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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

[X]      Annual Report Pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934 For the Fiscal Year Ended September 30, 2001

[ ]      Transition Report Under Section 13 or 15(d) of Securities
         Exchange Act of 1934
         For the transition period from ______ to ______

                           Commission File No. 0-27159

                      NATIONAL RESIDENTIAL PROPERTIES, INC.
--------------------------------------------------------------------------------
                 (Name of Small Business Issuer in its charter)

          Nevada                                             65-439467
---------------------------                              ----------------------
State or other Jurisdiction                                 (IRS Employer
    or organization                                      Identification Number)

                      2921 NW 6th Ave, Miami, Florida 33127
--------------------------------------------------------------------------------
                    (Address of principal executive offices)

                                 (305) 573-8882
--------------------------------------------------------------------------------
                 (Issuer's Telephone Number Including Area Code)

        Securities registered pursuant to Section 12(b) of the Act: None

          Securities registered pursuant to Section 12(g) of the Act:

                          Common Stock $.001 par value
                                (Title of Class)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days Yes [X] No  [ ]

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Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information: [ ]

Statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB: [ ]

On January 22, 2002, the aggregate market value of the Company's Common Stock
based on the average of the bid and asked price, held by non-affiliates was
$770,009.

                    APPLICABLE ONLY TO CORPORATE REGISTRANTS

The number of shares outstanding of the Company's Common Stock as of January 9,
2002, was 1,938,566,046 shares.

The Company's revenues for its most recent fiscal year were $76,764.

                   ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
                           DURING THE PAST FIVE YEARS

Check whether the issuer has filed all documents and reports required to be
filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court Yes [ ]    No [ ]

                    DOCUMENTS INCORPORATED BY REFERENCE: None



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                      NATIONAL RESIDENTIAL PROPERTIES, INC.
                              REPORT ON FORM 10-KSB
                  FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001

                                TABLE OF CONTENTS

                                     PART I

Item 1. Description of the Business..........................................  4
Item 2. Description of Property.............................................. 18
Item 3. Legal Proceedings.................................................... 19
Item 4. Submission of Matters to Vote of Security Holders.................... 19

                                     PART II

Item 5. Market for Common Equity and related Shareholder Matters............. 19
Item 6. Management's Discussion and Analysis or Plan of Operation............ 24
Item 7. Financial Statements................................................. 27
Item 8. Changes in and Disagreements with Accountants on
          Accounting and Financial Disclosure................................ 27

                                    PART III

Item 9. Directors and Executive Officers..................................... 27
Item 10. Executive Compensation.............................................. 29
Item 11. Security Ownership of Certain Beneficial Owners and Management...... 30
Item 12. Certain Relationships and Related Transactions...................... 31

                                     PART IV

Item 13. Exhibits, Lists and Reports on Form 8-K............................. 33
Signatures .................................................................. 35



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                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

GENERAL

National Residential Properties, Inc., was incorporated on October 18, 1971, in
the State of Nevada, originally under the name of Mister Las Vegas, Inc. It is a
fully reporting 12(g), 34 Act publicly traded company. The Company's business is
residential real estate development and building construction services. The
Company has undergone many changes to date as a result of certain
reorganizations and changes in management. The current business evolved when
National Rehab Properties, Inc., which was incorporated in Florida in 1993,
completed a reverse merger with Mister Las Vegas, Inc. in 1994 and changed the
name of the surviving Nevada Corporation to National Rehab Properties, Inc. On
September 12, 2000, pursuant to a vote of the shareholders at the annual meeting
of shareholders held at the offices of the Company, the shareholders of the
Company voted to amend the Articles of Incorporation of the Company to change
the name of the Company from National Rehab Properties, Inc., to "National
Residential Properties, Inc." Effective after the September 12, 2000, meeting,
the name of the Company became National Residential Properties, Inc. The change
of name was made in order to more clearly reflect the business of the Company.
Historical changes are more fully disclosed in prior filings under the
Securities Exchange Act of 1934. The Company's principal office is located at
2921 NW 6th Avenue, Miami, Florida 33127, and its telephone number is (305)
573-8882.

The Company's business is residential real estate development and building
construction services. From 1993 until 1999, the Company's business concentrated
on investing in and revitalizing single family homes in established older
residential neighborhoods in urban areas. The Company either bought single unit
vacant properties and built resale single family homes on individual lots or it
bought abandoned homes and completed all renovations to the home followed by a
sale of the home. In 1999 the Company sold its single family homes and entered a
second phase of business: the development, construction and ownership of
multifamily housing projects. Beginning in the fiscal year ended September 30,
1999, the Company initiated a program of acquisition of properties suitable for
development as multifamily housing or single family subdivision development
tracts. Since 1999, the Company has purchased four tracts with the intention of
building from 60 to 72 apartment units on each tract and one twenty acre citrus
grove for a single family subdivision development. The Company has four
multifamily apartment projects and one single family subdivision development in
various stages of development.

In April 2000, the Company acquired 80% Encore Services, Inc., a general
construction contractor ("Encore"). Certain of the construction of the Company's
building and

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development projects are now conducted through Encore as the general contractor.
Encore is a licensed building contractor and, as such, is able to secure
building permits throughout the state of Florida. The Company's Conquistador
Plaza project in Miami, Florida, is being constructed by another corporation,
Encore Builders, Inc., which is a subsidiary of the Company's Vacation Ownership
Marketing, Inc., affiliate.

The Company is currently authorized to issue 1,500,000,000 common shares, $0.001
par value. The Company has issued and outstanding 1,938,566,046 common shares as
of the date of this Report. The Company's Board of Directors has designated
2,000,000 shares of common stock, $.001 par value as Class A common stock, with
voting right equivalent to 20 common shares for each Class A share, 1,000,000 of
which are outstanding at the date of this report. However, the Company does not
believe that such shares were duly authorized and accordingly will in all
probability rescind the issuance of such Class A common stock. In January 1999,
the Company completed a reverse split of its $.001 par value Common Stock on a 1
for 10 basis. In February 2001 the Company forward-split its common stock on a 3
for 1 basis. All references to shares of Common Stock in this Report take into
account this 1 for 10 reverse split of $.001 par value Common Stock.

CURRENT OPERATIONS

The Company's business is residential real estate development and building
construction services. From 1993 until 1999, the Company's business concentrated
in investing in and revitalizing single family homes in established older
residential neighborhoods in urban areas. The Company either bought single unit
vacant properties and built single family homes on them or it bought abandoned
homes which it renovated and sold. During 1999, the Company substantially
terminated its single unit business and entered a second business, the
development, construction and ownership of multifamily housing projects.
Beginning in the fiscal year ended September 30, 1999, the Company initiated a
program of acquisition of properties suitable for development as multifamily
housing or multiple unit single family development tracts. Since 1999, the
Company has purchased four tracts with the intention of building from 60 to 72
apartment units on each tract and one twenty acre citrus grove for single family
home development. In April 2000, the Company acquired Encore Services, Inc., a
general construction contractor. The Company has four multifamily apartment
projects and one single family home subdivision development as work in progress
in various stages of development.

SUBSIDIARIES

The Company has two subsidiaries, only one of which, Conquistador Plaza, Inc.,
is active. Conquistador Plaza, Inc., has under construction the Conquistador
Plaza Apartments, a sixty unit apartment project in Miami, Florida. The
Company's Encore Services, Inc., subsidiary is inactive.

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MANAGEMENT

On April 1, 2000, in conjunction with the acquisition of Encore, Braulio
Gutierrez, the previous sole shareholder of Encore, and an individual previously
unaffiliated with the Company other than as a contractor on the Company's
housing refurbishing projects, was appointed to the Board of Directors as a
Director.

On September 12, 2000, the shareholders reelected Richard Astrom and Christopher
Astrom, each of whom has been a Director of the Company since 1994, and Braulio
Gutierrez, who was originally appointed as a board member on April 1, 2000, to
the Board of Directors.

At a Board of Directors meeting held September 29, 2000, the Board of Directors
voted to retain the following officers, each of whom has been an officer of the
Company since 1994: Richard Astrom as President, CEO and Chairman of the Board
of Directors, and Christopher Astrom as Secretary and Treasurer.

Current management of the Company consists of President and CEO, Richard Astrom,
Secretary/Treasurer, Christopher Astrom, and Braulio Gutierrez as a non-officer
Director of the Company. Please see Part III, Item 9, of this Report.

CERTAIN ACQUISITIONS

On April 1, 2000, the Company acquired eighty percent of the common stock of
Encore Services, Inc., a Florida Corporation, in exchange for (a) 250,000 shares
of the Company's $.001 par value Common Stock issued to Braulio Gutierrez, who
was then the sole shareholder of Encore Services, Inc., and (b) an assignment
and assumption agreement with Encore Services, Inc. whereby, with the assent of
HLKT Holdings, L.L.C., Encore Services, Inc. assigned to the Company and the
Company irrevocably and unconditionally assumed all the rights and obligations
of Encore Services, Inc. under a $1,000,000 face amount Convertible Debenture
previously issued by Encore Services, Inc. to HLKT Holdings, L.L.C., a Colorado
Limited Liability Company, on March 15, 2000. On April 1, 2000, Mr. Gutierrez
was appointed as a Director of the Company. Commencing April 12, 2000, and
continuing through June 28, 2000, the total $1,000,0000 face amount of the
Debenture was presented to the Company's transfer agent for conversion in
accordance with the terms of the Debenture to unrestricted $.001 par value
Common Stock of the Company pursuant to the assignment and assumption agreement
with Encore Services, Inc. A total of 28,856,464 shares of the Company's $.001
par value Common Stock were exchanged for the $1,000,000 Debenture, and an
additional 140,023 shares of the Company's $.001 par value Common Stock were
issued in payment of accrued interest on the Debenture.

As reported on Form 8-K dated February 14, 2000, pursuant to a Stock Exchange
Agreement


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(the "Exchange Agreement") dated as of February 10, 2000 between MRC Legal
Services Corporation, a California Corporation, which entity is the controlling
shareholder of MAS Acquisition XV Corp. ("MAS XV"), an Indiana corporation, and
National Rehab Properties, Inc., a Nevada corporation, approximately 96.8%
(8,250,000 shares) of the outstanding shares of common stock of MAS Acquisition
XV Corp. were exchanged for 1,000,000 shares of Common Stock of National Rehab
Properties, Inc. in a transaction in which the Company became the parent
corporation of MAS XV. The additional shares representing 3.2% of MAS XV were
subsequently acquired by the Company, making MAS XV a wholly owned subsidiary of
the Company.

As Reported on Form 8-K dated May 4, 2001, the Company's then wholly-owned
subsidiary, Connecticut Acquisition Corp. No. 1, entered into a joint venture
with an unrelated third party to develop a parcel of land located in Hebron,
Connecticut, as a senior adult community. Under the same agreement, the Company
acquired unimproved real property in Hebron, Connecticut, and an option to
purchase four other parcels of land in Connecticut. In contemplation of the
costs of these acquisitions and the funding of the cost of their development, on
April 12, 2001, Connecticut Acquisition Corp. No. 1 obtained a loan from
accredited investors through the issuance of its 8% Series A $1,000,000 Senior
Subordinated Convertible Redeemable Debenture, convertible into shares of that
company's common stock, par value $.001. On May 8, 2001, following the
acquisition of the Hebron parcel and the options for the additional four parcels
in Connecticut, Connecticut Acquisition Corp. No. 1 was merged into the Company.
Pursuant to the merger agreement, and by operation of law, the rights and
obligations of Connecticut Acquisition Corp. No. 1 with respect to all of the
Hebron property, the four options, the obligations and rights of the Company
with respect to the development of those properties, and the debentures issued
by Connecticut Acquisition Corp. No. 1, were assumed by the Company. As a
consequence, the Company issued its debentures in replacement of the debentures
previously issued by Connecticut Acquisition Corp. No. 1 and assumed the
obligation to issue the Company's shares of common stock upon conversion of its
debentures.

On December 26, 2001, effective as of October 31, 2001, the Company assigned its
interest in the Hebron parcel, options, and joint venture to Senior Adult
Lifestyle, Inc., a subsidiary of Genesis Capital Corporation ("Genesis"), which
may be deemed an affiliate of the Company, in consideration of the assumption of
two mortgages having an aggregate principal balance of $315,000 and the issuance
to the Company of 20,000,000 restricted shares of Genesis common stock based on
a value of $.10 per share, which value is determined by the average bid price of
Genesis common stock during the week prior to the effective date of October 31,
2001, for an agreed consideration of $2,000,000. The value of the assets sold
has not been appraised by any independent party. At the earlier of (a) the
expiration of three years from the date of conveyance, or (b) the time that the
Company has sold all of the shares, if the gross sale proceeds realized by the
Company for the sale of the


                                     - 7 -
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Genesis shares is less than $2,000,000, Genesis will be required to issue the
Company additional shares of common stock in an amount based on the closing bid
price as quoted on the OTC Bulletin Board on the day before the date of such
additional share issuance in order to make up the difference between said gross
sale proceeds and $2,000,000. The ability of the Company to realize $2,000,000
from the sale of these assets is dependent upon a number of factors, including,
without limitation, the Company's ability to sell restricted shares of Genesis
common stock into the public markets in accordance with Securities and Exchange
Commission Rule 144; the trading volume of Genesis common stock at the time or
times that the Company sells stock into the markets; the operating results of
Genesis and the markets reaction to those results; the number of Genesis common
shares tradeable on the OTC Bulletin Board; and other factors affecting the
market price of, and market for, Genesis common stock. There can be no assurance
that Genesis will realize $2,000,000 from the development or sale of these
assets, or that they have a fair market value of $2,000,000, which is the amount
agreed to by the parties. Further, Genesis and the Company may be deemed
affiliates and therefore there can be no assurance that the terms of sale,
including the value assigned to the parties by the assets, would be the same as,
or similar to, the terms to which unrelated parties would agree in an
arm's-length transaction. See "Certain Relationships and Related Transactions"
in Part III, Item 12.

REAL ESTATE PURCHASED FOR DEVELOPMENT OR RESALE

In 1999, the Company purchased land to build a sixty unit apartment building at
the northern border of Coral Gables, a prestigious area of Miami. This project,
known as Granada Grand, is in the permitting stage. On September 26, 2001, the
Company announced that it had agreed to sell Granada Grand to Vacation Ownership
Marketing, Inc., which was not then, but is now, an affiliate of the Company,
for $3,625,000, including the assumptions of an existing first mortgage in the
amount of $525,000 and $3,125,000 market value of the common stock of Vacation
Ownership Marketing, Inc. The agreement was later cancelled by the parties due
to the difficulty of obtaining financing for the project. The project is subject
to an agreement of sale executed on December 12, 2001, with an unrelated third
party. The agreement, which is subject to a financing contingency in the amount
of $1,200,000 and certain other contingencies, including permitting, provides
for the sale of this property for a purchase price of $2,000,000, payable in
cash at closing. The Company cannot give any assurance that the buyer, listed on
the sale agreement as G & F Corp., a Florida corporation, will be able to
fulfill any of the terms of the agreement and purchase the property.

In 2000 the Company purchased land to build a sixty unit apartment building in a
quality status neighborhood in Miami, Florida. This project, known as
Conquistador Plaza, is under construction and is anticipated to be completed by
July 1, 2002.

In 2000, the Company purchased a site permitted for a sixty unit apartment
building on Bay Harbor Island near Miami Beach, Florida. The Company intended to
construct a sixty unit apartment project on this site. On December 17, 2001, the
Company entered into an agreement with an individual, Dennis Almendares, an
independent third party, for the sale of the Residences at Bay Harbor project.

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The agreed purchase price is $2,250,000, payable in cash at closing. The buyer
has paid a deposit of $20,000, which is being held in escrow by the buyer's law
firm. The agreement provides that the buyer will deposit an additional $188,000
as an escrow deposit with his law firm within 120 days of the effective date of
the agreement. The buyer's obligation to purchase this property is subject,
among other things, to an inspection period which ends February 28, 2002. In the
event that the buyer determines that the property is unsuitable for the proposed
development, the agreement can be terminated by the buyer and all deposits must
then be returned to him. The closing of the property is also subject to the
buyer's obtaining building permits for the property. There can be no assurance
that the buyer and seller will be able to complete all of the terms of their
purchase and sale agreement, nor that the sale of this property will occur.

Also in 2000, the Company purchased a multifamily housing site in Miami upon
which the Company intends to build a seventy two unit apartment project. This
project, called Barcelona Apartments, is in the planning and permitting stage,
and will probably be sold prior to the commencement of construction..

In 2000, the Company closed on a twenty acre citrus grove in Vero Beach,
Florida. The Company successfully rezoned the property to a single family
development. It is anticipated that lots will be marketed to home buyers from
northern states seeking to retire in Florida. In this project, known as Eagle
Trace, the Company will sell bare lots, allowing the buyer to employ his own
architect and contractor, or sell to building contractors who will sell home and
lot packages to home buyers.

The Company has, as described in this Report, entered into agreements for the
sale of its Granada Grand and Residences at Bay Harbor projects without
constructing any buildings on these projects. The Company entered into the
agreement in part because the Company has encountered continuing problems with
performance bonds, the amount of cash required by banks to obtain bank
construction loans, the requirements by banks that the Company's officers and
directors personally guarantee construction loans, and time delays. The Company
has found that it in general a project requires eighteen months to go through
the process of obtaining architectural drawings and plans, permitting, and
obtaining approval of plans by the applicable city and county. Accordingly, with
the exception of the Company's Conquistador Plaza Apartments project, the
Company intends to sell its existing projects pursuant to the two outstanding
agreements of sale (as to the Granada Grand and Residences at Bay Harbor
projects) or pursuant to other purchase and sale agreements into which it may
enter in the future. As of the date of this Report, the only agreements of sale
for the Company's real property are the Granada Grand and Residences at Bay
Harbor agreements.


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GOVERNMENT REGULATION

The Company's operations are subject to government regulation primarily by city
and local zoning regulations, plat restrictions and housing quality and
component requirements. These regulations and requirements determine the
available locations for multifamily housing projects, the size of individual
lots, the number of apartment units which can be built on a project site,
building heights, and various other specifications related to housing projects.

Under federal, state, and local environmental laws, ordinances, and regulations,
the Company may be liable for removal or remediation costs, as well as other
costs (such as fines or injuries to persons and property) where our employees
may have arranged for removal, disposal, or treatment of hazardous or toxic
substances. In addition, environmental laws impose liability for release of
asbestos-containing materials into the air, and third parties can seek recovery
from the Company for personal injury associated with those materials.

Legislation or materially different rules may be proposed and enacted at any
time and may have a material adverse affect on the operations of the Company. At
this time, the Company is unaware of any pending legislation or rule-making
proceedings that would have a material adverse affect on the current operations
of the Company.

COMPETITION

The Company has not experienced difficulty in locating investment opportunities.
Management believes that ownership of properties in which the Company invests is
highly fragmented among individuals, partnerships, public and private
corporations, and REITs. No single entity or person dominates the market for
such properties. At any given time, a significant number of apartment properties
are available for purchase in the various markets where the Company may seek
additional acquisitions. Management believes that there is and will continue to
be a strong demand for well-maintained, affordable housing in these markets and
that the factors discussed above provide a market where a sufficient number of
attractive investment opportunities will be available to allow the Company to
continue to expand through acquisitions as well as through the development of
new properties. However, since the success of any multifamily real estate
investment is affected by factors outside of the Company's control, including
general demand for home purchases, apartment living, interest rates, operating
costs, and job growth, there can be no assurance that we will be successful in
the Company's strategy to continue to expand through acquisitions and
development. Further, the Company, as other companies it size, will in all
probability continue to encounter substantial problems in obtaining contractors
who, in turn, are able to obtain performance bonds for building contracts;
obtaining bank financing for construction; and obtaining financing without
personal guarantees of its officers and directors, all of which materially
adversely affect its ability to carry on its business.


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EMPLOYEES AND CONSULTANTS

As of the date of this filing, the Company employs a total of four (4) persons
on a full time basis. Richard Astrom is the President and Chief Executive
Officer of the Company, Christopher Astrom is the Secretary and Treasurer of the
Company, and Braulio Gutierrez is employed as the President of Encore, a
subsidiary of the Company, but is not paid for his services. The Company also
employs an administrative assistant.

The Company periodically retains outside consultants such as attorneys,
accountants, engineers, technicians and subcontractors to perform certain
corporate administrative tasks as well as actual construction and development of
real estate projects.

REAL ESTATE DEVELOPMENT INDUSTRY

Ownership of properties in the categories of which the Company invests is highly
fragmented among individuals, partnerships, public and private corporations, and
REITs. No single entity or person dominates the market for such properties. At
any given time, a significant number of apartment properties as well as
individual lots and tracts suitable for single family homes are available for
purchase in the various markets where the Company may seek additional
acquisitions. Industry risks include environmental hazards; changes in general
or local economic conditions; changes in interest rates and the availability of
permanent mortgage financing which may render the acquisition, sale, or
refinancing of a property difficult or unattractive and which may make debt
service burdensome; changes in real estate and zoning laws; changes in income
taxes, real estate taxes, or federal or local economic or rent controls; floods,
earthquakes, and other acts of nature; and other factors beyond the control of
any firm involved in the real estate development industry. The illiquidity of
real estate investments generally may impair an industry participant's ability
to respond promptly to changing circumstances. See "Risk Factors," below.

CERTAIN RISK FACTORS

CERTAIN FACTORS ASSOCIATED WITH REAL ESTATE AND RELATED INVESTMENTS. The Company
is subject to the risks associated with ownership, operation, and financing of
real estate. These risks include, but are not limited to, liability for
environmental hazards; changes in general or local economic conditions; changes
in interest rates and the availability of construction and permanent mortgage
financing which may render the acquisition, sale, or refinancing of a property
difficult or unattractive and which may make debt service burdensome; changes in
real estate and zoning laws; bonding requirements; permitting requirements,
changes in income taxes, real estate taxes, or federal or local economic or rent
controls; floods, earthquakes, and other acts of nature; and other factors
beyond the company's control. The illiquidity of real estate investments
generally may impair the Company's ability to respond promptly to changing
circumstances.


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Under federal, state, and local environmental laws, ordinances, and regulations,
the Company may be liable for removal or remediation costs, as well as other
costs (such as fines or injuries to persons and property) where our employees
may have arranged for removal, disposal, or treatment of hazardous or toxic
substances. In addition, environmental laws impose liability for release of
asbestos-containing materials into the air, and third parties can seek recovery
from the Company for personal injury associated with those materials.

LIMITED REVENUES; LIMITED RELEVANT OPERATING HISTORY; SIGNIFICANT AND CONTINUING
OPERATING LOSSES; NEGATIVE CASH FLOW; ACCUMULATED DEFICIT. Since its inception,
the Company has been engaged primarily in development of real estate, and has
had limited revenues from sales of its properties. Accordingly, the Company has
a limited relevant operating history upon which an evaluation of its prospects
can be made. Such prospects must be considered in light of the risks, expenses
and difficulties frequently encountered in the establishment of a relatively new
business in the real estate development industry, which is a continually
evolving industry characterized by an increasing number of market entrants and
intense competition, as well as the risks, expenses and difficulties encountered
in the real estate development and building construction business. The Company
has incurred operating losses in each quarter since inception and on September
30, 2000, the Company had an accumulated deficit of approximately $1,435,158.
There can be no assurance that the Company will be successful in generating
revenues at a sufficient quantity or margin or that the Company will ever
achieve profitable operations.

SIGNIFICANT CAPITAL REQUIREMENTS; NEED FOR ADDITIONAL CAPITAL. The Company's
capital requirements have been and will continue to be significant. The Company
has been dependent primarily on the private placement of equity securities and
debt financings. The Company anticipates, based on its current proposed growth
plans and assumptions relating to its growth and operations, that the proceeds
from the existing private placements and borrowings and planned revenues will be
sufficient to satisfy the Company's contemplated cash requirements for the next
twelve months. In the event that the Company's plans change or its assumptions
prove to be inaccurate (due to unanticipated expenses, delays, problems, or
otherwise), the Company would be required to seek additional funding sooner than
anticipated. Any such additional funding could be in the form of additional
equity capital. The Company is currently pursuing potential funding
opportunities. However, there can be no assurance that any of such opportunities
will result in actual funding or that additional financing will be available to
the Company when needed, on commercially reasonable terms, or at all. If the
Company is unable to obtain additional financing if needed, it will likely be
required to curtail its real estate development plans and may possibly cease its
operations. Any additional equity financings may involve substantial dilution to
the Company's then-existing shareholders.


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MANAGEMENT OF GROWTH AND ATTRACTION AND RETENTION OF KEY PERSONNEL. Management
of the Company's growth may place a considerable strain on the Company's
management, operations and systems. The Company's ability to execute any future
business strategy will depend in part upon its ability to manage the demands of
a growing business. Any failure of the Company's management team to effectively
manage growth could have a material adverse affect on the Company's business,
financial condition or results of operations. The Company's future success
depends in large part on the continued service of its key management personnel.
The Company believes that its future success also depends on its ability to
attract and retain skilled technical, managerial and marketing personnel.
Competition for qualified personnel is intense. The Company has from time to
time experienced difficulties in recruiting qualified personnel. Failure by the
Company to attract and retain the personnel it requires could have a material
adverse affect on the financial condition and results of operations of the
Company.

LACK OF DIVIDEND HISTORY; NO DIVIDENDS. The Company has never paid cash
dividends on its Common Stock and intends to utilize any earnings for growth of
its business. Therefore, the Company does not intend to pay cash dividends for
the foreseeable future. This lack of dividends and a dividend history may
adversely affect the liquidity and value of the Company's Common Stock.

VOLATILITY OF MARKET PRICE; ISSUANCE OF SUBSTANTIAL NUMBER OF SHARES; AUTHORIZED
SHARES; PROXY RULES. The Company's Common Stock has been traded on the OTC
Bulletin Board since 1994. The Company believes that factors such as (but not
limited to) the sale of common stock issued on conversion of the Company's
debentures, announcements of developments related to the Company's business,
fluctuations in the Company's quarterly or annual operating results, failure to
meet expectations, general economic conditions, interest rate changes or money
supply fluctuations and developments in the Company's relationships with clients
and suppliers will cause the price of the Company's Common Stock to fluctuate
substantially. In recent years the stock market has experienced extreme price
fluctuations, which have often been unrelated to the operating performance of
affected companies. Such fluctuations could adversely affect the market price of
the Company's Common Stock.

As of September 30, 2001, the Company had issued and outstanding 1,095,300,351
shares of common stock. As of January 9, 2002, the Company had issued and
outstanding 1,938,566,046 shares of common stock (of which only 1,500,000,000
shares were authorized) held by 559 shareholders of record. By comparison, the
Company had only 44,161,866 shares of common stock issued and outstanding on
September 30, 2001. In the year ended September 30, 2000, the Company issued
33,946,488 shares upon conversion of debentures, and it received approximately
$1,752,676 from the sale of the debentures which were converted into common
stock. The Company issued 1,051,138,485 shares of common stock upon conversion
of debentures during the year ended September 30, 2000, and


                                     - 13 -
<PAGE>



received, during the same period, $812,990 from the sale of the debentures that
were converted into shares of common stock. The Company's assumption of the
debentures issued by its former subsidiaries and the concomitant obligation of
the Company to issue shares of its common stock to debenture holders has
resulted in the issuance of significant numbers of shares of the Company's
common stock to such debenture holders as they convert portions of the
debentures into common stock of the Company at seventy percent of the prevailing
common stock bid price. The common stock issued to them upon conversion is
saleable, and is generally sold through the public markets immediately upon
conversion. As a consequence of the number of shares of common stock being sold
and the frequency with which such shares are sold, the price of the Company's
common stock on the OTC Bulletin Board has declined very substantially, and may
be anticipated to decline substantially in the future until such time as the
full amount of the debentures is paid for and the debenture holders have fully
exercised their conversion privilege, which exercise the Company believes is
highly probable. The Company cannot now anticipate the number of shares into
which the debentures will be converted, as that number depends on the market
price of the Company's common stock prevailing from time-to-time as debentures
are converted into common stock.

In November 2000 the Company increased its authorized shares from 40,000,000 no
par shares to 250,000,000 shares having a par value of $.001 each. There was no
shareholder vote, although the Company's professional advisors at that time
advised that no shareholder vote was necessary. The Company has subsequently
been advised by counsel that in counsel's opinion this action could not have
been taken without a shareholder vote. Further, no proxy or information
statement with respect to this matter was filed with the Securities and Exchange
Commission, although, the Company does not believe that it had an obligation to
comply with the proxy or information statement rules because no shareholder vote
was taken. On January 22, 2001, the Company increased its authorized shares from
250,000,000 to 750,000,000. This increase was effected by resolution of the
Board of Directors and by consent of a majority of shares, all in apparent
conformity with Nevada law. However, no information statement on Schedule 14C
was filed with the Securities and Exchange Commission. On January 7, 2001, the
number of authorized shares was increased to 1,500,000,000. Although this
increase appears to have been done in compliance with Nevada law, the Company
did not file an information statement. The effect of any of these matters on the
Company is not now known. However, the Company has been advised that the
original purchasers of shares not authorized in conformity with Nevada law will
in all probability have recission rights, and that the original purchasers of
shares authorized and issued without compliance with Section 14 of the
Securities Exchange Act of 1934 and the proxy rules promulgated under that
Section may have recission rights. In addition, the Securities and Exchange
Commission has the power to sanction the Company for any failure to meet the
requirements of the Securities Exchange Act of 1934 and the Commission's rules.
The effect of any of these matters on the Company is not now known.


                                     - 14 -
<PAGE>



On October 17, 2001, the Company's DC Power Products Acquisition Corp.
subsidiary, sold its $1,000,000 principal amount convertible debenture to three
accredited investors. See the discussion of this transaction under the caption
"Recent Sales of Unregistered Securities" in Part III, Item 5, below.

On December 13, 2001, the Company entered into an Escrow Agreement with Sroya
Holdings, LLC ("Sroya"), as escrow agent and Sea Lion Investors, LLC, Equity
Planners, LLC, and Myrtle Holdings, LLC, the purpose of which was to amend and
supplement the subscription agreement pursuant to which Acquisition Corp.'s
Debentures were issued through those investors and subsequently assumed by the
Company. Pursuant to the Escrow Agreement, the Company agreed to deposit
100,000,000 shares of its common stock (the "Escrow Shares") with Sroya to
ensure the timely deliver of the Company common stock upon the exercise of the
conversion privileges by the Debenture Holders under outstanding Debentures .
Under the Escrow Agreement, Sroya, as escrow agent, does not have an interest in
either the Debentures or the Escrow Shares and neither is Sroya considered a
stockholder of the Company by virtue of holding the Escrow Shares. However, for
purposes of determining the number of shares of the Company's common stock that
are issued and outstanding, the Escrow Shares, when issued and delivered to
Sroya, are considered issued and outstanding. The Escrow Shares will be
deposited with Sroya pursuant to Regulation D, Rule 540(b)(iii) and Section
3(a)(9) of the Securities Act of 1933 as a result of the assumption by the
Company of all of the obligations of its former subsidiaries under the
Debentures, including the obligation to repay the principal and interest and the
obligation to convert the Debentures on demand into shares of common stock. The
issuance of the Escrow Shares to the Debenture Holders upon the exercise of the
conversion privileges under the Debentures and any subsequent sale of the Escrow
Shares could have a material adverse effect on the Company's common stock and
cause its market price to decline substantially. The Company has not issued any
Escrow shares to Sroya and will not do so until it can increase its authorized
common stock. See the preceding paragraph.

The Company has authorized 1,500,000,000 shares of common stock, but has issued
and outstanding 1,938,566,046 shares of common stock, substantially all of which
shares have been issued as a consequence of the conversion of the debentures.
The Company intends to implement substantial controls to ensure that the
debenture conversion process will not in the future result in the issuance of
shares beyond those authorized by the Company. The impact upon the Company of
the issuance of shares in excess of its authorized capital is not now known,
although the Company believes that the value of the excess shares is material,
based upon the per-share value of the Company's common stock as traded on the
OTC Bulletin Board in December 2001, the time that the excess shares were
issued. The Company's ability to meet is conversion obligations under the
debentures and its escrow deposit obligations under the escrow hereinafter
described is dependent upon the Company's increasing its authorized shares,
which cannot occur until the Company is able to file the


                                     - 15 -
<PAGE>



definitive Information Statement on Schedule 14C. The Company filed a
preliminary Information Statement on Schedule 14C on December 6, 2001. The
Securities and Exchange Commission has made preliminary comments on that filing.
Until the Company is able to clear the Staff's comments, it will be unable to
file a definitive Information Statement on Schedule 14C nor, as a consequence,
increase its authorized capital. See Part II, Item 6, "Management's Discussion
and Analysis or Plan of Operation--Liquidity and Capital Resources."

OTC BULLETIN BOARD LISTING REQUIREMENTS. Under the new rules for continued
listing on the Bulletin Board, OTC traded firms are required to become and
remain fully reporting under Section 12 of the 1934 Securities and Exchange Act.
Although the Company intends to complete all future required filings on a timely
basis, there can be no assurance that its $.001 par value Common Stock (NRES)
will not be de-listed from the Bulletin Board. If de-listed, the market will
almost certainly reflect a depressive effect on the price of the Company's
Common Stock.

PENNY STOCK REGULATIONS AND REQUIREMENTS FOR LOW PRICED STOCK. The Commission
adopted regulations which generally define a "penny stock" to be any non-Nasdaq
equity security that has a market price of less than $5.00 per share, subject to
certain exceptions. Based upon the price of the Company's Common Stock as
currently traded on the OTC Bulletin Board, the Company's stock is subject to
Rule 15g-9 under the Exchange Act which imposes additional sales practice
requirements on broker-dealers which sell securities to persons other than
established customers and "accredited investors." For transactions covered by
this Rule, a broker-dealer must make a special suitability determination for the
purchaser and have received a purchasers written consent to the transaction
prior to sale. Consequently, the Rule may have a negative effect on the ability
of shareholders to sell common shares of the Company in the secondary market.

THE COMPANY WILL NEED ADDITIONAL FUNDS. The Company will require substantial
additional funding to further its real estate operations and business
objectives. Although management believes that such funds will become available
from sources including cash flow from business operations, bank loans, mortgage
loans, sale of convertible debt or stock, there is no assurance that the Company
will be able to obtain such funds in the amount necessary for its existing
operations or to acquire new projects, or that the terms of funding will be
acceptable to the Company. If the Company's capital is insufficient to conduct
its business and if the Company is unable to obtain needed financing, it will be
unable to pursue its business plan and may have to sell its existing properties.

MANAGEMENT CONTROLS THE COMPANY'S FUNDS. Management has broad discretion over
how to spend the funds held by the Company. Although management will endeavor to
act in the best interests of the shareholders, there can be no assurance that
the decision to utilize proceeds will prove profitable to the Company.


                                     - 16 -
<PAGE>



THE COMPANY MAY NOT BE SUCCESSFUL. The Company competes in a competitive market
of real estate development and housing construction. The Company's prospects for
success will depend on management's ability to successfully market its lots or
houses to buyers and its apartment projects to renters. As a result, demand and
market acceptance for our houses and apartment projects is subject to a high
level of uncertainty. The Company currently has limited financial, personnel and
other resources to undertake the extensive activities that will be necessary to
acquire property and build apartment complexes, houses and related real estate
projects. If the Company is unable to expand its marketing efforts, it will not
generate substantial additional revenues. Investors should be aware that if the
Company is not successful in the operation of its current business, or any
future acquisition endeavors, each investors entire investment in the Common
Stock of the Company could become worthless. Even if the Company is successful
in our operations and potential acquisitions, it is not certain that investors
will derive a profit from investment in the Company.

THE COMPANY RELIES ON ITS MANAGEMENT. The Company is dependent upon the members
of management set forth herein. If the current management is no longer able to
provide services to the Company, its business will be negatively affected. No
member of management is currently serving under a written employment agreement.

ADDITIONAL DEBT, CONVERTIBLE DEBT, OR EQUITY FINANCING MAY AFFECT INVESTOR'S
ABILITY TO SELL COMMON STOCK. The Company's Common Stock currently trades on the
OTC Bulletin Board under the symbol NRES. Stocks trading on the OTC Bulletin
Board generally attract a smaller number of market makers and a less active
public market and may be subject to significant volatility. If the Company
raises additional money from the sale of its Common Stock, the market price
could drop and investor's ability to sell stock could be diminished. As more
fully described under the caption "Risk Factors--Volatility of Market Price;
Issuance of Substantial Number of Shares; Authorized Shares; Proxy Rules," as
the Company has in the past financed its capital needs substantially through the
sale of convertible debentures of subsidiaries, which convertible debentures
(including the obligation to issue common stock upon conversion of the
debentures) the Company has assumed upon the merger of subsidiaries into the
Company, the number of shares which have been issued upon conversion of
debentures constitutes substantially all of the issued and outstanding shares of
the Company. The number of shares which may be issued in the future, assuming
conversion of outstanding debentures, will probably be very substantial. The
issuance of shares of common stock upon debenture conversions not only results
in a substantial number of shares being available for resale in the public
markets, but also the resale of those shares frequently results in a substantial
decrease in the per-share market price.

The Company's ability to obtain additional equity financing is also dependent
upon its ability to increase its authorized shares from time-to-time. Subsequent
to September 30, 2001, the year for which this Report is filed, the Company
filed a preliminary Information Statement on Schedule 14C with the Securities

                                     - 17 -
<PAGE>



and Exchange Commission. The Commission has made some preliminary comments to
the Company with respect to that filing. Until the Company amends its
Information Statement in a manner acceptable to the Commission, the Company will
not be able to increase its authorized shares of common stock and, as a
consequence, the holders of the debentures will not fund amounts due for the
payment of debentures issued by the Company. Further, even if the Company is
able to increase its authorized shares, there can be no assurance that it will
be able to obtain sufficient shareholder votes in the future for any such
increase, which votes are required by Nevada law.

FORWARD-LOOKING STATEMENTS

A number of the matters and subject areas discussed in the foregoing "Risk
Factors" section and elsewhere in this Form 10-KSB Report deal with potential
future circumstances and developments. The discussion of such matters and
subject areas is qualified by the inherent risks and uncertainties surrounding
future expectations generally, and also may materially differ from the Company's
actual future experience involving any one or more of such matters and subject
areas. The Company has attempted to identify, in context, certain of the factors
that it currently believes may cause actual future experience and results to
differ from the Company's current expectations regarding the relevant matter or
subject area. The operation and results of the Company's real estate development
business also may be subject to the effect of other risks and uncertainties in
addition to the relevant qualifying factors identified elsewhere in the
foregoing "Risk Factors" section, including, but not limited to, general
economic conditions in the geographic areas and occupational market segments
(such as, for example, construction, delivery, and real estate management
services) that the Company is targeting for its apartment units, the ability to
achieve adequate occupancy levels, access to sufficient debt or equity capital
to meet the Company's operating and financing needs, the quality and price of
similar or comparable housing offered or to be offered by the Company's
competitors, future legislative or regulatory actions relating to real estate
activities and real estate financing, other housing trends generally and other
risks and uncertainties described from time to time in the Company's reports
filed with the Commission.

ITEM 2. DESCRIPTION OF PROPERTY

The Company shares offices with Encore Builders, Inc. The Company pays no rent
for its space. Encore Builders, Inc., a subsidiary of the Company's Vacation
Ownership Marketing, Inc., affiliate, leases approximately 4000 square feet of
combination warehouse and executive office space at 2921 NW 6th Avenue, Miami,


                                     - 18 -
<PAGE>



Florida 33127. The lease is a month to month lease. All corporate,
administrative, accounting and operational functions are carried out from the
corporate headquarters. The leased facility consists of approximately 4000
square feet of a combination office and warehouse; approximately six hundred
square feet of office space is utilized by the Company and eight hundred square
feet of office space and twenty six hundred feet of warehouse space is utilized
by Encore Builders, Inc. in its operations. This leased space is 90% utilized
for Company purposes and is adequate for the Company's current needs.

See the information, under the caption "Real Estate Properties Purchased for
Development or Resale" in Item 1 for a description of the Company's property
held for development.

ITEM 3. LEGAL PROCEEDINGS

Neither the Company nor its property is a party to, or he subject of, any
pending legal proceeding other than routine litigation incidental to the
Company's business.

ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

No matter was submitted during the fourth quarter of the year ended September
30, 2001, to a vote of security holders.

                                     PART II

ITEM 5. MARKET FOR COMMON STOCK EQUITY AND RELATED STOCKHOLDER MATTERS.

MARKET INFORMATION

The Company's common stock is traded on the OTC Electronic Bulletin Board.

The following table sets forth the quarterly high and low bid market prices of
the Company's common stock for the fiscal years ended September 30, 2000 and
September 30, 2001, as reported on the OTC Bulletin Board. Such quotes do not
necessarily reflect actual transactions. In January 1999, the Company completed
a reverse split of its $.001 par value Common Stock on a 1 for 10 basis, and in
February 2001 the Company completed a 3-for-1 forward stock split. All
references to shares of Common Stock in this report take into account both stock
splits.

                                                       BID PRICES
                                              -------------------------
                                              HIGH                  LOW
                                              -----                 ---
Quarter Ended December 31, 1999               $.21                  $.105
Quarter Ended March 31, 2000                  $.32                  $.13
Quarter Ended June 30, 2000                   $.16                  $.04
Quarter Ended September 30, 2000              $.075                 $.03
Quarter Ended December 31, 2000               $.31                  $.009
Quarter Ended March 31, 2001                  $1.50                 $.0033
Quarter Ended June 30, 2001                   $.081                 $.0028
Quarter Ended September 30, 2001              $.029                 $.0019



                                     - 19 -
<PAGE>

These quotations reflect inter-dealer prices, without retail markup, markdown or
commissions, and may not represent actual transactions.

The Company understands that sixteen member firms of the NASD are currently
acting as market makers for the Company's common stock.

The Company has only one class of common stock which is publicly-traded. As of
January 9, 2002, there were 559 shareholders of record for the Company's common
stock and a total of 1,938,566,046 shares of common stock issued and
outstanding. The shares outstanding exceed the Company's authorized capital of
1,500,000,000 shares. Certain of the shares of the Company's common stock and
warrants are held in "street name" and may, therefore, be held by several
beneficial owners.

The holders of the common stock are entitled to one vote for each share held of
record on all matters submitted to a vote of stockholders. Holders of the common
stock have no preemptive rights and no right to convert their common stock into
any other securities. There are no redemption or sinking fund provisions
applicable to the common stock.

DIVIDENDS

The Company paid no dividends during the fiscal year ended September 30, 2001.
On November 19, 2001, the Company declared a dividend of one-tenth share for
each share of common stock to holders of record on November 19, 2001, and he
dividend was scheduled to be paid, but was not paid, on January 10, 2002. The
Company will pay such dividend as and when it is able to increase its authorized
shares of common stock. See the discussion under the caption "Volatility of
Market Price; Issuance of Substantial Number of Shares; Authorized Shares; Proxy
Rules" and "Risk Factors," in Part I, Item 1 of this Report.

On June 13, 2001, the Company announced that it had begun to buy its common
stock on the open market. The Company subsequently determined to use its
available cash for other purposes and ceased purchasing its common stock.

The declaration and payment by the Company of dividends, if any, in the future
rests within the discretion of its Board of Directors and will depend, among
other things, upon the Company's earnings, its capital requirements and its
financial condition, as well as other relevant factors. There is no current plan
to pay dividends.


                                     - 20 -
<PAGE>


RECENT SALES OF UNREGISTERED SECURITIES

The following is a list of unregistered securities sold by the Company within
the last three years, including the date sold, the title of the securities, the
amount sold, the identity of the purchaser, and the price or other consideration
paid for the securities.

<TABLE>
<CAPTION>

                  NUMBER
DATE              OF SHARES         ISSUED TO                                   CONSIDERATION
----              ---------         ---------                                   -------------
<S>               <C>               <C>                                         <C>
10/01/1999        5,056,818         Debentureholders                            Debenture Conversions
to 12/31/2000
10/13/1999        227,272           Consultant                                  Consulting Services
11/30/2000        308,333           Consultant                                  Consulting Services
12/07/1999        250,000           Consultant                                  Consulting Services
02/10/2000        455,000           MRC Legal Services LLC                      MAS XV Acquisition Agreement*
02/10/2000        140,000           Brian A. Lebrecht                           MAS XV Acquisition Agreement*
02/10/2000        105,000           Vi Bui                                      MAS XV Acquisition Agreement*
02/10/2000        125,000           MAS Capital, Inc.                           MAS XV Acquisition Agreement*
02/10/2000        87,500            James Stubler                               MAS XV Acquisition Agreement*
02/10/2000        87,500            Portfolio Investment Strategies, Inc.       MAX XV Acquisition Agreement*
02/10/2000        260,000           M. Richard Cutler                           Consulting Agreement**
02/10/2000        80,000            Brian Lebrecht                              Consulting Agreement**
02/10/2000        60,000            Vi Bui                                      Consulting Agreement**
02/10/2000        50,000            James Stubler                               Consulting Agreement**
02/10/2000        50,000            Samuel Eisenberg                            Consulting Agreement**
04/01/2000        250,000           Braulio Gutierrez                           80% of Equity in Encore Services, Inc.
04/03/2000        6,000,000         Christopher Astrom                          $6,000,000 Option Price of Shares***
04/12/2000        29,136,510        HLKT Holdings, L.L.C.                       Assignment of $1,000,000 Debenture****
05/02/2000        250,000           Yeshiva Gedoluh of Midwood                  Charitable Donation
</TABLE>

--------------------
*    Pursuant to a Stock Exchange Agreement (the "Exchange Agreement") dated as
     of February 10, 2000, between MRC Legal Services Corporation, a California
     Corporation, which entity is the controlling shareholder of MAS Acquisition
     XV Corp. ("MAS XV"), an Indiana corporation, and the Company, in which
     approximately 96.8% (8,250,000 shares) of the outstanding shares of common
     stock of MAS Acquisition XV Corp. were exchanged with the shareholders of
     MAS XV for 1,000,000 shares of Common Stock of the Company. in a
     transaction in which the Company became the parent corporation of MAS XV.

**   On February 10, 2000, the Company entered into a consulting agreement
     between the Company and the following individual professional persons who
     acted as consultants to the Company: M. Richard Cutler, Brian A. Lebrecht,
     Vi Bui, James Stubler and Samuel Eisenberg for services involving
     consultation, advice and counsel with respect to the negotiation and
     completion of the stock exchange between the Company and MAS XV. In
     addition to cash compensation, the agreement called for issuance of a total




                                     - 21 -
<PAGE>

     of 500,000 shares of the Company to be issued to the consultants together
     with an obligation for the Company to register such shares on Form S-8 at
     the Company's sole expense. This obligation was completed in February 2000.

***  On March 1, 1999, Christopher Astrom was granted options to acquire
     6,000,000 shares of Common Stock at a price of $.001 per share. On April 3,
     2000, Mr. Astrom exercised his option and acquired 6,000,000 shares
     (18,000000 shares on a February 2001 post-split basis) of the Company's
     $.001 par value Common Stock for payment of $6,000. These options were
     authorized and awarded to Mr. Christopher Astrom by a written consent in
     lieu of combined special meeting of Directors and Shareholders held on
     March 1, 1999. The options were granted to Christopher Astrom in
     consideration of his waiver of compensation during 1996 and 1997. On
     December 16, 2001, the Company and Mr. Astrom rescinded the exercise of the
     6,000,000 share purchase option and the issuance of the 18,000,000
     (post-split) shares to Mr. Astrom. Mr. Astrom has accordingly agreed to
     return all of such shares to the Company for cancellation.

**** On April 1, 2000, the Company acquired, in a transaction exempt from
     registration under Section 4(2) of the Securities Act of 1933, eighty
     percent of the common stock of Encore Services, Inc., a Florida
     Corporation. With the consent of HLKT Holdings, L.L.C., Encore Services,
     Inc. assigned to the Company and the Company irrevocably and
     unconditionally assumed all the rights and obligations of Encore Services,
     Inc. under a $1,000,000 Convertible Debenture previously issued by Encore
     Services, Inc. to HLKT Holdings, L.L.C., a Colorado limited liability
     company, on March 15, 2000. Commencing April 12, 2000, and continuing
     through June 28, 2000, the total $1,000,000 face amount of the Debenture
     was presented to the Company's transfer agent for conversion in accordance
     with the terms of the Debenture to unrestricted $.001 par value Common
     Stock of the Company pursuant to the assignment and assumption agreement
     with Encore Services, Inc. A total of 28,856,464 shares of the Company's
     $.001 par value Common Stock were exchanged for the $1,000,000 Debenture,
     and an additional 140,023 shares of the Company's $.001 par value Common
     Stock were issued in payment of accrued interest on the Debenture. The
     debentures were convertible on the basis described below for debentures
     issued by 2217 Acquisition, Inc., and certain other former subsidiaries of
     the Company.


On October 10, 2000, 2217 Acquisition, Inc. ("2217 Acquisition") issued its 8%
Series A $1,000,000 Senior Subordinated Convertible Redeemable Debenture due
October 10, 2002 (the "2217 Acquisition Debenture"),together with underlying
shares of 2217 Acquisition's common stock, par value $.001, into which the 2217
Acquisition Debenture is convertible from time-to-time. The 2217 Acquisition
Debenture was issued to Sea Lion Investors LLC, Equity Planners LLC, and Myrtle
Holdings, LLC, all of which represented to 2217 Acquisition they were accredited
investors. The debentures were issued pursuant to Regulation D, Rule
504(b)(iii). The debentures permit the holders thereof to convert all or any
amount over $5,000 of the principal face amount of the debentures into shares of
common stock at a conversion price of 70% of the per-share price valued in
accordance with the book value of the common stock or 70% of the lowest closing




                                     - 22 -
<PAGE>

bid price as quoted on the OTC Bulletin Board, if the shares of 2217 Acquisition
or its successors or assigns are quoted on the OTC Bulletin Board. Subsequent to
the issuance of the 2217 Acquisition Debenture, 2217 Acquisition was merged into
the Company and the Company assumed the obligation, and did issue to the
debenture holders, the Company's debentures convertible into common stock of the
Company. 2217 Acquisition and, subsequently, the Company, received an aggregate
of approximately $795,000 from the purchase of the 2217 Acquisition Debenture.

In May 2001, Connecticut Acquisition Corp. No. 1 ("Connecticut Acquisition")
issued $1,000,000 principal amount of its 8% Series A Senior Subordinated
Convertible Redeemable Debentures ("Connecticut Acquisition Debenture"),
together with underlying shares of Connecticut Acquisition's common stock, par
value $.001, into which the Connecticut Acquisition Debenture is convertible
from time-to-time. The Connecticut Acquisition Debenture was issued to Sea Lion
Investors LLC, Equity Planners LLC, and Myrtle Holdings, LLC, all of which
represented to Connecticut Acquisition they were accredited investors. The
debentures were issued pursuant to Regulation D, Rule 504(b)(iii). The
debentures permit the holders thereof to convert all or any amount over $5,000
of the principal face amount of the debentures into shares of common stock at a
conversion price of 70% of the per-share price valued in accordance with the
book value of the common stock or 70% of the lowest closing bid price as quoted
on the OTC Bulletin Board, if the shares of Connecticut Acquisition or its
successors or assigns are quoted on the OTC Bulletin Board. Subsequent to the
issuance of the Connecticut Acquisition Debenture, Connecticut Acquisition was
merged into the Company and the Company assumed the obligation, and did issue to
the debenture holders, the Company's debentures convertible into common stock of
the Company. Connecticut Acquisition and, subsequently, the Company, received an
aggregate of approximately $825,000 from the purchase of the Connecticut
Acquisition Debenture.

On or about October 17, 2001, DC Power Products Acquisition Corp ("DC Power")
issued its 8% Senior Subordinated Convertible Redeemable Debentures ("DC Power
Debenture") in the aggregate principal amount of $1,000,000 to Sea Lion
Investors LLC, Equity Planners LLC, and Myrtle Holdings LLC. The DC Power
Debenture was issued pursuant to Regulation D, Rule 504(b)(iii). The DC Power
Debenture permits the holders thereof to convert all or any amount over $5,000
of the principal face amount of the debentures into shares of common stock at a
conversion price of 70% of the per-share price valued in accordance with the
book value of the common stock or 70% of the lowest closing bid price as quoted
on the OTC Bulletin Board, if the shares of DC Power or its successors or


                                     - 23 -
<PAGE>



assigns are quoted on the OTC Bulletin Board. Subsequent to the issuance of the
DC Power Debenture, on November 1, 2001, DC Power was merged into the Company
and the Company assumed the obligation to issue, and did issue to the debenture
holders, the Company's debentures convertible into common stock of the Company.
DC Power and, subsequently, the Company, have received an aggregate of
approximately $208,345 from the purchase of the DC Power Acquisition Debenture,
of which approximately $661,655 remains unpaid by the debenture holders.

On December 13, 2001, the Company entered into an escrow agreement (the "Escrow
Agreement") with Sroya Holdings LLC, as escrow agent ("Sroya") and Sea Lion
Investors LLC, Equity Planners LLC, and Myrtle Holdings LLC, the purpose of
which was to amend and supplement the October 30, 2001, agreement among Senior
Lifestyle Communities, Inc., and the debenture holders. Pursuant to the Escrow,
the Company deposited 100,000,000 shares of its common stock ("Escrow Shares")
with Sroya to ensure the timely delivery of the Company's common stock upon the
exercise of the conversion privileges by the debenture holders under the
debentures issued on October 17, 2001. Under the Escrow Agreement, Sroya, as
escrow agent, does not have an interest in either the debentures or the Escrow
Shares and neither is Sroya considered a shareholder of the Company by virtue of
holding the Escrow Shares. However, for purposes of determining the number of
shares of the Company's common stock are issued and outstanding, the Escrow
Shares are considered issued and outstanding. The Escrow Shares were deposited
with Sroya pursuant to Regulation D, Rule 504(b)(iii) and Section 3(a)(9) of the
Securities Act of 1933 as a result of the assumption by the Company of all of
the obligations under Senior Lifestyle Communities under the debentures,
including the obligation to repay the principal and interest and the conversion
privileges. The issuance of the Escrow Shares to the debenture holders upon the
exercise of the conversion privileges under the debentures and any subsequent
sale of the Escrow Shares could have a materially adverse affect on the
Company's common stock and cause its market price to decline substantially.

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

FORWARD-LOOKING STATEMENTS

This Report, including the following discussion, contains certain
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These
forward-looking statements include the plans and objectives of management for
future operations, including plans and objectives relating to the possible
further capitalization and potential acquisitions of or mergers with operating
companies. The forward-looking statements included herein are based on current
expectations that involve numerous risks and uncertainties. Assumptions relating
to the foregoing involve judgments with respect to, among other things, future


                                     - 24 -
<PAGE>



economic, competitive and market conditions and future business decisions, all
of which are difficult or impossible to predict accurately and many of which are
beyond the control of the Company. Although the Company believes that the
assumptions underlying the forward-looking statements are reasonable, any of
the assumptions could be inaccurate and, therefore, there can be no assurance
that the forward-looking statements included in this Form 10-KSB/A will prove
to be accurate. In light of the significant uncertainties inherent in the
forward-looking statements included herein, the inclusion of such information
should not be regarded as a representation by the Company or any other person
that the objectives and plans of the Company will be achieved.

The following is a discussion of the consolidated financial condition and
results of operations of the Company for the fiscal years ended September 30,
2001, and September 30, 2000, which should be read in conjunction with, and is
qualified in its entirety by, the consolidated financial statements and notes
thereto included elsewhere in this Report.

THE MANAGEMENT'S DISCUSSION AND ANALYSIS PRESENTED BELOW REFLECTS CERTAIN
RESTATEMENTS TO OUR PREVIOUSLY REPORTED RESULTS OF OPERATIONS FOR THESE PERIODS.

RESULTS OF OPERATIONS

The Company had gross sales of $76,764 in the year ended September 30, 2001,
compared to gross sales of $62,500 in the year ended September 30, 2000. The
Company's lack of substantial operating revenues is attributable in large part
to its change of business from the purchase and sale of residential properties
in fiscal 1999 to the development in 2000 and 2001 of residential projects, the
sales of which cannot occur until development is completed, individual units are
completed and sold, or the sale of a development project prior to completion.
The Company's total expenses were substantially the same in fiscal 2001 as in
fiscal 2000, decreasing to $678,395 in fiscal 2001 from $706,752 in fiscal 2000.
The Company had a net loss before other income and expenses of $644,252 in the
year ended September 30, 2000, compared to a net loss of $601,631 in fiscal
2001, while operating revenues and total operating expenses remained
substantially unchanged. The Company's net loss decreased from $908,803 in the
year ended September 30, 2000, to $583,644 in the year ended September 30, 2001,
as the Company expended $318,700 in acquisition costs in fiscal 2000 but had no
such expense in fiscal 2001.

The Company's ability to operate at a profit is dependent upon the successful
completion of its existing projects, the sale of those projects before or upon
completion, the sale of individual units within the projects, and the initiation
of new real estate or other projects. The Company has invested substantial funds
in its existing projects, but was not been able to realize material profits from
any of these projects in the year ended September 30, 2001. See "Liquidity and
Capital Resources," below.


                                     - 25 -
<PAGE>




LIQUIDITY AND CAPITAL RESOURCES

The Company's cash and cash equivalents decreased from $137,990 at September 30,
2000, to $80,704 at September 30, 2001. The Company's real estate holdings
increased from $3,321,090 at September 30, 2000, to $8,738,514, as the Company
acquired real property for development or sale. The Company's total assets
increased from $3,888,820 at September 30, 2000, to $9,449,550 at September 30,
2001, substantially as a consequence of the Company's increase in real estate
holdings. The Company had total liabilities of $5,764,456 at September 30, 2001,
compared to total liabilities of $1,672,237 at September 30, 2000, as the
Company incurred substantial mortgage debt to acquire property. Total
stockholders' equity increased from $2,216,583 at September 30, 2000, to
$3,685,094 at September 30, 2001, substantially due to an increase in paid-in
capital from financings. The Company had an accumulated deficit of $1,435,158 at
September 30, 2000, compared to an accumulative deficit of $2,018,802 at
September 30, 2001, as a consequence of the Company's continuing operating
losses.

Prior to becoming a publicly owned company, the Company relied primarily upon
loans originated by the Company's President, Richard Astrom. These loans helped
to finance working capital needs when operations did not provide enough cash
flow. Additionally, the Company has relied upon bank financing to acquire
properties and pay operational costs. The bank financing has required the
personal guarantees of Richard Astrom and Christopher Astrom. In the future, the
Company will need additional financing in the form of mortgage funding or public
or private offerings of stock or debt instruments. If funds are required in the
future in addition to funds provided from the sale of real estate under
development or held for resale, they may be generated from stock sales, debt
issuance or from the mortgaging of real estate. There can be no assurance that
any such funds will be available or that, if they are, they will be available on
favorable terms and conditions or when required.

In the year ended September 30, 2000, the Company realized cash flow of $812,990
from the sale of debentures, and $2,052,155, from the sale of debentures in the
year ended September 30, 2001. For those same periods, the Company realized net
proceeds of $4,071,514 (in fiscal 2001) and $950,233 (in fiscal 2000).

The Company continued to operate at a loss in the year ended September 30, 2001.
The Company was able to continue its operations in fiscal 2001 through the
proceeds of the sale of the securities of its subsidiaries, and through the
proceeds of notes and mortgages payable. The Company's ability to meet its
continuing operating expenses depends, in substantial part, upon its ability to
continue to raise capital through the sale of debt or equity by the Company or
its subsidiaries, and through construction and permanent mortgage financing;
through the completion and sale, or sale prior to completion, of the Company's
real estate projects; and to raise capital for operating expenses through the


                                     - 26 -
<PAGE>



sale of land purchased, but not developed, by the Company. In the event that the
Company were forced to sell certain of its projects prior to completion or, with
respect to undeveloped property, prior to the time at which the Company could
benefit from any increase in the value of those properties, such should increase
occur, the Company's profit, if any, from its real estate activities could be
materially adversely affected. There can be no assurance that the Company will
be able to raise additional capital on a debt or equity basis, or obtain
mortgage financing, to complete any of its projects under development, or to
sell any completed development projects (should they be completed) or land
purchased for resale or development at a profit. Further, there is no assurance
that the Company will be able to complete the sale of the Granada Grand and
Residences at Bay Harbor projects under contracts of sale outstanding on the
date of this Report.

ITEM 7. FINANCIAL STATEMENTS

Reference is made to the Consolidated Financial Statements, the notes thereto,
and Independent Accountants' Report thereon commencing at page F-1 of this
Report, which Consolidated Financial Statements, notes and Report are included
herein by reference.

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

The Company has previously reported information with respect to its change of
accountants on Reports on Form 8-K filed July 23, 2001, as amended on Form 8-K/A
filed August 9, 2001; and on August 10, 2001.

                                    PART III

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

The following table sets forth: (1) names and ages of all persons who presently
are Directors of the Company; (2) all positions and offices with the Company
held by each such person; (3) the term or office of each person named as a
Director; and (4) any period during which he or she has served as such:

NAME                    AGE      POSITIONS WITH THE COMPANY
-----                   ---      ---------------------------
Richard Astrom          54       Director, CEO and President Since 1994
Christopher Astrom      30       Director, VP, Secretary, Treasurer Since 1994
Braulio Gutierrez       48       Director Since April 2000


                                     - 27 -
<PAGE>



There is no understanding or arrangement between any Directors or any person or
persons pursuant to which such individual was or is to be selected as a Director
or nominee of the Company.

Each Director is serving a term of office, which shall continue until the next
annual meeting of Shareholders and until his successor has been duly elected and
qualified. Officers of the Company serve at the pleasure of the Board of
Directors.

Richard Astrom currently serves as President, Chief Executive Officer and
Chairman of the Board of Directors of the Company. He has extensive experience
in the first-time home buyer's market. Throughout his career in real estate, he
has devoted himself to the needs of people seeking to own a piece of the
American dream. Mr. Astrom is a graduate of the University of Miami with a
Bachelor's degree in Business Administration and a major in Finance. As a
certified real estate broker, he has been active as a salesperson, developer,
and real estate investor since 1969. For more than 25 years, he has specialized
in rehabilitating the existing housing stock of Miami, one of America's largest
and fastest growing cities. He gained invaluable experience outside of the Miami
area in the roll of vice president and sales manager of a 200 home retirement
community in Ocala, Florida, selling land and home packages. He was the primary
developer of the land, recreation facilities, and housing stock. He also sold
commercial properties and land in the same area, including 40 to 100 acres
parcels for horse farms. He has directed the Company through a December 1994
merger with a publicly owned and traded company. Richard Astrom has been
President of the Company since 1993. Mr. Astrom is an officer and director of
Vacation Ownership Marketing, Inc., and Genesis Capital Corporation, both of
which are publicly-traded companies.

Christopher Astrom currently serves as Vice President, Secretary, Treasurer and
Director of the Company. Christopher manages all corporate acquisitions. He has
experience in the analysis of market areas and their resale ability. In
addition, he has developed management systems to control costs of acquisition
and rehab thereby helping to ensure our profitability. He received his Bachelor
of Arts in Business Administration from the School of Business at the University
of Florida. Christopher Astrom has been employed by the Company since 1995. Mr.
Astrom is an officer, director and principal shareholder of Vacation Ownership
Marketing, Inc., and Genesis Capital Corporation, both of which are
publicly-traded companies.

Braulio Gutierrez currently serves as a Director of the Company and President of
Encore Services, Inc., a subsidiary of the Company. Mr. Braulio has twenty two
years of supervisory and construction management experience in the Miami,
Florida area and has been a 18 Florida Certified Construction Contractor since
1980. Mr. Braulio has been the qualifying agent and President of Encore
Services, Inc., a custom home and residential apartment builder since 1988.
Encore Services, Inc. was acquired as an eighty percent owned subsidiary


                                     - 28 -
<PAGE>



of the Company on April 1, 2000. Mr. Gutierrez was appointed as a Director of
the Company on April 1, 2000. Mr. Gutierrez is President of Vacation Ownership
Marketing, Inc.

Richard Astrom and Christopher Astrom, both of whom are officers and Directors
of the Company, are father and son.

No event listed in Subparagraphs (1) through (4) of Subparagraph (d) of Item 401
of Regulation S-B, has occurred with respect to any present executive officer or
Director of the Company during the past five years, which event is material to
an evaluation of the ability or integrity of such Director or officer.

COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Based solely upon our review of Forms 3 and 4 and amendments thereto furnished
to the Company under Rule 16(a)-3(e) during its most recent fiscal year, none of
the officers and directors of the Company filed Forms 3 on a timely basis. Each
officer and director of the Company filed Form 3 on January 7, 2002. Christopher
Astrom reported the acquisition of 1,000,000 shares of Series A Common Stock in
a report on Form 4 filed January 15, 2002, although such shares were acquired in
June 2001. However, the Company does not believe that the shares delivered to
Mr. Astrom were duly authorized, and accordingly does not believe that he had an
obligation to file Form 4 with respect to their receipt by him.

ITEM 10. EXECUTIVE COMPENSATION

The following table and notes present for the Company's Chief Executive Officer
for each of the three fiscal years ended September 30, 2001. No executive
officer of the Company or any subsidiary received an annual salary and bonus in
excess of $100,000 in any of those fiscal years.

No employee of the Company other than Richard Astrom, its CEO, earned in excess
of $100,000 during the fiscal years ended September 30, 1999 and September 30,
2000.

                           SUMMARY COMPENSATION TABLE

NAME AND POSITION                   YEAR       SALARY   BONUS     OTHER
-----------------                   ----       ------   ------    -----
Richard Astrom,                     2001       -0-         -0-    $31,147(1)
CEO and President                   2000       $50,000     -0-    -0-
                                    1999       $60,000     -0-    -0-
-------------
(1)  Consists of the book value of tangible personal property assigned to Mr.
     Astrom as compensation for services.


                                     - 29 -
<PAGE>



No director receives any additional compensation for his services as a director.
The Company has no option, profit sharing or pension plan currently in effect,
nor any termination of employment or change-in-control arrangement with any
employee.

The Company does not have a compensation committee. Compensation is determined
by the Board of Directors acting as a whole on the basis of the value of an
employee or contracted service to the Company. In addition, compensation by
other companies of like size for comparable services and other factors specific
to each determination of compensation are taken into consideration.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The table below sets forth information with respect to the beneficial ownership
of the Company's common stock by (i) each person who is known to the Company to
be the beneficial owner of more than five percent (5%) of the Company's common
stock, (ii) all directors and nominees, (iii) each executive officer, and (iv)
all directors and officers as a group.

Unless otherwise indicated, the Company believes that the beneficial owner has
sole voting and investment power over such shares. The Company does not believe
that any shareholders act as a "group," as that term is defined in Section 13(d)
of the Securities Exchange Act of 1934, as amended. As of January 9, 2002, the
Company had 1,938,566,046 shares of common stock issued and outstanding.

NAME AND ADDRESS OF             NUMBER OF SHARES           PERCENTAGE OF
COMMON STOCK                    OF COMMON STOCK            COMMON STOCK
BENEFICIAL OWNER                BENEFICIALLY OWNED         OWNERSHIP
--------------------            ------------------         ---------------

Richard Astrom (3)(5)           763,050                             (2)
11415 NW 123 Lane
Reddick, FL 32686

Christopher Astrom (3)(4)(5)     30,000(1)                          (2)
11415 NW 123 Lane
Reddick, FL 32686

Braulio Gutierrez(5)            750,000                             (2)
2921 N.W. 6th Avenue
Miami, FL 33127

All Officers and Directors    1,543,050                             (2)
As a Group (3 persons)


                                     - 30 -
<PAGE>


---------------
(1)  Does not include 6,000,000 shares issued to Mr. Astrom issued on conversion
     of options in May 2001, which shares were rescinded by Mr. Astrom and the
     Company.
(2)  Less than one percent (1%).
(3)  Richard Astrom is the father of Christopher Astrom. Pursuant to Rule 13d-4,
     Richard and Christopher Astrom have advised the Company that each disclaims
     beneficial ownership of the other's common stock. However, they may
     together be deemed members of a group in accordance with Rule 13d-5 and
     instruction 7 to Item 403 of Regulation S-B.
(4)  Does not include 1,000,000 shares designated Class A Common Stock or the
     number of shares equivalent to the designated voting rights of Class A
     Common Stock. The Company has determined that such class of shares was not
     duly authorized or issued. See Item 12, below.
(5)  Richard Astrom and Christopher Astrom are officers and directors of the
     Company. Mr. Gutierrez is a director.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Richard Astrom, President, CEO and Director, is the father of Christopher
Astrom, Vice President, Secretary, Treasurer and Director, of the Company.
Richard Astrom and Christopher Astrom make up the majority of the Board of
Directors of the Company and control the activities and actions of the Company.
Richard Astrom and Christopher Astrom are required by lenders to personally
guarantee mortgage loans obtained by the Company in its real estate development
projects.

On March 1, 1999, Christopher Astrom was granted options to acquire 6,000,000
shares of Common Stock at a price of $.001 per share. On April 3, 2000, Mr.
Astrom exercised his option and acquired 6,000,000 shares (18,000,000 shares on
post-split basis) of the Company's $.001 par value Common Stock for payment of
$6,000. These options were authorized and awarded to Mr. Christopher Astrom by a
written consent 21 in lieu of combined special meeting of Directors and
Shareholders held on March 1, 1999. The options were granted to Christopher
Astrom in consideration for waiver of compensation during 1996 and 1997. In
December 2001 Mr. Astrom and the Company rescinded these shares and he has
agreed to return them to the Company.

On June 17, 1999, by a written consent in lieu of combined special meeting of
Directors and Shareholders, a new class of Common Stock, "Class A Common Stock"
was authorized on June 17, 1999. On that same date, 1,000,000 shares were issued
to Mr. Christopher Astrom. However, the Company did not amend its articles of
incorporation to reflect that authorization. Accordingly, the Company does not
believe such shares were validly authorized or issued, nor that they are
outstanding. Each share of Class A Common Stock, if duly authorized, would
entitle Mr. Astrom to the equivalent of 20 common share votes in any matter to
be voted on by the shareholders of the Company.



                                     - 31 -
<PAGE>


On February 10, 2000, the Company entered into a consulting agreement between
the Company and the following individual professional persons who acted as
consultants to the Company: M. Richard Cutler, Brian A. Lebrecht, Vi Bui, James
Stubler, and Samuel Eisenberg for services involving consultation, advice and
counsel with respect to the negotiation and completion of the stock exchange
between the Company and MAS XV. In addition to cash compensation, the agreement
called for issuance of a total of 500,000 shares of the Company to be issued to
the consultants together with an obligation for the Company to register such
shares on Form S-8 at the Company's sole expense. This obligation was completed
in February 2000.

As was reported on Form 8-K dated February 14, 2000, pursuant to a Stock
Exchange Agreement (the "Exchange Agreement") dated as of February 10, 2000,
between MRC Legal Services Corporation, a California Corporation, which entity
is the controlling shareholder of MAS Acquisition XV Corp. ("MAS XV"), an
Indiana corporation, and National Rehab Properties, Inc., a Nevada corporation,
approximately 96.8% (8,250,000 shares) of the outstanding shares of common stock
of MAS Acquisition XV Corp. were exchanged for 1,000,000 shares of Common Stock
of National Rehab Properties, Inc. in a transaction in which the Company became
the parent corporation of MAS XV. The additional shares representing 3.2% of MAS
XV were subsequently acquired by the Company, making MAS XV a wholly owned
subsidiary of the Company.

On April 1, 2000, the Company acquired, in a transaction exempt from
registration, eighty percent of the common stock of Encore Services, Inc., a
Florida Corporation, in exchange for (a) 250,000 shares of the Company's $.001
par value Common Stock issued to Braulio Gutierrez, and (b) an assignment and
assumption agreement with Encore Services, Inc. whereby, with the assent of HLKT
Holdings, L.L.C., Encore Services, Inc. assigned to the Company and the Company
irrevocably and unconditionally assumed all the rights and obligations of Encore
Services, Inc. under a $1,000,000 Convertible Debenture previously issued by
Encore Services, Inc. to HLKT Holdings, L.L.C., a Colorado Limited Liability
Company, on March 15, 2000. On April 1, 2000, Mr. Gutierrez was appointed as a
Director of the Company.

The President of the Company, Richard Astrom owed the Company $302,000 pursuant
to a note which matured September 20, 2000. Pursuant to an agreement dated
September 29, 2000, entitled "Prepaid Management Agreement," the previous
$302,000 note was cancelled and a new arrangement for the repayment of the
$302,000 note was created. (See Note 8 to the Financial Statements.)

The Company has entered into construction contracts totaling $10,934,000 with
Encore Builders, Inc., a corporation wholly owned by Braulio Gutierrez, a
Director of the Company. Mr. Gutierrez is also a minority shareholder of Encore
Services, Inc. Encore Services, Inc. is a subsidiary of the Company, in which
the Company owns 80% equity and Mr. Gutierrez owns 20% equity.



                                     - 32 -
<PAGE>


The Company shares offices with Encore Builders, Inc., a subsidiary of the
Company's Vacation Ownership Marketing, Inc., affiliate. The Company pays no
rent for its space. Encore Builders, Inc. leases approximately 4000 square feet
of combination warehouse and executive office space at 2921 NW 6th Avenue,
Miami, Florida 33127. Approximately six hundred square feet of office space are
utilized by the Company.

As of September 30, 2001, the Company had loaned $261,167 to its president,
Richard Astrom. In December 2001, the Company's Board of Directors, of which
Richard and Christopher Astrom constitute two of the three directors, agreed to
accept 5,230,000 shares of the common stock of Genesis Capital Corporation, an
affiliate of the Company, owned by Christopher Astrom in payment of the
indebtedness of Richard and Christopher Astrom to the Company then aggregating
$523,000. Christopher Astrom agreed to provide additional shares of Genesis
Capital Corporation to the Company in the event the Company was unable to
realize the $523,000 from the sale of the Genesis Capital Corporation stock.

In the fiscal year ended September 30, 2001, Richard Astrom received three
automobiles then owned by the Company having a book value of $31,147 in lieu of
salary payable to him by the Company.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
<TABLE>
<CAPTION>

         EXHIBIT
         NUMBER            DESCRIPTION
         ------            -----------
<S>                       <C>
         2.0               Acquisition of Encore Services, Inc. dated April 1, 2000. (1)
         2.1               Merger Agreement between 2217 Acquisition, Inc. and National Rehab
                           Properties, Inc. dated October 11, 2000. Incorporated by reference to
                           Form 8-K filed November 17, 2000. (1)
         3.1               Articles of Incorporation. (1)
         3.2               Articles of Amendment to Articles of Incorporation.
         3.3               Certificate of Change in Number of Authorized Shares.
         3.4               By-laws. (1)
         10.01             Consulting Agreement dated February 10, 2000. (1)
         10.02             Written Consent in Lieu of Combined Special Meeting of Directors and
                           Shareholders dated June 17, 1999. (1)
         10.03             Written Consent in Lieu of Combined Special Meeting of Directors and
                           Shareholders dated March 1, 1999. (1)
         10.04             Prepaid Management Agreement dated September 29, 2000. (1)
         21                Subsidiaries of the registrant. (1)
         21.1              Mas Acquisition XV Corp., an Indiana Corporation. (1)
         21.2              Encore Services, Inc., a Florida Corporation. (1)
         21.3              Granada Grand, Inc., a Florida Corporation. (1)
         21.4              Conquistador Plaza, Inc., a Florida Corporation. (1)

</TABLE>
---------------------
(1)  Previously filed.




                                     - 33 -
<PAGE>

REPORTS ON FORM 8-K

The Company did not file any reports on Form 8-K during the last quarter of the
period covered by this Report.


                                     - 34 -
<PAGE>

                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Securities Exchange Act
of 1934, the Registrant caused this Annual Report and any subsequent amendments
thereto to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                        NATIONAL RESIDENTIAL PROPERTIES, INC.

Dated: January 24, 2002                 By:       /s/ RICHARD ASTROM
                                            -----------------------------------
                                                 Richard Astrom, President

Pursuant to the requirements of the Securities Act of 1934, this Annual Report
has been signed below by the following persons in their respective capacities
with the Registrant and on the dates indicated.

         SIGNATURE                   TITLE                   DATE
         ---------                   -----                   ----

 /s/ RICHARD ASTROM         President, Chief Executive       January 24, 2002
----------------------      Officer and Director
Richard Astrom

/s/ CHRISTOPHER ASTROM      Vice President, Secretary        January 24, 2002
----------------------      and Director
Christopher Astrom


                                     - 35 -
<PAGE>
                      NATIONAL RESIDENTIAL PROPERTIES, INC.
                                AND SUBSIDIARIES

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                 PAGE(S)
                                                                 -------

Independent Auditors' Report ..................................... F-2

Consolidated Financial Statements:

         Balance Sheets as of  September  30, 2001 and 2000 ...... F-4

         Statements of Operations for the Years
         Ended September 30, 2001 and 2000 ....................... F-6

         Statements of Changes in Stockholders' Equity
         For the Years Ended September 30, 2001 and 2000 ......... F-7

         Statements of Cash Flows for the Years Ended
         September  30, 2001 and 2000 ............................ F-8

         Notes to Consolidated Financial Statements .............. F-10



















                                      F-1
<PAGE>











                          INDEPENDENT AUDITORS' REPORT

To the Stockholders of
National Residential Properties, Inc. and Subsidiaries
Miami, Florida

We have audited the accompanying consolidated balance sheet of National
Residential Properties, Inc. and Subsidiaries (the "Company") as of September
30, 2001 and the related consolidated statements of operations, changes in
stockholders' equity, and cash flows for the year then ended. These consolidated
financial statements are the responsibility of management. Our responsibility is
to express an opinion on these consolidated financial statements based on our
audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall consolidated financial statement presentation. We
believe that our audit provides a reasonable basis for our opinion.

The accompanying consolidated financial statements for September 30, 2001 have
been prepared assuming the Company will continue as a going concern. As
discussed in Note 13 to the consolidated financial statements, the Company has
raised certain issues that lead to substantial doubt about its ability to
continue as a going concern. Management's plans in regards to these matters are
also discussed in Note 13. The consolidated financial statements do not include
any adjustments that might result from the outcome of these uncertainties.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
National Residential Properties, Inc. and Subsidiaries as of September 30, 2001,
and the consolidated results of its statements of operations, changes in
stockholders' equity, and cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of America.


                                      F-2
<PAGE>

The consolidated balance sheet of National Residential Properties, Inc. and
Subsidiaries as of September 30, 2000, and the related consolidated statements
of operations, changes stockholders' equity and cash flows for the year then
ended were audited by Baum and Company, P.A. Baum and Company, P.A. issued an
unqualified opinion on those consolidated financial statements dated December
18, 2001 as restated by them.

/s/ BAGELL, JOSEPHS & COMPANY, L.L.C.
---------------------------------------
BAGELL, JOSEPHS & COMPANY, L.L.C.
Gibbsboro, New Jersey

January 14, 2002







                                      F-3
<PAGE>

             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                           SEPTEMBER 30, 2001 AND 2000

                                     ASSETS
<TABLE>
<CAPTION>

                                                           2001            2000
                                                        ----------      ----------
<S>                                                     <C>             <C>
Cash and cash equivalents ........................      $   80,764      $  137,990
Inventory - Real Estate Holdings .................       8,738,514       3,321,090
Other assets .....................................          30,844          25,287
Fixed assets, net of depreciation ................          11,803          45,395
Prepaid management fee ...........................         262,258         302,000
Loan receivable - Officers .......................         261,167            --
Mortgage receivable - and other ..................          58,107          55,344
Deposits .........................................           5,375            --
Goodwill .........................................            --             1,219
Organizational costs, net ........................             718             495
                                                        ----------      ----------
TOTAL ASSETS .....................................      $9,449,550      $3,888,820
                                                        ==========      ==========



</TABLE>










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


                                      F-4
<PAGE>




             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES

                     CONSOLIDATED BALANCE SHEETS (CONTINUED)
                           SEPTEMBER 30, 2001 AND 2000


                      LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>

                                                                          2001           2000
                                                                      -----------    -----------


<S>                                                                   <C>            <C>
LIABILITIES
  Accounts payable and accrued expenses ...........................   $    92,709    $    72,004
  Notes and mortgages payable .....................................     5,671,747      1,600,233
                                                                      -----------    -----------
          TOTAL LIABILITIES .......................................     5,764,456      1,672,237
                                                                      -----------    -----------

STOCKHOLDERS' EQUITY
  Common Stock, $.001 Par Value; authorized 1,500,000,000 and
    100,000,000 shares on September 30, 2001 and 2000 respectively,
    issued and outstanding 1,095,300,351 and 44,161,866 shares on
    September 30, 2001 and 2000, respectively .....................     1,095,299         44,161
  Common Stock Class A Voting, $.001 Par Value; authorized
    2,000,000 shares on September 30, 2001 and 2000, respectively,
    issued and outstanding 1,000,000 shares on
    September 30, 2001 and 2000, respectively .....................         1,000          1,000
  Additional paid-in capital ......................................     4,607,597      3,606,580
  Deficit .........................................................    (2,018,802)    (1,435,158)
                                                                      -----------    -----------
      TOTAL STOCKHOLDERS' EQUITY ..................................     3,685,094      2,216,583
                                                                      -----------    -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ........................   $ 9,449,550    $ 3,888,820
                                                                      ===========    ===========


</TABLE>





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


                                      F-5
<PAGE>

             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENT OF OPERATIONS
                 FOR THE YEARS ENDED SEPTEMBER 30, 2001 AND 2000

<TABLE>
<CAPTION>

                                                          2001                2000
                                                    -------------       -------------
<S>                                                 <C>                 <C>
OPERATING REVENUES ...........................      $      76,764       $      62,500
                                                    -------------       -------------
OPERATING EXPENSES

   Management Fees ...........................            152,098
   Professional Fees and Compensation Expenses            290,586
   Advertsing ................................             35,641
   Travel and Automobile Expense .............             24,006
   Telephone and Utilities ...................             13,834
   Real Estate Taxes and Property Maintenance              16,441
   Office and Administrative Expenses ........             96,609
   Miscellaneous .............................             43,170
   Depreciation ..............................              2,660
                                                    -------------       -------------
          TOTAL OPERATING EXPENSES ...........            675,045
                                                    -------------       -------------
LOSS BEFORE OTHER INCOME (EXPENSES) ..........           (598,281)

OTHER INCOME (EXPENSES)
   Interest Income ...........................             17,987              45,121
   Interest Expense ..........................               --               (19,927)
                                                    -------------       -------------
          TOTAL OTHER INCOME (EXPENSES) ......             17,987              25,194

NET LOSS BEFORE PROVISION
  FOR INCOME TAXES ...........................                  0            (570,762)
   Provision for Income Taxes ................                  0              29,005
                                                    -------------       -------------
NET LOSS APPLICABLE TO COMMON SHARES .........      $    (580,294)      $    (541,757)
                                                    =============       =============
NET LOSS PER BASIC AND DILUTED SHARES ........                  0       $      0.0265
                                                    =============       =============
WEIGHTED AVERAGE NUMBER OF
  COMMON SHARES OUTSTANDING ..................        537,373,506          28,951,990
                                                    =============       =============
</TABLE>


                 The accompanying notes are an integral part of
                     the consolidated financial statements



                                      F-6
<PAGE>


             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                           SEPTEMBER 30, 2001 AND 2000

<TABLE>
<CAPTION>
                                                                                                   CLASS A
                                                             COMMON STOCK                        COMMON STOCK
                                                     -------------------------------   -------------------------------
                                                         SHARES           AMOUNT           SHARES            AMOUNT
                                                     --------------   --------------   --------------   --------------

<S>                                                       <C>         <C>                   <C>         <C>
September 30, 1999 ...............................        7,654,773   $        7,655        1,000,000   $        1,000

Shares issued for services rendered ..............          785,605              785             --               --

Shares issued for acquisition of companies .......        1,750,000            1,750             --               --

Shares contributed to charity ....................           25,000               25             --               --

Additional shares issued from debenture conversion       33,946,488           33,946             --               --

Net loss .........................................             --               --               --               --
                                                     --------------   --------------   --------------   --------------

September 30, 2000 ...............................       44,161,866           44,161        1,000,000            1,000

Shares issued from debenture conversion ..........    1,051,138,485        1,051,138             --               --

Net loss .........................................             --               --               --               --
                                                     --------------   --------------   --------------   --------------

                                                      1,095,300,351   $    1,095,299        1,000,000   $        1,000
                                                     ==============   ==============   ==============   ==============

</TABLE>


<TABLE>
<CAPTION>

                                                       ADDITIONAL
                                                        PAID-IN         ACCUMULATED
                                                         CAPITAL           DEFICIT           TOTALS
                                                     --------------    --------------    --------------

<S>                                                  <C>               <C>               <C>
September 30, 1999 ...............................   $    1,434,490    $     (526,355)   $      916,790

Shares issued for services rendered ..............          133,385              --             134,170

Shares issued for acquisition of companies .......          318,750              --             320,500

Shares contributed to charity ....................            1,225              --               1,250

Additional shares issued from debenture conversion        1,718,730              --           1,752,676

Net loss .........................................               --          (908,803)         (908,803)
                                                     --------------    --------------    --------------

September 30, 2000 ...............................        3,606,580        (1,435,158)        2,216,583

Shares issued from debenture conversion ..........        1,001,017              --           2,052,155

Net loss .........................................             --            (583,644)         (583,644)
                                                     --------------    --------------    --------------

                                                     $    4,607,597    $   (2,018,802)   $    3,685,094
                                                     ==============    ==============    ==============

</TABLE>



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




                                      F-7
<PAGE>

             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED SEPTEMBER 30, 2001 AND 2000



<TABLE>
<CAPTION>

                                                                         2001           2000
                                                                    -----------    -----------
<S>                                                                 <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss .....................................................   $  (583,644)   $  (908,803)
                                                                    -----------    -----------
   Adjustments to reconcile net loss to net cash
     used in operating activities

     Depreciation ...............................................         3,656         20,171
     Common stock issued for services and contributions .........          --          135,420
     Write down of acquisitions .................................          --          318,750
     Distribution of property and equipment .....................        31,147           --

   CHANGES IN ASSETS AND LIABILITIES
     (Increase) in inventory - real estate holdings .............    (5,417,424)    (2,011,490)
     Decrease in prepaid expenses and other assets ..............        28,595          3,873
     Increase (Decrease) in accounts payable and accrued expenses        20,705        (34,359)
                                                                    -----------    -----------
      Total adjustments .........................................    (5,333,321)    (1,567,635)
                                                                    -----------    -----------
          NET CASH USED IN OPERATING ACTIVITIES .................    (5,916,965)    (2,476,438)
                                                                    -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES
     (Acquisition) Disposal of fixed assets .....................          --          (15,847)
     Goodwill generated from acquisition ........................          --           (1,219)
     Loans to officers ..........................................      (261,167)          --
     (Increase) in mortgage and notes receivable ................        (2,763)       (42,986)
                                                                    -----------    -----------
          NET CASH USED IN INVESTING ACTIVITIES .................      (263,930)       (60,052)
                                                                    -----------    -----------
</TABLE>


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



                                      F-8
<PAGE>


             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED SEPTEMBER 30, 2001 AND 2000



<TABLE>
<CAPTION>

                                                                     2001           2000
                                                                 -----------    -----------

<S>                                                                <C>              <C>
CASH FLOWS FROM FINANCING ACTIVITIES
     Proceeds from debentures ................................     2,052,155        812,990
     Net proceeds from issuance of notes and mortgages payable     4,071,514        950,233
     Decrease in subscription receivable .....................          --          500,000
                                                                 -----------    -----------
          NET CASH PROVIDED BY FINANCING ACTIVITIES ..........     6,123,669      2,263,223
                                                                 -----------    -----------

NET DECREASE IN CASH AND CASH EQUIVALENTS ....................       (57,226)      (273,267)

CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR ................       137,990        411,257
                                                                 -----------    -----------
CASH AND CASH EQUIVALENTS - END OF YEAR ......................   $    80,764    $   137,990
                                                                 ===========    ===========


SUPPLEMENTAL DISCLOSURE OF CASH FLOW
   INFORMATION:

CASH PAID DURING THE YEAR FOR:
     Interest expense ........................................   $      --      $   104,135
                                                                 ===========    ===========

SUPPLEMENTAL DISCLOSURE OF NONCASH
   FINANCING ACTIVITIES:
     Issuance of common stock for:
        Acquisitions .........................................   $      --      $   320,500
                                                                 ===========    ===========
        Services .............................................   $      --      $   134,170
                                                                 ===========    ===========
        Contributions ........................................   $      --      $     1,250
                                                                 ===========    ===========
        Debt conversions .....................................   $ 2,052,155    $ 1,752,676
                                                                 ===========    ===========
     Distribution of property and equipment as compensation ..   $    31,147    $      --
                                                                 ===========    ===========
</TABLE>


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




                                      F-9
<PAGE>

             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2001 AND 2000

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION

         National Residential Properties, Inc., was originally incorporated in
         the State of Nevada on October 18, 1971 under the name of Mister Las
         Vegas, Inc. On December 15, 1994, the Company merged with a privately
         owned company, National Rehab Properties, Inc., a Florida corporation
         formed on October 1, 1993. The surviving Nevada corporation changed its
         name to National Rehab Properties, Inc. and became authorized to
         conduct business in the State of Florida on August 17, 1995. On
         September 13, 2000, the Company changed its name to National
         Residential Properties, Inc.

         The Company's business is residential real estate development and
         building construction services. From 1993 to 1999 the Company's
         business concentrated in investing in and revitalizing single family
         homes in established older residential neighborhoods in urban areas.
         The Company buys either single unit vacant properties and builds single
         family homes or it buys abandoned homes and completes all renovations
         to the home followed by a sale of the home. During 1999, while
         retaining its efforts in the renovation of urban single family homes as
         one aspect of the business, the Company entered a second phase of
         business, the development, construction and ownership of multi-family
         housing projects.

         Beginning in the fiscal year ending September 30, 1999, the Company
         initiated a program of acquisition of properties suitable for
         development as multi-family housing or multiple unit single family
         development tracts. Since 1999, the Company has purchased eleven tracts
         with the intention of building from 60 to 72 apartment units on each
         tract and one twenty acre citrus grove for single family home
         development. In April 2000, the Company acquired Encore Services, Inc.,
         a bonded general construction contractor.

         On May 4, 2001, the Company's wholly-owned subsidiary, Connecticut
         Acquisition Corp. No. 1, entered into a joint venture to develop a
         parcel of land pursuant to a Land Development Agreement located in
         Hebron, Connecticut, as a Senior Adult Community with Mr. Nathan Kahn
         and various entities controlled by Mr. Nathan Kahn. The objective of
         this development will be to either sell developed lots to builders, or
         erecting dwellings themselves.

         Mr. Kahn's entities had obtained options to purchase and develop other
         properties, and the Kahn entities advised that they would need
         additional funding to pay for the expenses in connection with the
         obtaining and maintenance of these options.


                                      F-10
<PAGE>

             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           SEPTEMBER 30, 2001 AND 2000

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION (CONTINUED)

         Pursuant to the Land Development Agreement, Connecticut Acquisition
         Corp. No. 1 advanced funds to the Kahn entities earmarked for a
         specific option and specific set of itemized expenses related to a
         specific property and for each option in question to serve collateral
         for the funds advanced by Connecticut Acquisition Corp. No.1. While the
         Land Development Agreement contemplates that the advance will be repaid
         when the parties obtain financing to acquire and develop that
         particular parcel of land, nevertheless, the obligation to repay the
         advance came due in August, 2001, and, that option, and all attendant
         rights thereto, reverted to, and became the property of, Connecticut
         Acquisition Corp. No. 1.

         The Land Development Agreement called for Connecticut Acquisition Corp.
         No. 1 to fund the initial costs of acquisition and development, and,
         after deduction of expenses from gross revenues, profits will be
         divided 50-50 between the parties.

         In contemplation of the financing of this project, on April 12, 2001,
         Connecticut Acquisition Corp. No. 1, obtained a loan from accredited
         investors evidenced by its 8% Series A $1,000,000 Senior Subordinated
         Convertible Redeemable Debentures, together with underlying shares of
         Connecticut Acquisition Corp. No. 1's Class A Common Stock, Par Value
         $.001, into which Connecticut Acquisition Corp. No. 1 Debentures may be
         convertible from time to time.

         On May 8, 2001, following the acquisition of the parcel of land,
         Connecticut Acquisition Corp. No. 1 was merged into the Company. As a
         result, all rights and obligations of Connecticut Acquisition Corp. No.
         1 will ensure to the benefit of and be binding upon the Company.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         PRINCIPLES OF CONSOLIDATION

         The consolidated financial statements include the accounts of the
         Company and all of its wholly-owned subsidiaries. All significant
         intercompany accounts and transactions have been eliminated in
         consolidation.


                                      F-11
<PAGE>

             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           SEPTEMBER 30, 2001 AND 2000

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         (CONTINUED)

         USE OF ESTIMATES

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

         REVENUE AND COST RECOGNITION

         Sales of real estate are generally recognized under the full accrual
         method. Under that method, gain is not recognized until the
         collectibility of the sales price is reasonably assured and the
         earnings process is virtually complete. When a sale does not meet the
         requirements for income recognition a gain is deferred until those
         requirements are met.

         Acquisition and other direct costs, interest, and other indirect costs
         related to acquisition and development of lots are capitalized.
         Capitalized costs are allocated based on the relative sales value of
         each lot. The capitalized costs are charged to earnings when the
         relative revenue is recognized.

         CASH AND CASH EQUIVALENTS

         The Company considers all highly liquid debt instruments and other
         short-term investments with an initial maturity of three months or less
         to be cash equivalents.

         The Company maintains cash and cash equivalent balances at several
         financial institutions which are insured by the Federal Deposit
         Insurance Corporation up to $100,000.

         FIXED ASSETS

         Equipment is stated at cost. Depreciation is computed primarily using
         the straight-line method over the estimated useful life of the assets.

         Office Equipment                                      3 to 5 Years





                                      F-12
<PAGE>

             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           SEPTEMBER 30, 2001 AND 2000

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         (CONTINUED)

         RECLASSIFICATIONS

         Certain amounts for the year ended September 30, 2000, have been
         reclassified to conform with the presentation of the September 30, 2001
         amounts. The reclassifications have no effect on net income for the
         year ended September 30, 2000.

         INCOME TAXES

         The income tax benefit is computed on the pretax loss based on the
         current tax law. Deferred income taxes are recognized for the tax
         consequences in future years of differences between the tax basis of
         assets and liabilities and their financial reporting amounts at each
         year-end based on enacted tax laws and statutory tax rates.

         FAIR VALUE OF FINANCIAL INSTRUMENTS

         The carrying amount reported in the consolidated balance sheets for
         cash and cash equivalents, loans receivable, accounts payable and
         accrued expenses approximate fair value because of the immediate or
         short-term maturity of these financial instruments. The carrying amount
         reported for notes and mortgages payable approximates fair value
         because, in general, the interest on the underlying instruments
         fluctuates with market rates.

         ADVERTISING

         Costs of advertising are expensed as incurred. Advertising costs were
         $35,641 and $27,881 for the years ended September 30, 2001 and 2000,
         respectively.

         EARNINGS (LOSS) PER SHARE OF COMMON STOCK

         Historical net income (loss) per common share is computed using the
         weighted average number of common shares outstanding. Diluted earnings
         per share (EPS) includes additional dilution from common stock
         equivalents, such as stock issuable pursuant to the exercise of stock
         options and warrants. Common stock equivalents were not included in the
         computation of diluted earnings per share when the Company reported a
         loss because to do so would be antidilutive for periods presented.


                                      F-13
<PAGE>

             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           SEPTEMBER 30, 2001 AND 2000

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         EARNINGS (LOSS) PER SHARE OF COMMON STOCK (CONTINUED)

         The following is a reconciliation of the computation for basic and
         diluted EPS:

<TABLE>
<CAPTION>

                                                         SEPTEMBER 30,         SEPTEMBER 30,
                                                             2001                2000
                                                         -------------       -------------
<S>                                                      <C>                 <C>
         Net Loss .................................      $    (583,644)      $    (908,803)
                                                                             -------------

         Weighted-average common shares
             outstanding (Basic) ..................        537,373,506          18,306,334

         Weighted-average common stock equivalents:

                 Stock options ....................               --                  --
                 Warrants .........................               --                  --

         Weighted-average common shares
             outstanding (Diluted) ................        537,373,506          18,306,334

</TABLE>

         Options and warrants outstanding to purchase stock were not included in
         the computation of diluted EPS because inclusion would have been
         antidilutive.

NOTE 3 - INVENTORY - REAL ESTATE HOLDINGS

         Inventory consists of residential single family homes held for resale
         and land held for development and is valued at the lower of cost or
         market value. Cost includes acquisition, renovation and carrying costs
         specifically identified with each unit.

NOTE 4 - LOANS RECEIVABLE - OFFICERS

         Amounts represent advances to and from the officers of the Company. The
         balance at September 30, 2001 of $261,167, according to management,
         will be repaid in the company's second fiscal 2002 quarter.


                                      F-14
<PAGE>

             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           SEPTEMBER 30, 2001 AND 2000

NOTE 5 - MORTGAGES RECEIVABLE AND OTHER

         Represents amounts due from individuals who purchased property from the
         Company. Amounts due at September 30, 2001 and 2000 were $58,107 and
         $55,344, respectively.

NOTE 6 - FIXED ASSETS

         Fixed assets consist of the following at September 30, 2001 and 2000,
         respectively:

                                               2001           2000
                                              --------       --------

         Office Equipment ..............      $ 20,663       $ 75,343

         Accumulated Depreciation ......        (8,860)       (29,948)
                                              --------       --------

                                   Total      $ 11,803       $ 45,395
                                              ========       ========



         Depreciation expense was $2,660 and $17,887 for the years ended
         September 30, 2001 and 2000, respectively.

NOTE 7 - MORTGAGES AND NOTES PAYABLE
<TABLE>
<CAPTION>

<S>                                                                                      <C>            <C>
         Mortgages and notes payable consist of the following at September 30,
         2001 and 2000, respectively:                                                      2001           2000
                                                                                           ----           ----

         Construction loans payable with a bank, bearing interest at the greater
         of 8.25% or 1.5% above the prime lending rate. The monthly interest is
         added to the principal balance of the loans, that are due to be paid
         upon the sale of the real estate used as collateral for the loan. The
         loans payable are guaranteed by an officer of the Company.                        $979,535     $325,233

         Note payable with a bank, bearing interest at 12% and payable in full
         plus accrued interest on June 29, 2000, which was extended through
         June 29, 2005.                                                                     400,000      500,000


</TABLE>



                                      F-15
<PAGE>


             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           SEPTEMBER 30, 2001 AND 2000

NOTE 7 - MORTGAGES AND NOTES PAYABLE (CONTINUED)

<TABLE>
<CAPTION>
                                                                                           2001         2000
                                                                                           ----         ----

<S>                                                                                      <C>            <C>
         Note payable with a bank, bearing interest at 12% payable monthly, and
         due upon the sale of the underlying real estate or December 9, 2002.
         The note was secured by the real estate and was guaranteed by an
         officer of the Company.                                                         $     --       $100,000

         Note payable with a bank, bearing interest at 9.50%, secured by real
         estate and due August 2, 2001, which at that time was refinanced with
         another bank.                                                                    675,000        675,000

         Construction note payable with a bank, bearing interest at a rate of
         7.625%, payable monthly through February 2002 at which time payments of
         interest and principal are due through January 1, 2042.                        2,492,212             --

         Construction note payable with a bank, bearing interest at prime plus
         1.5%, payable monthly, and due upon the sale of the underlying real
         estate or January 1, 2003. The note is secured by the real estate.               600,000             --

         Construction notes payable with a bank, bearing interest at rates
         between 7 and 14%, payable monthly, secured by the underlying real
         estate.                                                                          525,000             --
                                                                                       ----------     ----------
                           Total                                                       $5,671,747     $1,600,233
                                                                                       ==========     ==========
</TABLE>

         The following schedule represents the maturities of the mortgages and
         notes payable for the next five years and in the aggregate.

         SEPTEMBER 30,
         -------------

             2002                              $2,594,535
             2003                                 630,000
             2004                                  30,000
             2005                                  30,000
             2006                                  30,000
             Thereafter                         2,357,212
                                               ----------
                                               $5,671,747
                                               ==========


                                      F-16
<PAGE>

             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           SEPTEMBER 30, 2001 AND 2000

NOTE 8 - COMMITMENTS AND CONTINGENCIES

         RELATED PARTY TRANSACTIONS

         PREPAID MANAGEMENT FEES

         Pursuant to a "Prepaid Management Agreement" between the Company and
         its President, dated September 29, 2000, the Company prepaid management
         fees to the President in the amount of $302,000. This fee is to be paid
         back by the President commencing January 1, 2001 and for the next five
         years, the first $60,400, plus an additional amount equal to the
         accrued interest on the unearned portion of the balance, at a rate of
         8% per annum, of the President's annual compensation from the Company
         will be withheld by the Company and applied against the principal
         amount owed to the Company. This agreement is made a part of any
         existing agreements, whether oral or written or compensation between
         the Company and the President, as well as any future compensation
         agreements between the Company and its President.

         RELATED PARTY TRANSACTIONS

         OFFICER COMPENSATION AND BENEFITS

         Officers of the Company were paid an aggregate of $89,307, which
         includes automobiles with a book value of approximately $ 31,000 for
         the year ended September 30, 2001.

         LEASES

         A company wholly-owned by a minority shareholder of Encore Services,
         Inc. provides office space to the Company.

NOTE 9 - ACQUISITIONS

         On February 10, 2000, the Company acquired MAS XV Acquisitions Corp.
         for 1,500,000 shares of its common stock shares. This acquisition was
         handled as a purchase method of accounting for business combination

         On April 1, 2000, the Company acquired 80% of Encore Services, Inc. for
         250,000 common shares of its stock.

         On May 8, 2001, the Company merged with Connecticut Acquisition Corp.
         No. 1 upon the acquisition of a parcel of land in Hebron, Connecticut.





                                      F-17
<PAGE>

             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           SEPTEMBER 30, 2001 AND 2000

NOTE 10 - STOCKHOLDERS' EQUITY

          As of September 30, 2001 and 2000, there were 1,500,000,000 and
          100,000,000 authorized shares, and 1,095,300,351 and 44,161,866 issued
          and outstanding shares of the Company's common stock with a par value
          of $.001.

          As of September 30, 2001 and 2000, there were 2,000,000 authorized
          shares and 1,000,0000 issued and outstanding shares of the Company's
          Class A Voting common stock with a par value of $.001.

          The Company got approval to increase the authorized shares to
          1,500,000,000 during the quarter ended June 30, 2001 from 250,000,000
          (October 10, 2000). The Company issued 1,188,672,667 shares of its
          common stock, and had 137,534,182 shares cancelled during the year
          ended September 30, 2001. These majority shares were issued from the
          conversion of the debentures issued with respect to the transaction
          with Connecticut Acquisitions Corp. No. 1.

NOTE 11 - INCOME TAXES

          The net deferred tax assets in the accompanying consolidated balance
          sheets include the following components at September 30, 2001 and
          2000:

                                                   2001            2000
                                                ---------       ---------

          Deferred tax assets ............      $ 540,000       $ 340,000
          Deferred tax valuation allowance      $ (40,000)       (340,000)
                                                ---------       ---------

          Net deferred tax assets ........      $     -0-       $     -0-
                                                =========       =========



          Due to the uncertainty of utilizing the approximate $1,500,000 in net
          operating losses, and recognizing the deferred tax assets, an
          offsetting valuation allowance has been established.

NOTE 12 - SUBSEQUENT EVENT

          On October 30, 2001, the Company, assigned to Senior Adult Lifestyle,
          Inc., its interest in the land being developed in Hebron, Connecticut.
          The Company should certain conditions of the agreement be met, could
          receive up to two million dollars for the assignment.


                                      F-18
<PAGE>

             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           SEPTEMBER 30, 2001 AND 2000

NOTE 13 - GOING CONCERN

          As shown in the accompanying consolidated financial statements, the
          Company incurred substantial net losses for the years ended September
          30, 2001 and 2000. There is no guarantee whether the Company will be
          able to generate enough revenue and/or raise capital to support those
          operations. This raises substantial doubt about the Company's ability
          to continue as a going concern.

          Management also states that they are confident that they can improve
          operations and raise the appropriate funds to continue developing the
          properties being acquired.

          The consolidated financial statements do not include any adjustments
          that might result from the outcome of these uncertainties.


                                      F-19