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

                                   FORM 10-KSB

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                                 ---------------

                  FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2002

                         Commission File Number 0-27159
                                  ------------

                      NATIONAL RESIDENTIAL PROPERTIES, INC.
             (Exact Name of Registrant as Specified in its Charter)

            NEVADA                                              65-0439467
(State or Other Jurisdiction                              (I.R.S. Employer
of Incorporation)                                         Identification Number)

                                  6915 RED ROAD
                                   SUITE #222
                           CORAL GABLES, FLORIDA 33143
                                 (305) 666-6565

               (Address, including zip code, and telephone number,
                  of registrant's principal executive offices)
                                                   ------------

           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

         Check whether the issuer (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 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 |_|

         Check if there is no disclosure of delinquent filers pursuant to Item
405 of Regulation S-B is contained herein, and will not 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. X

         Issuer's revenues for its most recent fiscal year:  $3,202,283.

         The aggregate market value of voting stock held by non-affiliates of
the registrant as of January 8, 2004 was $383,954.60 (based on the last
reported sale price of $0.0002 per share on January 8, 2004).

         The number of shares of the registrant's common stock outstanding as of
January 8, 2004 was 1,938,566,046.
--------------------------------------------------------------------------------
<PAGE>




                      NATIONAL RESIDENTIAL PROPERTIES, INC.
                      FOR THE YEAR ENDED SEPTEMBER 30, 2002
<TABLE>
<CAPTION>
                                TABLE OF CONTENTS


<S>                                                                                                 <C>
PART I    ...........................................................................................3
          Restatement Information....................................................................3
          Background Capitalization Information......................................................4
          ITEM 1.  Business..........................................................................6
          RISK FACTORS..............................................................................12
          ITEM 2.  Properties.......................................................................14
          ITEM 3.  Legal Proceedings................................................................14
          ITEM 4.  Submission of Matters to a Vote of Security Holders..............................15
PART II   ..........................................................................................16
          ITEM 5.  Market for Registrant's Common Equity and Related Stockholder Matters............16
          ITEM 6.  Management's Discussion and Analysis or Plan of Operation........................18
          ITEM 7.  Financial Statements.............................................................24
          ITEM 8.  Changes in and Disagreements with Accountants on Accounting and Financial
                   Disclosure.......................................................................40
          ITEM 8A. Controls and Procedures..........................................................42
          ITEM 9.  Directors, Executive Officers, Promoters and Control Persons; Compliance With
                   Section 16(a) of the Exchange Act................................................42
          ITEM 10. Executive Compensation...........................................................43
          ITEM 11. Security Ownership of Certain Beneficial Owners and
                   Management and Related
                   Stockholder Matters..............................................................44
          ITEM 12. Certain Relationships and Related Transactions...................................45
          ITEM 13. Exhibits and Reports on Form 8-K.................................................45
          ITEM 14. Principal Accountant Fees and Services...........................................46
</TABLE>



         THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES. SUCH STATEMENTS ARE BASED ON CURRENT EXPECTATIONS, ASSUMPTIONS,
ESTIMATES AND PROJECTIONS ABOUT THE COMPANY AND ITS INDUSTRY. FORWARD-LOOKING
STATEMENTS ARE SUBJECT TO KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER
FACTORS THAT MAY CAUSE ACTUAL RESULTS, LEVELS OF ACTIVITY, PERFORMANCE,
ACHIEVEMENTS AND PROSPECTS TO BE MATERIALLY DIFFERENT FROM THOSE EXPRESSED OR
IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THE COMPANY UNDERTAKES NO OBLIGATION
TO UPDATE PUBLICLY ANY FORWARD-LOOKING STATEMENTS FOR ANY REASON EVEN IF NEW
INFORMATION BECOMES AVAILABLE OR OTHER EVENTS OCCUR IN THE FUTURE.






                                       2
<PAGE>
                                     PART I
                                     ------

RESTATEMENT INFORMATION

         National Residential Properties, Inc., a Nevada corporation (the
"COMPANY"), in consultation with its independent accountants, is presenting its
consolidated financial statements for its fiscal year ended September 30, 2002
in this annual report on Form 10-KSB. The effect of the presentation included in
this annual report is to restate financial information presented for the periods
ended September 30, 2001, December 31, 2001 and March 31, 2002. As the effects
of this restatement are being reflected in this annual report, the Company does
not plan to file an amended annual report for the fiscal year ended September
30, 2001 or amended quarterly reports for the periods ended December 31, 2001
and March 31, 2002. Also, because the Company is not restating the financial
information included in its quarterly report on Form 10-QSB for the period ended
June 30, 2002, that report will not be amended either. The following is a
summary of the cumulative effect of the restatement of the Company's net loss
for the periods ended December 31, 2001 and March 31, 2002 as well as for the
year ended September 30, 2001:

NET LOSS FOR THE YEAR ENDED SEPTEMBER 30, 2001

     NET LOSS, AS PREVIOUSLY STATED                               $(583,644)

          Amortization of discount on debenture conversions      (1,129,866)
          Legal fees - debentures                                   (60,000)
          Fees - investors                                         (640,865)
                                                               -------------

     NET LOSS, AS RESTATED                                      $(2,414,375)
                                                               =============

NET LOSS FOR THE PERIOD ENDED DECEMBER 31, 2001

     NET LOSS, AS PREVIOUSLY STATED                                $(47,655)

          Amortization of discount on debenture conversions        (100,480)
          Interest expense - debentures                              (4,922)
          Fees - investors                                          (68,735)
          Revenue - sales of property                                90,762
          Cost of sales - sales of property                         (40,963)
          Reversal of gain on sale of property                      (15,741)
                                                               -------------

     NET LOSS, AS RESTATED                                        $(187,734)
                                                               =============












                                       3
<PAGE>
<TABLE>
<CAPTION>
NET LOSS FOR THE PERIOD ENDED MARCH 31, 2002

<S>                                                                         <C>
THREE MONTHS ENDED MARCH 31, 2002
    NET LOSS, AS PREVIOUSLY STATED                                          $(1,106,453)

           Amortization of discount on debenture conversions
           Interest expense - debentures                                         (5,887)
           Additional management compensation                                  (372,851)
           Reclassification of unrealized losses on investment securities       804,952
                                                                            ------------

    NET LOSS, AS RESTATED                                                     $(680,239)
                                                                            ============

SIX MONTHS ENDED MARCH 31, 2002
    NET LOSS, AS PREVIOUSLY STATED                                          $(1,154,108)

           Amortization of discount on debenture conversions                   (100,480)
           Interest expense - debentures                                        (10,809)
           Fees - investors                                                     (68,735)
           Revenue - sales of property                                           90,762
           Cost of sales - sales of property                                    (40,963)
           Reversal of gain on sale of property                                 (15,741)
           Additional management compensation                                  (372,851)
           Reclassification of unrealized losses on investment securities       804,952
                                                                            ------------

    NET LOSS, AS RESTATED                                                     $(867,973)
                                                                            =============
</TABLE>

BACKGROUND CAPITALIZATION INFORMATION

         The Company's original Articles of Incorporation (the "ARTICLES")
authorized the Company to issue 1 million shares of the Company's common stock
("NRES COMMON STOCK"). After its incorporation, the following events occurred:
(i) in December of 1994, the Company attempted to effect a 2 for 1 stock split
(the "1994 STOCK SPLIT"); (ii) in January of 1999, the Company attempted to
effect a 1 for 10 reverse stock split (the "1999 REVERSE STOCK SPLIT"); (iii)
between the date of its incorporation and January of 2001, the Company believed
it increased the number of shares it was authorized to issue from 1 million to
40 million shares of NRES Common Stock (the "40 MILLION SHARE INCREASE"); (iv)
in October of 2000, the Company attempted to increase the number of shares the
Company was authorized to issue from 40 million to 250 million shares of NRES
Common Stock (the "250 MILLION SHARE INCREASE"); (v) in January of 2001, the
Company attempted to increase the number of shares it was authorized to issue
from 250 million to 750 million shares of NRES Common Stock and effected a 3 for
1 stock split (the "750 MILLION SHARE INCREASE"); and (vi) in June of 2001, the
Company attempted to increase the number of shares it was authorized to issue
from 750 million to 1.5 billion shares of NRES Common Stock (the "1.5 BILLION
SHARE INCREASE", and together with the 1994 Stock Split, the 1999 Reverse Stock
Split, the 40 Million Share Increase, the 250 Million Share Increase and the 750
Million Share Increase, the "CAPITAL CHANGES"). The Company has since determined
that some or all of the Capital Changes were not validly adopted by the
Company's board of directors, approved by the Company's shareholders or filed
with the Secretary of State of the State of Nevada as required by the laws of
the State of Nevada. As a result, it appears the Company never has been
authorized to issue more than 1 million shares of NRES Common Stock. All shares
of NRES Common Stock issued in excess of 1 million shares appear to have been
issued in excess of the authorized amount.



                                       4
<PAGE>
         Given the foregoing, the Company has attempted to determine the
majority owners of the validly issued shares of NRES Common Stock. The Company
discovered that Richard Astrom and Pamela Gay Astrom, tenants by the entireties,
were issued a substantial block of shares shortly after the Company merged with
National Rehab Properties, Inc. These shares consisted of the majority of the
Company's validly issued outstanding shares. The Company's former transfer
agent's records show that these shares can be traced to such point that the
Company's former transfer agent and the Company severed relations, when they
were still held by Richard and Pamela Astrom, as tenants by the entireties. The
Company's current transfer agent's records confirm that these shares can be
traced from that time to the present, as they are still held by Richard and
Pamela Astrom, as tenants by the entireties, and have not been sold or otherwise
transferred. As such, Richard Astrom and Pamela Gay Astrom, as tenants by the
entireties, appear to hold a majority of the validly issued shares of NRES
Common Stock.

         After making the aforementioned factual findings, the Company proceeded
to retain local counsel in the State of Nevada to determine the effect of the
invalidity of some or all of the Capital Changes and to confirm the foregoing
analysis under Nevada law. The Company believes that Richard and Pamela Astrom,
as the valid owners of a majority of the Company's validly issued shares, can
amend the Articles to increase the Company's authorized number of shares. The
Company also believes that the issuance of NRES Common Stock in excess of the
authorized amount can be cured by the Company's board of directors. The Company
and Richard and Pamela Astrom intend to amend the Company's Articles and cure
and ratify any issuances of shares issued in excess of the authorized amount
after the Company's local counsel renders these opinions. The Company also
intends to file an Information Statement on Schedule 14C reflecting these
actions, as appropriate.

RECENT DEVELOPMENTS

     o   On August 2, 2002, Encore Builders filed suit against Conquistador
         Plaza, a subsidiary of the Company, in the Circuit Court of the
         Eleventh Judicial Circuit in Miami-Dade County, Florida seeking
         foreclosure of a mechanic's lien with respect to the Conquistador Plaza
         development. Conquistador Plaza retained Encore Builders to construct
         the Conquistador Plaza development. Encore Builders asserted
         Conquistador Plaza breached the January 30, 2001 construction contract
         between Encore Builders and Conquistador Plaza. Encore Builders
         asserted that $504,076.03 is due from Conquistador Plaza, Inc. and is
         seeking damages with interest, costs and attorneys fees. Encore
         Builders was bonded by Mountbatten Surety Company, Inc. On August 26,
         2003, the parties stipulated for a full settlement of all claims that
         existed amongst them. As part of the settlement, $55,000 was to be paid
         for the benefit of Encore Builders and $50,000 was to be paid to
         Mountbatten Surety Company, Inc.

     o   On December 13, 2002, the Company filed an Amended Complaint against
         the Town of Bay Harbor Islands and the Director of the Town of Bay
         Harbor Islands, Building and Zoning Department in the Circuit Court of
         the 11th Judicial Circuit for Miami-Dade County, Florida regarding (i)
         an application by the Company for zoning approval for a planned
         residential development overlay district and (ii) approval from the
         Town of Bay Harbor for the development of the Residences at Bay Harbor.
         Subsequent to the filing of this case, the Company filed a related
         complaint in the United States District Court for the Southern District
         of Florida. The federal claim was dismissed with prejudice on May 20,
         2003. In July 2003, the Company filed a Second Amended Complaint
         amending its complaint add state law counts that were previously
         asserted by the Company in its federal complaint.

     o   On November 1, 2002, the Company sold a vacant lot property located at
         3102 NW 61st Street in Miami, Florida for $20,000.

     o   On November 1, 2002, the Company sold a vacant lot property located at
         3000 NW 93rd Street in Miami Florida for $20,000. The sale was financed
         with a purchase money mortgage which was paid off in full in December
         2002.



                                       5
<PAGE>
     o   The Eagle Trace Subdivision is a 20 acre citrus grove in Vero Beach,
         Florida that the Company successfully rezoned to a single family
         development. The Company completed construction of 62 single-family
         lots in 2002 and sold the property to WBS Management & Acquisition Corp
         on July 30, 2003, pursuant to a Vacant Land Contract dated as of May
         29, 2003. The purchase price for the property was $1,980,000 and was
         determined through arms-length negotiations.

     o   The Company's July 31, 2002 contract to sell the Barcelona Apartments
         property to Antonio Sarmiento fell through. The Company is currently
         continuing its efforts to sell this property. The Company entered into
         an agreement for purchase and sale with Salomon Yuken to sell the
         Barcelona Apartments to Salomon Yuken on January 10, 2003. On May 8,
         2003, the Company and Salomon Yuken entered into an amendment to the
         agreement for purchase and sale. In June 2003, the Company and Salomon
         Yuken entered into a second amendment to the agreement for purchase and
         sale which, among other things, extended the closing date to October
         31, 2003. A $100,000 deposit has been paid to the Company by Salomon
         Yuken. The closing date was subsequently extended to January 2004.

     o   The Company concluded that the 1994 Stock Split, the 1999 Reverse Stock
         Split, the 40 Million Share Increase, the 250 Million Share Increase,
         the 750 Million Share Increase and the 1.5 Billion Share Increase may
         not have not been validly adopted by the Company's board of directors,
         approved by the Company's shareholders or filed with the Secretary of
         State of the State of Nevada, as required by the laws of the State of
         Nevada. As such, the Company believes it currently has only 1 million
         shares of NRES Common Stock authorized, a majority of which are owned
         by Richard and Pamela Astrom as tenants by the entireties.

ITEM 1.       BUSINESS

OVERVIEW

     o   National Residential Properties, Inc. was incorporated on October 18,
         1971, in the State of Nevada under the name of Mister Las Vegas, Inc.
         At the time of its incorporation, the Company was authorized to issue 1
         million shares of its common stock.

     o   Pursuant to a letter agreement executed on November 15, 1994, Richard
         Astrom, the then-president of National Rehab Properties, Inc., a
         Florida corporation formed on October 1, 1993, purchased 200,000 of the
         235,000 issued and outstanding shares of NRES Common Stock from the
         Company's then controlling stockholders. At this time the Company was
         authorized to issue 1 million shares of NRES Common Stock. On December
         15, 1994, the Company's board of directors approved the 1994 Stock
         Split, giving Richard Astrom 400,000 of the issued and outstanding
         shares of NRES Common Stock.

     o   On December 15, 1994, the Company entered into an agreement of merger
         with National Rehab Properties, Inc. On May 15, 1995, the merger became
         effective and National Rehab Properties, Inc. merged with and into the
         Company, with National Rehab Properties, Inc. remaining as the
         surviving entity. Pursuant to the agreement of merger, each share of
         National Rehab Properties, Inc.'s common stock was converted into one
         share of NRES Common Stock and each share of NRES Common Stock before
         the merger remained as one share of NRES Common Stock. At the time of
         the merger, Richard Astrom owned 1,000 shares of National Rehab
         Properties, Inc.'s common stock. After the merger, Richard Astrom and
         members of his family held 401,000 shares of the issued and outstanding
         shares of NRES Common Stock. The surviving entity subsequently changed
         its name to National Rehab Properties, Inc. and became authorized to
         conduct business in the State of Florida on August 17, 1995.

     o   In January of 1999, the Company attempted to effect the 1999 Reverse
         Stock Split.



                                       6
<PAGE>
     o   Between the date of its incorporation and January of 2001, the Company
         attempted to increase the number of shares the Company was authorized
         to issue from 1 million to 40 million shares of Common Stock pursuant
         to the 40 Million Share Increase.

     o   On June 17, 1999, pursuant to a joint action by written consent of the
         Company's shareholders and board of directors, the Company was given
         the authority to amend its Articles of Incorporation to authorize 2
         million shares of Class A Common Stock per share and to issue 1 million
         shares of its newly authorized Class A Common Stock to Christopher
         Astrom.

     o   In April of 2000, the Company acquired 80% of Encore Services, Inc.
         ("ENCORE SERVICES"). Encore Services served as the Company's general
         construction contractor, but was subsequently replaced by Encore
         Builders, Inc. ("ENCORE BUILDERS"), a former subsidiary (through March
         21, 2002) of Vacation Ownership Marketing, Inc. Vacation Ownership
         Marketing, Inc. ("VACATION OWNERSHIP") is an affiliate of the Company.
         Encore Builders was the general construction contractor for the
         Company's Conquistador Plaza project in Miami, Florida. Since the time
         Encore Builders replaced Encore Services as the general construction
         contractor of the Company's Conquistador Plaza project, to the time the
         Company severed its relationship with Encore Services in March of 2002,
         Encore Services has been inactive.

     o   In October of 2000, the Company changed its name to National
         Residential Properties, Inc. (the "NATIONAL RESIDENTIAL NAME CHANGE").

     o   In October of 2000, the Company attempted to effect the 250 Million
         Share Increase by filing a Certificate of Change in Number of
         Authorized Shares with the Nevada Secretary of State to increase its
         authorized number of shares from 40 million shares, to 250 million
         shares.

     o   In January of 2001, the Company attempted to effect the 750 Million
         Share Increase.

     o   On April 12, 2001, the Company's wholly-owned subsidiary, Connecticut
         Acquisition Corp. No. 1 ("CONNECTICUT ACQUISITION") obtained a loan
         from accredited investors evidenced by its 8% Series A Senior
         Subordinated Convertible Redeemable Debentures due April 12, 2003 (the
         "CONNECTICUT ACQUISITION DEBENTURES"), which were convertible from time
         to time into shares of Connecticut Acquisition's Class A common stock.
         On May 8, 2001, Connecticut Acquisition merged with and into the
         Company, with the Company remaining as the surviving entity. As a
         result, all rights and obligations of Connecticut Acquisition inured to
         the benefit of and became binding upon the Company. Pursuant to the
         merger, the Connecticut Acquisition Debentures were surrendered and
         canceled, and new debentures, identical to the Connecticut Acquisition
         Debentures (the "NRES CONNECTICUT DEBENTURES" and together with the
         NRES Connecticut Debentures, the "NRES DEBENTURES"), but convertible
         into authorized and unissued shares of NRES Common Stock, were issued
         by the Company to the holders of the Connecticut Acquisition
         Debentures.

     o   In June of 2001, the Company filed a Certificate of Amendment with the
         Nevada Secretary of State attempting to effect the 1.5 Billion Share
         Increase.

     o   On October 17, 2001, the Company's wholly-owned subsidiary, DC Power
         Products Acquisition Corp. ("DC POWER"), a Florida corporation,
         obtained a loan from accredited investors evidenced by its 8% Series A
         Senior Subordinated Convertible Redeemable Debentures due October 17,
         2003 (the "DC POWER DEBENTURES"), which were convertible from time to
         time into shares of DC Power's common stock. On November 1, 2001, DC
         Power merged with and into the Company with the Company remaining as
         the surviving entity. As a result, all rights and obligations of DC
         Power inured to the benefit of and became binding upon the Company.
         Pursuant to the merger, the DC Power Debentures were surrendered and
         canceled, and new debentures, identical to the DC Power Debentures (the
         "NRES DC POWER DEBENTURES"), but convertible into authorized and
         unissued shares of NRES Common Stock, were issued by the Company to the
         holders of the DC Power Debentures.

                                       7
<PAGE>
     o   The Company's Articles of Incorporation, as amended, currently provide
         that the Company is authorized to issue up to 1.5 billion shares of
         NRES Common Stock. However, the Company concluded that the 1994 Stock
         Split, the 1999 Reverse Stock Split, the 40 Million Share Increase, the
         250 Million Share Increase, the 750 Million Share Increase and the 1.5
         Billion Share Increase may not have been validly adopted by the
         Company's board of directors, approved by the Company's shareholders or
         filed with the Secretary of State of the State of Nevada, as required
         by the laws of the State of Nevada. As such, the Company believes it
         currently has only 1 million shares of NRES Common Stock authorized, a
         majority of which are owned by Richard and Pamela Gay Astrom, as
         tenants by the entireties. As such, all references to shares of NRES
         Common Stock do not reflect the Capital Changes referenced above
         (including any stock splits). o It has come to the Company's attention
         that, as a result of the conversion of the NRES Debentures into NRES
         Common Stock and the decrease in the price of NRES Common Stock,
         investors were entitled to more shares than authorized. As a result,
         the Company, as of January 8, 2004, has 1,938,566,046 shares of NRES
         Common Stock issued, which exceeds the number of authorized shares.
         Under the state law of Nevada, it may be possible that the transactions
         for shares in excess of the number of authorized shares will not be
         viewed as valid and the Company may be responsible for taking
         corrective action or compensating the stockholders.

o        The Company currently is a land development company that purchases
         zoned, but undeveloped real property, develops architectural plans for
         the real property, obtains building permits for the real property and
         subsequently sells the real property when it is ready for development.
         The Company has the potential to realize profit with these activities
         because developers who purchase the real property will not need to
         delay obtaining construction financing until they receive a building
         permit.

OPERATING HISTORY

         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 single family homes on them, or bought abandoned homes
which the Company then renovated and sold. During 1999, while retaining its
efforts in the renovation of urban single family homes as one aspect of its
business, the Company entered a second phase of business: the development,
construction and ownership of multifamily housing projects.

     Connecticut Properties

         On May 4, 2001, the Company's wholly-owned subsidiary, Connecticut
Acquisition, entered into a land development agreement with a Mr. Nathan Kahn
and various companies controlled by him (the "KAHN ENTITIES") to develop a
parcel of land located in Hebron, Connecticut (the "HEBRON PARCEL") as a senior
adult community. Thereafter, Connecticut Acquisition and the Kahn Entities hoped
to continue to develop the Hebron Parcel with a view toward either selling
developed lots to builders or erecting dwellings themselves. In addition, the
Kahn Entities had obtained options to purchase and develop other properties, and
the Kahn Entities advised they would need additional funding to pay their
expenses, such as engineering reports, zoning studies, and the like, in
connection with the obtaining and maintenance of these options.

         The land development agreement called for Connecticut Acquisition to
advance funds to the Kahn Entities earmarked for a specific option and a
specific set of itemized expenses related to a specific property and for each
option in question to serve as collateral for the funds advanced by Connecticut
Acquisition. If the advance is not timely repaid, that option, and all attendant
rights thereto, revert to, and become the property of, Connecticut Acquisition.

         The land development agreement provided that Connecticut Acquisition
would fund the initial costs of acquisition and development, and, after
deduction of expenses from gross revenues, profits would be divided 50-50
between Connecticut Acquisition and the Kahn Entities. On April 12, 2001, in
contemplation of the financing of this project, Connecticut Acquisition obtained
a loan from accredited investors evidenced by the Connecticut Acquisition
Debentures.



                                       8
<PAGE>
         From the proceeds of the sale of the Connecticut Acquisition Debentures
approximately (a) $160,000 was to be used by Connecticut Acquisition to acquire
the Hebron Parcel (together with a mortgage in the amount of $315,000 which
Connecticut Acquisition would assume) and (b) $680,000 was to be used by
Connecticut Acquisition to pay the expenses to be incurred with the development
of the other properties.

         On May 8, 2001, following the acquisition of the Hebron Parcel by
Connecticut Acquisition, Connecticut Acquisition merged with and into the
Company. As a result of the Merger, (a) the rights and obligations of
Connecticut Acquisition with respect to the land development agreement inured to
the benefit of and became binding upon the Company, and (b) the Connecticut
Acquisition Debentures were surrendered and canceled and the NRES Connecticut
Debentures, which were convertible into NRES Common Stock, were issued by the
Company to the holders of the Connecticut Acquisition Debentures.

         Pursuant to an agreement executed on December 26, 2001, made effective
as of October 31, 2001 and a statutory warranty deed dated October 31, 2001, the
Company sold all the rights, title and interest in (i) the Hebron Parcel and
(ii) contracts to purchase certain parcels of real property in Watertown, New
Milford, Granby and East Windsor, Connecticut to Senior Adult Lifestyle, Inc., a
subsidiary of Genesis Capital Corporation of Nevada ("GENESIS"), which may be
deemed an affiliate of the Company. The agreement contemplated that the Company
would assume two mortgages having an aggregate principal balance of $315,000 and
be issued 20 million shares of restricted Genesis common stock ("GENESIS COMMON
STOCK") based on a value of $.10 per share, which value was determined by the
average bid price of Genesis Common Stock during the week prior to the October
31, 2001 effective date. While the agreed upon consideration was $2 million, the
net effect of this transaction was to transfer $1.685 million in Genesis Common
Stock after deducting the aggregate principal balance on the mortgages. The
value of the assets sold has not been appraised by any independent party.

         On February 1, 2002, the Company received the 20 million shares of
Genesis Common Stock. If, at the earlier of (a) the expiration of three years
from the date of the conveyance, or (b) the time the Company has sold all of the
shares of Genesis Common Stock, the market value or gross sale proceeds realized
by the Company for the sale of the Genesis Common Stock is less than $2 million,
Genesis must issue the Company additional shares of Genesis Common Stock in an
amount based on the closing bid price of Genesis Common Stock as quoted on the
OTC Bulletin Board the day before the date of such additional shares are issued
to make up the difference between the market value or gross sale proceeds and $2
million. The value of the Genesis Common Stock on February 1, 2002 was $180,000.
The ability of the Company to realize $2 million from the sale of these assets
is dependent upon a number of factors, including, without limitation: (i) the
Company's ability to sell shares of Genesis Common Stock into the public markets
in accordance with the rules of the SEC; (ii) the trading volume of Genesis
Common Stock at the time or times the Company sells stock into the markets;
(iii) the operating results of Genesis and the market reaction to such operating
results; (iv) the number of shares of Genesis Common Stock tradable on the OTC
Bulletin Board; and (v) other factors affecting the market price of, and market
for, Genesis Common Stock. There can be no assurance the Company will realize $2
million from the development or sale of these assets, or that it will have a
fair market value of $2 million. Further, Genesis and the Company may be deemed
affiliates of one another 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.

     Conquistador Plaza

         In April 2000, the Company acquired 80% of the outstanding shares of
Encore Services, a general construction contractor. The remaining shares were
held by Braulio Gutierrez who, until March 2002, was a director of the Company
as well as a director and officer of Vacation Ownership, which may be deemed an
affiliate of the Company.

         Encore Builders, a subsidiary of Vacation Ownership whose president was
a director of the Company, was the primary construction company responsible for
construction projects at the Company's properties. However, the first of these
projects, the Conquistador Plaza project, was subject to substantial delays due
to the inability of Encore Builders to


                                       9
<PAGE>
meet completion schedules. The delays in construction caused the Company to
commence financing construction loan interest from its own resources, rather
than from construction loan proceeds, and to terminate Encore Builders as the
project's contractor. In March of 2002, the Company returned the shares of
Encore Services, the Company's wholly-owned inactive company.

         On April 18, 2002, the Company's subsidiary, Conquistador Plaza, Inc.
("CONQUISTADOR PLAZA") received a notice of default from its lender. The notice
cited violations of loan covenants by Conquistador Plaza, specifically relating
to the proceeds of the construction loan being insufficient to complete
construction of the Conquistador Plaza development. The notice of default also
cited the termination of work on the project for a period of more than 20 days.
As a consequence of the defaults, the lender accelerated and declared due and
payable Conquistador Plaza's entire indebtedness of $3,205,317.89, and advised
Conquistador Plaza that the lender would take action to protect its interest if
Conquistador Plaza did not return the entire balance by May 19, 2002. Although
the Company is not liable on the Conquistador Plaza loan, the Company has
invested substantial funds in the Conquistador Plaza development and would lose
its investment were the lender to foreclose on the lender's mortgage. In order
to repay the lender, Conquistador Plaza entered into a contract to sell the
Conquistador Plaza project. Litigation with Encore Builders is described in more
detail in "Legal Proceedings". The Company entered into a contract dated June
24, 2002, to sell this property to Shamrock at the Gables LLC for $3.5 million.
This transaction was completed on October 8, 2002.

CURRENT OPERATIONS

     Overview

         From 1999 until 2002, the Company's business focused on residential
real estate development and building construction services, and in particular on
acquiring properties suitable for development as multifamily housing or multiple
unit single family development tracts. During this time period, the Company
purchased four parcels of land for apartment construction and one 20-acre citrus
grove for subdivision development. These properties are described below in
detail along with the status of each project in light of the transition in the
Company's business plan.

     Granada Grand Apartments

         This property is in the Hazelton subdivision in Miami, Florida and was
purchased with the intention of constructing a 60-unit apartment building on it.
The land was purchased for $800,000. The Company intended for Encore Builders to
handle the construction of the building and obtained a mortgage commitment from
First Housing Development Corporation of Florida and was due to close on the
mortgage, but one day prior to closing, Encore Builders' construction
performance bond was revoked. Encore Builders attempted unsuccessfully to get
rebonded (including performing a merger with the Company's affiliate, Vacation
Ownership). In December of 2001, the Company entered into a contract with G&F
Corp. to sell the property as a vacant parcel. Although resale was not the
original goal of the purchase, it allowed the Company to realize a profit on the
purchase and sale of Granada Grand. The Company sold the five lots of real
property to G&F Corp. for $1,805,500 in cash on July 24, 2002. Mortgages and
closing expenses totaled $801,870. G&F Corp. assigned the purchase contract to
M.E.D. of Miami, LLC before closing on July 24, 2002. The Company received
$1,003,360 after satisfaction of the mortgages on this property and closing
costs. The Company never built on the property. The purchase price was
determined through arms-length negotiations.

     Eagle Trace Subdivision

         This property is a 20-acre citrus grove in Vero Beach, Florida that the
Company successfully rezoned to a single family development. The Company
completed construction of 62 single-family lots in 2002 and sold the property to
WBS Management & Acquisition Corp on July 30, 2003, pursuant to a Vacant Land
Contract dated as of May 29, 2003. The purchase price for the property was
$1,980,000 and was determined through arms-length negotiations.

     Barcelona Apartments

                                       10
<PAGE>
         On this property, located in Miami, Florida and purchased in 2000, the
Company intended to construct 70 rental apartments. Litigation relating to the
Barcelona Apartments is discussed under "Item 3 - Legal Proceedings". The
Company's July 31, 2002 contract to sell this property to Antonio Sarmiento fell
through. The Company is currently continuing its efforts to sell this property.
The Company entered into an agreement for purchase and sale with Salomon Yuken
to sell the Barcelona Apartments to Salomon Yuken on January 10, 2003. On May 8,
2003, the Company and Salomon Yuken entered into an amendment to the agreement
for purchase and sale. In June 2003, the Company and Salomon Yuken entered into
a second amendment to the agreement for purchase and sale which, among other
things, extended the closing date to October 31, 2003. A $100,000 deposit has
been paid to the Company by Salomon Yuken. The closing date was subsequently
extended to January 2004.

     Residences at Bay Harbor

         The Bay Harbor property, located on Bay Harbor Island, Florida, was
purchased by the Company in 2000, for $850,000. The Company intended to
construct a 15-story, 60 unit apartment building on the Bay Harbor property and
intended for Encore Builders to handle the construction. Immediately after
closing the acquisition of the land, the Company applied for a building permit,
but to this date, the permit has not been obtained due to various neighborhood
objections to construction. The initial business plan called for the building to
be sold as a condominium project for $18 million, with construction costs at
approximately $12 million. Due to the Company's relations with Encore Builders
and the difficulties with the building permit, the Company chose not to
construct the building and instead, on December 17, 2001, chose to resell the
land for $2.2 million to Dennis Almandares, an independent third party. The
transaction contemplated by this agreement did not close, and the Company
subsequently entered into a purchase and sale agreement dated as of May 20, 2002
to sell this property to Gateway Mortgage Bankers, Inc. for $2.3 million. The
Company expected to close this transaction in September of 2002 or upon the
issuance of a building permit by the city building department for a 15-story
building but was unable to obtain the required building permit. Subsequently,
the Company filed a complaint against the Town of Bay Harbor. See "Item 3 -
Legal Proceedings" for a discussion of the related litigation.

     Other Properties

         On July 31, 2001, the Company sold a property located at 3104 NW 61st
Street in Miami, Florida for $92,000. The Company received $29,953 after
satisfaction of the mortgage on this property and closing costs.

         On August 2, 2002, the Company sold a property located at 1521 NW 84th
Street in Miami, Florida for $95,000. The Company received $5,500 after
satisfaction of the mortgage on this property and closing costs.

         On November 1, 2002, the Company sold a vacant lot property located at
3102 NW 61st Street in Miami, Florida for $20,000.

         On November 1, 2002, the Company sold a vacant lot property located at
3000 NW 93rd Street in Miami Florida for $20,000. The sale was financed with a
purchase money mortgage.







                                       11
<PAGE>
                                  RISK FACTORS

         IN ADDITION TO OTHER INFORMATION IN THIS REPORT, YOU SHOULD CONSIDER
THE FOLLOWING RISK FACTORS CAREFULLY. THESE RISKS MAY IMPAIR THE COMPANY'S
OPERATING RESULTS AND BUSINESS PROSPECTS AS WELL AS THE MARKET PRICE OF THE
COMPANY'S COMMON STOCK.

RISKS RELATED TO LEGAL UNCERTAINTIES

     The Company Believes It Has Violated Nevada Corporate Law

         At the time of its incorporation, the Company had 1 million shares of
its common stock authorized. Since that time, the Company believed it had
effected the 1994 Stock Split, the 1999 Reverse Stock Split, the 40 Million
Share Increase, the 250 Million Share Increase, the 750 Million Share Increase
and the 1.5 Billion Share Increase. These changes in capital structure appear to
have not been validly adopted by the Company's board of directors, approved by
the Company's shareholders or filed with the Secretary of State of the State of
Nevada, as required by the laws of the State of Nevada. As such, it appears the
Company currently has only 1 million shares of NRES Common Stock authorized, and
the majority of the validly issued shares are held by Richard and Pamela Astrom
as tenants by the entireties. The Company believes a majority of the Company's
validly issued and outstanding shares and the board of directors can cure and
ratify the overissuances of stock and the aforementioned changes in capital
structure. Until that time, the Company may be liable to the holders of the NRES
Common Stock issued in excess of the authorized amount. The Company also
believes the issuance of Class A common stock to Christopher Astrom was not
authorized as an amendment to the Company's Articles of Incorporation was never
filed with the Secretary of State of the State of Nevada. The Company believes
the recipient of the unauthorized shares, Christopher Astrom, may have a claim
against the Company for damages, but it is unlikely that Christopher Astrom will
file a claim against the Company as he is an officer, director and principal
shareholder of the Company. Also, as discussed below, the Company's board of
directors and the holders of a majority of its validly issued shares intend to
authorize the creation of Class A common stock and issue shares to Christopher
Astrom.

         It has come to the Company's attention that, as a result of the
conversion of the debentures issued by the Company into NRES Common Stock,
coupled with the decrease in the trading price of NRES Common Stock, investors
were entitled to more shares of NRES Common Stock than is authorized under the
Company's Articles of Incorporation. As a result, as of January 8, 2004, the
Company has 1,938,566,046 shares of NRES Common Stock issued, which exceeds the
number of shares authorized. As stated above, the Company believes the holders
of a majority of the Company's validly issued and outstanding shares and the
board of directors can cure and ratify the overissuances of stock. If this
cannot be accomplished, the Company may be liable to the holders of the NRES
Common Stock issued in excess of the authorized amount in an amount equal to
1,937,566,046 shares (the number of shares issued in excess of the amount
authorized) multiplied by the price each such share was issued for (which ranged
from approximately $.0001 to $5.4 per share). The overissuance, together with
the Company's inability to increase its authorized number of shares, has
eliminated the Company's ability to raise capital through issuances of publicly
registered securities. The Company believes it will not be able to continue
trading NRES Common Stock or increase its capital resources through selling
publicly registered securities until the overissuance is cured and the Company
increases the authorized number of shares of NRES Common Stock. The Company may
also have violated other provisions of Nevada law with respect to the duties of
officers and directors to the Company and by not having sufficient shares
available upon the conversion of debentures issued by the Company.

     The Company May Face Litigation For Issuing Securities in Violation of
Section 5 of the Securities Act.

         Section 5 of the Securities Act prohibits the public sale of securities
absent an effective registration statement being filed with the SEC, unless an
exemption from registration applies. All shares of NRES Common Stock issued upon
conversion of the NRES Debentures were sold by holders of the NRES Debentures
following


                                       12
<PAGE>
conversion. This occurred during the period beginning on May 16, 2001 and ending
on July 13, 2001 for the NRES Connecticut Debentures and beginning on November
5, 2001 and ending on August 2, 2002 for the NRES DC Power Debentures. In
October of 2000, the Company issued debentures pursuant to a merger with 2217
Acquisition Inc., a Nevada corporation. These debentures were also converted
into NRES Common Stock. These transactions were performed in a manner thought to
be exempt from the registration requirements of Section 5 of the Securities Act.
However, the requirements of the exemptions relied on do not appear to have been
satisfied. As of the date of the filing of this report, because there have been
no actions filed against the Company based upon a violation of Section 5 and
because the statute of limitations has run, it is unlikely that these holders of
NRES Common Stock will file an action against the Company. However, any such
action maintained against the Company could have a substantial impact on the
Company and capital resources. The ramifications of this may entail a possible
rescission offer to the stockholders affected within the past year. Other
possible ramifications include an enforcement action by the SEC.

         As of the date of this report, the Company has not received $540,000 in
additional proceeds from the sale of the NRES DC Power Debentures and has
$199,202 in NRES DC Power Debentures outstanding. The Company has no plans to
issue additional NRES Debentures for any amounts not yet received and has no
plans to permit outstanding NRES Debentures to be converted.The Company May Have
Violated the Federal Proxy Rules

         At the time of its incorporation, the Company had 1 million shares of
its common stock authorized. Since that time, the Company believed it had
effected the 1994 Stock Split, the 1999 Reverse Stock Split, the 40 Million
Share Increase, the 250 Million Share Increase, the 750 Million Share Increase
and the 1.5 Billion Share Increase. These changes in capital structure appear to
have not been validly adopted by the Company's board of directors, approved by
the Company's shareholders or filed with the Secretary of State of the State of
Nevada, as required by the laws of the State of Nevada. The Company may have
violated the federal proxy rules by either (i) not obtaining the requisite
shareholder approval to effect these changes or (ii) not providing shareholders
with an Information Statement on Schedule 14C. As such, it appears the Company
has only 1 million shares of NRES Common Stock authorized. Until the Company's
board of directors and shareholders cure and ratify the overissuances of stock,
the 40 Million Share Increase, the 250 Million Share Increase, the 750 Million
Share Increase and the 1.5 Billion Share Increase and comply with the federal
proxy rules in doing so by properly obtaining shareholder approval, the Company
may be liable to the holders of the NRES Common Stock issued in excess of the
authorized amount. The Company still may be subject to an enforcement action for
possible violations of this and other provisions of the federal securities laws.

     The Company May Not be Able to Raise Additional Capital

         On December 6, 2001, the Company filed an Information Statement on
Schedule 14C with the SEC to increase the number of shares of authorized NRES
Common Stock from 1.5 billion shares to 5 billion shares, among other things.
The Company plans to seek stockholder approval to cure and ratify the Capital
Changes and provide a related information statement on Schedule 14C to its
stockholders shortly after the Company is satisfied it has resolved any of the
SEC's comments. Pending resolution of this matter, the Company will not be able
to realize any proceeds from the sale of the NRES Debentures, other debt, or
equity (other than proceeds from mortgages on properties). Even if the Company
were able to increase its authorized capital, there can be no assurance that the
Company will be able to raise additional capital on a debt or equity basis, or
to obtain mortgage financing, to complete any of its projects under development
(should they be completed), or land purchased for resale or development at a
profit.

     The Company May Be In Default of the NRES Debentures

         It appears the Company is or will be in default under the terms of the
NRES Debentures because, among other things, the Company has no plans to
register additional NRES Common Stock to be issued upon conversion of the NRES
Debentures that are currently outstanding and has no plans to complete the
issuance of the NRES Debentures. Given the foregoing, the Company could face
litigation by the holders of the NRES Debentures seeking to enforce the
Company's obligations thereunder. This would likely have a substantial negative
effect on the Company's capital resources and would also negatively affect the
Company's liquidity.



                                       13
<PAGE>
OTHER RISKS

     The Company's Stock Price Has Declined Significantly and May Not Recover

         The trading price of NRES Common Stock has declined significantly since
approximately October 2001. The market for NRES Common Stock is essentially
non-existent and there can be no assurance of a change in the immediate future.

     Risks Related to 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.

         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 its
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.

ITEM 2.  PROPERTIES

         As of January 8, 2004 the only real property owned by the Company is
the Bay Harbor Property and the Barcelona property. For a discussion of the
Company's properties, see "Item 1 - Business" under the subheading "Current
Operations".

ITEM 3.  LEGAL PROCEEDINGS

         On February 4, 2002, O.M. Investments, Inc. ("O.M. INVESTMENTS") filed
suit against the Company in the Circuit Court for Miami-Dade County seeking
foreclosure on the Company's Barcelona Apartments property. O.M. Investments
sought to foreclose on a purchase money second mortgage executed and delivered
on December 13, 2000 with respect to the Barcelona Apartments property that
allegedly was in default. O.M. Investments sought $100,000 plus interest on this
mortgage amount as well as reasonable attorney's fees. A final judgment of
foreclosure was entered on April 8, 2002. The Company paid $114,437.75 on July
10, 2002 and O.M. Investments subsequently filed an acknowledgement that full
payment and satisfaction had been received.

         On August 2, 2002, Encore Builders filed suit against Conquistador
Plaza, a subsidiary of the Company, in the Circuit Court of the Eleventh
Judicial Circuit in Miami-Dade County, Florida seeking foreclosure of a
mechanic's lien with respect to the Conquistador Plaza development. Conquistador
Plaza retained Encore Builders to construct the Conquistador Plaza development.
Encore Builders asserted Conquistador Plaza breached the January 30, 2001
construction contract between Encore Builders and Conquistador Plaza. Encore
Builders asserted that $504,076.03 is due from Conquistador Plaza, Inc. and is
seeking damages with interest, costs and attorneys fees. Encore Builders was
bonded by Mountbatten Surety Company, Inc. On August 26, 2003, the parties
stipulated for a full settlement of all claims that existed amongst them. As
part of the settlement, $55,000 was to be paid for the benefit of Encore
Builders and $50,000 was to be paid to Mountbatten Surety Company, Inc.



                                       14
<PAGE>
         On December 13, 2002, the Company filed an Amended Complaint against
the Town of Bay Harbor Islands and the Director of the Town of Bay Harbor
Islands, Building and Zoning Department in the Circuit Court of the 11th
Judicial Circuit for Miami-Dade County, Florida regarding (i) an application by
the Company for zoning approval for a planned residential development overlay
district and (ii) approval from the Town of Bay Harbor for the development of
the Residences at Bay Harbor. Subsequent to the filing of this case, the Company
filed a related complaint in the United States District Court for the Southern
District of Florida. The federal claim was dismissed with prejudice on May 20,
2003. In July 2003 the Company filed a Second Amended Complaint to amending its
complaint add state law counts that were previously asserted by the Company in
its federal complaint.

         In the ordinary course of business, the Company and its subsidiaries
are involved in legal proceedings incidental to their operations. The Company
and its subsidiaries are not currently involved in any legal proceedings that
management believes would have a material adverse effect on the operations or
financial condition of the Company and its subsidiaries taken as a whole. See,
however, the discussion under Item 1, "Business," under the subheading,
"Operating History", with respect to the foreclosure proceedings on the
Company's Conquistador Plaza project.

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

Not applicable.

































                                       15
<PAGE>
                                     PART II
                                     -------

ITEM 5.       MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.

MARKET PRICE OF NRES COMMON STOCK

         NRES Common Stock is quoted on The Over the Counter Bulletin Board
under the symbol NRES.PK. While it appears there is no market for NRES Common
Stock, the Company has set forth in the table below the high and low closing bid
prices per share of NRES Common Stock as reported on The Over the Counter
Bulletin Board during the fiscal year ended September 30, 2002. The last
reported bid price on The Over the Counter Bulletin Board for NRES Common Stock
was $0.000 on January 8, 2004.

                                                  HIGH      LOW
2002(1)
First Quarter................................     $0.002    $0.000
Second Quarter...............................     $0.001    $0.000
Third Quarter................................     $0.000    $0.000
Fourth Quarter...............................     $0.000    $0.000
             -----------
             (1)  Source:  IDD Information Services, Tradeline

HOLDERS

         As of January 8, 2004, there were approximately 594 holders of record
of NRES Common Stock.

DIVIDEND POLICY

         The Company has never declared or paid any cash dividends on its
capital stock. The Company currently intends to retain future earnings, if any,
in the foreseeable future.

RECENT SALES OF UNREGISTERED SECURITIES

     NRES Debentures

         The Company has issued debentures to accredited investors in
transactions believed at the time to be exempt from registration under the
Securities Act. These debentures are convertible into NRES Common Stock and, as
result, have had a dilutive effect on outstanding NRES Common Stock.

         Pursuant to a securities subscription agreement, in May 2001,
Connecticut Acquisition issued the Connecticut Acquisition Debentures to Louvre
Investors LLC, Yellow Stream Company LLC and Carlsbad Capital LLC (together, the
"CONNECTICUT INVESTORS") which were convertible into Connecticut Acquisition's
common stock. Subsequently, Connecticut Acquisition merged with and into the
Company. Pursuant to an assignment and assumption agreement, the Company assumed
all the conditions and obligations of the subscription agreement and the
Connecticut Acquisition Debentures.

         Pursuant to a securities subscription agreement, in October 2001, DC
Power issued the DC Power Debentures to Sea Lion Investors LLC, Equity Planners
LLC and Myrtle Holdings LLC (together, the "DC POWER INVESTORS") which were
convertible into shares of DC Power's common stock. Subsequently, DC Power
merged with and into the Company. Pursuant to an assignment and assumption
agreement, the Company assumed all the conditions and obligations of the
subscription agreement and the DC Power Debentures.



                                       16
<PAGE>
         Other parties involved in the issuance of the Connecticut Acquisition
Debentures and the DC Power Debentures were Guy Stewart, attorney for the
Company and Jonathan Shephard. Guy Stewart received approximately $30,000 and
Jonathan Shepard received approximately $30,000.

         The official title of the NRES Connecticut Debentures issued in
exchange for the Connecticut Acquisition Debentures is "8% Series SPC Senior
Subordinated Convertible Redeemable Debentures due April 12, 2003." and the
official title of the NRES DC Debentures issued in exchange for the DC Power
Debentures is "8% Series SPD Senior Subordinated Convertible Redeemable
Debentures due October 17, 2003." It appears approximately $1,103,500 of
principal, $19,400 in interest, $144,943 in bookkeeping fees, $168,020 in
investor fees, $258,434 in professional fees and $30,000 in fees for the right
to borrow funds (a total of $1,724,297) were converted by the Connecticut
Investors during the period beginning on May 16, 2001 and ending on July 13,
2001. Although the Company believes it has been able to accurately calculate the
aggregate amount converted and the amount of capital raised, the Company has
estimated the exact breakdown of various fees and debt relating to the NRES
Connecticut Debentures that have been converted. Additionally, $160,798 of
principal (out of a total amount of $460,000 funded), $4,922 of interest paid
and $68,735 in bookkeeping fees (a total of $234,455) was converted by the DC
Power Investors during the period beginning on November 5, 2001 and ending on
August 2, 2002 ($199,202 remains payable). The Connecticut Investors received a
total of approximately 590,442,628 shares of NRES Common Stock with an average
price of $.00266 per share through conversions. The DC Investors received a
total of approximately 716,365,695 shares of NRES Common Stock with an average
price of $.000327 per share through conversions. All shares of NRES Common Stock
issued upon conversion were sold following conversion. This occurred during the
period beginning on May 16, 2001 and ending on July 13, 2001 for the NRES
Connecticut Debentures and beginning on November 5, 2001 and ending on August 2,
2002 for the NRES DC Power Debentures. The closing market prices during this
time ranged from $.0036 to $.0076 per share and $.0001 to $.0017 per share,
respectively. As of the date of this report, the Company has not received
$540,000 in additional proceeds from the sale of the NRES DC Power Debentures
and has $199,202 in NRES DC Power Debentures outstanding. The Company has no
plans to issue additional NRES Debentures for any amounts not yet received and
has no plans to permit outstanding NRES Debentures to be converted.

         The Company claimed the issuance of the Connecticut Debentures and the
DC Power Debentures was exempt from registration under Section 5 of the
Securities Act pursuant to Rule 504 of Regulation D promulgated under the
Securities Act. The Company relied on, among other things, its belief that (i)
Connecticut Acquisition and DC Power were not subject to the reporting
requirements of Section 13 or Section 15(d) of the Exchange Act, (ii)
Connecticut Acquisition and DC Power were not investment companies, (iii)
Connecticut Acquisition and DC Power were not development stage companies with
no specific business plan other than to engage in a business combination with an
unidentified company, (iv) the dollar amount of the offering of Connecticut
Acquisition's and DC Power's Common Stock would not exceed $1 million, (v)
Connecticut Acquisition's and DC Power's common stock would be issued under a
state law exemption that permitted general solicitation and general advertising
(so long as sales are made only to "accredited investors" as that term is
defined in Rule 501 promulgated under the Securities Act) and (vi) the
Connecticut Investors and the DC Power Investors represented themselves to be
"accredited investors". The requirements of this exemption do not appear to have
been satisfied as a result of the Company's subsequent merger with these two
entities. The Company claimed the issuance of the NRES Debentures and the NRES
Common Stock issued upon conversion of the NRES Debentures was exempt from
registration under Section 5 of the Securities Act pursuant to Section 3(a)(9)
of the Securities Act. In reaching this conclusion, the Company relied on an
opinion rendered by its former counsel opining to this effect and citing various
SEC interpretations as its basis.

         Any amount over $10,000 of the principal face amount of the NRES
Debentures is at the option of the holders, convertible into freely tradable
shares of NRES Common Stock at a conversion price for each share of NRES Common
Stock equal to 70% of the lowest closing bid price of the NRES Common Stock on
the trading day a notice of conversion is received by the Company. If the
conversion would require stockholder approval of the issuance, the Company is
required to take the necessary steps to seek such approval. Pursuant to the NRES
Debentures, the Company is obligated to pay the Connecticut Investors and the DC
Power Investors 8% interest per year in the form of NRES Common Stock. Pursuant
to the subscription agreement, notwithstanding the conversion rights listed in
the NRES Debentures, the

                                       17
<PAGE>
Connecticut Investors and the DC Power Investors and their respective affiliates
may not convert any portion of the NRES Debentures that, together with any
shares of NRES Common Stock already owned by the Connecticut Investors and DC
Power Investors, would result in beneficial ownership by the Connecticut
Investors and the DC Power Investors and their respective affiliates of more
than 4.999% of the then issued and outstanding NRES Common Stock.

         In October 2000, the Company issued debentures pursuant to a merger
with 2217 Acquisition Inc., a Nevada corporation. These debentures were also
converted into NRES Common Stock. Because these debentures were all converted
into NRES Common Stock over one year ago, it is unlikely a Section 5 action
could be maintained against the Company for offering these debentures or the
underlying NRES Common Stock.

     Escrow Agreement

         In escrow agreements with Sroya Holdings LLC, as escrow agent
("SROYA"), the Company agreed to deposit shares of NRES Common Stock with Sroya
for conversion of the NRES Debentures. If the Company does not have a sufficient
number of shares of NRES Common Stock to meet this requirement, it must deposit
with Sroya the number of shares of NRES Common Stock authorized but unissued,
and upon authorization of a sufficient additional number of shares, deposit
additional shares with Sroya. Further notices of conversion of the NRES
Debentures must be simultaneously sent to the Company and to Sroya as shares
issued upon conversion of the NRES Debentures are released by Sroya. "Freely
tradeable" securities must be deposited into the escrow. The Company believed it
could rely on an exemption to Section 5 of the Securities Act to issue the NRES
Common Stock upon conversion of the NRES Debentures. The Company currently
believes that it will not be able to rely on an exemption to Section 5 of the
Securities Act and, as such, will not be able to deposit "freely tradeable"
securities into the escrow. Choosing not to deposit "freely tradeable"
securities into the escrow may constitute a breach under the terms of the NRES
Debentures. As of the date of this report, Sroya does not hold any shares of
NRES Common Stock. The Company does not plan to issue additional Common Stock to
Sroya. The Company and the holders of the NRES Debentures agreed to indemnify
Sroya, for acts relating to the escrow of NRES Common Stock.

         For a description of the legal issues surrounding the sale and
conversion of the debentures, see "RISK FACTORS -- Risk Related to Legal
Uncertainties."

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

         THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE
COMPANY'S FINANCIAL STATEMENTS AND NOTES TO THOSE STATEMENTS AND OTHER FINANCIAL
INFORMATION APPEARING ELSEWHERE IN THIS REPORT.

RESULTS OF OPERATIONS

         The following is a discussion of the consolidated financial condition
and results of operations of the Company for the fiscal years ended September
30, 2002 and 2001, 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. Note this discussion of the Company's results
of operations includes restated financial information for the period ending
September 30, 2001.

         For the year ended September 30, 2002, the Company incurred net loss of
$347,513, compared to net loss of $2,414,375 for the comparable 2001 period. The
net loss in 2002 is primarily attributable to legal and accounting fees
attributable to compliance with securities regulations and Conquistador Plaza's
litigation with Encore Builders in addition to interest expenses on projects
that were to be constructed by Encore Builders.





                                       18
<PAGE>
RESULTS OF OPERATIONS FOR THE YEAR ENDED SEPTEMBER 30, 2002 AND SEPTEMBER 30,
2001

REVENUES

         Total revenues for the year ended September 30, 2002 increased to
$3,202,283, as compared to $308,764 for the year ended September 30, 2001. The
primary source of revenues for the year ended September 30, 2002 was the sale of
real estate held by the Company as well as rental income on properties then
held.

OPERATING EXPENSES

Management Fees

         Management fees for the year ended September 30, 2002 totaled $293,102
compared to $152,098 for the year ended September 30, 2001. This 93% increase in
management fees is primarily due to the Company forgiving a loan made to an
officer and treating it as compensation.

Professional Fees and Compensation Expenses

         Professional fees and compensation expenses for the year ended
September 30, 2002 totaled $734,562 compared to $290,586 for the year ended
September 30, 2001. This 153% increase is primarily related to legal fees and
compensation related to bringing the Company into compliance with state
corporate law and the federal securities laws.

Advertising

         Advertising expenses for the year ended September 30, 2002 totaled
$3,258 compared to $35,641 for the year ended September 30, 2001. This 91%
decrease in advertising expenses is primarily due to the fact that the Company
determined to sell off its real estate inventory rather than construct buildings
on purchased lots, as originally planned.

Travel and Automobile Expenses

         Travel and automobile expenses for the year ended September 30, 2002
totaled $76,443 compared to $24,006 for the year ended September 30, 2001. This
218% increase is primarily due to the fact that meetings relating to the
Company's business and financing opportunities were less regional in nature and
involved additional air travel..



DEPRECIATION AND AMORTIZATION

         Depreciation and amortization for the year ended September 30, 2002,
totaled $2,128 as compared to $2,660 for the year ended September 30, 2001.

OTHER INCOME (EXPENSE)

         Other income (expense) for the year ended September 30, 2001, was an
expense of $1,812,744, which decreased to an expense of $388,113 for the year
ended September 30, 2002. This decrease was primarily due to a reduction in the
Company's development related expenses.

LIQUIDITY AND CAPITAL RESOURCES

         To date, the Company has financed its operations primarily through
mortgage debt and the sale of NRES Common Stock issued through converting the
NRES Debentures. At September 30, 2002, the Company had $481,609 in cash and
cash equivalents, an increase of $400,845 from September 30, 2001. This increase
in cash and cash equivalents


                                       19
<PAGE>
is attributable to sales of and mortgages on the Company's properties. The
Company acquired $1,124,146 of real estate holdings in the year ended September
30, 2002, compared to real estate acquisitions of $5,017,424 in the comparable
2001 period, as the Company continued at a diminished rate its business plan to
develop, construct and own multifamily housing.

         The Company used $506,135 in investing activities for the year ended
September 30, 2002, as compared to $233,229 used in the year ended September 30,
2001. Net cash provided by financing activities was $1,293,295 for the year
ended September 30, 2002, as compared to $5,611,514 for the year ended September
30, 2001. This decrease in net cash provided by financing activities is
attributable to the shift in the Company's business away from purchasing and
holding properties. This change reflects the substantial decrease in the
Company's proceeds from the NRES Debentures and NRES Common Stock issuances, and
also from notes and mortgages payable.

         The Company had stockholders' deficit of $589,466 at September 30,
2002. The Company's determination that it has issued shares in excess of its
authorized amount resulted in the Company's determination that all shares issued
in excess of 1 million would be reclassified as temporary equity.

         The Company believes that when considered together with anticipated
income from the sale of real property, it has sufficient cash resources to
maintain operations for a period of at least twelve months. The Company's cash
requirements will largely depend upon the availability of real estate
acquisition opportunities and the costs to continue funding its real estate
development projects. There can be no assurance that funds required by the
Company for these purposes, or to meet its operating requirements, will be
available or, if they are, that they will be available on acceptable terms and
at such times as the Company requires. See "Outlook", below for a discussion on
possible limits on the Company's ability to raise capital.

OUTLOOK

         The Company invested substantial funds in its existing projects, but
only realized material profits from these projects upon the sale of the real
estate. While the Company entered into agreements to sell certain of its
remaining properties, it cannot guarantee these transactions will close or that
the sales will occur in a timely fashion. Further, the Company faces litigation
with respect to the Conquistador Plaza project resulting from the termination of
the project's contractor, a former subsidiary of the Company whose president was
a director of the Company. The Company terminated the project's contractor
because of its inability to meet completion schedules. The delays in
construction caused the Company to commence financing construction loan interest
from its own resources, rather than from construction loan proceeds. See "Item 3
- Legal Proceedings."

         The Company's ability to meet its continuing operating expenses largely
depends on its ability to continue to raise capital (i) through the sale of debt
or equity, (ii) through construction and permanent mortgage financing, (iii)
through the completion and sale, or sale prior to completion, of the Company's
real estate projects and (iv) through the sale of land purchased, but not
developed, by the Company. In the likely event the Company is forced to sell its
remaining property prior to completion or the time such property appreciates
substantially, should such increase occur, the Company's profit, if any, from
its real estate activities would be materially adversely affected. There can be
no assurance the Company will be able to raise additional capital on a debt or
equity basis, or obtain mortgage financing, complete any of its projects under
development, or sell any completed development projects (should they be
completed) or land purchased for resale or development at a profit.

         From time to time the Company has entered into agreements with
unrelated third parties for the sale of property. However, these agreements
contain customary contingencies, such as financing or governmental approval
contingencies, which the Company believes are sufficiently material as to make
uncertain the ability of the Company to complete these sales.



                                       20
<PAGE>
         The Company's operations are principally based in the residential real
estate market in South Florida. This market has historically been both cyclical
and seasonal. The Company experiences generally higher sales in the second and
third fiscal quarters. Therefore, the results of any interim period is not
necessarily indicative of the results that might be expected during a full
fiscal year.

         Section 5 of the Securities Act prohibits the public sale of securities
absent an effective registration statement being filed with the SEC, unless an
exemption from registration applies. On April 12, 2001, Connecticut Acquisition
issued the Connecticut Acquisition Debentures and on October 17, 2001, DC Power
issued the DC Power Debentures. The Connecticut Acquisition Debentures were
exchanged for the NRES Connecticut Debentures and the DC Power Debentures were
exchanged for the NRES DC Power Debentures. The shares of NRES Common Stock
underlying the converted portion of the NRES Debentures were sold by the holders
of the NRES Debentures. These two series of transactions were performed in a
manner thought to be exempt from the registration requirements of Section 5 of
the Securities Act. However, the requirements of the exemptions relied on do not
appear to have been satisfied. The Company is thereby exposed to possible
litigation under Section 12(a)(1) of the Securities Act. Section 13 of the
Securities Act provides that no action shall be maintained for offering or
selling securities in violation of Section 5 unless that action is brought
within one year of the date of the violation. If actions by the holders of NRES
Common Stock received upon conversion of the NRES Debentures are barred by this
statute of limitations, the Company expects to reclassify certain amounts from
temporary equity to permanent stockholder equity (after curing any
overissuances).

         While one year has passed from the initial placement of the NRES
Debentures, it appears that approximately $1,103,500 of principal, $19,400 in
interest, $144,943 in bookkeeping fees, $168,020 in investor fees, $258,434 in
professional fees and $30,000 in fees for the right to borrow funds (a total of
$1,724,297) were converted by the investors of the NRES Connecticut Debentures
during the period beginning on May 16, 2001 and ending on July 13, 2001.
Although the Company believes it has been able to accurately calculate the
aggregate amount converted and the amount of capital raised, the Company has
estimated the exact breakdown of various fees and debt relating to the NRES
Connecticut Debentures that have been converted. Additionally, $160,798 of
principal (out of a total amount of $460,000 funded), $4,922 of interest paid
and $68,735 in bookkeeping fees (a total of $234,455) was converted during the
period beginning on November 5, 2001 and ending on August 2, 2002 ($199,202
remains payable). The holders of the NRES Connecticut Debentures received a
total of approximately 590,442,628 shares of NRES Common Stock with an average
price of $.00266 per share through conversions and the holders of the NRES DC
Power Debentures received a total of approximately 716,365,695 shares of NRES
Common Stock with an average price of $.000327 per share through conversions.
All shares of NRES Common Stock issued upon conversion were sold by holders of
the NRES Debentures following conversion. This occurred during the period
beginning on May 16, 2001 and ending on July 13, 2001 for the NRES Connecticut
Debentures and beginning on November 5, 2001 and ending on August 2, 2002 for
the NRES DC Power Debentures. The closing market prices during this time ranged
from $.0036 to $.0076 per share and $.0001 to $.0017 per share, respectively. As
of the date of this report, there have been no actions filed against the Company
based upon a violation of Section 5. Because the statute of limitations has
almost run, it is unlikely that a large portion of these holders of NRES Common
Stock will file an action against the Company. However, any such action
maintained against the Company could have a substantial impact on the Company
and capital resources. The ramifications of this may entail a possible
rescission offer to the stockholders affected within the past year. Other
possible ramifications include an enforcement action by the SEC.

         As of the date of this report, the Company has not received $540,000 in
additional proceeds from the sale of the NRES DC Power Debentures and has
$199,202 in NRES DC Power Debentures outstanding. The Company has no plans to
issue additional NRES Debentures for any amounts not yet received and has no
plans to permit outstanding NRES Debentures to be converted.

         In October of 2000, the Company issued debentures pursuant to a merger
with 2217 Acquisition Inc., a Nevada corporation. These debentures were also
converted into NRES Common Stock. Because these debentures were all converted
into NRES Common Stock and sold over one year ago, it is unlikely that a Section
5 action could be maintained against the Company for offering these debentures
or the underlying NRES Common Stock.



                                       21
<PAGE>
         At the time of its incorporation, the Company had 1 million shares of
its common stock authorized. Since that time, the Company believed it had
effected the 1994 Stock Split, the 1999 Reverse Stock Split, the 40 Million
Share Increase, the 250 Million Share Increase, the 750 Million Share Increase
and the 1.5 Billion Share Increase. These changes in capital structure appear to
have not been validly adopted by the Company's board of directors, approved by
the Company's shareholders or filed with the Secretary of State of the State of
Nevada, as required by the laws of the State of Nevada. The Company may have
violated the federal proxy rules by either (i) not obtaining the requisite
shareholder approval to effect these changes or (ii) not providing shareholders
with an Information Statement on Schedule 14C. As such, it appears the Company
currently has only 1 million shares of NRES Common Stock authorized, and the
majority of the validly issued shares are held by Richard and Pamela Astrom as
tenants by the entireties. The Company believes a majority of the Company's
validly issued and outstanding shares and the board of directors can cure and
ratify the overissuances of stock and the aforementioned changes in capital
structure. Until that time, the Company may be liable to the holders of the NRES
Common Stock issued in excess of the authorized amount. The Company also
believes that the issuance of Class A common stock to Christopher Astrom was not
authorized as an amendment to the Company's Articles of Incorporation was never
filed with the Secretary of State of the State of Nevada. The Company believes
that the recipient of the unauthorized shares, Christopher Astrom, may have a
claim against the Company for damages, but it is unlikely that Christopher
Astrom will file a claim against the Company as he is an officer, director and
principal shareholder of the Company. Also, as discussed below, the Company's
board of directors and the holders of a majority of its validly issued shares
intend to authorize the creation of Class A common stock and issue shares to
Christopher Astrom.

         It has come to the Company's attention that, as a result of the
conversion of the debentures issued by the Company into NRES Common Stock,
coupled with the decrease in the trading price of NRES Common Stock, investors
were entitled to more shares of NRES Common Stock than is authorized under the
Company's Articles of Incorporation. As a result, as of January 8, 2004, the
Company has 1,938,566,046 shares of NRES Common Stock issued, which exceeds the
number of shares authorized. As stated above, the Company believes the holders
of a majority of the Company's validly issued and outstanding shares and the
board of directors can cure and ratify the overissuances of stock. If this
cannot be accomplished, the Company may be liable to the holders of the NRES
Common Stock issued in excess of the authorized amount in an amount equal to
1,937,566,046 shares (the number of shares issued in excess of the amount
authorized) multiplied by the price each such share was issued for (which ranged
from approximately $.0001 to $5.4 per share). The overissuance, together with
the Company's inability to increase its authorized number of shares, has
eliminated the Company's ability to raise capital through issuances of publicly
registered securities. The Company believes it will not be able to continue
trading NRES Common Stock or increase its capital resources through selling
publicly registered securities until the overissuance is cured and the Company
increases the authorized number of shares of NRES Common Stock. The Company may
also have violated other provisions of Nevada law with respect to the duties of
officers and directors to the Company and by not having sufficient shares
available upon the conversion of debentures issued by the Company.

CRITICAL ACCOUNTING ESTIMATES

         The Company's discussion and analysis of its financial condition is
based on the Company's consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States. The preparation of these financial statements requires the
Company to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses, and related disclosure of contingent
assets and liabilities. The Company regularly evaluates its estimates, including
those related to revenue, bad debts, intangible assets, restructuring,
contingencies and litigation. The Company bases its estimates on historical
experience and on various other assumptions that are believed to be reasonable
under the circumstances, the results of which form the basis of making judgments
about the carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates
under different assumptions or conditions.

         For the periods reported, the Company's two most important estimates
involved the impairment of the value of the Company's stock holdings in Genesis
and the estimates of potential liability for potential violation of federal and
state laws. Given that Genesis no longer has a market value, the Company decided
a complete write-off was in order. As for


                                       22
<PAGE>
the potential liabilities, the Company estimated the value of transactions that
may be challenged in the past year. The value of these transactions have been
treated as temporary equity in the financial statements.
























































                                       23
<PAGE>
ITEM 7.  FINANCIAL STATEMENTS

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Stockholders of
National Residential Properties, Inc. and Subsidiaries
Coral Gables, Florida

We have audited the accompanying consolidated balance sheet of National
Residential Properties, Inc. and Subsidiaries (the "Company") as of September
30, 2002 and 2001 and the related consolidated statements of operations, changes
in stockholders' equity (deficit), changes in temporary equity, and cash flows
for the years 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 audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits 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 audits provide a reasonable basis for our opinion.

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, 2002
and 2001, and the consolidated results of its operations, changes in
stockholders' equity (deficit), changes in temporary equity, and cash flows for
the years then ended in conformity with accounting principles generally accepted
in the United States of America.

As discussed in Note 16 to the consolidated financial statements, the Company
has restated its September 30, 2001 consolidated financial statements for
certain errors that resulted in an understatement of previously reported
expenses for the year ended September 30, 2001 that were discovered by the
Company's management. The recognition of these expenses have no effect on
stockholders' equity (deficit) since the expenses were associated with the
issuance of the Company's common stock. Additionally, the Company corrected the
duplication of a recorded liability and reclassified certain items that have no
effect on net income (loss), or stockholders' equity (deficit) for the period.
The net effect of these changes increased the deficit from ($2,018,802) as
originally reported to ($3,849,533), as amended. This increase in the deficit
was attributed to the recognition of the amortization of interest and fees
associated with the convertible debentures issued by the Company. Additionally,
the Company classified certain shares of its common stock as "Temporary" equity
from "Permanent" equity.


              MEMBER OF: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
                         NEW JERSEY SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
                         PENNSYLVANIA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
                         NEW YORK STATE SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS


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

July 24, 2003



                                       24
<PAGE>
<TABLE>
<CAPTION>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                           SEPTEMBER 30, 2002 AND 2001

                                     ASSETS
                                     ------
                                                                                                            RESTATED
                                                                                         2002                 2001
                                                                                     -----------           -----------
<S>                                                                                  <C>                   <C>
              Cash and cash equivalents                                                 $481,609               $80,764
              Inventory - real estate holdings                                         8,923,638             8,338,514
              Fixed assets, net of depreciation                                           41,184                11,803
              Prepaid management fee and other                                                 -               293,102
              Loan receivable - Officers                                                       -               261,167
              Loan receivable - Others                                                   312,778                     -
              Mortgage receivable and other                                               75,010                58,825
              Investment securities                                                        2,523                     -
              Deposits                                                                     6,725                 5,375
                                                                                     -----------           -----------

              TOTAL ASSETS                                                            $9,843,467            $9,049,550
                                                                                     ===========           ===========

              LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY (DEFICIT)
              ----------------------------------------------------------------

                                                                                                            RESTATED
                                                                                         2002                 2001
                                                                                     -----------           -----------
                Accounts payable and accrued expenses                                    $81,707               $92,709
                Debentures payable                                                       199,202                     -
                Notes and mortgages payable                                            5,734,086             5,271,747
                                                                                     -----------           -----------

                    TOTAL LIABILITIES                                                  6,014,995             5,364,456
                                                                                     -----------           -----------

              TEMPORARY EQUITY                                                         4,417,938             3,927,047
                                                                                     -----------           -----------
              STOCKHOLDERS' EQUITY (DEFICIT)
                Common Stock, $.001 Par Value; 1,000,000 shares
                  authorized and 1,000,000 shares issued and
                  outstanding, respectively                                                1,000                 1,000
                Common Stock Class A Voting, $.001 Par Value; 0 shares
                  authorized and 0 shares issued and
                  outstanding                                                                  -                     -
                Additional Paid-in Capital                                             3,606,580             3,606,580
                Deficit                                                              (4,197,046)           (3,849,533)
                                                                                     -----------           -----------

                    TOTAL STOCKHOLDERS' EQUITY (DEFICIT)                               (589,466)             (241,953)
                                                                                     -----------           -----------
              TOTAL LIABILITIES, TEMPORARY EQUITY AND
                 STOCKHOLDERS' EQUITY (DEFICIT)                                       $9,843,467            $9,049,550
                                                                                     ===========           ===========
</TABLE>
                                       25
<PAGE>
<TABLE>
<CAPTION>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED SEPTEMBER 30, 2002 AND 2001

                                                                                                            RESTATED
                                                                                         2002                 2001
                                                                                     -----------           -----------
<S>                                                                                  <C>                   <C>
           OPERATING REVENUES
              Revenue                                                                 $3,202,283              $308,764

           COST OF SALES                                                               1,937,011               200,149
                                                                                     -----------           -----------
           GROSS PROFIT                                                                1,265,272               108,615
                                                                                     -----------           -----------
           OPERATING EXPENSES
              Management fees                                                            293,102               152,098
              Professional fees and compensation expenses                                734,562               290,586
              Advertising                                                                  3,258                35,641
              Travel and automobile expenses                                              76,443                24,006
              Telephone and utilities                                                      9,902                13,834
              Real estate taxes and property maintenance                                  22,434                41,709
              Office expenses                                                             36,410               128,269
              Miscellaneous                                                               46,433                21,443
              Depreciation and amortization                                                2,128                 2,660
                                                                                     -----------           -----------
                  TOTAL OPERATING EXPENSES                                             1,224,672               710,246
                                                                                     -----------           -----------
           LOSS BEFORE OTHER INCOME (EXPENSE)                                             40,600              (601,631)

           OTHER INCOME (EXPENSE)
              Amortization of discount on debenture conversions                         (100,480)           (1,830,731)
              Loss on sale of property                                                   (44,022)                    -
              Unrealized loss on investment securities                                  (224,547)                    -
              Interest expense                                                           (22,814)                    -
              Interest income                                                              3,750                17,987
                                                                                     -----------           -----------
                  TOTAL OTHER INCOME (EXPENSE)                                          (388,113)           (1,812,744)
                                                                                     -----------           -----------

           NET LOSS BEFORE PROVISION FOR INCOME TAXES                                 $ (347,513)          $(2,414,375)
           PROVISION FOR INCOME TAXES                                                          -                     -
                                                                                     -----------           -----------
           NET LOSS APPLICABLE TO COMMON SHARES                                       $ (347,513)          $(2,414,375)
                                                                                     ===========           ===========
           NET LOSS PER BASIC AND DILUTED SHARES                                      $ (0.34751)            $(2.41438)
                                                                                     ===========           ===========
           WEIGHTED AVERAGE NUMBER OF COMMON
               SHARES OUTSTANDING                                                      1,000,000             1,000,000
                                                                                     ===========           ===========
</TABLE>









                                       26
<PAGE>
<TABLE>
<CAPTION>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
                         CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                 FOR THE YEARS ENDED SEPTEMBER 30, 2002 AND 2001


                                                              CLASS A              ADDITIONAL
                              COMMON STOCK                  COMMON STOCK            PAID-IN        ACCUMULATED
                          SHARES         AMOUNT         SHARES        AMOUNT        CAPITAL          DEFICIT          TOTALS
                        --------------   ----------     -----------   ---------    -----------     -----------      -----------
<S>                      <C>             <C>             <C>            <C>         <C>            <C>               <C>
September 30, 2001, as
previously reported      1,095,300,351   $1,095,299      1,000,000      $ 1,000     $4,607,597     $(2,018,802)      $3,685,094

Reclassification of
shares to temporary
equity - see Note 11    (1,094,300,351)  (1,094,299)    (1,000,000)      (1,000)    (1,001,017)              -       (2,096,316)

Prior period
adjustment, Note 16                  -            -              -            -              -      (1,830,731)     (1,830,731)
                        --------------   ----------     -----------   ---------    -----------     -----------      -----------
September 30, 2001, as                                           -            -
restated                     1,000,000        1,000                                  3,606,580      (3,849,533)       (241,953)

Net loss                             -            -              -            -              -        (347,513)       (347,513)
                        --------------   ----------     -----------   ---------    -----------     -----------      -----------

September 30, 2002           1,000,000       $1,000              -            -     $3,606,580    $ (4,197,046)     $ (589,466)
                        ==============   ==========    ===========   =========     ===========     ===========      ===========
</TABLE>




























                                       27
<PAGE>
<TABLE>
<CAPTION>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
               CONDENSED STATEMENTS OF CHANGES IN TEMPORARY EQUITY
                 FOR THE YEARS ENDED SEPTEMBER 30, 2002 AND 2001

                                                              CLASS A                               ADDITIONAL
                              COMMON STOCK                  COMMON STOCK                             PAID-IN
                          SHARES         AMOUNT         SHARES        AMOUNT        DISCOUNT         CAPITAL          TOTALS
                        --------------   ----------     -----------   ---------    -----------     -----------    -----------
<S>                      <C>             <C>             <C>            <C>         <C>            <C>            <C>
Balance, September 30,
2001, as previously                 -    $        -              -     $           $        -     $         -     $         -
reported
Reclassification of
shares to temporary
equity - see Note 11    1,094,300,351     1,094,299      1,000,000        1,000             -       1,001,017       2,096,316

Prior period
adjustment, Note 16                 -             -              -            -             -       1,830,731       1,830,731
                        --------------   ----------     -----------   ---------    -----------     -----------    -----------
Balance, September 30,
2001, as restated       1,094,300,351     1,094,299      1,000,000        1,000             -       2,831,748       3,927,047

Common stock
issued for debt
conversion, interest
expense and
discount on
convertible
debentures for
Quarter ended
December 31, 2001         843,265,695       843,267              -            -       (687,311)       334,935         490,891
                        --------------   ----------     -----------   ---------    -----------     -----------     ----------
Balance,
September 30, 2002      1,937,566,046    $1,937,566      1,000,000       $1,000      $(687,311)   $ 3,166,683     $ 4,417,938
                        ==============   ==========     ===========   =========    ===========     ===========     ===========
</TABLE>





















                                       28
<PAGE>
<TABLE>
<CAPTION>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
                       CONDENSED STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED SEPTEMBER 30, 2002 AND 2001

                                                                                       RESTATED
                                                                   2002                  2001
                                                               -----------           -----------
<S>                                                            <C>                  <C>
CASH FLOW FROM OPERATING ACTIVITIES
   Net loss                                                     $(347,513)          $(2,414,375)
   Adjustments to reconcile net loss to net cash               -----------           -----------
     used in operating activities

     Amortization of discount on convertible debentures            100,480             1,830,731
     Depreciation and amortization                                   2,128                 3,879
     Loss on sale of property                                       44,022                     -
     Unrealized loss on investment securities                      224,547                     -
     Management compensation                                       359,760                39,742

  CHANGES IN ASSETS AND LIABILITIES
     (Increase) in inventory - real estate holdings             (1,124,146)           (5,017,424)
     Decrease in prepaid expenses and other assets                 293,102               (10,932)
     (Increase) in deposits                                         (1,350)                    -
     Increase in accounts payable and
       and accrued expenses                                         62,655               132,868
                                                               -----------           -----------
     Total adjustments                                             (38,802)           (3,021,136)
                                                               -----------           -----------
     NET CASH (USED IN) OPERATING ACTIVITIES                      (386,315)           (5,435,511)

CASH FLOWS FROM INVESTING ACTIVITIES
   (Acquisition) disposal of fixed assets - net                    (31,509)               30,924
   Loans to officers, net                                         (145,663)             (261,167)
   Loans to/from others                                           (312,778)                    -
   (Increase) decrease in mortgage and notes receivable            (16,185)               (2,986)
                                                               -----------           -----------
      NET CASH (USED IN) INVESTING ACTIVITIES                     (506,135)             (233,229)
                                                               ===========           ===========
</TABLE>


















                                       29
<PAGE>
<TABLE>
<CAPTION>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
                 CONDENSED STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED SEPTEMBER 30, 2002 AND 2001

                                                                                       RESTATED
                                                                   2002                  2001
                                                               -----------           -----------
<S>                                                            <C>                  <C>
 CASH FLOWS FROM FINANCING ACTIVITIES
     Proceeds from debentures and common stock issuances, net     $360,000            $1,940,000
     Net change in temporary equity                                155,956                     -
     Net change in notes and mortgages payable                     777,339             3,671,514
                                                               -----------           -----------
        NET CASH PROVIDED BY FINANCING ACTIVITIES                1,293,295             5,611,514
                                                               -----------           -----------
 NET INCREASE (DECREASE) IN
     CASH AND CASH EQUIVALENTS                                     400,845              (57,226)

 CASH AND CASH EQUIVALENTS -
     BEGINNING OF PERIOD                                            80,764               137,990
                                                               -----------           -----------
 CASH AND CASH EQUIVALENTS - END OF PERIOD                        $481,609               $80,764
                                                               -----------           -----------
 SUPPLEMENTAL DISCLOSURE OF CASH FLOW
    INFORMATION:

 CASH PAID DURING THE YEAR FOR:
     Interest expense                                                $   -                 $   -

 SUPPLEMENTAL DISCLOSURE OF NONCASH
   ACTIVITIES:
     Issuance of common stock for:
        Debt conversions                                          $160,798            $2,052,155
     Accounts payable and accrued expenses associated with
     debentures                                                    $73,657                 $   -

     Amortization of discount on convertible debentures           $100,480                 $   -
   Other:
     Mortgage assumed                                             $315,000                 $   -

     Investments received                                         $227,070                 $   -
</TABLE>















                                       30
<PAGE>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2002 AND 2001

NOTE 1 -  ORGANIZATION AND BASIS OF PRESENTATION
          --------------------------------------

          National Residential Properties, Inc., (the "Company") 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 October 10, 2000, the Company changed its name to
          National Residential Properties, Inc.

          The Company's business was 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 bought either single unit vacant properties and built
          single family homes or it bought abandoned homes and completed 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
          multifamily housing projects.

          Beginning in the fiscal year ending 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 80% of Encore
          Services, Inc. ("Encore Services").

          On May 4, 2001, the Company's wholly-owned subsidiary, Connecticut
          Acquisition Corp. No. 1 ("Connecticut Acquisition") entered into a
          joint venture to develop a parcel of land located in Hebron,
          Connecticut (the "Hebron Parcel") as a senior adult community pursuant
          to a land development agreement with Mr. Nathan Kahn and various
          entities controlled by Mr. Nathan Kahn. The objective of this
          development was to either sell developed lots to builders, or erect
          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.

          The land development agreement called for Connecticut Acquisition to
          fund the initial costs of acquisition and development, and, after
          deduction of expenses from gross revenues, profits would be divided
          50-50 between the parties.

          In contemplation of the financing of this project, on April 12, 2001,
          Connecticut Acquisition, obtained a loan from accredited investors
          evidenced by its 8% Series A Senior Subordinated Convertible
          Redeemable Debentures due April 13, 2003 (the "Connecticut Acquisition
          Debentures"), which were convertible from time to time into shares of
          Connecticut Acquisition's Class A Common Stock. On May 8, 2001,
          following the acquisition of the Hebron Parcel, Connecticut
          Acquisition was merged into the Company. As a result, all rights and
          obligations of Connecticut Acquisition inured to the benefit of and
          became binding upon the Company. Pursuant to the merger, the
          Connecticut Acquisition Debentures were surrendered and canceled, and
          new debentures, identical to the Connecticut Acquisition Debentures,
          together with accompanying conversion rights into authorized but
          unissued shares of the Company's


                                       31
<PAGE>
          common stock, par value $.001 per share ("NRES Common Stock"), were
          issued by the Company to the holders of the Connecticut Acquisition
          Debentures.

          Pursuant to an agreement executed on December 26, 2001, made effective
          as of October 31, 2001 and a Statutory Warranty Deed dated October 31,
          2001, the Company sold to Senior Adult Lifestyle, Inc. ("Senior Adult
          Lifestyle") an entity which may be deemed an affiliate of the Company
          through common corporate officers, all of the rights, title and
          interest in (i) the Hebron Parcel; and (ii) contracts to purchase
          certain parcels of real property in Watertown, New Milford, Granley
          and East Windsor, Connecticut. As additional consideration for the
          conveyance to Senior Adult Lifestyle, the Company received on February
          1, 2002, 20 million shares of common stock of Genesis Capital
          Corporation of Nevada ("Genesis"), the parent of Senior Adult
          Lifestyles. These shares were based on a value of $0.10 per share, the
          value the stock was trading for in December 2001, for an agreed
          consideration of $2 million. Should the value at the earlier of (a)
          the time the Company sells these shares or (b) the expiration of three
          years from the date of the conveyance fall below $2 million, Genesis
          was required to issue to the Company, additional shares of Genesis
          Common Stock to make up the difference in value. The value of the
          Genesis Common Stock was $.009 ($180,000) on February 1, 2002.

          On October 17, 2001, the Company's other wholly-owned subsidiary, DC
          Power Products Acquisition Corp ("DC Power"), obtained a loan from
          accredited investors evidenced by its 8% Series A Senior Subordinated
          Convertible Redeemable Debentures due October 17, 2003 (the "DC Power
          Debentures"), which were convertible from time to time into shares of
          DC Power's common stock. DC Power was merged into the Company on
          November 1, 2001.

          As a result, all rights and obligations inured to the benefit of and
          became binding upon the Company. Pursuant to the merger, the DC Power
          Debentures were surrendered and canceled, and new debentures,
          identical to the DC Power Debentures, together with accompanying
          conversion rights into authorized but unissued shares of NRES Common
          Stock, were issued by the Company to the holders of the DC Power
          Debentures.

          The Company has amended its audited consolidated financial statements
          for September 30, 2001. These consolidated financial statements
          include those adjustments. The Company has adjusted for certain
          expenses not previously recognized. The Company is reporting
          $1,830,731 of amortization of discount on debenture conversions and
          professional fees and interest associated with the debentures that
          occurred in the year ended September 30, 2001. The Company also
          corrected a duplication of a note payable in the amount of $400,000.
          The results of these changes increased the net loss for the year ended
          September 30, 2001 from ($583,644) to ($2,414,375), and increased the
          Company's accumulated deficit from ($2,108,802) to ($3,849,533).

          The Company has restated its audited consolidated financial statements
          for September 30, 2001. The Company adjusted its consolidated
          financial statements for certain expenses not previously recognized
          relating to the amortization of discount on debenture conversions and
          fees and interest associated with the debentures in the amount of
          $1,830,731 that occurred in that fiscal year. There were also
          adjustments made to the statements of operations due to a change in
          the way the Company accounts for its sales of its real estate
          inventory. The changes resulted in an increase in the operating
          revenues of $232,000, an increase in the cost of sales of $200,149 and
          an increase in its gross profit and operating expenses of $31,851 for
          the year ended September 30, 2001. Cumulatively, the Company's
          accumulated deficit increased $1,830,731 to $3,849,533 from $2,108,802
          at September 30, 2001 and the net loss of the Company increased to
          $2,414,375 from $583,644.

          Additionally, the Company has reclassified its balance sheet at
          September 30, 2001 to reflect the temporary equity account from
          permanent stockholders' equity (deficit) (See Note 12).

                                       32
<PAGE>
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.

     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.

          The Company recorded the sale of property to Genesis Capital
          Corporation of Nevada under the cost recovery method. When this method
          is used, no profit is recognized on the sales transaction until the
          cost of the property sold is recovered (See Note 1).

          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

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

                  Equipment and other            3 to 5 Years
                  Vehicle                        3 Years

     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


                                       33
<PAGE>
          and liabilities and their financial reporting amounts at each year-end
          based on enacted tax laws and statutory tax rates.

     ADVERTISING

          Costs of advertising are expensed as incurred. Advertising costs were
          $3,258 and $35,641 for the years ended September 30, 2002 and 2001,
          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.

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

                                                                    Restated
                                                        2002          2001
                                                        ----          ----

          Net Loss                                   ($  347,513)  ($2,414,375)

          Weighted-average common shares
          outstanding (Basic)                          1,000,000     1,000,000

          Weighted-average common stock equivalents:
               Stock options                             -             -
               Warrants                                  -             -

          Weighted-average common shares
          outstanding (Diluted)                        1,000,000     1,000,000

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

          There are no options and warrants outstanding to purchase stock at
          September 30, 2002 and 2001.

     INVESTMENT SECURITIES

          Management determines the appropriate classification of investment
          securities at the time they are acquired and evaluates the
          appropriateness of such classifications at each balance sheet date.
          The classification of those securities and the related accounting
          policies are as follows:

          Trading securities: Trading securities are held for resale in
          anticipation of short-term fluctuations in market prices. Trading
          securities, consisting primarily of actively traded equity securities,
          are stated at fair value. Realized and unrealized gains and losses are
          included in income.

          Available-for-sale securities: Available-for-sale securities consist
          of marketable equity securities not classified as trading securities.
          Available-for-sale securities are stated at fair value, and unrealized

                                       34
<PAGE>
          holding gains and losses, net of the related deferred tax effect, are
          reported as a separate component of stockholders' equity unless the
          change in value is deemed permanent.

          Dividends on marketable equity securities are recognized in income
          when declared. Realized gains and losses are included in income.
          Realized gains and losses are determined on the basis of the actual
          cost of the securities sold.

     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 fair value of the notes and mortgages
          payable is estimated based on interest rates for the same or similar
          debt offered to the Company having the same or similar remaining
          maturities and collateral requirements.

     RECLASSIFICATIONS

          Certain amounts for the year ended September 30, 2001 have been
          reclassified to conform with the presentation of the September 30,
          2002 amounts. The reclassifications have no effect on the net loss for
          the year ended September 30, 2001.

NOTE 3 -  INVENTORY - REAL ESTATE HOLDINGS
          --------------------------------

          Inventory consists of 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 -  MORTGAGES RECEIVABLE AND OTHER
          ------------------------------

          Represents amounts due from individuals who purchased property from
          the Company and other various amounts due the Company. Amounts due at
          September 30, 2002 and 2001 were $75,010 and $58,825, respectively.

NOTE 5 -  LOANS RECEIVABLE - OFFICERS
          ---------------------------

          Amounts represent advances to and from the officers of the Company.
          The balances at September 30, 2002 and 2001 were $-0- and $261,167,
          respectively. Approximately $47,070 of the loans receivable were
          satisfied through an investment of common stock in an affiliated
          publicly trading company paid to the Company in February 2002. The
          Company has charged off the balance of the loans receivable as
          management compensation during the quarter ended March 31, 2002.

NOTE 6 -  FIXED ASSETS

          Fixed assets consist of the following at September 30, 2002 and 2001:

          Office Equipment and other                $20,663          $20,663
          Vehicles                                   31,509                -
                                                   --------          -------

                                                     52,172           20,663
          Accumulated Depreciation                 (10,988)          (8,860)
                                                   --------          -------

                                       35
<PAGE>
                            Total                   $41,184          $11,803
                                                    =======          =======

          Depreciation expense was $2,128 and $2,660 for the years ended
          September 30, 2002 and 2001, respectively.

NOTE 7 -  MORTGAGES AND NOTES PAYABLE

          Mortgages and notes payable consist of the following at September 30,
          2002 and 2001, respectively:
<TABLE>
<CAPTION>
                                                                                      2002            2001
                                                                                      ----            ----
<S>                                                                               <C>              <C>
          Note payable with a bank with interest at the banks prime rate
          secured by the Company's assets and guaranteed by an officer of
          the Company.                                                            $    30,314      $       -

          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.                                  1,348,339         979,535

          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 and the due date was extended.                 591,000         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.                                                                  3,164,433       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         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                                                           $5,734,086      $5,271,747
                                                                                   ==========      ==========
</TABLE>

NOTE 8 -  CONVERTIBLE DEBENTURES PAYABLE
          ------------------------------

          The Company has convertible debentures outstanding at
          September 30, 2002 and 2001 in the amount of $199,202 and $0,
          respectively. These debentures accrue interest at 8% per
          annum. These debentures mature along with the related interest
          at November 2003. The debentures are convertible at the
          investors' discretion pursuant to the convertible debenture
          agreement.

                                       36
<PAGE>
          Additionally, the Company recognized $100,480 and $1,830,731
          of amortization of the discount on the debenture conversions
          for the years ended September 30, 2002 and 2001, respectively.

NOTE 9 -  RELATED PARTY TRANSACTIONS
          --------------------------

          Prepaid Management Fees and Compensation

          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 was to be amortized by the Company
          commencing January 1, 2001 and for the next five years.
          Management fee expense was $293,102 and $152,098 for the years
          ended September 30, 2002 and 2001 respectively. The prepaid
          management has been completely charged off to expense as of
          September 30, 2002.

          Leases

          A company wholly owned by a minority shareholder of Encore
          Builders, Inc. provided office space to the Company through
          March 15, 2002.

          Other

          The Company's officers periodically received interest-free
          advances form the Company. These advances have been satisfied
          as of June 30, 2002 (See Note 5).

NOTE 10 - ACQUISITIONS
          ------------

          On February 10, 2000 the Company acquired MAS XV Acquisition
          Corp. for 1,500,000 shares of its common stock valued at $.19
          per share or $285,000. Additionally, on April 1, 2000 the
          Company acquired 80% of Encore Services, Inc. for 250,000
          common shares of its stock valued at $33,750. The Company
          restated its September 30, 2000 financial statements and
          expensed the entire amounts of these acquisitions because they
          were determined to have no value. Both companies had no assets
          or liabilities upon the purchase.

          On May 8, 2001, the Company merged with Connecticut
          Acquisition upon the acquisition of the Hebron Parcel. The
          Hebron Parcel was subsequently conveyed on October 31, 2001 to
          genesis, an entity related to the Company through common
          officers and directors.

          DC Power merged into the Company on November 1, 2001. The Company
          currently has no operations.

NOTE 11 - CONTINGENCY/UNCERTAINTY
          -----------------------

          The Company during the year ended September 30, 2001, became aware
          that some or all of the capital changes were not validly adopted by
          the Company's board of directors, approved by the Company's
          shareholders, or filed with the Secretary of State of the State of
          Nevada as required by the laws of the State of Nevada. As a result, it
          appears that the Company never has been authorized to issue more than
          1,000,000 shares of its common stock. All shares of the Company's
          common stock issued in excess of 1,000,000 shares appear to have been
          issued in excess of the Company's authorized amount, therefore, these
          shares have been reclassified to temporary equity (See Note 12).

          Additionally, the Company issued common stock above the Company's
          authorized amount and issued shares that at the time may not have been
          in compliance with the registration provisions of Section 5 of


                                       37
<PAGE>
          the Securities Act of 1933, as amended. The full impact of these items
          were unknown at this time. As a result, the Company had reclassified
          $3,927,047 to temporary equity as of September 30, 2001. Subsequent to
          September 30, 2001, the Company issued 843,265,695 shares of stock in
          connection with the conversion of debentures that have been classified
          as temporary equity. This resulted in an increase to temporary equity
          of $490,891 for the year ended September 30, 2002. This account acts
          as a reserve for capital that the Company may be required to repay.

          As per Note 17, the Company expects to reclassify certain amounts from
          temporary equity to permanent stockholders' equity after curing any
          over issuances of its common stock pursuant to Section 13 of the
          Securities Act.

NOTE 12 - TEMPORARY EQUITY
          ----------------

          The Company has recorded on its balance sheet as a temporary equity
          account for those securities issued that may not be in compliance with
          the registration provisions of Section 5 of the Securities Act of
          1933, as amended and for the issuance of common stock issued above its
          authorized amount. All related amounts that were previously included
          in common stock and additional paid-in capital of the permanent
          stockholders' equity (deficit) section have been reclassified to
          temporary equity as their redemption may not be solely within the
          control of the issuer.

          Temporary equity at September 30, 2002 and 2001, were $4,417,938 and
          $3,927,047, respectively. Substantially all the shares issued in
          connection with the conversion of debentures have been reclassified as
          temporary equity.

NOTE 13 - STOCKHOLDERS' EQUITY (DEFICIT)
          ------------------------------

          As of September 30, 2002 and 2001, there were 1,000,000 shares
          authorized, and 1,000,000 shares issued and outstanding of the
          Company's common stock with a par value of $.001.

          The Company issued 843,265,695 shares of common stock for the year
          ended September 30, 2002. These shares are recorded in temporary
          equity along with 1,094,300,351 shares of common stock from fiscal
          2001 which have been reclassified to temporary equity (see Note 12).
          All of the 843,265,695 shares of common stock issued were issued in
          excess of authorized limits.

          As of September 30, 2002 and 2001, there were 0 shares authorized and
          0 shares issued and outstanding of the Company's Class A Voting common
          stock with a par value of $.001.

          The shares of common stock issued for the years ended September 30,
          2002 and 2001 relate to the debenture conversions.

NOTE 14 - INCOME TAXES
          ------------

          The net deferred tax assets in the accompanying consolidated balance
          sheets include the following components at September 30, 2002 and
          2001:

                                                                       Restated
                                                           2002          2001
                                                           ----          ----

                 Deferred tax assets                  $1,678,818    $1,347,337
                 Deferred tax valuation allowance     (1,678,818)   (1,347,337)
                                                      -----------   -----------
                 Net deferred tax assets              $   -0-       $  -0-

                                       38
<PAGE>
          Due to the uncertainty of utilizing the approximate $1,678,818 and
          $1,347,337 in net operating losses, respectively, and recognizing the
          deferred tax assets, an offsetting valuation allowance has been
          established.

NOTE 15 - LITIGATION
          ----------

          On August 2, 2002, Encore Builders, Inc. filed suit against
          Conquistador Plaza, Inc., a wholly owned subsidiary of the Company, in
          the Circuit Court of the Eleventh Judicial Circuit in Miami-Dade
          County, Florida seeking the foreclosure of a mechanic's lien with
          respect to the Conquistador Plaza development. Encore Builders, Inc.
          asserts that $504,076 is due from Conquistador Plaza, Inc. and is
          seeking damages with interest, costs and attorneys fees. Encore
          Builders, Inc. was bonded by Mountbatten Surety Company, Inc. and the
          Company intends to vigorously defend this claim.

NOTE 16 - PRIOR PERIOD ADJUSTMENT
          -----------------------

          The Company has restated its audited consolidated financial statements
          for the year ended September 30, 2001, and its condensed consolidated
          financial statements for the periods ended December 30, 2001, and
          March 31, 2002.

          The Company has recognized $372,851 of management compensation, income
          of $804,952 from the reclassification of unrealized losses on
          investment securities, and an additional $5,887 in interest expense
          attributable to the debentures for the quarter ended March 31, 2002.

          Additionally, the Company has recognized $100,480 of amortization of
          discounts and $73,657 of fees related to the convertible debentures,
          and recognized an additional $34,058 of income from the gain on a sale
          of property for the quarter ended December 31, 2001.

          The net effect of all of these prior period adjustments for the six
          months ended March 31, 2002 was to decrease the net loss for the six
          months ended March 31, 2002 $286,135 from a loss of ($1,154,108), as
          originally stated to ($867,973), as restated.

          There were no adjustments effecting the quarter ended June 30, 2002 or
          the quarter ended September 30, 2002.

          Accordingly, the deficit is restated as follows:

              Deficit, September 30, 2001, as previously reported  ($2,018,802)
              Prior Period Adjustment, September 30, 2001           (1,830,731)
                                                                    -----------

              Deficit, September 30, 2001, as restated             ($3,849,533)
              Net loss for the year ended September 30, 2002          (347,513)
                                                                      ---------

              Deficit, September 30, 2002                          ($4,197,046)
                                                                   ============

          Accordingly, related stockholders' equity (deficit) accounts and
          temporary equity accounts were adjusted to account for this
          recognition (See Notes 11, 12 and 13).

NOTE 17 - SUBSEQUENT EVENTS
          -----------------



                                       39
<PAGE>
          On October 8, 2002, the Company sold its "Conquistador Plaza"
          property. The sales price for that property was $3,500,000. A majority
          of the proceeds went to pay off an existing mortgage on that property
          of approximately $3,164,433 (See Note 7).

          The Company has entered into agreements to sell its other properties.
          Management of the Company believes all deals will be closed before the
          end of its fiscal year ending September 30, 2003.

          On August 2, 2002, Encore Builders filed suit against Conquistador
          Plaza, a subsidiary of the Company, in the Circuit Court of the
          Eleventh Judicial Circuit in Miami-Dade County, Florida seeking
          foreclosure of a mechanic's lien with respect to the Conquistador
          Plaza development. Conquistador Plaza retained Encore Builders to
          construct the Conquistador Plaza development. Encore Builders asserted
          Conquistador Plaza breached the January 30, 2001 construction contract
          between Encore Builders and Conquistador Plaza. Encore Builders
          asserted that $504,076.03 is due from Conquistador Plaza, Inc. and is
          seeking damages with interest, costs and attorneys fees. Encore
          Builders was bonded by Mountbatten Surety Company, Inc. On August 26,
          2003, the parties stipulated for a full settlement of all claims that
          existed amongst them. As part of the settlement, $55,000 was to be
          paid for the benefit of Encore Builders and $50,000 was to be paid to
          Mountbatten Surety Company, Inc.

NOTE 18 - RESTATEMENT INFORMATION
          -----------------------

          The Company, in consultation with its independent accountants, is
          presenting its consolidated financial statements for its fiscal year
          ended September 30, 2002 in this annual report on Form 10-KSB. The
          effect of the presentation included in this annual report is to
          restate financial information presented for the periods ended
          September 30, 2001, December 31, 2001 and March 31, 2002. As the
          effects of this restatement are being reflected in this annual report,
          the Company does not plan to file an amended annual report for the
          fiscal year ended September 30, 2001 or amended quarterly reports for
          the periods ended December 31, 2001 and March 31, 2002. Also, because
          the Company is not restating the financial information included in its
          quarterly report on Form 10-QSB for the period ended June 30, 2002,
          that report will not be amended either. The following is a summary of
          the cumulative effect of the restatement of the Company's net loss for
          the periods ended December 31, 2001 and March 31, 2002 as well as for
          the year ended September 30, 2001:
<TABLE>
<CAPTION>
NET LOSS FOR THE YEAR ENDED SEPTEMBER 30, 2001

<S>                                                                          <C>
      NET LOSS, AS PREVIOUSLY STATED                                          $(583,644)

            Amortization of discount on debenture conversions                (1,129,866)
            Legal fees - debentures                                             (60,000)
            Fees - investors                                                   (640,865)
                                                                            ------------
      NET LOSS, AS RESTATED                                                 $(2,414,375)
                                                                            ============

NET LOSS FOR THE PERIOD ENDED DECEMBER 31, 2001

         NET LOSS, AS PREVIOUSLY STATED                                        $(47,655)

            Amortization of discount on debenture conversions                  (100,480)
            Interest expense - debentures                                        (4,922)
            Fees - investors                                                    (68,735)
            Revenue - sales of property                                          90,762
            Cost of sales - sales of property                                   (40,963)


                                       40
<PAGE>
            Reversal of gain on sale of property                                (15,741)
                                                                             -----------

         NET LOSS, AS RESTATED                                                $(187,734)
                                                                             ===========


NET LOSS FOR THE PERIOD ENDED MARCH 31, 2002

     THREE MONTHS ENDED MARCH 31, 2002
         NET LOSS, AS PREVIOUSLY STATED                                     $(1,106,453)

            Amortization of discount on debenture conversions
            Interest expense - debentures                                        (5,887)
            Additional management compensation                                 (372,851)
            Reclassification of unrealized losses on investment securities       804,952
                                                                              -----------

         NET LOSS, AS RESTATED                                                 $(680,239)
                                                                              ===========

     SIX MONTHS ENDED MARCH 31, 2002
         NET LOSS, AS PREVIOUSLY STATED                                     $(1,154,108)

            Amortization of discount on debenture conversions                  (100,480)
            Interest expense - debentures                                       (10,809)
            Fees - investors                                                    (68,735)
            Revenue - sales of property                                          90,762
            Cost of sales - sales of property                                   (40,963)
            Reversal of gain on sale of property                                (15,741)
            Additional management compensation                                 (372,851)
            Reclassification of unrealized losses on investment securities      804,952
                                                                            ------------

         NET LOSS, AS RESTATED                                                $(867,973)
                                                                            ============
</TABLE>






















                                       41
<PAGE>
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

         As provided in the Company's current report on Form 8-K filed with the
SEC on July 23, 2001, and amended on Form 8-K/A on August 9, 2001, on July 16,
2001 the Company terminated its former accountants, Baum & Company, P.A.,
Certified Public Accountants. As provided in the Company's current report on
Form 8-K filed with the SEC on August 10, 2001, the board of directors of the
Company approved the engagement of Bagell, Josephs & Company, L.L.C., as its
independent auditors, replacing the firm of Baum & Company, P.A., Certified
Public Accountants. In the two most recent fiscal years (periods ended September
30, 2000 and 2001) there were no disagreements or reportable conditions with the
former accountants on any matter of accounting principles or practices,
financial statement disclosures, or adjusting scope of procedures. The decision
for the change in accountants was recommended by the Company's management, and
approved by its board of directors.

ITEM 8A. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

         Based on their evaluation of the Company's disclosure controls and
procedures conducted as of the end of the period covered by this report on Form
10-KSB, Richard Astrom, the Company's Chief Executive Officer, and Christopher
Astrom, the Company's Chief Financial Officer, have concluded that they are the
only individuals involved in the Company's disclosure process. The Company has
no formal procedures in place for processing and assembling information to be
disclosed in the Company's periodic reports. The Company's system is designed so
that information is retained by the Company and relayed to counsel and the
Company's accountants as it becomes available. Though the Company has had
difficulty implementing its disclosure controls and procedures in the past, the
Company's principal executive officer and principal financial officer believe
that as of the end of the period being repoted, the Company's disclosure
controls and procedures are effective to ensure that information required to be
disclosed by the Company in the reports that it files or submits under the
exchange act is recorded, processed, summarized and reported, within the
required time periods.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

         No changes in the Company's internal control over financial reporting
have come to management's attention during the Company's last fiscal quarter
that have materially affected, or are likely to materially affect, the Company's
internal control over financial reporting.

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

         The Company's board of directors currently consists of two people. The
following information with respect to the principal occupation or employment,
other affiliations and business experience during the last five years of the
directors has been furnished to the Company by such directors. Except as
indicated, the directors have had the same principal occupation for the last
five years. The Company has no standing audit committee.

     NAME                 AGE      PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT
     ----                 ---      ------------------------------------------

     Richard Astrom       56       Richard Astrom has been a director of the
                                   Company since 1994. Richard Astrom Secretary
                                   of Vacation Ownership and has served as one
                                   of its directors since September of 2001. Mr.
                                   Astrom has served as President and a director
                                   of Genesis Capital Corporation of Nevada
                                   since September of 2001 and a director of
                                   Prime Rate Investors, Inc. since August of
                                   2002.

                                       42
<PAGE>
     Christopher Astrom   31       Christopher Astrom has been a director of the
                                   Company since June of 1995. Christopher
                                   Astrom is currently President, Chief
                                   Executive Officer and Chief Financial Officer
                                   of Vacation Ownership, and has served as one
                                   of its directors since August of 2001. Mr.
                                   Astrom has served as Secretary and Treasurer
                                   of Genesis Capital Corporation of Nevada
                                   since September of 2001 and is currently a
                                   director and has served as President of Prime
                                   Rate Investors, Inc. since September of 2002.

EXECUTIVE OFFICERS

         The following individuals were serving as executive officers of the
Company on January 8, 2004:

NAME                 AGE  POSITION WITH THE COMPANY

Richard Astrom.....  56   President and Chief Executive Officer
Christopher Astrom.  31   Vice President, Secretary and Chief Financial Officer

         Richard Astrom is Christopher Astrom's father. The Company does not
have any employees besides Christopher Astrom and Richard Astrom.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Section 16(a) of the Exchange Act requires the Company's directors,
executive officers and persons who own more than ten percent of the outstanding
NRES Common Stock to file with the SEC and the Company reports on Form 4 and
Form 5 reflecting transactions affecting beneficial ownership. Based solely upon
its review of the copies of such forms received by it, the Company believes
that, during fiscal year 2002, all persons complied with such filing
requirements.

ITEM 10. EXECUTIVE COMPENSATION
<TABLE>
<CAPTION>
                           SUMMARY COMPENSATION TABLE

                                                                                      LONG-TERM
                                                                                     COMPENSATION
                                                                                  AWARDS: SECURITIES     ALL OTHER
NAME AND PRINCIPAL POSITION                     YEAR       SALARY         BONUS   UNDERLYING OPTIONS    COMPENSATION
---------------------------                     ----       ------         -----   ------------------    ------------
                                                         ANNUAL COMPENSATION(1)
                                                         -------------------

<S>                                             <C>      <C>              <C>     <C>                    <C>
Richard Astrom,
 President and Chief Executive Officer(2)...... 2002      $505,525(4)      $0             _                  _
                                                2001             _          _             _                  _
                                                2000             _          _             _                  _
Christopher Astrom,
  Vice President, Secretary and Chief Financial 2002       $76,439         $0             _                  _
  Officer(3)          ......................... 2001             _          _             _                  _
                                                2000             _          _             _                  _
</TABLE>
-----------

                                       43
<PAGE>
(1)   In accordance with the rules of the Securities and Exchange Commission,
      compensation in the form of perquisites and other personal benefits has
      been omitted for the Company's named executive officers because the
      aggregate amount of such perquisites and other personal benefits
      constituted less than the lesser of $50,000 or 10% of the total of annual
      salary and bonuses for each named executive officer in the Company's prior
      fiscal year.

(2)   Richard Astrom joined the Company in 1994.

(3)   Christopher Astrom joined the Company in 1994.

(4)   Includes charge for management fees and write off for loan during the year
      ended September 30, 2002.

         Richard Astrom and Christopher Astrom are directors of the Company.
Directors currently do not receive a stated salary from the Company for their
service as members of the board of directors.

EMPLOYMENT AND SEPARATION AGREEMENTS

         The Company does not have any employment or separation agreements with
either Christopher Astrom or Richard Astrom, the Company's only employees as of
January 8, 2004.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
          RELATED STOCKHOLDER MATTERS

         To the Company's knowledge, the following table sets forth information
with respect to beneficial ownership of outstanding NRES Common Stock as of
January 8, 2004 by:

         o  each person known by the Company to beneficially own more than 5% of
            the outstanding NRES Common Stock;

         o  each of the Company's named executive officers;

         o  each of the Company's directors; and

         o  all of the Company's executive officers and directors as a group.

         Beneficial ownership is determined in accordance with the rules of the
SEC and includes voting or investment power with respect to the securities as
well as securities which the individual or group has the right to acquire within
sixty days of the original filing of this Form 10-KSB. Unless otherwise
indicated, the address for those listed below is c/o National Residential
Properties, Inc., 6915 Red Road, Suite 222, Coral Gables, Florida 33143. Except
as indicated by footnote, and subject to applicable community property laws, the
persons named in the table have sole voting and investment power with respect to
all shares of NRES Common Stock shown as beneficially owned by them. The number
of shares of NRES Common Stock outstanding used in calculating the percentage
for each listed person includes the shares of NRES Common Stock underlying
options held by such persons that are exercisable within 60 days of January 8,
2004, but excludes shares of NRES Common Stock underlying options held by any
other person. The number of shares of NRES Common Stock outstanding as of
January 8, 2004 was 1,938,566,046. Except as noted otherwise, the amounts
reflected below are based upon information provided to the Company and filings
with the SEC.
<TABLE>
<CAPTION>
NAME OF BENEFICIAL OWNER                                      NUMBER          PERCENT
------------------------                                      ------          -------
                                                            SHARES BENEFICIALLY OWNED
                                                            -------------------------
<S>            <C>                                          <C>             <C>
Richard Astrom (1)(2)                                           763,050         0.04%
Christopher Astrom (3)(4)                                    18,030,000         0.93%
All directors and executive officers as a group (2 persons)  18,793,050         0.97%
</TABLE>

------------------------

                                       44
<PAGE>
(1)   Richard Astrom serves as President, Chief Executive Officer and a director
      of the Company.

(2)   As discussed in the section entitled "Background Capitalization
      Information," and "Item 1 - Business" under the subheading "Overview," the
      Company may not be authorized to issue more than 1 million shares of
      Common Stock. As such, Richard and Pamela Astrom, as tenants by the
      entireties, appear to hold a majority of the authorized shares of the
      Company.

(3)   Christopher Astrom serves as a Vice President, Secretary, Chief Financial
      Officer and a director of the Company.

(4)   On June 17, 1999, the Company attempted to issue 2 million shares of Class
      A Common Stock to Christopher Astrom. Each such share of Class A Common
      Stock was entitled to 20 votes. The Company believes that these shares
      were not validly issued. Including these shares in the number of shares
      beneficially owned by Christopher Astrom would yield a beneficial
      ownership percentage of 1.03%.

ITEM  12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         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 was to be amortized by the
Company commencing January 1, 2001 and for the next five years. Management fee
expense was $293,102 and $152,098 for the years ended September 30, 2002 and
2001 respectively. The prepaid management has been completely charged off to
expense as of September 30, 2002.

         Pursuant to an agreement executed on December 26, 2001, made effective
as of October 31, 2001 and a statutory warranty deed dated October 31, 2001, the
Company sold all the rights, title and interest in (i) the Hebron Parcel and
(ii) contracts to purchase certain parcels of real property in Watertown, New
Milford, Granby and East Windsor, Connecticut to Senior Adult Lifestyle, Inc., a
subsidiary of Genesis, which may be deemed an affiliate of the Company. The
agreement contemplated that the Company would assume two mortgages having an
aggregate principal balance of $315,000 and be issued 20 million shares of
restricted Genesis Common Stock based on a value of $.10 per share, which value
was determined by the average bid price of Genesis Common Stock during the week
prior to the October 31, 2001 effective date. While the agreed upon
consideration was $2 million, the net effect of this transaction was to transfer
$1.685 million in Genesis Common Stock after deducting the aggregate principal
balance on the mortgages. The value of the assets sold has not been appraised by
any independent party.

         A company wholly owned by a minority shareholder of Encore Builders,
Inc. provided office space to the Company through March 15, 2002.

         The Company's officers periodically received interest-free advances
form the Company. These advances have been satisfied as of June 30, 2002.

ITEM 13.      EXHIBITS AND REPORTS ON FORM 8-K

         (a) Exhibits:

    Exhibit
     Number                             Description
     ------                             -----------

     3.1*         Articles of Incorporation of the Company.
     3.2***       Certificate of Amendment to Articles of Incorporation of the
                  Company
     3.4*         Bylaws of the Company.
     4.1**        8% Series SPB Senior Subordinated Convertible Redeemable
                  Debentures due November 3, 2002
     4.2**        8% Series SPC Senior Subordinated Convertible Redeemable
                  Debentures due April 12, 2003

                                       45
<PAGE>
     4.3**        8% Series SPD Senior Subordinated Convertible Redeemable
                  Debentures due October 17, 2003
    10.1**        Securities Subscription Agreement dated as of October 10, 2000
                  by and between 2217 Acquisition Inc. and Louvre Investors LLC,
                  Yellow Stream Company LLC and Carlsbad LLC.
    10.2**        Assignment and Assumption Agreement dated as of November 3,
                  2000 by and between 2217 Acquisition Inc. and National
                  Residential Properties, Inc.
    10.3**        Securities Subscription Agreement dated as of April 12, 2001
                  by and between Connecticut Acquisition Corp. No. 1 and Louvre
                  Investors LLC, Yellow Stream Company LLC and Carlsbad Capital
                  LLC.
    10.4**        Assignment and Assumption Agreement dated as of April 19, 2001
                  by and between Connecticut Acquisition Corp. 1 and National
                  Residential Properties, Inc.
    10.5**        Securities Subscription Agreement dated as of October 17, 2001
                  by and between DC Power Products Acquisition Corp. and Equity
                  Planners LLC, Sea Lion Investors LLC and Myrtle Holdings LLC.
    10.6**        Assignment and Assumption Agreement dated as of November 5,
                  2001 by and between DC Power Acquisition Corp. and National
                  Residential Properties, Inc.
    10.7**        Real Estate Purchase and Sale Agreement dated as of December
                  17, 2001 by and between Dennis Almendares and National
                  Residential Properties, Inc.
    10.8**        Real Estate Purchase and Sale Agreement dated as of May 20,
                  2002 by and between Gateway Mortgage Bankers and National
                  Residential Properties, Inc.
    31.1          Certification of the Principal Executive Officer pursuant to
                  Rule 13a-14(a)
    31.2          Certification of the Principal Financial Officer pursuant to
                  Rule 13a-14(a)
    32.1          Certifications of the Principal Executive Officer and
                  Principal Financial Officer pursuant to 18 U.S.C. Section 1350

*  Previously filed.

** Filed as an exhibit to the Company's quarterly report on Form 10-QSB for the
   period ended June 30, 2002, filed with the Securities and Exchange Commission
   on January 8, 2004.

***Filed as an exhibit to the Company's annual report on Form 10-KSB for the
   year ended September 30, 2000, filed with the Securities and Exchange
   Commission on January 16, 2001.

         (b) Reports on Form 8-K:

         o  A Form 8-K was filed on January 10, 2002 reporting the sale of the
            Hebron Parcel and various contracts to purchase certain parcels of
            real property in Connecticut to Senior Adult Lifestyle, Inc.

         o  A Form 8-K was filed on August 5, 2002 reporting the sale on July
            24, 2002 of the Granada Grand Apartments to G&F Corp.

ITEM 14       PRINCIPAL ACCOUNTANT FEES AND SERVICES

         Certain information required by Part III, Item 14 is omitted from this
annual report on Form 10-KSB because the Company plans to file an information
statement on Schedule 14C within 120 days after the end of its fiscal year ended
September 30, 2003, and the information included in the information statement is
incorporated herein by reference.






                                       46
<PAGE>
                                   SIGNATURES

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

                                     NATIONAL RESIDENTIAL PROPERTIES, INC.



                                     By:  /s/ Richard Astrom
                                        ----------------------------------
                                     Richard Astrom
                                     President and Chief Executive Officer




         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on January 8, 2004:

      SIGNATURE                                  TITLE(S)

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


/s/  CHRISTOPHER ASTROM     Vice President, Chief Financial Officer, Secretary
-----------------------     and Director
Christopher Astrom



























                                       47