE>

                         HOUSTON OPERATING COMPANY, INC.
                          Notes To Financial Statements
                                December 31, 2003

NOTE 1 - GENERAL
         -------

         NATURE OF OPERATIONS

         Houston Operating Company, Inc. (the "Company") was incorporated under
         the laws of the State of Delaware on August 31, 1989. The Company was
         formed to act as successor to a debtor under a plan of reorganization
         dated April 21, 1990. Under the terms of the plan, the Company issued
         approximately 2.8 million shares of common stock.

         GOING CONCERN

         The accompanying financial statements have been prepared in conformity
         with generally accepted accounting principles, which contemplates
         continuation of the Company as a going concern. The Company's current
         liabilities exceed current assets by $25,298, and the Company has
         suffered recurring losses of $71,443 at December 31, 2003.

         The future success of the Company is likely dependent on its ability to
         attain additional capital to find an acquisition to add value to its
         present shareholders and ultimately, upon its ability to attain future
         profitable operations. There can be no assurance that the Company will
         be successful in obtaining such financing, or that it will attain
         positive cash flow from operations. The Company plans to pursue the
         issuance of additional equity securities, and to pursue corporate
         marketing alliances and collaborative agreements, as required meeting
         its cash requirements.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         ------------------------------------------

         BASIS OF ACCOUNTING

         The accompanying financial statements have been prepared on the accrual
         basis of accounting in accordance with generally accepted accounting
         principles.

         ESTIMATES

         The preparation of financial statements in conformity with U.S.

         generally accepted accounting principles requires management to make
         estimates and assumptions that affect certain reported amounts and
         disclosures. Accordingly, actual results could differ from those
         estimates.

         CASH AND CASH EQUIVALENTS

         For purposes of the statement of cash flows, the Company considered all
         cash and other highly liquid investments with initial maturities of
         three months or less to be cash equivalents.

         NET EARNING (LOSS) PER SHARE

         The net (loss) per share has been computed by dividing net income
         (loss) by the weighted average number of common shares and equivalents
         outstanding.

         OTHER COMPREHENSIVE INCOME

         The Company has no material components of other comprehensive income
         (loss) and accordingly, net loss is equal to comprehensive loss in all
         periods.
                                       F-6




<PAGE>

                         HOUSTON OPERATING COMPANY, INC.
                          Notes To Financial Statements
                                December 31, 2003

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Continued)
         -------------------------------------------------------

         INCOME TAXES

         The Company accounts for income taxes under SFAS No. 109, which
         requires the asset and liability approach to accounting for income
         taxes. Under this method, deferred tax assets and liabilities are
         measured based on differences between financial reporting and tax bases
         of assets and liabilities measured using enacted tax rates and laws
         that are expected to be in effect when differences are expected to
         reverse.

NOTE 3 - CAPITAL STOCK TRANSACTIONS:
         ---------------------------

         CHANGE OF CONTROL OF REGISTRANT

         In April 2003, J.R. Nelson, a majority shareholder, officer and
         director of Houston Operating Company, a Delaware corporation sold
         7,030,000 share of common stock of the company to Speed Action Limited,
         a British Virgin Islands corporation pursuant to the Share Purchase
         Agreement, dated as of April 25, 2003. There are 7,795,172 shares of
         the Registrant's common stock issued and outstanding as of the date
         hereof. As a result of the stock sale, Speed Action Limited become the
         majority shareholder of the Registrant holding approximately 90% of the
         Registrant's common stock.

NOTE 4 - INCOME TAXES
         ------------

         There has been no provision for U.S. federal, state, or foreign income
         taxes for any period because the Company has incurred losses in all
         periods and for all jurisdictions.

         Deferred income taxes reflect the net tax effects of temporary
         differences between the carrying amounts of assets and liabilities for
         financial reporting purposes and the amounts used for income tax
         purposes. Significant components of deferred tax assets are as follows:

         Deferred tax assets
            Net operating loss carryforwards                          $  71,443
            Valuation allowance for deferred tax assets                 (71,443)
                                                                      ----------
         Net deferred tax assets                                      $      --
                                                                      ==========

        Realization of deferred tax assets is dependent upon future earnings, if
        any, the timing and amount of which are uncertain. Accordingly, the net
        deferred tax assets have been fully offset by a valuation allowance. As
        of December 31, 2003, the Company had net operating loss carryforwards
        of approximately $71,443 for federal and state income tax purposes.
        These carryforwards, if not utilized to offset taxable income begin to
        expire in 2007. Utilization of the net operating loss may be subject to
        substantial annual limitation due to the ownership change limitations
        provided by the Internal Revenue Code and similar state provisions. The
        annual limitation could result in the expiration of the net operating
        loss before utilization.

NOTE 5 - FINANCIAL ACCOUNTING DEVELOPMENTS
         ---------------------------------

         Recently Issued Accounting Pronouncements

         In January 2003, the FASB issued FASB Interpretation No. 46,
         "Consolidation of Variable Interest Entities" and interpretation of ARB
         (Accounting Research Bulletin) No. 51. The interpretation addresses
         consolidation and disclosure issues associated with variable interest
         entities. In October 2003, the effective date of FIN 46 for variable
         interest entities in existence prior to February 1, 2003, was delayed
         to December 31, 2003. In December 2003, the FASB issued a revised
         version of FIN 46, which effectively delayed implementation until March
         2004, with earlier adoption permitted. SFAS did not materially effect
         the financial statements.

         In March 2003, the FASB issued SFAS No. 149, "Amendment of Statement
         133 on Derivative Instruments and Hedging Activities". SFAS is
         effective for contracts entered into or modified after June 30, 2003.
         This statement amends and clarifies financial accounting and reporting
         for derivative instruments, including certain derivative instruments
         embedded in other contracts (collectively referred to as derivatives)
         and for hedging activities under SFAS 133, "Accounting for Derivative
         Instruments and Hedging Activities". SFAS 149 did not materially effect
         the financial statements.

         In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
         Financial Instruments with Characteristics of Both Liabilities and
         Equity". SFAS 150 is effective for financial instruments entered into
         or modified after May 31, 2003, and otherwise is effective at the
         beginning of the first interim period beginning after June 15, 2003.
         This statement establishes new standards for how an issuer classifies
         and measures certain financial instruments with characteristics of both
         liabilities and equity. SFAS 150 requires that an issuer classify a
         financial instrument that is within the scope of this statement as a
         liability because the financial instrument embodies an obligation of
         the issuer. This statement applies to certain forms of mandatorily
         redeemable financial instruments including certain types of preferred
         stock, written put options and forward contracts. SFAS did not
         materially effect the financial statement.

                                      F-7

<PAGE>

ITEM 8 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.

On April 24, 2001 the Company filed an 8K in which a change of Auditors was
announced. Ostrich and Oppenhiem CPA's resigned, and Michael Johnson & Co. CPA's
became the new auditors.

Michael Johnson & Company, CPA's of Denver, Colorado were retained in 2001 as
auditors for the Company for fiscal year 2000 and thereafter.

In connection with audits of two most recent fiscal years and any interim period
preceding resignation, no disagreements exist with any former accountant on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope of procedure, which disagreements if not resolved to the
satisfaction of the former accountant would have caused him to make reference in
connection with his report to the subject matter of the disagreement(s).

The decision to change accountants was approved by the Board of Directors as the
registrant has no audit committee.

The principal accountants' reports on the financial statements for any of the
past two years contained no adverse opinion or a disclaimer of opinion nor was
qualified as to uncertainty, audit scope, or accounting principles except for
the "going concern" qualification.

ITEM 8A. CONTROLS AND PROCEDURES

The management of the company has evaluated the effectiveness of the issuer's
disclosure controls and procedures as of a date within 90 days prior to the
filing date of the report (evaluation date) and have concluded that the
disclosure controls and procedures are adequate and effective based upon their
evaluation as of the evaluation date.

There were no significant changes in internal controls or in other factors that
could significantly affect internal controls subsequent to the date of the most
recent evaluation of such, including any corrective actions with regard to
significant deficiencies and material weaknesses.

                                       19





<PAGE>

                                    PART III

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

The directors and executive officers currently serving the Company are as
follows:

Name                     Age                   Position Held              Tenure
- --------------------------------------------------------------------------------
Chin Sin Low             42                    President, CFO
                                               and Director               Annual

Florence Mei Fong CHOONG 36                    Secretary and Director     Annual

The directors named above will serve until the next annual meeting of the
Company's stockholders. Thereafter, directors will be elected for one-year terms
at the annual stockholders' meeting. Officers will hold their positions at the
pleasure of the board of directors, absent any employment agreement, of which
none currently exists or is contemplated. There is no arrangement or
understanding between the directors and officers of the Company and any other
person pursuant to which any director or officer was or is to be selected as a
director or officer.

The directors and officers of the Company will devote such time to the Company's
affairs on an "as needed" basis, but less than 20 hours per month. As a result,
the actual amount of time which they will devote to the Company's affairs is
unknown and is likely to vary substantially from month to month.

BIOGRAPHICAL INFORMATION
- ------------------------

Mr. Chin Sin LOW, 42, is the founder and managing director of Thico Limited.
Thico Limited is the exclusive distributor of a Japan health product called Sun
Chlorella in Hong Kong since 1989. Prior to founding Thico Limited, he held
various senior positions with several health food related private companies. Mr.
Low received his Bachelor of Commerce degree from the University of Windsor,
Canada in 1984.

Florence Mei Fong CHOONG, age 36, graduated from the New York City Technical
College with a Professional A.A.S. Degree in Advertising in 1989. Ms. Choong has
been performing art designs of all kinds of apparels as well as product sourcing
in the past 5 years. She is also well experienced in managing trading business
in connection with apparels.

Management will devote minimal time to the operations of the Company, and any
time spent will be devoted to screening and assessing and, if warranted,
negotiating to acquire business opportunities.

None of the Company's officers and/or directors receives any compensation for
their respective services rendered to the Company, nor have they received such
compensation in the past. They all have agreed to act without compensation until
authorized by the Board of Directors, which is not expected to occur until the
Company has generated revenues from operations after consummation of a merger or
acquisition. As of the date of filing this report, the Company has no funds
available to pay officers or directors. Further, none of the officers or
directors is accruing any compensation pursuant to any agreement with the
Company. No retirement, pension, profit sharing, stock option or insurance
programs or other similar programs have been adopted by the Company for the
benefit of its employees.

The Company has not adopted yet its code of ethics but plans to do so at its
next meeting of the Board of Directors.

                                       20





<PAGE>

INDEMNIFICATION OF OFFICERS AND DIRECTORS
- -----------------------------------------

As permitted by Delaware Statutes, the Company may indemnify its directors and
officers against expenses and liabilities they incur to defend, settle, or
satisfy any civil or criminal action brought against them on account of their
being or having been Company directors or officers unless, in any such action,
they are adjudged to have acted with gross negligence or willful misconduct.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, the Company has been informed that, in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in that Act and is, therefore, unenforceable.

EXCLUSION OF LIABILITY
- ----------------------

The Delaware General Corporation Law excludes personal liability for its
directors for monetary damages based upon any violation of their fiduciary
duties as directors, except as to liability for any breach of the duty of
loyalty, acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, acts in violation of the Delaware
General Corporation Law, or any transaction from which a director receives an
improper personal benefit. This exclusion of liability does not limit any right
which a director may have to be indemnified and does not affect any director's
liability under federal or applicable state securities laws.

                                       21




<PAGE>

CONFLICTS OF INTEREST
- ---------------------

The officer and director of the Company will not devote more than a portion of
his time to the affairs of the Company. There will be occasions when the time
requirements of the Company's business conflict with the demands of other
business and investment activities. Such conflicts may require that the Company
attempt to employ additional personnel. There is no assurance that the services
of such persons will be available or that they can be obtained upon terms
favorable to the Company.

Conflicts of Interest - General. Certain of the officers and directors of the
Company may be directors and/or principal shareholders of other companies and,
therefore, could face conflicts of interest with respect to potential
acquisitions. In addition, officers and directors of the Company may in the
future participate in business ventures which could be deemed to compete
directly with the Company. Additional conflicts of interest and non-arms length
transactions may also arise in the future in the event the Company's officers or
directors are involved in the management of any firm with which the Company
transacts business. The Company's Board of Directors has adopted a policy that
the Company will not seek a merger with, or acquisition of, any entity in which
management serve as officers or directors, or in which they or their family
members own or hold a controlling ownership interest. Although the Board of
Directors could elect to change this policy, the Board of Directors has no
present intention to do so. In addition, if the Company and other companies with
which the Company's officers and directors are affiliated both desire to take
advantage of a potential business opportunity, then the Board of Directors has
agreed that said opportunity should be available to each such company in the
order in which such companies registered or became current in the filing of
annual reports under the Exchange Act subsequent to January 1, 1997.

The Company's officers and directors may actively negotiate or otherwise consent
to the purchase of a portion of their common stock as a condition to, or in
connection with, a proposed merger or acquisition transaction. It is anticipated
that a substantial premium over the initial cost of such shares may be paid by
the purchaser in conjunction with any sale of shares by the Company's officers
and directors which is made as a condition to, or in connection with, a proposed
merger or acquisition transaction. The fact that a substantial premium may be
paid to the Company's officers and directors to acquire their shares creates a
potential conflict of interest for them in satisfying their fiduciary duties to
the Company and its other shareholders. Even though such a sale could result in
a substantial profit to them, they would be legally required to make the
decision based upon the best interests of the Company and the Company's other
shareholders, rather than their own personal pecuniary benefit.

COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
- -------------------------------------------------

Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to
the registrant pursuant to Rule 16a-3(e) during its most recent fiscal year and
Forms 5 and amendments thereto furnished to the registrant with respect to its
most recent fiscal year, and any written representation referred to in paragraph
(b)(2)(i) of this Item.

No person who, at any time during the fiscal year, was a director, officer,
beneficial owner of more than ten percent of any class of equity securities of
the registrant registered pursuant to section 12 of the Exchange Act failed to
file on a timely basis, as disclosed in the above Forms, reports required by
section 16(a) of the Exchange Act during the most recent fiscal year, except
that J.R. Nelson, President and Director made delinquent filings of Forms 4 and
5 on April 3, 2002 and Forms 4/A and 5/A on April 24, 2002 and Forms 4 and 5/A
on January 27, 2003. Mr Nelson filed a Form 5 on April 4, 2002.

                                       22




<PAGE>

ITEM 10 - EXECUTIVE COMPENSATION.

                    SUMMARY COMPENSATION TABLE OF EXECUTIVES
                    ----------------------------------------

                           ANNUAL COMPENSATION AWARDS

Name and Principal Year Salary Bonus Other Annual Restricted Securities

Position                   ($)     ($)    Compensation Stock Award(s) Underlying
                                          ($)                          Options/
                                                                        SARs (#)
- --------------------------------------------------------------------------------
                     2003      0     0         0           0              0
J.R. Nelson,         2002      0     0         0           0              0
former President,    2001      0     0         0           0              0
Director (1)

Chin Sin Low         2003      0     0         0           0              0
President, CFO
Director

================================================================================

(1) Resigned in 2003 as President and Director

                             Directors' Compensation
                             -----------------------

Name                  Annual     Meeting  Consulting    Number     Number of
                      Retainer   Fees     Fees/Other    of         Securities
                      Fee ($)    ($)      Fees ($)      Shares     Underlying
                                                        (#)        Options
                                                                   SARs(#)
- --------------------------------------------------------------------------------
Chin Sin Low
Director                0          0         0           0             0

F. Mei Fong Choong
Director                0          0         0           0             0

                         OPTION/SAR GRANTS TABLE (NONE)

Aggregated Option/SAR Exercises in Last Fiscal Year an FY-End Option/SAR value
(None)

          LONG TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR (NONE)

 No officer or director has received any other remuneration in the two year
period prior to the filing of this registration statement. There is no current
plan in existence, to pay or accrue compensation to its officers and directors
for services related to seeking business opportunities and completing a merger
or acquisition transaction, and the Board has adopted a policy to preclude such
payments. See "Certain Relationships and Related Transactions." The Company has
no stock option, retirement, pension, or profit-sharing programs for the benefit
of directors, officers or other employees, but the Board of Directors may
recommend adoption of one or more such programs in the future.

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

The following table sets forth, as of the date of this Registration Statement,
the number of shares of common stock owned of record and beneficially by
executive officers, directors and persons who hold 5.0% or more of the
outstanding common stock of the Company. Also included are the shares held by
all executive officers and directors as a group.

                                       24


<PAGE>

                                               AMOUNT OF
NAME AND                                       BENEFICIAL          PERCENT OF
ADDRESS                                       OWNERSHIP (1)        CLASS (1)
- -------                                       -------------        ---------

Chin Sin Low (1)                              7,030,000 (2)         90.09%
President, CFO and Director

Florence Mei Fong Choong (1)                          0                 *
Nominee Director and Secretary

All Directors and Officers
as a Group (2 persons)                        7,030,000            90.09%
_______________________________

*       Less than 1%

As used in this table, "beneficial ownership"is determined in accordance with
the rules of the Securities and Exchange Commission and generally includes
voting or investment power with respect to the shares shown. Except as indicated
by footnote and subject to community property laws where applicable, to the
Company's knowledge the stockholders named in the table have sole voting and
investment power with respect to all shares of Common Stock shown as
beneficially owned by them.

(1) C/o Houston Operating Company address: 610 Newport Center Dr., Suite 1400,
Newport Beach, CA 92660

(2) Based on 7,795,172 shares of common stock of the Registrant held indirectly
by Mr, Low. Mr. Low is a beneficial owner of Speed Action Limited, a BVI
corporation and a direct beneficial owner of the shares.

ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

As of April 28, 2003, J.R. Nelson, a majority shareholder, officer and director
of Houston Operating Company, a Delaware corporation (the "Company") sold
7,030,000 shares of common stock of the Company to Speed Action Limited, a
British Virgin Islands corporation pursuant to the Share Purchase Agreement,
dated as of April 25, 2003, by and among J.R. Nelson, the Company and Speed
Action Limited (the "Closing"). There are 7,795,172 shares of the Company's
common stock issued and outstanding as of the date hereof. As a result of the
stock sale, Speed Action Limited became the majority shareholder of the Company
holding approximately 90% of the Company's common stock.

In the two years prior to the date of this Annual Report, the sole share
issuance by the Company was to J.R. Nelson, who was appointed as President and
director, a total of 5,000,000 shares of common stock for a total of $1,000 in
cash and services valued at $4,000. The shares were subscribed in July 2000 and
issued in the fourth quarter of 2000. Certificates evidencing the common stock
issued by the Company to this person have all been stamped with a restrictive
legend, and are subject to stop transfer orders by the Company.

No officer, director, or affiliate of the Company has or proposes to have any
direct or indirect material interest in any asset proposed to be acquired by the
Company through security holdings, contracts, options, or otherwise.

                                       25

<PAGE>

There are currently no plans, proposals, arrangements, or understandings with
respect to the sale or issuance of additional securities by the Company prior to
the location of an acquisition or merger candidate. The Board has adopted a
resolution and policy whereby no additional issuances of share will be made
until an arrangement or contract has been made with a target company.

ITEM 13 - EXHIBITS AND REPORTS ON FORM 8-K

(a) No Exhibits are filed with this Annual Report. Certain Exhibits are
incorporated by reference to Form 10SB file #000-31553.

(b) Reports on Form 8-K

None.

INCORPORATED BY REFERENCE TO FORM 10SB FILE #000-31553
2.1 Share Exchange Agreement*
3.1 Articles of Incorporation *

3.2 Bylaws *

10.2 Disclosure Statement of Cambridge Oil Company, Debtor in Possession, and
Normandy Oil and Gas Company, Inc. and its wholly owned subsidiary, Houston
Operating Company, Successor to the Debtor Under the Plan *

10.3 Order Confirming Debtor's Plan of Reorganization *

 *PREVIOUSLY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

ITEM 14.  PRINCIPAL FEES AND SERVICES.

Set forth below are fees paid to the Company's independent accountants for the
past two years for the professional services performed for the Company.

Audit Fees: We agreed to pay Michael Johnson & Company a total of $3,000 for
professional services rendered in connection with performance of our independent
audit for the year ending December 31, 2002 and $3,000 for professional services
rendered in connection with performance of our independent audit for the year
ending December 31, 2003.

Audit Related Fees: None

Tax Fees: None

All Other Fees: We agreed to pay Michael Johnson & Company a total of $750 for
professional services rendered in connection with the review of the Form 10-KSB
for the year ending December 31, 2002 and the reviews of the March 31, 2002,June
30, 2002 and September 30, 2002, Forms 10-QSB. We agreed to pay Michael Johnson
& Company a total of $1,500 for professional services rendered in connection
with the review of the Form 10-KSB for the year ending December 31, 2003 and the
reviews of the March 31, 2003,June 30, 2003 and September 30, 2003, Forms
10-QSB.

                                       26


<PAGE>

                                   SIGNATURES

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

                            HOUSTON OPERATING COMPANY

DATE:   APRIL 14, 2004               By /s/ Low Chin Sin
                                     --------------------------------------
                                     President and Chief Financial Officer
                                     (PRINCIPAL EXECUTIVE AND FINANCIAL OFFICER)

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

DATE: APRIL 14, 2004                  By /s/ Low Chin Sin
                                      ----------------------------------------
                                       LOW CHIN SIN, PRESIDENT AND DIRECTOR

DATE: APRIL 14, 2004                  By /s/ Florence Mei Fong Choong
                                      ----------------------------------------
                                       FLORENCE MEI FONG CHOONG, DIRECTOR

                                       27



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>3
<FILENAME>houston_10ka1-ex31.txt
<TEXT>
<PAGE>

Exhibit 31

                                  CERTIFICATION
                                  -------------

I, Low Chin Sin, President and Chief Financial Officer of Houston
Operating Company(the "Company" or the "Registrant") certify that:

1. I have reviewed this annual report on Form 10-KSB/A of the Company;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit 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 quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
Registrant as of, and for, the periods presented in this annual report;

4. The Registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
Company and have:

                  (a) Designed such disclosure controls and procedures, or
         caused such disclosure controls and procedures to be designed under my
         supervision, to ensure that material information relating to the
         registrant, is made known to us by others within Company, particularly
         during the period in which this report is being prepared;

                  (b) Designed such internal control over financial reporting,
         or caused such internal control over financial reporting to be designed
         under our supervision, to provide reasonable assurance regarding the
         reliability of financial reporting and the preparation of financial
         statements for external purposes in accordance with generally accepted
         accounting principles;

                  (c) Evaluated the effectiveness of the registrant's disclosure
         controls and procedures and presented in this report our conclusions
         about the effectiveness of the disclosure controls and procedures, as
         of the end of the period covered by this report based on such
         evaluation; and

                  (d) Disclosed in this report any change in the registrant's
         internal control over financial reporting that occurred during the
         Company's fourth fiscal quarter that has materially affected, or is
         reasonably likely to materially affect, the Company's internal control
         over financial reporting; and

5. The Registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

     a. all significant deficiencies in the design or operation of internal
     controls which could adversely affect the registrant's ability to record,
     process, summarize and report financial data and have identified for the
     registrant's auditors any material weaknesses in internal controls; and

     b. any fraud, whether or not material, that involves management or other
     employees who have a significant role in the registrant's internal
     controls; and

6. The Registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: April 14, 2004

/s/ Low Chin Sin
- ---------------------------
President and Chief Financial Officer


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>4
<FILENAME>houston_10ka1-ex32.txt
<TEXT>
<PAGE>

Exhibit 32

      CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
               PURSUANT TO 18 U.S.C. SS. 1350 ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

         In connection with the Report of Houston Operating Company (the
"Company") on Form 10-KSB/A for the for the fiscal year ended December 31, 2003
as filed with the Securities and Exchange Commission on the date hereof (the
"Report"), I, Low Chin Sin, President and Chief Financial Officer of the
Company, certify pursuant to 18 U.S.C. section 1350, as adopted pursuant to
section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and result of operations of the Company.

                               By /s/ Low Chin Sin
                                  --------------------------------------------
                                  Low Chin Sin, President and CFO
                                  Date: 4/14/04

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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