EXHIBIT 99.2


               PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 -
                   SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS


     The Private Securities Litigation Reform Act of 1995 provides a safe harbor
for  forward  looking  statements  made by public  companies.  This safe  harbor
protects  a  company  from   securities   law  liability  in   connection   with
forward-looking  statements if the company complies with the requirements of the
safe harbor. As a public company, Wade Cook Financial Corporation has relied and
will continue to rely on the  protection  of the safe harbor in connection  with
its written and oral forward-looking statements.

     When  evaluating  Wade Cook Financial  Corporation's  business,  you should
consider:

     o    all of the information in this quarterly report on Form 10-Q;

     o    the risk factors described in the Company's Annual report for the year
          ended  December  31,  2001  filed  with the  Securities  and  Exchange
          Commission; and

     o    the risk factors described below.


                                  RISK FACTORS


Corporate Control By Wade B. Cook

Wade B. Cook is the founder, majority stockholder,  Chairman of the Board, Chief
Executive Officer and President of the Company.  Laura Cook, Mr. Cook's wife, is
the  Secretary  of the Company,  and  frequently  serves as a consultant  to the
Company's  executive  management.  Several of Mr. Cook's  relatives  work at the
Company.  Mr. Cook maintains control over most aspects of the Company including,
but not limited to, setting corporate policy,  determining  strategic direction,
determining  the  acquisition  or sale of assets  by the  Company,  setting  the
material terms of acquisitions  and determining the material  provisions of many
of the Company  contracts.  Mr. Cook provides input on practically every product
and seminar  sponsored  by the Company.  Mr. Cook also  directs  most  marketing
efforts of the Company and has a substantial  influence on the management of the
Company.  Mr.  Cook  will  continue  to have a  significant  influence  over the
policies  and  procedures  of the Company and will be in a position to determine
the outcome of corporate actions requiring stockholder  approval,  including the
election of Directors, the


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adoption of  amendments to the Company's  corporate  documents,  the approval of
mergers and the sale of the Company assets.

Dependence on Wade B. Cook

The  Company's  business  is  highly  dependent  on  the  continuing   effective
involvement  of Mr.  Cook.  Mr.  Cook  personally  directs  most  aspects of the
Company's business.  The Company has a non-exclusive  license which expires June
30,  2002  to use Mr.  Cook's  products,  intellectual  property,  name,  image,
identity, trademarks and trade symbols which are featured prominently in many of
the Company's  services and products.  Mr. Cook is not prohibited from competing
with  the  Company  or  granting  licenses  to  competitors.   See  "Business  -
Intellectual  Property."  The  business  of  the  Company  would  be  materially
adversely affected if Mr. Cook's services were not available to the Company,  or
if Mr.  Cook  should  compete  with  the  Company  or  grant  licenses  or other
assistance to competitors.

Working Capital Deficiency, Liquidity Constraints

At December 31, 2001, the Company had current assets of $9.1 million and current
liabilities of $10.3  million,  resulting in a working  capital  deficit of $1.2
million (See  "Management's  Discussion and Analysis of Financial  Condition and
Results of  Operations  -  Liquidity  and  Capital  Resources").  The  Company's
principal  source of cash has been from its  education  seminars and its sale of
books,  tapes and other  materials  focused on  business  strategies,  financial
planning  and personal  wealth  management.  See  "Management's  Discussion  and
Analysis  of  Financial  Condition  and  Results  of  Operations  -  Results  of
Operations and Liquidity and Capital Resources."

The Company's  practice of using  available  cash to fund  subsidiaries  and new
non-marketable   investments,   its  working  capital  deficit,   the  Company's
significant long and short term  obligations,  recent earthquake  damage,  costs
associated  with the  Company's  consumer  redress  program,  the  September  11
terrorist attack,  the fact that the Company's  segments are not generating cash
as in the past, and the  significant  losses  experienced in the Company's Other
Income have resulted in substantial constraints on liquidity.

If the Company is required to generate cash from its non-marketable  investments
to  satisfy  its  current  obligations,  it may not be able to  liquidate  these
investments in a timely manner or in a manner that allows it to receive the full
value of the  investments.  Failure to generate  adequate cash  resources  could
require the  Company to cut back  operations,  delay  expansion  or  development
projects, or cause the Company to be unable to meet its obligations when due.

Legal Proceedings and Governmental Investigations

The Company is a party to a small number of legal proceedings. See Item 3. Legal
Proceedings.   The  Company,  based  upon  the  information  available  to  date
(including  information  supplied by counsel) and  particularly  in light of the
Company's past history of settling  previous  legal disputes out of court,  does
not presently expect material liability in these matters or any others. However,
the outcome of such matters is difficult to predict and subject to  uncertainty,
and the legal fees and other costs  involved  could be  material.  Any  negative
finding as a result of this investigation could have a materially adverse effect
on the Company's financial condition and results of operations.

Effect of Securities Market Conditions on the Company's Business

The  Company   believes  that  the  level  of  public   interest  in  investing,
particularly in the securities and option markets as well as electronic  trading
has  significantly  influenced  the market for its  products and  services.  The
securities markets have experienced  substantial volatility in recent periods. A
sharp  drop or  sustained  or  gradual  decline  in  securities  prices or other
developments  in  the  securities   markets  typically  could  cause  individual
investors to be less inclined to invest in the securities  markets,  which would
be likely to result in reduced  interest in the  Company's  seminars and related
products and services. Declines in the securities markets also adversely affects
the value of the Company's investment portfolio.


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Management of Growth and Integration of Acquisitions

In  1999,  the  Company's  business  declined  in terms of  revenue,  number  of
employees and scope of activities in which it engages. During the year 2000, the
Company showed similar  declines in revenue,  number of employees,  and scope of
business activities.  During 1997, the Company acquired all interests and rights
in Worldwide, Origin, Gold Leaf and Ideal, and during 1998, the Company acquired
all rights and interests in IQ  (distribution of paging devices that distributed
stock market data). The Company discontinued  Origin's operations as of December
31, 2001.  The Company  currently has a minority  interest in one hotel.  During
2001, Brookhaven Homes Limited Partnership,  a Company controlled entity, become
involved in the  construction  and  development  of luxury  homes in the Western
Washington  area.  Additionally,  in the beginning of 2002, the Company  through
Health and Wealth, Inc., a wholly owned subsidiary,  became involved in the sale
and  distribution of the Fresh  Cleanse(R) skin care product line. Some of these
acquired businesses,  investments, and recent diversification have not performed
as well as  expected  by the  Company.  In the  past,  such  growth  has  placed
significant strains on the Company's management, accounting, financial and other
resources and systems, and on its cash resources and working capital. Failure to
manage  successfully the growth in size and scope of the Company's  business and
to successfully  integrate and manage the Company's recently acquired businesses
could have a material adverse effect on the Company's  results of operations and
financial condition.

State and Federal Government Relations

As  discussed  throughout  this  report,  the  Company is a party to a number of
voluntary Consent Decrees (the  "Agreements")  with the Federal Trade Commission
and the consumer affairs  divisions of 14 states.  The Agreements  relate to the
Company's  future  advertising  practices and the  implementation  of a consumer
redress  program.   While  the  Company  fully  intends  to  comply  with  these
Agreements, failure to comply with the terms of these Agreements could result in
legal action by the  respective  state and federal  authorities.  Legal remedies
could include injunctions against violating  respective consumer laws, recission
of prior customer contracts, customer refunds, contempt, and/or disgorgement. On
February 20, 2002, the FTC filed an  application  for a motion for contempt (the
"Application")  in the Federal District Court for Western  Washington,  claiming
that the Company had allegedly violated provisions of the Agreements.  According
to an FTC press release dated February 21, 2002, the alleged  violations involve
disclosure  of the  Company's  rate of  return,  substantiation  of  promotional
claims,  and  compliance  with consumer  redress  program  deadlines and payment
obligations.  The  Company  is  reviewing  the  Application.  While the  Company
believes that the FTC's actions are unmerited and has been working  closely with
the FTC in resolving  the matter,  failure to  successfully  resolve this matter
could have a material  adverse  affect on the Company's  results of  operations,
operations,  and financial condition (For a more complete  description of recent
events see Item 3. Legal Proceedings).

February 28, 2001 Earthquake

On February 28, 2001,  an  earthquake  (the  "Earthquake")  measuring 6.8 on the
Richter scale struck Western  Washington.  In concert with the earthquake,  Wade
Cook   Financial    Corporation's    ("WCFC")   corporate    headquarters   (the
"Headquarters"),  located in Seattle,  Washington,  experienced severe localized
resulting water damage (the  "Flooding").  The  Headquarters is home to WCFC, as
well as the Stock  Market  Institute  of Learning,  Inc.  ("SMILe"),  Lighthouse
Publishing Group, Inc.  ("Lighthouse"),  Ideal Travel Concepts,  Inc. ("Ideal"),
and  Information  Quest,  Inc.  ("IQ"),  all wholly owned  subsidiaries of WCFC.
Collectively SMILe, Lighthouse, Ideal, and IQ account for the majority of WCFC's
annual  revenues.  The combination of the Earthquake and the Flooding has caused
the Company to  significantly  reduce  operations,  and rendered one half of the
Headquarters unusable for an extended period of time. Occupation was restored to
the  corporate  headquarters  in July of  2001.  All  repairs  have not yet been
completed,  and it is not presently known when the Company  headquarters will be
fully  restored.  The  inability  to  complete  restoration  or to fully  resume
operations  for a number of months  caused and continues to cause the Company to
lose a significant amount of revenue,  as well as the attendant loss of profits,
and to incur substantial continuing and extra expenses. As of December 31, 2001,
the Company was still in the process of  estimating  the extent of full property
damage,  lost profits,  loss of goodwill,  and associated  expenses  incurred on
account of the  Earthquake  and the  Flooding.  However,  initial  estimates  of
physical  damage  to  the  Headquarters  and  related  furniture,  fixtures  and
inventory indicate that the repair, reconstruction, and/or replacement costs for
these  items  may equal  $5,000,000.  The  Company  has  received  approximately
$800,000 in insurance proceeds from its


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commercial  property  insurance  carrier Caliber One Indemnity Company thus far.
The Company is seeking additional  insurance proceeds from Caliber One Indemnity
Company to fund  continued  restoration  of the  Company's  headquarters  and to
compensate  it for  various  losses  caused  by the  earthquake  and  subsequent
flooding,  including damaged and destroyed equipment,  lost business income, and
extra  expenses.  Failure to properly  resolve  coverage  issues  arising out of
recent  Flooding and  Earthquake or inadequate  insurance  coverage could have a
material adverse effect on operations and the Company's financial condition.

Audited Financials for the Year Ended December 31, 1999 Filed in April 2001

In May of 2001, the Company was contacted by the SEC concerning technical filing
error with respect to its Annual Report on the Form 10-K  ("Annual  Report") for
the year ended December 31, 2000. The asserted  technical  filing error involved
the Company's  filing of the Annual Report without  including a written  consent
("Consent") by Miller and Co. LLP ("Miller") relating to the Company's financial
report for the year ended  December  31,  1999.  Miller,  the  Company's  former
auditor,  was  dismissed in November of 2000.  On December 4, 2000,  the Company
filed a Special Report on the Form 8-K ("8-K")  disclosing  Miller's  dismissal.
Miller  attached  a letter  to the 8-K,  agreeing  substantially  that  Miller's
reports for 1998 and 1999 do not contain an adverse  opinion or disclaimer,  and
that  there  had been no  disagreements  with  Miller  on  matters  relating  to
accounting principles or practices,  financial statement disclosure, or auditing
scope  and  procedure   which  were  not  resolved  to  Miller's   satisfaction.
Furthermore,  there were no  reportable  events as described in Item 304 (a) (1)
(iv) of Regulation S-K, or any reportable  event, as the term is defined in Item
304(a)(1)(v)  of Regulation  S-K. (For  additional  information  concerning this
event  please see the  Company's  Special  Report on Form 8-K filed  December 4,
2000).  Shortly before filing the Annual Report,  the Company requested Miller's
written  Consent to refile the prior audited  financials  in the current  Annual
Report.  In a letter dated April 9, 2001, Miller stated "it is our understanding
that we are not  required to  authorize  the  release of the firm's  report." In
reliance on Miller's statements,  the Company believed that Miller's Consent was
either  implicitly  given and/or would not be needed to file the Annual  Report,
and acted accordingly. Subsequent to filing the Annual Report, the SEC contacted
the Company,  informing  Company  representatives  that absent Miller's  written
Consent,  the financials from prior audit years (1998 - 1999) would be deemed as
unaudited by the SEC. The SEC also disclosed that as a result of this situation,
the Company would be unable to raise capital through public  offerings until the
matter  was  resolved.  The  Company is not aware of any  assertions  by Miller,
claiming that its prior audit  information  is  inaccurate,  misleading,  or has
otherwise been impacted by subsequent  events.  The Company  contacted Miller to
solicit express written consent.  The Company also contacted Miller in effort to
gain access to the  Company's  client  records and relevant  work papers held by
Miller  that  would be  needed to  perform a  re-audit  of the  Company's  prior
financials  should Miller choose not to issue a written  consent.  However,  the
Company  was unable,  after  lengthy  discussions,  to come to terms with Miller
regarding either their written consent or access to the Company's client records
and relevant  work papers.  Consequently  in August  2001,  the Company  filed a
lawsuit   against  Miller  to  resolve  this  situation  (for  a  more  complete
description of the lawsuit against Miller, please see Item 3 - Legal Proceedings
of this Report). While the Company is attempting to resolve this situation,  the
Company can make no assurances as to whether it will be  successful.  Failure to
resolve  this  situation   could  adversely   affect  the  Company's   reporting
relationship with the SEC or ability to raise capital through public offering.

September 11, 2001 Terrorist Attacks

The September 11, 2001 terrorist attack (the "Attack") on the World Trade Center
in New York and the Pentagon in Virginia had an adverse  impact on the Company's
operations  and ability to supply seminar  services to its clientele.  Initially
after the  Attack,  the  Company  was  forced to cancel  some of its  previously
scheduled  seminars  during the months of  September  through  November,  and to
reschedule  others.  Cancellation and  rescheduling  resulted in the loss and/or
deferment  of  significant  revenue.  Also as a result of the Attack,  some U.S.
residents  seem to be  choosing  to  travel  less  frequently,  and if they must
travel,  to take alternative  means to air transport.  A significant  portion of
customers who attend the Company's events travel by airplane.  While the Company
is taking steps to lessen the  potential  future  effects of September 11, 2001,
the Company's revenues in future periods could be adversely effected, if a large
percentage of the  Company's  future  customers  choose not to travel to Company
events or to use the Company's travel agency to book travel plans.


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General Economic Conditions

Any  negative  changes in  economic  conditions,  significant  price  increases,
inflation,  or adverse  events  related to the seminar,  travel and/or  tourism,
commercial real estate, or information  services industries such as the cost and
availability of fuel, the price of real estate, or the willingness of individual
investors  to  trade  could  harm  discretionary  consumer  spending  and have a
material  adverse  effect on the Company's  business,  results of operations and
financial condition.  These types of economic  conditions,  including recession,
could  also  adversely  affect  the  availability  to  secure  future  financing
transaction on terms favorable to the Company.  Furthermore,  adverse changes in
economic  conditions could  negatively  affect the  collectability  of Company's
notes receivable.


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