##### Table of Contents



U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-QSB

(Mark One)

|                                                                  |  |                                                                                        
|----------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------
|x                                                                 |  | Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
|                                                                  |  |                                                                                        
|For the quarterly period ended March 31, 2003                    
|                                                                  |  |                                                                                        
|o                                                                 |  | Transition report under section 13 or 15(d) of the Securities Exchange Act of 1934     
|                                                                  |  |                                                                                        
|For the transition period from _______________ to ______________.

Commission file number 0-18808

Great Western Land and Recreation, Inc.

(Name of small business issuer as specified in its charter)


|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|Nevada                                                         |  | 13-3530765                       
|(State or other jurisdiction
of incorporation or organization) |  | (IRS Employer
Identification No.)

5115 N. Scottsdale Road, Suite 101
Scottsdale, AZ 85250
(480) 949-6007
(Address and telephone number of
principal executive offices)

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act during the past
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the
past 90 days.

Yes x No o

The number of shares of the registrants Common Stock outstanding at April 30,
2003 was 20,779,508.

1



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TABLE OF CONTENTS



|                             |                                                             |  |  |  |  |  |  | 
|---------------------------- | ----------------------------------------------------------- |  |  |  |  |  |  | 
|PART I FINANCIAL INFORMATION
|                             | Item 1. Financial Statements                               
|                             | Item 2. Managements Discussion and Analysis               
|                             | Item 3. Controls and Procedures                            
|PART II: OTHER INFORMATION  
|                             | Item 1. Legal Proceedings                                  
|                             | Item 2. Changes in Securities and Use of Proceeds          
|                             | Item 3. Defaults Upon Senior Securities                    
|                             | Item 4. Submission of Matters to a Vote of Security Holders
|                             | Item 5. Other Information                                  
|                             | Item 6. Exhibits and Reports on Form 8-K                   
|SIGNATURES                  
|EXHIBIT INDEX               
|EX-99.2                     
|EX-99.3                     
|EX-99.4                     
|EX-99.5                     



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##### Table of Contents



GREAT WESTERN LAND AND RECREATION, INC.

CONTENTS

|           |                                                             |  |      |    | 
|---------- | ----------------------------------------------------------- |  | ---- | -- | 
|           |                                                             |  | PAGE
|           |                                                             |  |     
|Part I     |                                                             |  |      |   
|           | Financial Information                                       |  |      |    | 
|           | Item 1. Financial Statements                                |  |      | 3  | 
|           | Item 2. Managements Discussion and Analysis                |  |      | 10 | 
|           | Item 3. Controls and Procedures                             |  |      | 12 | 
|Part II    |                                                             |  |      |   
|           | Other Information                                           |  |      |    | 
|           | Item 1. Legal Proceedings                                   |  |      | 13 | 
|           | Item 2. Changes in Securities and Use of Proceeds           |  |      | 13 | 
|           | Item 3. Defaults Upon Senior Securities                     |  |      | 13 | 
|           | Item 4. Submission of Matters to a Vote of Security Holders |  |      | 13 | 
|           | Item 5. Other Information                                   |  |      | 13 | 
|           | Item 6. Exhibits and Reports on Form 8-K                    |  |      | 13 | 
|Signatures |                                                             |  | 14   |   

2



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##### Table of Contents






PART I FINANCIAL INFORMATION




Item 1.Financial Statements

GREAT WESTERN LAND AND RECREATION, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)

|                                     |                                                                                                               |                                                                                                                              |                            |           |           |           |              |           |           |           | 
|------------------------------------ | ------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------- | -------------------------- | --------- | --------- | --------- | ------------ | --------- | --------- | --------- | 
|                                     |                                                                                                               |                                                                                                                              |                            |           | March 31, |           | December 31,
|                                     |                                                                                                               |                                                                                                                              |                            |           | 2003      |           | 2002        
|                                     |                                                                                                               |                                                                                                                              |                            |           |           |           |             
|ASSETS                               |                                                                                                               |                                                                                                                              |                            |           |           |           |              |          
|                                     | Cash and cash equivalents                                                                                     |                                                                                                                              | $                          | 83,205    |           |           | $            | 654,369   |          
|                                     | Notes receivable                                                                                              |                                                                                                                              |                            | 1,567,494 |           |           |              | 1,574,569 |          
|                                     | Land held for development and sale                                                                            |                                                                                                                              |                            | 8,904,865 |           |           |              | 8,648,204 |          
|                                     | Receivable from related entities                                                                              |                                                                                                                              |                            | 69,755    |           |           |              | 66,370    |          
|                                     | Property and equipment, net of accumulated
depreciation of $52,967 and $40,356
in 2003 and 2002, respectively |                                                                                                                              |                            | 178,448   |           |           |              | 192,905   |          
|                                     | Other                                                                                                         |                                                                                                                              |                            | 251,040   |           |           |              | 268,921   |          
|                                     |                                                                                                               |                                                                                                                              |                            |           |           |           |              |          
|                                     |                                                                                                               | $                                                                                                                            | 11,054,807                 |           |           | $         | 11,405,338   |          
|                                     |                                                                                                               |                                                                                                                              |                            |           |           |           |              |          
|LIABILITIES AND STOCKHOLDERS EQUITY |                                                                                                               |                                                                                                                              |                            |           |           |           |              |          
|                                     | Liabilities                                                                                                   |                                                                                                                              |                            |           |           |           |              |           |          
|                                     |                                                                                                               | Notes payable                                                                                                                |                            | $         | 3,921,732 |           |              | $         | 4,028,170 |          
|                                     |                                                                                                               | Subordinated debt                                                                                                            |                            |           | 3,539,712 |           |              |           | 3,457,520 |          
|                                     |                                                                                                               | Payable to related entities                                                                                                  |                            |           | 750,545   |           |              |           | 869,400   |          
|                                     |                                                                                                               | Accounts payable and other accrued liabilities                                                                               |                            |           | 518,033   |           |              |           | 324,298   |          
|                                     |                                                                                                               |                                                                                                                              |                            |           |           |           |              |          
|                                     |                                                                                                               |                                                                                                                              | Total liabilities          |           |           | 8,730,022 |              |           |           | 8,679,388 | 
|                                     | Minority interest                                                                                             |                                                                                                                              |                            | 47,881    |           |           |              | 46,009    |          
|                                     | Stockholders equity                                                                                          |                                                                                                                              |                            |           |           |           |              |           |          
|                                     |                                                                                                               | Preferred stock, $0.001 par value; 10,000,000 shares
authorized; 14,380 issued and outstanding;
liquidation value  $719,000 |                            |           | 640,374   |           |              |           | 628,559   |          
|                                     |                                                                                                               | Common stock, $0.001 par value; 30,000,000 shares
authorized; 20,779,508 shares outstanding                                  |                            |           | 20,779    |           |              |           | 20,779    |          
|                                     |                                                                                                               | Additional paid-in capital                                                                                                   |                            |           | 2,321,920 |           |              |           | 2,333,735 |          
|                                     |                                                                                                               | Accumulated other comprehensive loss                                                                                         |                            |           | (733      | )         |              |           | (703      | )        
|                                     |                                                                                                               | Accumulated deficit                                                                                                          |                            |           | (705,749  | )         |              |           | (302,742  | )        
|                                     |                                                                                                               | Treasury stock                                                                                                               |                            |           | 313       |           |              |           | 313       |          
|                                     |                                                                                                               |                                                                                                                              |                            |           |           |           |              |          
|                                     |                                                                                                               |                                                                                                                              | Total stockholders equity |           |           | 2,276,904 |              |           |           | 2,679,941 | 
|                                     |                                                                                                               |                                                                                                                              |                            |           |           |           |              |          
|                                     |                                                                                                               | $                                                                                                                            | 11,054,807                 |           |           | $         | 11,405,338   |          
|                                     |                                                                                                               |                                                                                                                              |                            |           |           |           |              |          

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

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GREAT WESTERN LAND AND RECREATION, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

|                                                                                   |                                            |   |                              |         |      |   |            |         | 
|---------------------------------------------------------------------------------- | ------------------------------------------ | - | ---------------------------- | ------- | ---- | - | ---------- | ------- | 
|                                                                                   |                                            |   | Three months ended March 31,
|                                                                                   |                                            |   |                             
|                                                                                   |                                            |   | 2003                         |         | 2002
|                                                                                   |                                            |   |                              |         |     
|Land and lot sales                                                                 |                                            | $ | 694,590                      |         |      | $ | 816,068    |        
|Cost of land and lot sales                                                         |                                            |   | 375,357                      |         |      |   | 429,953    |        
|                                                                                   |                                            |   |                              |         |      |   |            |        
|                                                                                   | Gross profit on sales                      |   |                              | 319,233 |      |   |            | 386,115 | 
|Operating, selling, general and
administrative expense                             |                                            |   | 516,344                      |         |      |   | 618,342    |        
|                                                                                   |                                            |   |                              |         |      |   |            |        
|                                                                                   |                                            |   | (197,111                     | )       |      |   | (232,227   | )      
|Other income (expense)                                                             |                                            |   |                              |         |      |   |            |        
|Interest expense                                                                   |                                            |   | (178,233                     | )       |      |   | (249,656   | )      
|                                                                                   | Interest income                            |   |                              | 35,102  |      |   |            | 44,074  | 
|                                                                                   | Equity in losses of unconsolidated company |   |                              | (53,530 | )    |   |            |        | 
|                                                                                   | Gain on settlement of note receivable      |   |                              |        |      |   |            | 118,000 | 
|                                                                                   | Other income (expense)                     |   |                              | (7,363  | )    |   |            | 25,197  | 
|                                                                                   |                                            |   |                              |         |      |   |            |        
|                                                                                   |                                            |   | (204,024                     | )       |      |   | (62,385    | )      
|                                                                                   |                                            |   |                              |         |      |   |            |        
|Loss before minority interest                                                      |                                            |   | (401,135                     | )       |      |   | (294,612   | )      
|Minority interest                                                                  |                                            |   | (1,872                       | )       |      |   |           |        
|                                                                                   |                                            |   |                              |         |      |   |            |        
|Net loss                                                                           |                                            | $ | (403,007                     | )       |      | $ | (294,612   | )      
|                                                                                   |                                            |   |                              |         |      |   |            |        
|Net loss per common and common equivalent share
Basic and diluted                  |                                            | $ | (0.02                        | )       |      | $ | (0.01      | )      
|                                                                                   |                                            |   |                              |         |      |   |            |        
|Weighted average common and common equivalent shares outstanding
Basic and diluted |                                            |   | 20,779,508                   |         |      |   | 20,779,508 |        
|                                                                                   |                                            |   |                              |         |      |   |            |        

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

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GREAT WESTERN LAND AND RECREATION, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

|                                                                                                                                                     |                                                                                            |                                                               |                                                     |          |                              |          |          |            |         |          |  
|---------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------ | ------------------------------------------------------------- | --------------------------------------------------- | -------- | ---------------------------- | -------- | -------- | ---------- | ------- | -------- | -
|                                                                                                                                                     |                                                                                            |                                                               |                                                     |          | Three months ended March 31,
|                                                                                                                                                     |                                                                                            |                                                               |                                                     |          |                             
|                                                                                                                                                     |                                                                                            |                                                               |                                                     |          | 2003                         |          | 2002    
|                                                                                                                                                     |                                                                                            |                                                               |                                                     |          |                              |          |         
|Cash flows from operating activities                                                                                                                 |                                                                                            |                                                               |                                                     |          |                              |          |          |           
|Net loss                                                                                                                                             |                                                                                            | $                                                             | (403,007                                            | )        |                              | $        | (294,612 | )         
|                                                                                                                                                     | Adjustments to reconcile net loss to net cash provided
by (used in ) operating activities: |                                                               |                                                     |          |                              |          |          |            |        
|                                                                                                                                                     |                                                                                            | Depreciation and amortization                                 |                                                     |          | 9,619                        |          |          |            | 2,735   |         
|                                                                                                                                                     |                                                                                            | Bad debt expense                                              |                                                     |          | 13,967                       |          |          |            |        |         
|                                                                                                                                                     |                                                                                            | Accrued interest expense included in debt                     |                                                     |          | 150,372                      |          |          |            | 154,527 |         
|                                                                                                                                                     |                                                                                            | Accretion of interest income                                  |                                                     |          | 4,916                        |          |          |            | (28,613 | )       
|                                                                                                                                                     |                                                                                            | Collection of notes receivable relating to prior years sales |                                                     |          | 25                           |          |          |            | 635,272 |         
|                                                                                                                                                     |                                                                                            | Uncollected notes receivable from current year sales          |                                                     |          | (11,833                      | )        |          |            |        |         
|                                                                                                                                                     |                                                                                            | Loss on disposal of property, plant and equipment             |                                                     |          | 9,756                        |          |          |            |        |         
|                                                                                                                                                     |                                                                                            | Equity in losses of unconsolidated company                    |                                                     |          | 53,530                       |          |          |            |         |         
|                                                                                                                                                     |                                                                                            | Minority interests in earnings of consolidated subsidiaries   |                                                     |          | 1,872                        |          |          |            |        |         
|                                                                                                                                                     |                                                                                            | Change
in operating assets and liabilities:                   |                                                     |          |                              |          |          |            |         |         
|                                                                                                                                                     |                                                                                            |                                                               | Land held for development and sale                  |          |                              | (391,623 | )        |            |         | 425,398  |  
|                                                                                                                                                     |                                                                                            |                                                               | Other assets                                        |          |                              | 14,587   |          |            |         | 65,256   |  
|                                                                                                                                                     |                                                                                            |                                                               | Accounts payable and other accrued liabilities      |          |                              | 193,735  |          |            |         | (158,712 | )
|                                                                                                                                                     |                                                                                            |                                                               | Deferred income                                     |          |                              |         |          |            |         | (235,455 | )
|                                                                                                                                                     |                                                                                            |                                                               |                                                     |          |                              |          |          |           
|                                                                                                                                                     |                                                                                            |                                                               | Net cash provided by (used in) operating activities |          |                              | (354,084 | )        |            |         | 565,796  |  
|Cash flows from investing activities                                                                                                                 |                                                                                            |                                                               |                                                     |          |                              |          |          |           
|                                                                                                                                                     | Increase (decrease) in advances to related parties                                         |                                                               |                                                     | 12,722   |                              |          |          | (128,067   | )      
|                                                                                                                                                     | Investment in unconsolidated company                                                       |                                                               |                                                     | (53,530  | )                            |          |          |           |        
|                                                                                                                                                     | Purchase of property and equipment                                                         |                                                               |                                                     | (1,654   | )                            |          |          | (16,276    | )      
|                                                                                                                                                     |                                                                                            |                                                               |                                                     |          |                              |          |          |           
|                                                                                                                                                     |                                                                                            |                                                               | Net cash used in investing activities               |          |                              | (42,462  | )        |            |         | (144,343 | )
|Cash flows from financing activities                                                                                                                 |                                                                                            |                                                               |                                                     |          |                              |          |          |           
|                                                                                                                                                     | Issuance of notes payable                                                                  |                                                               |                                                     | 317,406  |                              |          |          | 1,324,283  |        
|                                                                                                                                                     | Payments on notes payable                                                                  |                                                               |                                                     | (492,024 | )                            |          |          | (1,207,264 | )      
|                                                                                                                                                     | Decrease in subordinated debt                                                              |                                                               |                                                     |         |                              |          |          | (559,513   | )      
|                                                                                                                                                     |                                                                                            |                                                               |                                                     |          |                              |          |          |           
|                                                                                                                                                     |                                                                                            |                                                               | Net cash used in financing activities               |          |                              | (174,618 | )        |            |         | (442,494 | )
|                                                                                                                                                     |                                                                                            |                                                               |                                                     |          |                              |          |          |           
|Net decrease in cash and cash equivalents                                                                                                            |                                                                                            |                                                               | (571,164                                            | )        |                              |          | (21,041  | )         
|Cash and cash equivalents at beginning of period                                                                                                     |                                                                                            |                                                               | 654,369                                             |          |                              |          | 317,969  |           
|                                                                                                                                                     |                                                                                            |                                                               |                                                     |          |                              |          |          |           
|Cash and cash equivalents at end of period                                                                                                           |                                                                                            | $                                                             | 83,205                                              |          |                              | $        | 296,928  |           
|                                                                                                                                                     |                                                                                            |                                                               |                                                     |          |                              |          |          |           
|Supplemental disclosure of cash flow information:                                                                                                    |                                                                                            |                                                               |                                                     |          |                              |          |          |           
|Cash paid during the period for interest, net of amount capitalized                                                                                  |                                                                                            | $                                                             | 34,451                                              |          |                              | $        | 60,005   |           
|Noncash investing and financing activities                                                                                                           |                                                                                            |                                                               |                                                     |          |                              |          |          |           
|Transfer of Wagon Bow Ranch land in exchange for minority interest in Willow
Springs Ranch, LLC and a reduction in the payable to minority investors |                                                                                            |                                                               | 134,962                                             |          |                              |          |         |           

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

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##### Table of Contents



GREAT WESTERN LAND AND RECREATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

NOTE A  BACKGROUND AND BASIS OF PRESENTATION

The accompanying consolidated financial statements as of March 31, 2003 and
December 31, 2002 and for the three month periods ended March 31, 2003 and 2002
include the accounts of Great Western Land and Recreation, Inc. (formerly 1st
Realty Investments, Inc.) and its wholly- and majority-owned subsidiaries
(collectively, the Company). Investments in companies that represent 20% to
50% of the ownership interest are accounted for on the equity method.
Investments in companies that represent less than a 20% ownership interest are
accounted for on the cost basis. All material intercompany accounts and
transactions have been eliminated.

The accompanying unaudited financial information reflects all adjustments,
consisting only of normal recurring adjustments, that are, in the opinion of
management, necessary for a fair statement of the results for the interim
periods presented. Such financial information should be read in conjunction
with the consolidated financial statements and related notes as of December 31,
2002 included in Form 8-K/A filed with the SEC on May 5, 2003.

The Company maintains its records and prepares its financial statements in
accordance with accounting principles generally accepted in the United States
of America for real estate operations. In preparing financial statements in
conformity with accounting principles generally accepted in the United States
of America, management is responsible for making estimates and assumptions that
affect the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of the financial statements, and
reported amounts of revenues and expenses during the reported period. Actual
results could differ from those estimates.

On July 23, 2002, the Company entered into an Agreement and Plan of Merger (the
Merger Agreement or the Agreement) with Great Western Land and Recreation,
Inc., a Delaware corporation (Great Western Delaware). Under the Merger
Agreement, the Company agreed to undertake a series of transactions the result
of which would be the transfer of control of the Company to
Amortibanc Investments LC (Amortibanc), the stockholder of
Great Western Delaware, and the merger of Great Western Delaware into the
Company. The Company would be the surviving entity. The transaction also
involves the election of new directors of the Company and the amendment of the
Companys Articles of Incorporation to change its name to Great Western Land
and Recreation, Inc. The Board of Directors of the Company unanimously approved
the Merger Agreement and the other transactions to be undertaken and the
holders of a majority of the outstanding stock of the Company approved the
transactions in writing on July 25, 2002. On July 23, 2002 the stockholder of
Great Western Delaware consented in writing to the Merger Agreement
transactions. Under applicable Nevada law, written consent by the holders of a
majority of the outstanding stock of the Company to the transactions outlined
in the Agreement is sufficient to approve the transactions, without a meeting
or vote of all of the stockholders. This transaction became effective on
February 20, 2003. Immediately following the merger, former 1st Realty
stockholders owned approximately 9% of the Company and Amortibanc owned
approximately 91% of the Company (94% assuming the conversion of the preferred
stock into common stock).

The Company expects that the Merger will be treated as a tax-free
reorganization under Section 368(a)(1)(B) of the Internal Revenue Code of 1986,
as amended. If the Merger qualifies as a tax-free reorganization, no gain or
loss will be recognized for income tax purposes by either the Company or Great
Western Delaware as a result of the acquisition. There also should not be any
material tax effects to the existing stockholders of the Company as a result of
the transaction. However, neither the Company nor Great Western Delaware
requested a tax ruling from the Internal Revenue Service with respect to the
transaction. Accordingly, the Company can give no assurance that the
transaction will qualify as a tax-free reorganization. The Company has
accounted for its acquisition of Great Western Delaware as a reverse
acquisition, with Great Western Delaware the acquirer and the Company the
acquiree for reporting purposes. Prior to September 2000, the Company was a
dormant non-operating company. Its current operations are solely the result of
the series of transactions it entered into with Great Western Delaware. As a
result, the assets and liabilities of both companies have been combined at
their historical cost. The accompanying financial statements and notes are
presented as if the Merger were consummated on January 1, 2002.

NOTE B  LOSS PER COMMON SHARE

Basic loss per share is computed by dividing net loss less preferred stock
dividends applicable to the period by 20,779,508 common shares. The 20,779,508
common shares issued and outstanding upon the completion of the merger are
assumed to be outstanding for all periods presented. Diluted loss per share is
the same as basic loss per share because the convertible preferred stock and
the stock options are anti-dilutive and therefore excluded from the
computation.

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NOTE C  INVESTMENT IN UNCONSOLIDATED COMPANY

On September 19, 1997, the Company acquired a 25.52% ownership in Laguna at
Arrowhead Apartments L.L.C., which owns an apartment complex in Phoenix,
Arizona. This investment is accounted for using the equity method. Under the
equity method, the Companys investment balance approximates the Companys
original cost adjusted for its equity interest in the earnings and losses of
Laguna since September 19, 1997, the date of acquisition. At March 31, 2003 and
2002, the Companys investment balance was $-0-. Under the terms of the Laguna
at Arrowhead Apartments L.L.C. operating agreement, Laguna Investments L.L.C.
is subject to additional capital calls in connection with its ownership
interest in Laguna at Arrowhead Apartments L.L.C. Laguna Investments L.L.C.
was notified of a capital call for $53,530, which was paid in 2003. As a
result of this payment, unrecognized equity losses from prior periods were
recorded in the first three months of 2003 to the extent of the capital call.
Unrecognized losses as of March 31, 2003 total $138,143. Had Laguna
Investments L.L.C. failed to make the required payment, its ownership interest
would have been reduced from 25.52% to 24.14%. Summarized financial
information for Laguna is as follows:

|                       |              |   |           |           | 
|---------------------- | ------------ | - | --------- | --------- | 
|                       |              |   | March 31,
|                       |              |   | 2003     
|                       |              |   |          
|Current assets         |              | $ | 122,813   |          
|Noncurrent assets      |              |   | 8,613,811 |          
|                       |              |   |           |          
|                       | Total assets |   | $         | 8,736,624 | 
|                       |              |   |           |          
|Current liabilities    |              | $ | 170,541   |          
|Noncurrent liabilities |              |   | 9,292,938 |          
|Members capital       |              |   | (726,855  | )        
|                       |              |   |           |          
|                       |              | $ | 8,736,624 |          
|                       |              |   |           |          

|                                                 |  |  |  |  |  |                            |          |      |  |   |          |  
|------------------------------------------------ |  |  |  |  |  | -------------------------- | -------- | ---- |  | - | -------- | -
|                                                 |  |  |  |  |  | For the three months ended
|                                                 |  |  |  |  |  | March 31,                 
|                                                 |  |  |  |  |  |                           
|                                                 |  |  |  |  |  | 2003                       |          | 2002
|                                                 |  |  |  |  |  |                            |          |     
|Revenues                                         |  |  |  |  |  | $                          | 397,853  |      |  | $ | 380,209  |  
|Net loss from continuing operations and net loss |  |  |  |  |  |                            | (160,912 | )    |  |   | (102,266 | )

NOTE D  RELATED ENTITIES

Related entity receivables/payables are as follows:

|                                                    |                                                      |   |           |         |              |   |         |         | 
|--------------------------------------------------- | ---------------------------------------------------- | - | --------- | ------- | ------------ | - | ------- | ------- | 
|                                                    |                                                      |   | March 31, |         | December 31,
|                                                    |                                                      |   | 2003      |         | 2002        
|                                                    |                                                      |   |           |         |             
|Receivable from related entities                    |                                                      |   |           |         |              |   |         |        
|Management Pool, LLC                                |                                                      | $ | 37,452    |         |              | $ | 37,302  |        
|                                                    | Other                                                |   |           | 32,303  |              |   |         | 29,068  | 
|                                                    |                                                      |   |           |         |              |   |         |        
|                                                    |                                                      | $ | 69,755    |         |              | $ | 66,370  |        
|                                                    |                                                      |   |           |         |              |   |         |        
|Payable to related entities                         |                                                      |   |           |         |              |   |         |        
|Minority investors in Willow Springs Ranch, LLC (3) |                                                      | $ |          |         |              | $ | 134,962 |        
|                                                    | Minority investors in Glendale Condominiums, LLC (2) |   |           | 680,885 |              |   |         | 665,885 | 
|                                                    | Lafayette Financial Services (1)                     |   |           | 64,182  |              |   |         | 63,075  | 
|                                                    | Other                                                |   |           | 5,478   |              |   |         | 5,478   | 
|                                                    |                                                      |   |           |         |              |   |         |        
|                                                    |                                                      | $ | 750,545   |         |              | $ | 869,400 |        
|                                                    |                                                      |   |           |         |              |   |         |        



---

|(1) |  | Lafayette Financial Services is 50% owned by the Chairman of the
Companys Board of Directors. This note resulted from the purchase of
certain real estate options by the Company in 1999. The note bears
interest at prime and is payable in semi-annual installments of $15,760
plus interest.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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##### Table of Contents



|(2) |  | The Company has a 70% interest in Glendale Condominiums, LLC. The
land for the project was purchased from an individual and a trust who
own the other 30% of the project. The payable represents the balance
due, including interest at 8% per annum, for this purchase. Principal
and interest are due quarterly from September 2008 through September
2018. The land cost and preliminary development costs for this project
total $1,635,105 and $1,219,198 at March 31, 2003 and December 31, 2002,
respectively, and are included in land held for development and sale in
Arizona properties.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(3) |  | The Company has an 85% interest in Willow Springs Ranch, LLC, with
several minority investors owning the remaining 15%. The payable to the
minority investors has no specific repayment terms, and will be repaid
through distributions made by Willow Springs Ranch, LLC to its members.
On March 1, 2003, the Company bought out the minority investors in
exchange for 640 acres of Arizona ranch land.                                                                                                                                                                                         

NOTE E  SUBORDINATED DEBT

The Companys operations have been partially financed with periodic advances in
prior years from Amortibanc. The advances are subordinate to the Companys bank
financing and bear interest at 8% to 10%. The interest accrued on these advances
has primarily been added to the subordinated debt. Payments on the debt are
made only when cash flow from a land sale, after payment of bank debt, exceeds
the Companys operating cash requirements. This determination is made by the
Companys management. The total advances and accrued interest due are
$3,539,712 and $3,457,520 at March 31, 2003 and December 31, 2002 respectively.

NOTE F  COMMITMENTS AND CONTINGENCIES

The Company sold notes receivable with repayment terms of up to 15 years,
with recourse upon nonpayment by the debtor of $21,913 and $74,880
during the three
months ended March 31, 2003 and 2002, respectively. The remaining balances
due, with recourse, of all notes sold are $1,072,972 and $1,106,426 as of March
31, 2003 and December 31, 2002 respectively.

In certain instances, 15% of the note sales proceeds are retained by the
purchaser of the notes as a nonpayment reserve and returned to the Company when
the original land purchasers pay off the note balances. The reserve balance is
$185,431 and $176,902 at March 31, 2003 and December 31, 2002, respectively
and is included in other assets, net of an allowance established for recourse
chargeback of $55,652 and $55,652 at March 31, 2003 and December 31, 2002,
respectively. If the Company incurs a chargeback, ownership of the original
land sold will revert to the Company and can be resold to help recover any
losses incurred by the Company as a result of the chargeback. During the three
months ended March 31, 2003, the Company was notified of two chargebacks,
totaling $61,600.

The Company is involved in a variety of legal matters that arise in the normal
course of business. Based on information currently available, management does
not believe that the ultimate resolution of these matters will have a material
adverse effect on the Companys financial condition, results of operations or
cash flow.

The Company entered into a five-year employment agreement with its president
during 2001. In the event the Company consummates an acquisition (as defined in
the agreement) during the terms of the agreement, the contract provides for
salary increases and issuance of options to acquire a total of 600,000 common
shares of the surviving corporation at a price not to exceed the fair market
value of such shares on the closing date of the acquisition. The agreement also
provides for severance payments upon termination in the amount of the total
compensation for the remainder of the contract terms and a consulting
arrangement upon retirement of the president.

NOTE G  PREFERRED STOCK

The Company has outstanding 14,380 shares
of Series A Cumulative Convertible Preferred Stock, with a liquidation value of
$719,000. The preferred stock is not redeemable at a fixed or determinable
price on a fixed or determinable date or upon the occurrence of any event that
is not solely within the Companys control. The preferred stock is convertible
by the holder at any time into shares of the Companys common stock at a price
equal to the average market price of the Companys common stock for the thirty
business days immediately preceding the conversion, and is redeemable by the
Company at any time after one year from the date of issuance. Since no public
market currently exists for the Companys

8



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common stock, market price is determined by the Board of Directors. The
preferred stock has a cumulative dividend, payable semi-annually at the
following rates:

|                                      |  |              |  | 
|------------------------------------- |  | ------------ |  | 
|First year from the date of issuance  |  | 0% per annum
|Second year from the date of issuance |  | 2% per annum
|Third year from the date of issuance  |  | 4% per annum
|Fourth year from the date of issuance |  | 5% per annum
|Fifth year from the date of issuance  |  | 6% per annum
|Thereafter                            |  | 7% per annum

As the preferred stock has an increasing dividend rate, the preferred stock was
initially recorded at its fair value at the date of its issuance by discounting
the preferred stock using managements estimate of the current market rate for
dividend yields and comparing it to the actual dividend rate of the preferred
stock. This resulted in a discount of $114,071, which is being amortized over the period of
increasing dividend rates of the preferred stock. Amortization for the three
months ended March 31, 2003 was $11,815.

NOTE H  RELATED PARTY TRANSACTIONS

Prior to March 1, 2003, the Company owned an 85% interest in Willow Springs
Ranch, LLC, with several minority investors, including Lafayette Financial
Services, a company that is 50% owned by the Chairman of the Companys board of
directors, another partnership controlled by the Chairman, and the Companys
senior vice president, owning the remaining 15%. On March 1, 2003, the Company
bought out the minority investors interest in exchange for 640 acres of
Arizona ranch land and cancellation of a $134,962 payable.

9



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##### Table of Contents






Item 2.Managements Discussion and Analysis

The following discussion includes forward-looking statements that involve risks
and uncertainties. Our actual results could differ materially from the results
contemplated by these forward-looking statements due to certain factors,
including those discussed below, elsewhere in this Form 10-QSB and in the
Companys other filings with the SEC.

Overview

On July 23, 2002, we entered into an Agreement and Plan of Merger (the Merger
Agreement or the Agreement) with Great Western Land and Recreation, Inc. a
Delaware corporation (Great Western Delaware). Under the Merger Agreement, we
agreed to undertake a series of transactions the result of which was the
transfer of control of the Company to Amortibanc Investments, LC
(Amortibanc), the stockholder of Great Western
Delaware, and the merger of Great Western Delaware into the Company. We were
the surviving entity. The transaction also involves the election of new
directors and the amendment of our Articles of Incorporation to change our name
to Great Western Land and Recreation, Inc. Our Board of Directors unanimously
approved the Merger Agreement and the other transactions to be undertaken and
the holders of a majority of our outstanding stock approved the transactions in
writing on July 25, 2002. On July 23, 2002 the stockholder of Great Western
Delaware consented in writing to the Merger Agreement transactions. Under
applicable Nevada law, written consent by the holders of a majority of our
outstanding stock to the transactions outlined in the Agreement was sufficient
to approve the transactions, without a meeting or vote of all of the
stockholders. The transaction became effective on February 20, 2003.
Immediately following the merger, former 1st Realty stockholders owned
approximately 9% of the Company and Amortibanc owned approximately 91% of the
Company (94% assuming the conversion of the preferred stock into common stock).

We expect that the Merger will be treated as a tax-free reorganization under
Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended. If the
Merger qualifies as a tax-free reorganization, no gain or loss will be
recognized for income tax purposes by either 1st Realty or Great Western
Delaware as a result of the acquisition. There also should not be any material
tax effects to our existing stockholders as a result of the transaction.
However, neither 1st Realty nor Great Western Delaware requested a tax ruling
from the Internal Revenue Service with respect to the transaction. Accordingly,
we can give no assurance that the transaction will qualify as a tax-free
reorganization. We have accounted for our acquisition of Great Western Delaware
as a reverse acquisition, with Great Western Delaware the acquirer and 1st
Realty the acquiree for reporting purposes. Prior to September 2000, we were a
dormant non-operating company. Our current operations are solely the result of
the series of transactions we entered into with Great Western Delaware. As a
result, the assets and liabilities of both companies have been combined at
their historical cost. The accompanying discussion and analysis is presented
as if the Merger was consummated on January 1, 2002.

Results of Operations

Three months ended March 31, 2003 (first quarter of 2003) compared to the three
months ended March 31, 2002 (first quarter of 2002)

Land and lot sales.Land and lot sales decreased $121,000 or 15% to $695,000 in
the first quarter of 2003 from $816,000 in the first quarter of 2002. This
decrease was the result of decreases in bulk land sales of $51,000 and
residential lot sales of $116,000 partially offset by an increase in ranch land
sales of $46,000. The bulk sale in the first quarter of 2002 consisted of the
sale of a parcel of land in Houston, Texas to another developer who owned the
adjacent property. There were no such bulk sales in the first quarter of 2003.
The decline in residential lot sales reflects the current economic slowdown,
and the fact that our current projects in Houston are nearing completion. We
anticipate that these projects will be sold out early in 2004. However, we
expect Warren Ranch, a new residential development in the Houston metro area,
to begin generating revenue in early 2004. The increase in ranch land sales is
the result of our focus on improving the quality of the sales force at our
ranches. We believe that these efforts, along with an improvement in the
economy, will lead to increased ranch land sales.

Our land and lot sales are affected by numerous factors including mortgage
interest rates, demand for new housing starts and the availability of finished
lots within a particular area. Generally, the pace of sales and the price per
lot increase over the life of a project as developments gain popularity and as
contract price escalators become effective.

Cost of land and lot sales.Cost of land and lot sales decreased $55,000, or
13%, to $375,000 in the first quarter of 2003 from $430,000 in the first
quarter of 2002. As a percentage of land and lot sales, the cost of land and
lot sales increased to 54% in the first quarter of 2003 from 53% in the first
quarter of 2002. This was due to the $51,000 bulk sale discussed above. The
bulk sale land had been carried at zero value due to its location in a flood
way, which severely limited its ability to be developed. However, changes in
circumstances increased the development potential of the land when combined
with the adjacent property.

Operating, selling, general and administrative expenses.Operating, selling,
general and administrative expenses decreased $102,000,

10



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##### Table of Contents



or 17%, to $516,000 in the first quarter of 2003 from $618,000 in the first
quarter of 2002. The decrease was primarily due to decreases in professional
fees of $54,000, advertising and promotion of $49,000, auto expense of $11,000
and maintenance and repairs of $9,000, partially offset by a $14,000 increase
in bad debt expense. Professional fees in 2002 were unusually high due to
activity related to Great Western Delawares proposed merger with quepasa.com.
Advertising costs were higher in 2002 because at that time our advertising
program included television. Our current advertising program focuses on print
and other types of advertising. We believe this is a more effective way to
reach our target audience. The bad debt expense in the first quarter of 2003
was due to a $14,000 write down of one of Firebird Financials second mortgage
loans.

Interest expense.Interest expense decreased $72,000 or 29% to $178,000 in the
first quarter of 2003 from $250,000 in the first quarter of 2002. The decrease
is due to declining interest rates on the variable rate loans associated with
the residential lot sales business, and to lower average outstanding balances
on our loans due to the repayment of principal as lots are sold.

Interest income.Interest income decreased $9,000 to $35,000 in the first
quarter of 2003 from $44,000 in the first quarter of 2002 due to lower
outstanding balances on notes receivable.

Equity in losses of unconsolidated company.Equity in losses of unconsolidated
company (Laguna) was $54,000 in the first quarter of 2003 compared to $0 in
the first quarter of 2002. Due to losses experienced by Laguna in prior years,
our investment in Laguna had been written down to $0. However, under the terms
of the Laguna at Arrowhead Apartments L.L.C. operating agreement, Laguna
Investments L.L.C. is subject to additional capital calls in connection with
its ownership interest in Laguna at Arrowhead Apartments L.L.C. An additional
capital call for $54,000, was paid during the first quarter of 2003. As a
result of this payment, unrecognized equity losses from prior periods were
recorded to the extent of the capital call.

Gain on settlement of note receivable.Gain on settlement of note receivable
was $0 in the first quarter of 2003 compared to $118,000 in the first quarter
of 2002.

Other income (expense).Other income (expense) was a net expense of $7,000 in
the first quarter of 2003 compared to income of $25,000 in the first quarter
of 2002. Other income in the first quarter of 2002 included $35,000 in grazing
lease income related to the Wagon Bow Ranch. In the fourth quarter of 2002,
these grazing rights were sold.

Net loss.Net loss increased $108,000, from $295,000 in the first quarter of
2002 to $403,000 for the first quarter of 2003. This increase is primarily due
to a $67,000 decrease in gross profit due to lower sales, equity in losses of
unconsolidated company of $54,000 a decrease of $118,000 in gain on settlement
of note receivable and a $32,000 decrease in other income (expense), partially
offset by decreases in operating expenses and interest expense.

Liquidity and Capital Resources

In this section of the management discussion and analysis segment, we are going to discuss:



| |  |  | sources and uses of cash, and significant factors that influence both;
| | - |  | ----------------------------------------------------------------------
|
| |  |  | our analysis of our cash flows for the first quarter of 2003; and     
|
| |  |  | our commitments and contractual obligations.                          

All of these factors are important to obtain an understanding of our ability to
meet our current obligations, to fund working capital, to finance the
acquisition and development of new projects, or to pay down existing debt.

Sources and uses of cash. We require cash to fund our operating expenses, to
finance the acquisition and development of new projects and to pay debt
service. Our principal sources of liquidity are cash on hand, cash generated
from land and lot sales, cash generated from bulk land sales, collections on
notes receivable and funds from external borrowings. We may also raise
additional funding through future equity offerings, subject to market
conditions.

We believe that the key factors that could affect sources of cash include:



| |  |  | factors that affect our results of operations and cash flows,
including reduced demand for land resulting from the recent economic
slowdown, competitive pricing pressures; and          
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | factors that affect our access to bank financing that could impair
our ability to obtain needed financing on acceptable terms to finance
the acquisition and development of new projects.

Analysis of cash flows.Cash flow information for the quarters ended March 31,
2003 and 2002 follows:

|                                                 |                                                                                           |                                                     |          |                              |          |      |         |            |          |  
|------------------------------------------------ | ----------------------------------------------------------------------------------------- | --------------------------------------------------- | -------- | ---------------------------- | -------- | ---- | ------- | ---------- | -------- | -
|                                                 |                                                                                           |                                                     |          | Quarter ended March 31, 2003
|                                                 |                                                                                           |                                                     |          |                             
|                                                 |                                                                                           |                                                     |          | 2003                         |          | 2002
|                                                 |                                                                                           |                                                     |          |                              |          |     
|Cash flows from operating activities             |                                                                                           |                                                     |          |                              |          |      |         |           
|                                                 | Net loss                                                                                  |                                                     | $        | (403,007                     | )        |      | $       | (294,612   | )       
|                                                 | Adjustments to reconcile net loss to net cash provided
by (used in ) operating activities |                                                     |          | 232,224                      |          |      |         | 763,921    |         
|                                                 | Change in assets and liabilities                                                          |                                                     |          | (183,301                     | )        |      |         | 96,487     |         
|                                                 |                                                                                           |                                                     |          |                              |          |      |         |           
|                                                 |                                                                                           | Net cash provided by (used in) operating activities |          |                              | (354,084 | )    |         |            | 565,796  |  
|Cash flows from investing activities             |                                                                                           |                                                     |          |                              |          |      |         |           
|                                                 | Increase (decrease) in advances to related parties                                        |                                                     |          | 12,722                       |          |      |         | (128,067   | )       
|                                                 | Investment in unconsolidated company                                                      |                                                     |          | (53,530                      | )        |      |         |           |         
|                                                 | Purchase of property and equipment                                                        |                                                     |          | (1,654                       | )        |      |         | (16,276    | )       
|                                                 |                                                                                           |                                                     |          |                              |          |      |         |           
|                                                 |                                                                                           | Net cash used in investing activities               |          |                              | (42,462  | )    |         |            | (144,343 | )
|Cash flows from financing activities             |                                                                                           |                                                     |          |                              |          |      |         |           
|                                                 | Issuance of notes payable                                                                 |                                                     |          | 317,406                      |          |      |         | 1,324,283  |         
|                                                 | Payments on notes payable                                                                 |                                                     |          | (492,024                     | )        |      |         | (1,207,264 | )       
|                                                 | Decrease in subordinated debt                                                             |                                                     |          |                             |          |      |         | (559,513   | )       
|                                                 |                                                                                           |                                                     |          |                              |          |      |         |           
|                                                 |                                                                                           | Net cash used in financing activities               |          |                              | (174,618 | )    |         |            | (442,494 | )
|                                                 |                                                                                           |                                                     |          |                              |          |      |         |           
|Net decrease in cash and cash equivalents        |                                                                                           |                                                     | (571,164 | )                            |          |      | (21,041 | )         
|Cash and cash equivalents at beginning of period |                                                                                           |                                                     | 654,369  |                              |          |      | 317,969 |           
|                                                 |                                                                                           |                                                     |          |                              |          |      |         |           
|Cash and cash equivalents at end of period       |                                                                                           | $                                                   | 83,205   |                              |          | $    | 296,928 |           
|                                                 |                                                                                           |                                                     |          |                              |          |      |         |           

Cash flow activity for the quarter ended March 31, 2003.As of March 31, 2003,
we had cash and cash equivalents of $83,000, a decrease of $571,000 from the
December 31, 2002 balance. This compares to a decrease in cash and cash
equivalents of $21,000 in the first quarter of 2002.

Cash flow used in operating activities was $354,000 for the first quarter of
2003 compared to cash provided by operating activities of $566,000 in the first
quarter of 2002, a decrease of $920,000. Factors causing decreased cash flows
from operating activities in the first quarter of 2003 as compared to the first
quarter of 2002 include:



| |  |  | A decrease in land and lot sales to $695,000 in the first quarter
of 2003 from $816,000 in the first quarter of 2002; and                                                                                                                        
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Collections of notes receivable of $25 in the first quarter of 2003
compared to $635,000 in the first quarter of 2002. The 2002
collections were primarily due to the payoff of a $633,000 note related
to a bulk sale of land in Houston, Texas.

These were partially offset by the following factors causing increased cash
flows:



| |  |  | Accounts payable and other accrued liabilities increased $194,000
during the first quarter of 2003, compared to a decrease of $159,000 in
the first quarter of 2002; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | The change in deferred income was $0 during the first quarter of
2003 compared to a decrease of $235,000 in the first quarter of 2002.                                  

Looking forward, we expect cash flow from operations to remain stable in the
second quarter of 2003 as compared to the first quarter of 2003.

Net cash used in investing activities was $42,000 in the first quarter of 2003
compared to $144,000 in the first quarter of 2002. Advances to related parties
increased $13,000 in the first quarter of 2003 compared to a decrease of
$128,000 in the first quarter of 2002. During the first quarter of 2003, we
paid $54,000 as an additional capital call in connection with our ownership
interest in Laguna at Arrowhead Apartments L.L.C. This was the first cash call
since we made an investment in Laguna in 1997, and we do not anticipate any
additional capital calls for the remainder of the year. We also purchased
$2,000 of property and equipment in the first quarter of 2003 compared to
$16,000 in the first quarter of 2002. We are not planning any significant
purchases of property and equipment for the remainder of the year.

Net cash used in financing activities was $175,000 in the first quarter of 2003
compared to $442,000 in the first quarter of 2002. During the first quarter of
2003, additional borrowings totaled $317,000 compared to $1,324,000 in the
first quarter of 2002. The borrowings in 2003 consisted primarily of draws on
a construction loan for the development of a condominium project in Glendale,
Arizona. Construction on this phase of the project is expected to continue
through the end of 2003, with sales beginning this summer. Payments on notes
payable totaled $492,000 in the first quarter of 2003 compared to $1,207,000 in
the first quarter of 2002. Principal payments on our notes are made primarily
through release prices as lots are sold.

Contractual obligations. Our long term debt includes notes payable of
$3,922,000 and subordinated debt of $3,540,000. Other than two vehicle loans,
all of the notes payable were incurred to finance the development of our real
estate projects. Principal payments on those notes payable are primarily made
as lots are sold, although minimum principal payments are also required on
certain loans. Included in notes payable is a $509,000 loan used to purchase
480 acres of land in Houston metro area for a new subdivision. This loan is
due in July 2003. It is our intent to refinance this loan with a development
loan for the project, however this financing has not yet been obtained. In
addition, our construction loan for a condominium project in Glendale, Arizona
requires cash contributions by the Company each time construction on a new
building is started. As of March 31, 2003, construction on one 8-unit building
has been started. The remaining five buildings in this phase of the project
are expected to begin construction at various dates through the rest of 2003.
Payments on the subordinated debt are made only when cash flow from a land
sale, after payment of bank debt, exceeds our operating cash requirements. This
determination is made by our management. On June 28, 2002, our majority
stockholder contributed an additional $719,000 of capital
to the Company through the conversion of subordinated debt to preferred stock.
The preferred stock is convertible into shares or our common stock, and has a
cumulative dividend, payable semi-annually. The dividend rate is 0% for the
first year from the date of issuance, and escalates each year until it reaches
7% in the sixth year from the date of issuance.

In the normal course of our business, we have also entered into various
operating leases for equipment and vehicles.

Our primary future cash needs, both in the short term and in the long term will
focus on funding operating expenses, financing the acquisition and development
of new projects and paying debt service. During the first quarter of 2003,
cash generated by land and lot sales was not sufficient to pay our operating
expenses. To meet our cash flow needs during the remainder of 2003 it will be
necessary to supplement the land and lot sales with bulk sales of ranch
property. Although there can be no assurances, management believes that cash
flow from operations coupled with existing cash and cash equivalent balances,
proceeds from bulk sales of property and borrowings from banks and other
financial institutions will generate sufficient cash to fund our operating and
cash flow needs for the next twelve months. To the extent that actual results
or events differ from our financial projections, our liquidity may be adversely
affected.

We project that our capital expenditures for property and development will be
approximately $5.5 million over the next twelve months, but that only a portion
of that amount will need to be funded internally. The remainder will be
borrowed from banks and other financial institutions. As part of our business
strategy, we continuously review acquisition opportunities and proposals. We
expect to finance any future acquisitions with additional equity and debt
financing, to the extent available on attractive terms.

We hold approximately $1.6 million of third party notes receivable from the
sale of property. These notes are generally secured by the property sold and
bear interest at rates ranging between 9% and 12% per year. We evaluate the
collectibility of these notes based on the payment history and the value of the
collateral, and charge off any uncollectible balances. As of March 31, 2003,
there were no delinquencies on any of our notes receivable other than the
second mortgage notes receivable held by one of our subsidiaries, Firebird
Financial. These mortgage notes, net of unamortized discount, total $137,380.
Many of these notes are seriously delinquent, with the status ranging up to 54
months delinquent. All but $13,967 of this balance had been reserved for in
prior periods. Due to the continued delinquency, all of these notes were
charged off during the first quarter of 2003.

Business Risks and Forward-Looking Statements

This Quarterly Report on Form 10-QSB includes forward-looking statements.
Forward-looking statements are often characterized by the use of words such as
may, believes, plans, will, anticipates, estimates, expects, or
intends or by discussions of strategy, plans or intentions. All
forward-looking statements in this Form 10-QSB are made based on our current
expectations and estimates, which involve risks, uncertainties and other
factors that could cause results to differ materially from those expressed in
forward-looking statements. You are cautioned not to place undue reliance on
any such forward-looking statements. We have no obligation to publicly release
the result of any revisions which may be made to any forward-looking statements
to reflect anticipated or unanticipated events or circumstances occurring after
the date of such statements. Forward-looking statements involve a number of
risks and uncertainties including, but not limited to, general economic
conditions, competitive factors, our ability locate new projects and to finance
the acquisition and development of these projects, our exposure to changes in
interest rates, and the cost of compliance with government regulations.

11



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Item 3. Controls and Procedures



|(a) |  | We maintain disclosure controls and procedures (as defined in Securities
Exchange Act 1934 Rules 13a-14(c) and 15d-14(c)) that are designed to
ensure that information required to be disclosed in our Exchange Act
reports is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commissions rules and
forms, and that such information is accumulated and communicated to our
management, including our Chief Executive Officer and Principal Financial
Officer, as appropriate, to allow timely decisions regarding required
disclosure. In designing and evaluating the disclosure controls and
procedures, management recognized that any controls and procedures, no
matter how well designed and operated, can provide only reasonable
assurance of achieving the desired control objectives, and management
necessarily was required to apply its judgment in evaluating the
cost-benefit relationship of possible controls and procedures.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | Within 90 days prior to the date of this quarterly report, we carried out an
evaluation, under the supervision and with the participation of management,
including our Chief Executive Officer and Principal Financial Officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures. Based on the foregoing, our Chief Executive Officer and Principal
Financial Officer concluded that our disclosure controls and procedures were
effective.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|(b) |  | There have not been any significant changes in our internal controls or
in other factors that could significantly affect these controls subsequent
to the date of their evaluation. There were no significant deficiencies or
material weaknesses, and therefore no corrective actions were taken.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

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PART II: OTHER INFORMATION




Item 1.Legal Proceedings

We are not a party to any pending legal proceedings and, to the best of
our knowledge, no litigation by or against us has been threatened.




Item 2.Changes in Securities and Use of Proceeds

Not Applicable.




Item 3.Defaults Upon Senior Securities

Not Applicable.




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

Not Applicable




Item 5.Other Information

Not Applicable




Item 6.Exhibits and Reports on Form 8-K

(a) Exhibits

|        |  |                                                                                                                                      
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                      
|No.     |  |                                                                                                                                      
|        |  |                                                                                                                                      
|99.2    |  | Certification of Jay N. Torok pursuant to 18 U.S.C. Section
1350 as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|99.3    |  | Certification of Ron OConnor pursuant to 18 U.S.C. Section
1350 as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|99.4    |  | Certification of Jay N. Torok pursuant to 18 U.S.C. Section
1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
|99.5    |  | Certification of Ron OConnor pursuant to 18 U.S.C. Section
1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002



|(b) |  | Reports on Form 8-K                                                                                                                                                                                                                                                                                                                                                                                               
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | On March 7, 2003 a Form 8-K was filed to report the completion of the merger
between the Registrant and Great Western Land and Recreation, Inc., a
Delaware corporation (GWLAR) effective February 20, 2003, and to report a
change in fiscal year end to December 31. This Form 8-K was inadvertently
filed under the Edgar ID number for GWLAR, and omitted certain information
regarding the acquired assets.
|   
|    |  | On March 31, 2003, a Form 8-K/A was filed to amend the Form 8-K filed on
March 7, 2003 and to refile it under the correct Edgar ID number.                                                                                                                                                                                                                                                                        

13



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##### Table of Contents






SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.

|                   |  |                                         |  |                                                                                                                              
|------------------ |  | --------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------
|                   |  | GREAT WESTERN LAND AND RECREATION, INC.
|                   |  | (Registrant)                           
|                  
|Date: May 15, 2003 |  | By                                      |  | /s/ Ron OConnor                                                                                                             
|                   |  |                                         |  |                                                                                                                              
|                   |  |                                         |  | Ron OConnor, Vice President of Finance and Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer)

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##### Table of Contents






EXHIBIT INDEX

|        |  |                                                                                                                                      
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                      
|No.     |  |                                                                                                                                      
|        |  |                                                                                                                                      
|99.2    |  | Certification of Jay N. Torok pursuant to 18 U.S.C. Section
1350 as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|99.3    |  | Certification of Ron OConnor pursuant to 18 U.S.C. Section
1350 as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|99.4    |  | Certification of Jay N. Torok pursuant to 18 U.S.C. Section
1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
|99.5    |  | Certification of Ron OConnor pursuant to 18 U.S.C. Section
1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002

15