SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-Q/A



|X|      QUARTERLY  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES
         EXCHANGE  ACT OF 1934 FOR THE  QUARTERLY  PERIOD  ENDED  SEPTEMBER
         30, 2003, OR

|_|      TRANSITION  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES
         EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____ TO _____


                         Commission File Number: 0-2616


                         CONSUMERS FINANCIAL CORPORATION
             (Exact name of registrant as specified in its charter)


                       Pennsylvania                               23-1666392
              (State or other jurisdiction of                 (I.R.S. Employer
              incorporation or organization)                 Identification No.)


            132 Spruce Street, Cedarhurst, NY                       11516
         (Address of principal executive offices)                 (Zip Code)


                                  516-792-0900
              (Registrant's telephone number, including area code)


         Indicate by check mark whether the registrant (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
filing such requirements for the past 90 days.

                          Yes   _X_         No ___


         Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.

                                                              Outstanding at
         Class of Common Stock                                 May 5, 2004
         ---------------------                                -------------
           $.01 Stated Value                                    21,506,696


<PAGE>


                CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARIES
                                TABLE OF CONTENTS


                                EXPLANATORY NOTE

This Form 10-Q/A shall amend and restate in its entirety the Form 10-Q filed by
the Company on January 30, 2004.


<TABLE>
<CAPTION>
Number                                                                                Page
------                                                                                ----
          Part I. Financial Information

<S>       <C>                                                                         <C>
Item 1.   Condensed Consolidated Financial Statements:

          Balance Sheets - September 30, 2003 (Unaudited) and December 31, 2002         3

          Statements of Operations and Comprehensive Income (Loss) (Unaudited) -
               For the Nine and Three Months Ended September 30, 2003 and 2002          4

          Statements of Cash Flows (Unaudited)- For the Nine Months Ended
               September 30, 2003 and 2002                                              5

          Notes to Condensed Consolidated Financial Statements                          6

Item 2.   Management's Discussion and Analysis of Financial Condition
               and Results of Operations                                                18

Item 3.   Quantitative and Qualitative Disclosure About Market Risk                     24

Item 4.   Controls and Procedures                                                       24


          Part II. Other Information

Item 1.   Legal Proceedings                                                             26

Item 2.   Changes in Securities and Use of Proceeds                                     26

Item 3.   Defaults upon Senior Securities                                               26

Item 4.   Submission of Matters to a Vote of Security Holders                           26

Item 5.   Other Information                                                             27

Item 6.   Exhibits and Reports on Form 8-K                                              28

          Certifications

Pursuant to Section 302 of Sarbanes-Oxley Act                                           30

Pursuant to Section 906 of Sarbanes-Oxley Act                                           32
</TABLE>



                                       2
<PAGE>

                          PART I. FINANCIAL INFORMATION

Item 1.  Condensed Consolidated Financial Statements

                Consumers Financial Corporation and Subsidiaries
                      Condensed Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                                               September 30
                                                                                   2003
                                                                               (Unaudited)
                                                                               (as restated     December 31
                                                                                see Note 2)        2002
                                                                               ------------    ------------
<S>                                                                            <C>             <C>
ASSETS

Current Assets:
Cash and cash equivalents                                                      $      6,169    $    165,758
Prepaid expenses                                                                         --          30,420
                                                                               ------------    ------------
  Total current assets                                                                6,169         196,178

Property and equipment, net of accumulated
 depreciation of $43,744 and $43,090, respectively                                    2,292              --
Restricted cash held in escrow account                                              269,021         314,225
Prepaid insurance                                                                    66,379          87,363
                                                                               ------------    ------------

Total Assets                                                                   $    343,861    $    597,766
                                                                               ============    ============


LIABILITIES, REDEEMABLE PREFERRED STOCK
  AND SHAREHOLDERS' DEFICIENCY

Current Liabilities:
Accounts payable and accrued expenses                                          $    161,419    $     32,168
Due to Officer                                                                        5,000              --
Other                                                                                    --          22,134
                                                                               ------------    ------------
  Total current liabilities                                                         166,419          54,302
                                                                               ------------    ------------

Redeemable preferred stock:
  Series A, 8 1/2% cumulative convertible, authorized 632,500 shares; issued
   75,326 shares; outstanding 2003, 63,161 shares; 2002, 75,326 shares;
   redemption amount 2003, $631,610; 2002,
   $753,260; net of treasury stock of $31,629 in 2003                               711,799         739,949
                                                                               ------------    ------------

Shareholders' Deficiency:
  Common stock, $.01 stated value, authorized 10,000,000 shares, 17,002,096
   (includes 9,913,042 shares to be issued) and
   5,276,781 shares issued and outstanding, respectively                            170,021          52,768
Capital in excess of stated value                                                11,446,312       8,938,865
Deficit                                                                         (12,122,003)     (9,188,118)
Less: Deferred compensation                                                         (28,687)             --
                                                                               ------------    ------------
   Total shareholders' deficiency                                                  (534,357)       (196,485)
                                                                               ------------    ------------

Total liabilities and shareholders' deficiency                                 $    343,861    $    597,766
                                                                               ============    ============
</TABLE>


      See accompanying notes to condensed consolidated financial statements


                                        3
<PAGE>

                Consumers Financial Corporation and Subsidiaries
 Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                             Nine Months                         Three Months
                                                               Ended                                 Ended
                                                            September 30,       Nine Months       September 30,    Three Months
                                                                2003              Ended              2003              Ended
                                                            (as restated       September 30,     (as restated      September 30,
                                                             see Note 2)           2002            see Note 2)         2002
                                                             -----------       -----------       -----------       ------------
<S>                                                          <C>               <C>               <C>               <C>
Selling, general and administrative expenses (Including
  stock based compensation of $2,596,012 for the nine
  and three months ended September 30, 2003)                 $ 2,930,244       $   419,078       $ 2,707,611       $   137,653
                                                             -----------       -----------       -----------       -----------

Other Income/Expense
  Interest income                                                  2,080            44,295               512             6,320
  Interest expense                                                (5,648)               --            (5,648)               --
  Net realized investment gains                                       --           242,480                --                --
  Proceeds from settlement of litigation                              --           255,000                --           255,000
  Other income                                                     3,406            41,192             1,959               222
                                                             -----------       -----------       -----------       -----------
                                                                    (162)          582,967            (3,177)          261,542
                                                             -----------       -----------       -----------       -----------

Net (loss) income                                             (2,930,406)          163,889        (2,710,788)          123,889
                                                             -----------       -----------       -----------       -----------

Other comprehensive loss, change in unrealized
  appreciation of debt securities                                     --           (54,702)               --                --
                                                             -----------       -----------       -----------       -----------

Comprehensive (loss) income                                  $(2,930,406)      $   109,187       $(2,710,788)      $   123,889
                                                             ===========       ===========       ===========       ===========

Per share data:
  Basic and diluted (loss) income per common share           $     (0.44)      $     (0.05)      $     (0.29)      $      0.00
                                                             ===========       ===========       ===========       ===========

 Weighted average number of common shares outstanding          6,783,070         2,909,419         9,515,637         3,574,636
                                                             ===========       ===========       ===========       ===========
</TABLE>


      See accompanying notes to condensed consolidated financial statements


                                       4
<PAGE>


                Consumers Financial Corporation and Subsidiaries
                 Condensed Consolidated Statements of Cash Flows
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                               Nine months ended September 30,
                                                               -------------------------------
                                                                   2003
                                                               (as restated
                                                                see Note 2)           2002
                                                                -----------       -----------
<S>                                                             <C>               <C>
Cash flows from operating activities:
Net (loss) income                                               $(2,930,406)      $   163,889

Adjustments to reconcile net (loss) income to cash flows
  used in operating activities:
  Depreciation and amortization                                         654                --
  Write-off of loans receivable from
    majority shareholder                                             27,500                --
  Gain on sale of investments                                            --           (56,448)
  Gain on sale of insurance licenses                                     --          (178,483)
  Stock based compensation                                        2,596,012                --

  Increase (decrease) in cash attributable to changes in
    assets and liabilities:
  Other receivables                                                      --            21,431
  Prepaid expenses                                                   51,404           (13,317)
  Accrued expenses                                                   94,858                --
  Change in employee severance liability                                 --          (177,962)
  Other current liabilities                                              --           (69,841)
  Other                                                                  --           (53,439)
                                                                -----------       -----------
   Total adjustments                                              2,770,428          (528,059)
                                                                -----------       -----------

Net cash used in operating activities                              (159,978)         (364,170)
                                                                -----------       -----------

Cash flows from investing activities:
  Loans to majority shareholder                                     (27,500)               --
  Purchase of capital assets                                         (2,946)               --
  Proceeds from sale of investments                                      --           945,181
  Proceeds from sale of insurance licenses, net of selling
   expenses of $44,767 and liability assumed by buyer
   of $132,120                                                           --            73,113
  Cash deposited into preferred stock escrow account, net
   of withdrawal                                                     45,204          (331,434)
                                                                -----------       -----------

Net cash provided by investing activities                            14,758           686,860
                                                                -----------       -----------

Cash flows from financing activities:
  Proceeds from loans by officer                                      5,000                --
  Purchase of redeemable preferred stock                            (19,369)       (1,660,067)
  Cash dividends to preferred shareholders                               --          (335,986)
  Proceeds from issuance of common stock                                 --           108,000
                                                                -----------       -----------

Net cash used in financing activities                               (14,369)       (1,888,053)
                                                                -----------       -----------

Net decrease in cash and cash equivalents                          (159,589)       (1,565,363)
Cash and cash equivalents, beginning                                165,758         1,802,265
                                                                -----------       -----------

Cash and cash equivalents, ending                               $     6,169       $   236,902
                                                                ===========       ===========

Non-cash investing activities:
  Due to preferred shareholders for redemption of shares        $    12,260       $        --
                                                                ===========       ===========
</TABLE>


      See accompanying notes to condensed consolidated financial statements


                                       5
<PAGE>

                CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                  NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
                                   (Unaudited)


1.       Overview, going concern and management plans

         The condensed consolidated balance sheet of Consumers Financial
Corporation and Subsidiaries as of September 30, 2003, the related condensed
consolidated statements of operations for the three and nine months ended
September 30, 2003 and 2002 and the condensed consolidated statements of cash
flows for the nine months ended September 30, 2003 and 2002, included in Item 1
have been prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission ("SEC"). Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America have been condensed or omitted pursuant to such rules
and regulations. In the opinion of management, the accompanying condensed
consolidated financial statements include all adjustments (consisting of normal,
recurring adjustments) necessary in order to make the financial statements not
misleading. The results of operations for the nine months ended September 30,
2003 are not necessarily indicative of the results of operations for the full
year or any other interim period. These condensed consolidated financial
statements should be read in conjunction with the audited consolidated financial
statements and notes thereto included in the Company's Annual Report on Form
10-K for the year ended December 31, 2002 and filed with the SEC.

         Since 1998 the Company has had no business operations and its revenues
and expenses have consisted principally of investment income on remaining assets
and corporate and other administrative expenses. In March 1998, the Company's
shareholders approved a Plan of Liquidation and Dissolution (the Plan of
Liquidation) pursuant to which the Company began liquidating its remaining
assets and paying or providing for all of its liabilities. However, in February
2002, the Company entered into an option agreement with CFC Partners, Ltd., a
New York investor group ("CFC Partners"), pursuant to which CFC Partners could
obtain a majority interest in the Company's common stock. In August 2002, the
option was exercised and 2,700,000 new common shares (approximately 51.2% of the
then total outstanding shares) were issued by the Company to CFC Partners. As a
result of the acquisition of the Company, the Plan of Liquidation was
discontinued. Immediately prior to the transaction with CFC Partners, the
Company paid a substantial portion of its remaining assets to its preferred
shareholders in connection with a tender offer to those shareholders (see Note
9).

  Going concern and management plans

         The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. However, as a result
of the events discussed above, at September 30, 2003, the Company had only
$6,169 in cash, a shareholders' deficiency of $534,357 and was unable to pay its
existing creditors. Also, as of September 30, 2003, the Company had not paid its
payroll taxes for either the second quarter of 2003 or for the third quarter of
2003 although these taxes were subsequently paid during the fourth quarter of
2003. These matters raise substantial doubt about the Company's ability to
continue as a going concern.

        CFC Partners is currently pursuing various business opportunities for
the Company, including strategic alliances, as well as the merger or combination
of existing businesses with the Company. The new management of the Company is
initially focusing on joint ventures with or acquisitions of companies in the
real estate, insurance agent, construction management and medical technology
businesses as well as the direct purchase of income-producing real estate.
However, there is no assurance that the Company's efforts in this regard will be
successful. In fact, given the Company's current cash position, without new
revenues and/or immediate financing, the Company's efforts to develop the
above-referenced businesses are not likely to succeed.


                                       6
<PAGE>


                CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
                  NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
                                   (Unaudited)


         The Company's ability to continue as a going concern is dependent on
its success in developing new cash revenue sources or, alternatively, in
obtaining short-term financing while its businesses are being developed. There
are no assurances that such financing can be obtained or, if available, be
obtained at terms acceptable to the Company. To the extent that such financing
is equity based, this may result in dilution to the existing shareholders.

         The condensed consolidated financial statements presented herein do not
include any adjustments that might result from the outcome of this uncertainty.


Basis of consolidation

        The condensed consolidated financial statements include the accounts of
Consumers Financial Corporation, its former wholly-owned subsidiary, Consumers
Life Insurance Company (Consumers Life) until June 19, 2002 when Consumers Life
was sold, its wholly-owned subsidiary Consumers Management Group and its 55%
owned subsidiary, P.E.T. Centers of America LLC. Since inception, these
subsidiaries have had no operations. All significant intercompany balances and
transactions herein have been eliminated in consolidation.

Equity method investee

         The Company carries its 47.5% investment in Vaughn Properties, LLC
("Vaughn") at a value of zero, which was the original cost, and accounts for its
financial activity under the equity method of accounting. Vaughn is operating at
a loss and the Company is not liable for any of the obligations of Vaughn,
either direct or indirect, and is under no requirement to contribute any capital
to Vaughn.

Cash and cash equivalents

         The Company considers all short-term investments with an original
maturity of three months or less when purchased to be cash equivalents.

Income taxes

         The Company accounts for income taxes using the liability method, which
requires the determination of deferred tax assets and liabilities based on the
differences between the financial and tax bases of assets and liabilities using
enacted tax rates in effect for the year in which differences are expected to
reverse. Deferred tax assets are adjusted by a valuation allowance, if, based on
the weight of available evidence, it is more likely than not that some portion
or all of the deferred tax assets will not be realized.

Equipment and fixtures

         Equipment and fixtures are stated at cost. Maintenance and repairs are
charged to expenses as incurred; costs of major additions and betterments are
capitalized. When equipment and fixtures are sold or otherwise disposed of, the
cost and related accumulated depreciation are eliminated from the accounts and
any resulting gain or loss is reflected in the Condensed Consolidated Statement
of Operations.

Depreciation

         Depreciation of equipment and fixtures is computed on the straight-line
method at rates adequate to allocate the cost of applicable assets over their
expected useful lives of three years.


                                       7


<PAGE>


                CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
                  NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
                                   (Unaudited)


Use of estimates in the financial statements

         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 disclosure 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 these
estimates.

Net loss per share

         Basic EPS is computed by dividing income (loss) available to common
shareholders by the weighted-average number of common shares outstanding for the
period. Diluted EPS is based on the weighted-average number of shares of common
stock and common stock equivalents outstanding at year-end.

Reclassifications

         Certain accounts in the prior year financial statements have been
reclassified for comparative purposes to conform with the presentation in the
current year financial statements. These reclassifications have no effect on
previously reported income.

Stock based compensation

         In October 1995, the Financial Accounting Standards Board "(FASB")
issued Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation" ("SFAS 123"). SFAS 123 prescribes accounting and
reporting standards for all stock based compensation plans, including employees
tock options, restricted stock, employee stock purchase plans and stock
appreciation rights. SFAS 123 requires compensation expense to be recorded (i)
using the new fair value method or (ii) using the existing accounting rules
prescribed by Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees" (APB 25") and related interpretations with pro forma
disclosure of what net income and earnings per share would have been had the
Company adopted the new fair value method. The Company intends to continue to
account for its stock based compensation plans in accordance with the provisions
of APB 25.

         On December 31, 2002, the FASB issued Statement of Financial Accounting
Standards No. 148, "Accounting for Stock-Based Compensation-Transition and
Disclosure" ("SFAS 148"). SFAS 148 amends SFAS 123 to provide an alternative
method of transition to SFAS 123's fair value method of accounting for stock
based employee compensation. SFAS 148 also amends the disclosure provisions of
SFAS 123 and Accounting Principles Board Opinion No. 28, "Interim Financial
Reporting" ("APB 28"), to require disclosure in summary of significant
accounting policies of the effects of an entity's accounting policy with respect
to stock based employee compensation on reported net income and earnings per
share in annual and interim financial statements. While the statement does not
amend SFAS 123 to require companies to account for employee stock options using
the fair value method, the disclosure provisions of SFAS 123 are applicable to
all companies with stock based employee compensation, regardless of whether they
account for that compensation using the fair value method of SFAS 123 or the
intrinsic value method of APB 25. The adoption of SFAS 148 did not have an
impact on net income or pro forma net income applying the fair value method as
the Company did not have compensatory stock options or warrants for the years
ended December 31, 2003 or 2002.

New accounting pronouncements

         In May 2003, the FASB issued Statement of Financial Accounting
Standards No. 150, "Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity" (SFAS 150"). SFAS 150 addresses
certain financial instruments that, under previous guidance, could be accounted
for as



                                       8
<PAGE>


                CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
                  NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
                                   (Unaudited)


equity, but now must be classified as liabilities in statements of financial
position. These financial instruments include: (i) mandatory redeemable
financial instruments, (ii) obligations to repurchase the issuer's equity shares
by transferring assets, and (iii) obligations to issue a variable number of
shares. SFAS 150 is generally effective for all financial instruments entered
into or modified after May 31, 2003, and otherwise effective at the first
interim period beginning after June 15, 2003. The adoption of the effective
provisions of SFAS 150 did not have any impact on the Company's condensed
consolidated financial position or statement of operations

         In January 2003 and revised in December 2003, the FASB issued FASB
Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46").
This interpretation of Accounting Research Bulletin No. 51, "Consolidated
Financial Statements," addresses consolidation by business enterprises of
variable interest entities, which possess certain characteristics. FIN 46
requires that if a business enterprise has a controlling financial interest in a
variable interest entity, the assets, liabilities, and results of the activities
of the variable interest entity must be included in the consolidated financial
statements with those of the business enterprise. FIN 46 applies immediately to
variable interest entities created after January 31, 2003 and to variable
interest entities in which an enterprise obtains an interest after that date.
The consolidation requirements apply to older entities in the first fiscal year
or interim period after June 15, 2003. The adoption of the effective provisions
of Interpretation 46 did not have any impact on the Company's condensed
consolidated financial position or statement of operations.


2.       Restatement

         As a result of a reclassification of any equity investment and certain
related adjustments for the three and nine months ended September 30, 2003, the
Company is restating its Form 10-Q filing included in those periods.

         The Company originally consolidated their 47.5% investment in Vaughn
(See Note 4) based on the position that significant control was maintained over
Vaughn. Subsequently it was determined that the Company did not in fact maintain
significant control and therefore is recording this investment as an equity
investment.

         Net loss and net loss per share for the three and nine months ended
September 30, 2003 as previously reported with the first amendment to the 10-Q
filed on January 31, 2004 was $2,502,929 ($0.26 per share) and $2,777,639 ($0.42
per share), respectively. The effect of the preceding adjustments was an
increase in net loss and net loss per share. The restated net loss and net loss
per share for the three and nine months ended September 30, 2003 is $2,710,788
($0.29 per share) and $2,930,406 ($0.44 per share), respectively.


3.       Acquisition of the company

         On August 28, 2002, CFC Partners exercised its option to acquire
2,700,000 shares of the Company's common stock. The option was granted to CFC
Partners through an option agreement dated February 13, 2002. The option price
of $108,000 had previously been deposited by CFC Partners into an escrow account
held by the Company. The newly issued shares represented approximately 51.2% of
the then outstanding common stock of the Company.


                                       9
<PAGE>


                CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
                  NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
                                   (Unaudited)


         In connection with the issuance of the new shares to CFC Partners, the
Board of Directors also terminated the Plan of Liquidation. The Board had
previously determined that selling the Company for its value as a "public
company shell" was a better alternative for the shareholders than the Plan of
Liquidation, in as much as the common shareholders were not expected to receive
any distribution in a liquidation of the Company. The preferred shareholders
were given an opportunity to exchange their shares for cash in a tender offer
completed by the Company on August 23, 2002 (see Note 9).

         The new management of the Company is currently pursuing various
business opportunities for the Company. Management's efforts have initially been
focused on joint ventures with or acquisitions of companies in the real estate,
construction management and medical technology businesses as well as the
purchase of income-producing real estate (see Note 4 and 5).

4.       Equity investment

         In May 2003, Vaughn, an Illinois limited liability company in which the
Company owns a 47.5% interest, acquired a real estate property in Springfield,
Illinois. Vaughn acquired this property for a purchase price of $5,440,940,
comprised of a $4,650,000 interest only bank loan secured by a first mortgage
lien on the property payable in two years, a $1,200,000 second mortgage on the
property, with principal amounts of $500,000 due six months from acquisition and
$700,000 due twelve months from acquisition, as well as a $100,000 loan made by
a private investor and $200,000 in cash which was contributed by third party
investors to Vaughn. Vaughn is currently in default on the second mortgage and
on the $100,000 loan made by the private individual. The mortgages carry
interest rates of 7.25% and 13% respectively. As a result of the default under
the second mortgage, the second mortgagee has the right to, among other rights,
sell the property, collect all rental income from the property and exclude
Vaughn therefrom. As a result of the default under the $100,000 loan, Vaughn is
liable for accrued interest from June 15, 2003 at an annual rate of 18% plus all
costs and fees incurred by the lender in collecting the amounts due under the
note. Vaughn also obtained and had not used approximately $299,000 of a $600,000
construction loan from the bank for the purpose of completing certain
renovations to the property at September 30, 2003.

         The Company is not directly or indirectly liable for any of the
obligations of Vaughn and its exposure is limited solely to its investment in
Vaughn which is carried at zero in these condensed consolidated financial
statements.

           Effective as of October 31, 2003, the Company approved an amended
operating agreement whereby Spartan would transfer to the Company 24.22% of its
interest in Vaughn in consideration for issuance by the Company of 250,000
shares of common stock. This amended operating agreement memorializing this
arrangement was not executed by members of Vaughn holding 5% of the membership
interests and the 250,000 shares of common stock were not issued. This amended
operating agreement has therefore not been and will not be ratified.

         The 47.5% equity interest in Vaughn is being accounted for under the
equity method in the financial statements at September 30, 2003.


                                       10
<PAGE>

                CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
                  NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
                                   (Unaudited)


         Selected financial information for Vaughn as of September 31, 2003 and
for the nine months then ended are as follows:

        Current Assets                            $   434,279
        Non-Current Assets                        $ 5,764,030
                                                  ------------
        Total Assets                              $ 6,198,309

        Current liabilities                       $ 1,561,945
        Non-current liabilities                   $ 4,650,000

        Rental income                             $   220,752
        Rental expenses                           $   250,513
        Loss on rentals                           $   (29,761)
        Loss from continuing operations           $   (29,761)
        Net loss                                  $  (213,637)

           On September 4, 2003, the Company's Board of Directors approved the
payment of broker's fees to the Company's majority shareholder, CFC Partners,
for real estate and other contracts obtained by CFC Partners and assigned to the
Company. The Board agreed to pay CFC Partners an amount equal to 5% of the
contract price following the completion of each transaction. As a result, the
Board authorized the issuance to CFC Partners of 1,227,273 shares of the
Company's common stock in connection with the acquisition of the Springfield
real estate. The cost of this transaction to the Company, as measured by the
market value of the shares at the time of issuance, is approximately $270,000,
which was expensed in during the nine months ended September 30, 2003.

5.         BUSINESS DEVELOPMENT ACTIVITIES

           On September 10, 2003, the Company entered into an agreement with
Hudson Valley Home Builders & Developers Corp. pursuant to which Hudson would
use its commercially reasonable efforts to introduce funding sources to provide
the Company with financing to consummate real estate transactions. Hudson agreed
to provide the Company with financing between $2,000,000 and $4,000,000 for 36
months from the date of the agreement. The Company agreed to use commercially
reasonable efforts to consummate a maximum of 10 real estate transactions each
12-month period. Pursuant to the terms of the agreement, Hudson would notify the
Company within 21 days of receipt of an executed contract on a real estate
project that it would fund such project. The investors would have the right to
designate a portion of their funding to be used to purchase shares of the
Company at a premium above market.

           Pursuant to the agreement, Hudson and its investors would be entitled
to 60% of the equity of a deal, as well as a cash payment equal to 10% of the
consideration received by the Company from Hudson and its investors. Upon
financing a real estate deal the Company would issue to Hudson and its investors
a warrant to purchase shares of the Company. The Company agreed to file a
registration statement for the shares of Hudson and its investors within 24
months and granted them piggyback registration rights after 18 months. Either
party has the right to terminate the agreement by written notice to the other.
To date, no funds have been generated by Hudson.


                                       11
<PAGE>

                CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
                  NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
                                   (Unaudited)


         During April, 2003, the Company entered into a Memorandum of
Understanding with Mariculture Systems, Inc. ("Mariculture") whereby the Company
would acquire 60% of the outstanding shares of Mariculture in exchange for the
Company's management and financial expertise. Mariculture designs, builds and
operates aquaculture farms used for raising certain species of fish for the
consumer market. Although not aggressively pursued by either party to date, and
still requiring appropriate due diligence review and board approvals, this
memorandum has no expiration date and neither party has expressed an intent to
terminate it.


6. Stock issuances to consultants

         On July 1, 2003, the Company filed a Registration Statement with the
Securities and Exchange Commission to register an aggregate of 353,000 shares of
its common stock, which the Company issued to three consultants pursuant to
certain agreements entered into between the Company and the respective
consultants. Each of these agreements terminates on December 31, 2003. In
exchange for receipt of the shares of common stock, such consultants will
provide various services to the Company, principally relating to the
identification of suitable merger or acquisition partners for the Company. The
cost of these services, measured by the market value of the shares at the time
of issue, is approximately $74,470.

         On September 19, 2003, the Company filed a Registration Statement with
the Securities and Exchange Commission to register 92,000 shares of common stock
which was issued to a consultant pursuant to a consultancy agreement entered
into between the Company and the consultant on said date. In exchange for
receipt of the shares of common stock, the consultant will provide various
services to the Company, principally relating to the identification of suitable
merger or acquisition partners for the Company. The cost of these services,
measured by the market value of the shares at the time of issue, is
approximately $21,160

         On November 7, 2003, the Company filed a Registration Statement with
the Securities and Exchange Commission to register 140,000 shares of common
stock which was issued to a consultant pursuant to a consultancy agreement
entered into between the Company and the consultant on July 2, 2003. In exchange
for receipt of the shares of common stock, the consultant will provide various
services to the Company, principally relating to the identification of suitable
merger or acquisition partners for the Company. The cost of his services,
measured by the market value of the shares at the time of issue, is
approximately $18,200.


7. Stock issuances to officers and execution of employment agreements

         At the September 4, 2003 meeting of the Board of Directors, the Board
approved bonuses for Donald J. Hommel, President and Chief Executive Officer and
Jack I. Ehrenhaus, Chairman and Chief Operating Officer of the Company. Each of
the individuals was issued 1,956,521 shares of common stock valued at $430,435.

         On September 1, 2003, the Company entered into employment agreements
with each of Donald J. Hommel, President and Chief Executive Officer and Jack I.
Ehrenhaus, Chairman and Chief Operating Officer, of the Company. Each agreement
provides for annual compensation of $225,000 in base salary with annual
increases of 10%, and annual bonuses as determined by the Board, which can range
from twice the amount of the base salary, but in no event will the bonus be less
than 50% of the salary. Each


                                       12
<PAGE>


                CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
                  NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
                                   (Unaudited)


officer is also entitled to an automobile allowance of $750 per month and
reimbursement of all business expenses. The term of each employment agreement is
ten years. If the Company terminates either officer without cause prior to the
term, the officer is entitled to a severance payment equal to his salary for the
remainder of the 10-year term or two years', whichever is greater. If there is a
material change in the Company which causes a substantial reduction of the
officer's duties, or a liquidation, transfer of assets or merger and the Company
is not the surviving entity, the officer is entitled to a severance payment. The
employment agreements also provide for the issuance of 3,000,000 shares of the
Company's common stock to each of the officers which were valued at an aggregate
of $1,380,000. Each officer also agreed that if the Company has a cash flow
shortfall, the officer will take stock in lieu of cash compensation at a 20%
discount to the stock price at the payment date.


8.       Loan receivable

During the first quarter of 2003, the Company made payments totaling $27,500 to
certain individuals who had previously loaned funds to CFC Partners so that CFC
Partners could purchase its majority interest in the Company's common stock.
Since any obligation to repay the Company is the responsibility of these
individuals, one of whom is a director of the Company, CFC Partners has agreed
to directly repay this amount to the Company. However, because CFC Partners
currently has no ability to repay the amount borrowed, this loan has been fully
reserved in the Company's consolidated financial statements through a charge to
non-operating expenses.


9.       Restricted assets

         As required by the terms of the option agreement with CFC Partners, the
Company deposited $331,434 (representing the tender price of $4.40 multiplied by
the 75,326 shares of preferred stock not tendered) into a bank escrow account
for the benefit of the remaining preferred shareholders. The funds in this
account, including any earnings thereon, are restricted in that they may only be
used by the Company to pay dividends or make other distributions to the
preferred shareholders. At September 30, 2003 and December 31, 2002, these
assets consisted entirely of money market funds. However, during 2003, $47,088
was withdrawn from the escrow account to purchase 12,165 shares of preferred
stock for $31,629. The remaining $15,459 was deposited into the Company's
general cash account. Included in accounts payable and accrued expenses at
September 30, 2003 is $12,260 due to preferred shareholders.


10.      Redeemable preferred stock:

         On August 23, 2002, the Company completed a tender offer to all of its
preferred shareholders, pursuant to which it purchased 377,288 shares
(approximately 83.4% of the shares then outstanding) at $4.40 per share plus
accrued dividends. The tender offer was completed in conjunction with and was a
condition to the exercise of the option by CFC Partners. Since all of the
Company's remaining assets would have been distributed to the preferred
shareholders if the Company had been liquidated, the Board of Directors believed
that the exercise of the option (and the related termination of the Plan of
Liquidation) should not take place until the preferred shareholders had been
given a chance to exchange their shares for cash.

         The terms of the redeemable preferred stock require the Company, when
and as appropriated by the Board out of funds legally available for that
purpose, to make annual payments to a sinking fund. Such


                                       13
<PAGE>


                CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
                  NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
                                   (Unaudited)


payments were to have commenced on July 1, 1998. The preferred stock terms also
provide that any purchase of preferred shares by the Company will reduce the
sinking fund requirements by an amount equal to the redemption value ($10 per
share) of the shares acquired. As a result of the Company's purchases of
preferred stock in the open market and in the tender offer described above, no
sinking fund payment for the preferred stock is due until July 1, 2006. However,
in connection with the exercise of the option by CFC Partners, the Company
deposited $331,434 into a bank escrow account for the benefit of the remaining
preferred shareholders (see Note 8).

         The redeemable preferred stock is redeemable at the option of the
Company at any time, as a whole or in part, for a redemption price of $10 per
share plus all unpaid accrued dividends.

          Dividends at an annual rate of $.85 per share are cumulative from the
date of original issue of the preferred stock. Dividends are payable quarterly
on the first day of January, April, July and October. The dividends payable on
January 1, April 1, July 1 and October 1, 2003 have not been declared or paid by
the Company. In addition, the dividend payable at January 1, 2004 has also not
been declared or paid by the Company. Dividends in arrears for the five quarters
as of January 1, 2004 total $74,205, $60,783 of which relates to the four
quarters of 2003.

         When the Company is in arrears as to preferred dividends or sinking
fund appropriations for the preferred stock, dividends to holders of the
Company's common stock as well as purchases, redemptions or acquisitions by the
Company of shares of the Company's common stock are restricted. Since the
Company is in default with respect to the payment of preferred dividends and the
aggregate amount of the deficiency is equal to at least four quarterly
dividends, the holders of the preferred stock are entitled, only while such
arrearage exists, to elect two additional members to the then existing Board of
Directors. The preferred shareholders have not elected these two additional
directors as of this date.

         In the event of a liquidation of the Company, the holders of the
preferred stock are entitled to receive $10 per share plus all unpaid and
accrued dividends prior to any distribution to be made to the holders of common
stock.

         The preferred stock is convertible at any time, unless previously
redeemed, into shares of common stock at a rate of 1.482 shares of common stock
for each share of preferred stock (equivalent to a conversion price of $6.75 per
share).

         The difference between the fair value of the preferred stock at the
date of issue and the mandatory redemption value is being recorded through
periodic accretions with an offsetting charge to the deficit. Such accretions
totaled $3,479 and $9,627 in the first nine months of 2003 and 2002,
respectively. The unaccreted discounts were $9,921 and $13,311 as of September
30, 2003 and December 31, 2002, respectively.


                                       14
<PAGE>

11. PER SHARE INFORMATION

<TABLE>
<CAPTION>
                                                      Nine Months       Nine Months       Three Months       Three Months
                                                        Ended              Ended             Ended              Ended
                                                     September 30,      September 30,    September 30,      September 30,
                                                          2003             2002              2003               2002
                                                   ---------------    ---------------  ---------------    ----------------
<S>                                                <C>                  <C>             <C>                 <C>
Net (loss) income                                  $  (2,930,406)       $  163,889      $ (2,710,788)       $  123,889
Preferred stock dividend requirement                     (44,777)         (239,806)          (13,422)          (47,445)
Accretion of carrying value of preferred stock            (3,479)          (83,708)           (1,513)          (74,821)
                                                   -------------        ----------      ------------        ----------
Numerator for basic loss per share - loss
 attributable to common shareholders                  (2,978,662)         (159,625)       (2,725,723)            1,623
Effect of dilutive securities                                 --                --                --                --
                                                   -------------        ----------      ------------        ----------
Numerator for diluted loss per share               $  (2,978,662)       $ (159,625)     $ (2,725,723)       $    1,623
                                                   =============        ==========      ============        ==========
Denominator for basic loss per share -
  weighted average shares                              6,783,070         2,909,419         9,515,637         3,574,636
Effect of dilutive securities                                 --                --                --                --
                                                   -------------        ----------      ------------        ----------
Denominator for diluted loss per share                 6,783,070         2,909,419         9,515,637         3,574,636
                                                   =============        ==========      ============        ==========
Basic and diluted loss per common share            $       (0.44)       $    (0.05)     $      (0.29)       $     0.00
                                                   =============        ==========      ============        ==========
</TABLE>


12.     Related Party Transactions

         During 2003, the Company received an unsecured loan from Mr. Hommel, an
officer of the Company, in the amount of $5,000 for working capital purposes.
This loan bears no interest rate and has no repayment term. No payments of
principal have been made on this loan and the amount of $5,000 is outstanding at
September 30, 2003.


13.      Legal Proceedings

         The Company is currently in arbitration against its co-defendant, Life
of the South, from a previously settled claim. Life of the South is seeking to
recover from the Company its share of the settlement totaling $17,500, its
unreimbursed fees of $27,825 plus interest, attorney fees and cost of
arbitration from the Company. The arbitration is in its initial stages and while
the outcome can not be predicted, the Company believes the arbitration will be
settled in favor of the Company.


                                       15
<PAGE>


                CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
                  NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
                                   (Unaudited)


14.      Commitment and contingency

         In September, the Company, through its subsidiary, had signed a lease
for a PET center in Suffolk County, New York, but subsequently the lease
terminated. The Company received a letter from the landlord dated November 11,
2003 claiming that the Company and the subsidiary are liable to the landlord for
all costs and expenses incurred in connection with enforcing the lease
provisions as well as liquidated damages provided for in the lease (the present
value of the lease payments discounted at 6%). The Company has received no
further communications from the landlord in connection with its demand.


15.      Subsequent events

         On October 10, 2003 the Company sold 208,000 shares of its common stock
to Wall Street Communications for $26,000 or $0.125 per share pursuant to a
subscription agreement.

           At the Special Meeting of the shareholders of the Company held August
27, 2003, the shareholders were asked to consider and vote upon a proposal to
amend the Company's Articles of Incorporation (i) to effect a one-for-10 reverse
stock split of the Company's common stock by reducing the number of issued and
outstanding shares of common stock, (ii) to authorize 50 million shares of
capital stock of the Company, of which 40 million shares will relate to common
stock and 10 million shares will relate to preferred stock and (iii) to permit
action upon the written consent of less than all shareholders of the Company,
pursuant to section 2524 of the Pennsylvania Business Corporation Law of 1988.
Although the meeting occurred and the three actions were approved by the
shareholders, at this time the Company's management has only effected two out of
three of such authorized actions. On January 27, 2004, an amendment to the
Company's Articles of Incorporation was filed with the Pennsylvania Department
of State Corporation Bureau which (i) increased the authorized share capital of
the Company to 50 million shares, divided into 40 million shares of common stock
and 10 million shares of preferred, and (ii) authorized the Company to take
action upon the written consent of stockholders holding the minimum number of
votes that would be necessary to authorize the action at a meeting at which all
stockholders entitled to vote thereon were present and voting.

         At December 31, 2003, the Company accrued unpaid salaries for Mr.
Hommel and Mr. Ehrenhaus, each in the amount of $85,600. Both Mr. Hommel and Mr.
Ehrenhaus agreed to accept common stock in lieu of cash and the Company has
agreed to issue 1,540,800 shares of common stock to each of Mr. Hommel and Mr.
Ehrenhaus, valued at $107,856, in satisfaction of these unpaid and accrued
salaries. These shares have been accrued for at December 31, 2003 and were
issued on March 31, 2004.

         During February 2004, the Company entered into a Memorandum of
Understanding with a privately-held corporation located in Connecticut with the
intent of a possible business combination either directly with the Company,
through a controlled subsidiary of the Company or with a public shell available
to the Company. The Company is in the preliminary investigative stages of its
customary due diligence and this combination is subject to certain conditions
precedent that are material to the transaction and whose outcome in subject to
material uncertainty at the present time.

         On March 1, 2004, the Company entered into a one-year consulting
agreement with Corporate Communications Group ("CCG") whereby CCG would provide
business development and marketing


                                       16
<PAGE>


                CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
                  NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
                                   (Unaudited)


services in exchange for 300,000 shares of the common stock of the Company. The
value of these shares on March 1, 2004 was $21,000.

         On March 19, 2004 the Company executed a loan agreement with Thomas
Willemsen in the amount of $50,000 for operating capital. This is an unsecured
loan, due on June 19, 2004 as to both interest in the amount of $5,000 and
principal.

         On March 22, 2004 the Company executed a loan agreement with Adar
Ulster Realty in the amount of $40,000 for operating capital. This is an
unsecured loan due on May 22, 2004 as to both interest in the amount of $1,200
and principal.

         On March 31, 2004, the Company issued an aggregate of 1,540,800 shares
of common stock to Mr. Ehrenhaus and Mr. Hommel that was accrued at December 31,
2003 for unpaid compensation.

         During October, 2003, the Company entered into a term sheet with
Dutchess Private Equities Fund II LP, a equity funding group ("Dutchess") to
provide the Company with a $2,000,000 equity line of credit to be used for
general corporate purposes. A formal agreement with Dutchess for this equity
line was executed on April 15, 2004 and provides that the market price of the
Company's stock for the 5 consecutive days prior to the put date can not be
below 75% of the closing bid price for the 10 trading days prior to the put
date. The put date is the date that the Company submits notice to the investor
that it desires to draw down a portion of the line. The purchase price for the
shares to be paid to the investor is discounted to the lowest closing bid price
of the stock during the 5 trading days immediately after a put date. The funds
will be available to the Company upon an effective registration of the Company's
stock issued pursuant to this agreement

         On October 27, 2003, the Company entered into an agreement with an
investment banking firm to arrange financing for the Company's operations and
expansion, provide financial advisory services on mergers and acquisitions, and
represent the Company with regard to introductions to accredited investors,
financial institutions, strategic partners and potential clients. The investment
banker is to receive a percentage based on the amount of equity or debt raised
for the Company, and will receive a retainer of $3,750 plus 85,000 shares of
common stock of the Company, which were valued at $15,300, with demand and
piggyback registration rights. In addition, the banker is entitled to warrants
equal to 3% of the equity of the Company upon the successful completion of any
financing or merger and acquisition transaction. The banker is also entitled to
registration rights, tag along rights, a put option, anti-dilution protection
and a right of first refusal. If the Company fails or refuses to close a
transaction after funds have been placed in escrow or a commitment letter
accepted and approved, the Company is liable for all direct and consequential
damages incurred by the banker. To date, no financing or mergers and
acquisitions have been generated by this investment banking firm.

         On October 31, 2003, the Company filed a Registration Statement with
the Securities and Exchange Commission to register 330,000 shares of common
stock issued on October 31, 2003 to a consultant, Pinchus Gold. The agreement is
for services to be provided through January 31, 2004. In exchange for receipt of
the shares of common stock, the consultant would provide various services to the
Company, principally relating to the identification of suitable merger or
acquisition partners for the Company. The cost of these services, as measured by
the market value of the shares at time of issuance, was approximately $82,500.

         In November 2003, an investor executed a subscription agreement to
purchase 1,000,000 shares of the Company's common stock for ten cents ($0.10)
per share. As of December 31, 2003, the investor has only paid $20,000 toward
the aggregate purchase price of $100,000; no additional amounts have been
received to date. The Private Placement has been subsequently cancelled.


                                       17
<PAGE>

ITEM 2.      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
             RESULTS OF OPERATIONS

         A review of the significant factors which affected the Company's
financial condition at September 30, 2003 and its results of operations for the
nine and three month periods then ended is presented below. Information relating
to the same periods in 2002 is also presented for comparative purposes. This
analysis should be read in conjunction with the Consolidated Financial
Statements and the related Notes appearing elsewhere in this Form 10-Q and in
the Company's 2002 Form 10-K.

         This Quarterly Report on Form 10-Q includes forward-looking statements
which are subject to "safe harbors" created by the Private Securities Litigation
Reform Act of 1995. We have based these forward-looking statements on our
current expectations and projections about future events. These forward-looking
statements can be identified by use of such terms and phrases as "may", "will",
"intend", "goal", "estimate", "could", "expect", "project", "predict",
"potential", "plans", "anticipate", "should", "continue", "might", "believe",
"scheduled" or the negative of such terms or other comparable terminology.
Readers are cautioned not to place undue reliance on these forward-looking
statements which speak only as of the date the statement was made. These risks,
uncertainties and other factors include those identified under "Risk Factors" in
this Quarterly Report on Form 10-Q. In light of these risks, uncertainties and
assumptions, the forward-looking events discussed in this Quarterly Report on
Form 10-Q might not occur.

         The Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise, after the date of this Quarterly Report on Form 10-Q. In
addition, we make no representation with respect to any materials available on
the Internet including materials available on our website.


                                    OVERVIEW

         At a special meeting of shareholders held on March 24, 1998, the
Company's preferred and common shareholders approved a Plan of Liquidation and
Dissolution (the Plan of Liquidation), pursuant to which the Company would be
liquidated and dissolved. The Plan of Liquidation permitted the Board of
Directors to continue to consider other alternatives to liquidating the Company.
Because the common shareholders would not receive a distribution under the plan
of liquidation and dissolution, and the preferred shareholders would receive
less than the full liquidation value of their shares, the Board of Directors
subsequently determined that selling the Company for its value as a "public
company shell" was a better alternative for the common and preferred
shareholders than liquidating the Company.

       In October 2001, the Board of Directors met to consider three offers
which were received regarding the potential purchase of the Company. One of the
three offers was from CFC Partners, Ltd. (CFC Partners). Following its review of
each offer, the Board determined that the offer from CFC Partners was the best
offer. In February 2002, the Company and CFC Partners entered into an option
agreement which permitted CFC Partners to acquire a 51.2% interest in the
Company at $.04 per share. The option held by CFC Partners was exercisable
following the completion by the Company of a tender offer to its preferred
shareholders. The completion of this tender offer was, in turn, dependent on the
sale of the Company's remaining insurance subsidiary, since substantially all of
the Company's assets were held by the subsidiary and state insurance laws would
not permit the withdrawal of those assets.

         In June 2002, the Company completed the sale of the insurance
subsidiary. In July 2002, the Board of Directors approved a tender offer to the
Company's preferred shareholders at a price of $4.40 per share, and on July 19,
2002, tender offer materials were mailed to the holders of the preferred stock.
On August 23, 2002, the Company purchased 377,288 shares of preferred stock, or
83.4% of the total preferred shares outstanding, from those shareholders who
elected to tender their shares.

On August 28, 2002, the Board of Directors terminated the Plan of Liquidation
and authorized the issuance of 2,700,000 shares of common stock to CFC Partners.
Donald J. Hommel, the president of CFC Partners, was


                                       18
<PAGE>


also appointed as a Director of the Company to fill an existing vacancy on the
Board. Following such appointment, the Company's officers resigned and the Board
elected Mr. Hommel as the Company's President and Chief Executive Officer. In
addition, James C. Robertson and John E. Groninger, who had been Directors of
the Company for more than 30 years, also resigned.


         In October 2002, the Board of Directors appointed Shalom S. Maidenbaum,
Esq. as an additional Director of the Company to fill an existing vacancy on the
Board. In addition, the Directors elected Mr. Hommel as the Company's Treasurer
and Mr. Maidenbaum as the Company's Vice President and Secretary. In March 2003,
the Board of Directors appointed William T. Konczynin as an additional Director
to fill an existing vacancy. In April 2003, Mr. Jack Ehrenhaus was appointed as
an additional Director to the Board.

         As a result of the approval of the Plan of Liquidation, the Company
adopted a liquidation basis of accounting for the period from March 25, 1998 to
August 28, 2002. Under this basis of accounting, assets were stated at their
estimated net realizable values and liabilities were stated at their anticipated
settlement amounts. As a result of the transaction with CFC Partners and the
related termination of the Plan of Liquidation, effective August 29, 2002, the
Company re-adopted accounting principles applicable to going concern entities.

         At September 30, 2003, other than its equity investment in Vaughn
Partners, LLC, the Company had no significant business operations; however, the
Company's new management is currently pursuing various business ventures. Their
initial focus is on joint ventures with or acquisitions of companies in the real
estate, construction management and medical technology businesses. In April
2003, the Company, through its majority shareholder, entered into agreements to
acquire garden apartment complexes in Springfield, Illinois. The Company also
had agreements to purchase garden apartment complexes in Marietta, Georgia and a
high-rise residential building in Chicago, Illinois; however, neither
transaction was consummated. In June 2003, the Company entered into an agreement
to acquire a 200-unit garden apartment complex in the Tampa, Florida area; this
transaction was also never consummated.

         In May 2003, Vaughn Partners LLC (Vaughn), an Illinois limited
liability company in which the Company owns a 47.5% interest, acquired the
Springfield, Illinois garden apartment complexes. Vaughn acquired this property
with cash contributed by the third party investors who own 5% of Vaughn, a
$4,650,000 bank loan secured by a first mortgage lien on the property and a
$1,200,000 second mortgage on the property. Vaughn is currently in default on
the second mortgage. As a result of the default under the second mortgage, the
second mortgagee has the right to, among other rights, sell the property,
collect all rental income from the property and exclude Vaughn therefrom. An
individual lent Vaughn $100,000 to close on the acquisition, and Vaughn is
currently in default on said loan. As a result of the default under the $100,000
loan, Vaughn is liable for accrued interest from June 15, 2003 at an annual rate
of 18% plus all costs and fees incurred by the lender in collecting the amounts
due under the note. Vaughn is currently in discussions with both the second
mortgagee and the individual lender regarding terms of re-payment on the
defaulted notes. Vaughn also obtained and used, as of September 30, 2003,
$301,000 of a $600,000 construction loan from the bank for the purpose of
completing certain renovations to the property. In connection with the
acquisition, Spartan Properties LLC, also entered into an agreement with Vaughn
to manage the property for a fee. The Company is not directly or indirectly
liable for any of the obligations of Vaughn and its exposure is limited solely
to its investment in Vaughn which is carried at zero in these condensed
consolidated financial statements.

         Effective as of October 31, 2003, the Company approved an amended
operating agreement whereby Spartan would transfer to the Company 24.22% of its
interest in Vaughn in consideration for issuance by the Company of 250,000
shares of common stock. This amended operating agreement memorializing this
arrangement was not executed by members of Vaughn Partners holding 5% of the
membership interests and the 250,000 shares of common stock were not issued.
This amended operating agreement has therefore not and will not be ratified.

         The 47.5% equity interest in Vaughn is being accounted for under the
equity method in the Company's condensed consolidated financial statements at
September 30, 2003.


                                       19
<PAGE>


         In April 2003, CFC Partners entered into a letter of intent with a
leading radiologist and operator of several radiology centers in the
metropolitan New York area to purchase, develop and operate positron emission
tomography (PET) imaging centers, initially in the New York area, but this
letter of intent has terminated. On September 10, 2003, the Company, through its
subsidiary, P.E.T. Centers of America, signed a lease for 3,450 square feet of
medical space and will begin to design and build its first PET imaging center in
Suffolk County, New York, but subsequently the lease terminated. The Company
received a letter from the landlord dated November 11, 2003 claiming that the
Company and PET Centers are liable to the landlord for all costs and expenses
incurred in connection with enforcing the provisions of the lease as well as the
liquidated damages provided for in the lease (the present value of the lease
payments discounted at 6%). The Company has received no further communications
from the landlord in connection with its demand.

         At September 30, 2003, the Company's shareholders' deficiency totaled
$534,359 compared to a shareholders' deficiency of $196,485 at December 31,
2002. The Company's net loss for the nine months ended September 30, 2003
totaled $2,930,406 compared to net income of $163,889 for the same period in
2002.

                              RESULTS OF OPERATIONS

         A discussion of the material factors which affected the Company's
results of operations for the nine and three months ended September 30, 2003 and
2002 is presented below.


Nine Months Ended September 30, 2003 and 2002

       For the nine months ended September 30, 2003, the Company reported a net
loss of $2,930,406 ($0.44 per share) compared to net income of $163,889 in the
first nine months of 2002. In 2002, the Company's net income was the result of a
$179,000 gain from the sale of the state insurance licenses of Consumers Life,
as part of the sale of that subsidiary, and a $56,000 gain on the sale of
certain bonds held by the subsidiary. During this period, the Company incurred
approximately $62,000 in professional fees, principally legal and accounting
fees, including $17,000 in legal fees related to the tender offer to the
Company's preferred shareholders. The Company also incurred a $29,000 fee in
connection with the termination of a guaranteed investment contract held by the
Company's retirement plan custodian.

         For the nine months ended September 30, 2003, the Company had only
nominal non-operating income during the period, so the current year net loss is
primarily the result of expenses incurred while the Company is attempting to
develop new businesses. During the first nine months of 2003, these costs
consisted principally of salaries to two individuals, the expense of $2,596,012
related to the issuance of an aggregate of 11,725,315 of shares issued during
2003, other selling, general and administrative expenses aggregating $306,732
and a $27,500 write-off on a receivable from the Company's majority shareholder.

Three Months Ended September 30, 2003 and 2002

         The Company's net loss for the third quarter of 2003 was $2,710,788
($0.29 per share). Since the Company only had nominal non-operating income
during the quarter, the net loss is attributable to ongoing expenses incurred in
connection with developing new business operations. During the quarter, the
Company incurred $2,596,012 of stock based compensation expenses in connection
with the issuances of an aggregate of 11,725,315 shares and $111,599 of
additional selling, general and administrative expenses. The majority of these
expenses consisted of officer salaries and consulting fees.

         For the three months ended September 30, 2002, the Company reported net
income of $123,889 ($0.01 per share) as a result of the gains arising from the
sale of Consumers Life. During the quarter, the


                                       20
<PAGE>


Company incurred approximately $33,500 in salaries and related benefits as well
as professional and other fees of $42,000.


                               FINANCIAL CONDITION

Capital Resources

         Other than as described below, the Company currently has no commitments
for any capital expenditures. However, if the Company develops certain planned
strategic alliances or identifies a target company to be merged or otherwise
combined with the Company, the Company's plans regarding capital expenditures
and related commitments are likely to change.

         For the nine months ended September 30, 2003, the Company's cash and
cash equivalents decreased by $159,589 to $6,169 at the end of the period. The
decrease is principally the result of the cash expenses paid by the Company
during the period and the $27,500 loan made to CFC Partners. The Company
currently has no ability to pay any additional expenses until it either develops
new revenue sources or obtains financing.

         Hudson Valley

         On September 10, 2003, the Company entered into an agreement with
Hudson Valley Home Builders & Developers Corp. pursuant to which Hudson would
use its commercially reasonable efforts to introduce funding sources to provide
the Company with financing to consummate real estate transactions. Hudson agreed
to provide the Company with financing between $2,000,000 and $4,000,000 for 36
months from the date of the agreement. The Company agreed to use commercially
reasonable efforts to consummate a maximum of 10 real estate transactions each
12-month period. Pursuant to the terms of the agreement, Hudson would notify the
Company within 21 days of receipt of an executed contract on a real estate
project that it would fund such project. The investors would have the right to
designate a portion of their funding to be used to purchase shares of the
Company at a premium above market.

         Pursuant to the agreement, Hudson and its investors would be entitled
to 60% of the equity of a deal, as well as a cash payment equal to 10% of the
consideration received by the Company from Hudson and its investors. Upon
financing a real estate deal the Company would issue to Hudson and its investors
a warrant to purchase shares of the Company. The Company agreed to file a
registration statement for the shares of Hudson and its investors within 24
months and granted them piggyback registration rights after 18 months.

Either party has the right to terminate the agreement by written notice to the
other. To date, no funds have been generated by Hudson.

         Equity Credit Line

         During  October,  2003,  the  Company  entered  into a term  sheet with
Dutchess  Private  Equities Fund II LP, a equity funding group  ("Dutchess")  to
provide  the  Company  with a  $2,000,000  equity  line of credit to be used for
general  corporate  purposes.  A formal  agreement with Dutchess for this equity
line was  executed on April 15, 2004 and  provides  that the market price of the
Company's  stock  for the 5  consecutive  days  prior to the put date can not be
below 75% of the  closing  bid price for the 10  trading  days  prior to the put
date.  The put date is the date that the Company  submits notice to the investor
that it desires to draw down a portion of the line.  The purchase  price for the
shares to be paid to the investor is discounted to the lowest  closing bid price
of the stock during the 5 trading days  immediately  after a put date. The funds
will be available to the Company upon an effective registration of the Company's
stock issued pursuant to this agreement.


                                       21
<PAGE>

         Investment Banking Agreement

         On October 27, 2003, the Company entered into an agreement with an
investment banking firm to arrange financing for the Company's operations and
expansion, provide financial advisory services on mergers and acquisitions, and
represent the Company with regard to introductions to accredited investors,
financial institutions, strategic partners, and potential clients. The
investment banker is to receive a percentage based on the amount of equity or
debt raised for the Company, as well as a retainer of $3,750 plus 85,000 shares
of common stock of the Company with demand and piggyback registration rights. In
addition, the banker is entitled to warrants equal to 3% of the equity of the
Company upon the successful completion of any financing or m&a transaction. The
banker is also entitled to registration rights, tag along rights, a put option,
anti-dilution protection and a right of first refusal. If the Company fails or
refuses to close a transaction after funds have been placed in escrow or a
commitment letter accepted and approved, the Company is liable for all direct
and consequential damages incurred by the banker.


Liquidity

         In connection with the acquisition of the Company by CFC Partners,
substantially all of the Company's remaining liquid assets were used to complete
a tender offer to the preferred shareholders in August 2002. At September 30,
2003, the Company had $6,169 in cash. Furthermore, as of that date, the Company
had no significant business operations and no sources of operating revenues and
cash flows. As indicated above, the Company is currently pursuing various
business opportunities, including strategic alliances, as well as the merger or
combination of existing businesses with the Company. The Company's management is
initially focusing on joint ventures with or acquisitions of companies in the
real estate, insurance agent, construction management and medical technology
business segments. However, there is no assurance that the Company's efforts in
this regard will be successful.

         As indicated above, the Company currently has no ability to pay any
additional expenses until it either develops new revenue sources or obtains
financing. Without new revenues and/or immediate financing, management's efforts
to develop the Company's real estate, insurance agent, construction management
and medical technology businesses are not likely to succeed.


Going concern and management plans

         The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. However, at
September 30, 2003 the Company had a cash balances of only $6,169, current
liabilities of $166,419 without any other current assets, a shareholders'
deficiency of $534,357 and was delinquent in its payment to its existing
creditors. These matters raise substantial doubt about the Company's ability to
continue as a going concern.

         CFC Partners is currently pursuing various business opportunities for
the Company, including strategic alliances, as well as the merger or combination
of existing businesses within the Company. The new management of the Company is
initially focusing on joint ventures with, or acquisitions of, companies in the
real estate, construction management and medical technology sectors as well as
the direct purchase of income-producing real estate. However, there is no
assurance that the Company's efforts in this regard will be successful. In fact,
given the Company's current cash position, without new revenues and/or immediate
financing, the Company's efforts to develop the above-referenced businesses are
not likely to succeed.

         The Company's ability to continue as a going concern is dependent on
its success in developing new cash revenue sources or, alternatively, in
obtaining short-term financing while its businesses are being developed. There
are no assurances that such financing can be obtained or, if available, be
obtained at terms acceptable to the Company. To the extent that such financing
is equity based, this may result in dilution to the existing shareholders.

         The condensed consolidated financial statements presented herein do not
include any adjustments that might result from the outcome of this uncertainty.


                                       22
<PAGE>


Redeemable Preferred Stock

         On August 23, 2002, the Company completed a tender offer to all of its
preferred shareholders, pursuant to which it purchased 377,288 shares
(approximately 83.4% of the shares then outstanding) at $4.40 per share plus
accrued dividends. The tender offer was completed in conjunction with and was a
condition to the exercise of the option by CFC Partners. Since all of the
Company's remaining assets would have been distributed to the preferred
shareholders if the Company had been liquidated, the Board of Directors believed
that the exercise of the option (and the related termination of the Plan of
Liquidation) should not take place until the preferred shareholders had been
given a chance to exchange their shares for cash.

         The terms of the redeemable preferred stock require the Company, when
and as appropriated by the Board out of funds legally available for that
purpose, to make annual payments to a sinking fund. Such payments were to have
commenced on July 1, 1998. The preferred stock terms also provide that any
purchase of preferred shares by the Company will reduce the sinking fund
requirements by an amount equal to the redemption value ($10 per share) of the
shares acquired. As a result of the Company's purchases of preferred stock in
the open market and in the tender offer described above, no sinking fund payment
for the preferred stock is due until July 1, 2006. However, in connection with
the exercise of the option by CFC Partners, the Company deposited $331,434 into
a bank escrow account for the benefit of the remaining preferred shareholders
(see Note 6).

         The redeemable preferred stock is redeemable at the option of the
Company at any time, as a whole or in part, for a redemption price of $10 per
share plus all unpaid accrued dividends.

        Dividends at an annual rate of $.85 per share are cumulative from the
original issue date of the preferred stock. Dividends are payable quarterly on
January 1, April1, July 1 and October1 of each year. The dividends payable on
January 1, 2004 and for all four quarters of 2003 have not been declared or paid
by the Company. Dividends in arrears for the five quarters total $74,205,
$60,783 of which relate to the four quarterly dividends for 2003. When the
Company is in arrears as to dividends or sinking fund appropriations for the
preferred stock, dividends to holders of the Company's common stock as well as
purchases, redemptions or acquisitions by the Company of shares of the Company's
common stock are restricted. Since the Company is in default with respect to the
payment of preferred dividends and the aggregate amount of the deficiency is
equal to at least four quarterly dividends, the holders of the preferred stock
are entitled, only while such arrearage exists, to elect two additional members
to the then existing Board of Directors. . The preferred shareholders have not
elected these two additional directors as of this date.

         In the event of a liquidation of the Company, the holders of the
preferred stock are entitled to receive $10 per share plus all unpaid and
accrued dividends prior to any distribution to be made to the holders of common
stock.

         The preferred stock is convertible at any time, unless previously
redeemed, into shares of common stock at a rate of 1,482 shares of common stock
for each share of preferred stock (equivalent to a conversion price of $6.75 per
share).

         The difference between the fair value of the preferred stock at the
date of issue and the mandatory redemption value is being recorded through
periodic accretions with an offsetting charge to the deficit. Such accretions
totaled $3,479 and $9,627 in the first nine months of 2003 and 2002,
respectively.


                                       23
<PAGE>


Item 3.      Quantitative and Qualitative Disclosure About Market Risk

         The Company believes it does not have any material exposure to interest
rate risk as its cash equivalents are short-term in nature and its debt
obligations are at fixed rates. The Company does not use derivative financial
instruments to hedge interest rate exposure and did not experience a material
impact from interest rate risk during fiscal 2003.

         Currently, the Company does not have any significant investments in
financial instruments for trading or other speculative purposes, or to manage
its interest rate exposure and has no other material speculative or quantitative
market risks particular to it.


Item 4.      Controls and Procedures


Evaluation of Disclosure Controls and Procedures

         As of the end of the period covered by this report, the Company
conducted an evaluation, under the supervision and with the participation of the
principal executive officer and principal financial officer, of the Company's
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
under the Securities Exchange Act of 1934 (the "Exchange Act")). Based on this
evaluation, the principal executive officer and principal financial officer have
concluded that the Company's disclosure controls and procedures are effective to
ensure that information required to be disclosed by the Company in reports that
it files or submits under the Exchange Act is recorded, processed, summarized
and reported within the time periods specified in Securities and Exchange
Commission's rules and forms.


Changes in Internal Controls Over Financial Reporting

         Internal controls over financial reporting consists of control
processes designed to provide assurance regarding the reliability of financial
reporting and preparation of our financial statements in accordance with
accounting principles generally accepted in the United States of America. To the
extent that components of our internal controls over financial reporting are
included in our disclosure controls, they are included in the scope of the
evaluation by our chief executive officer and chief financial officer referenced
above. There have been no significant changes in the Company's internal controls
over financial reporting during the Company's most recently completed fiscal
quarter that have materially affected, or are reasonably likely to materially
affect, the Company's internal controls over financial reporting.

         In connection with the first amendment to the form 10-Q filed on
January 31, 2004, our independent auditors did not report any matters involving
internal controls that were considered to be a reportable condition or material
weakness. In connection with the audit of our December 31, 2003 10-K which will
be filed in conjunction with this amended 10-Q, our independent auditors have
reported to our Audit Committee certain matters involving internal controls that
our independent auditors considered to be reportable conditions and material
weaknesses, under standards established by the American Institute of Certified
Public Accountants. The reportable conditions and material weaknesses relate to
the December 31, 2003 financial close process and absence of appropriate reviews
and approvals of transactions and accounting entries. Certain adjustments were
identified in the annual audit process, related to the recording of stock-based
compensation, prepaid expenses, accrued expenses, preferred stock and accounting
for an equity method investment. The adjustments related to these matters were
made by the Company in connection with the preparation of the audited financial
statements for the year ended December 31, 2003. It was subsequently determined
that these reportable conditions and material weaknesses also existed as of
September 30, 2003


                                       24
<PAGE>


         Given these reportable conditions and material weaknesses, management
devoted additional resources to resolving questions that arose during our
year-end audit. As a result, we are confident that our financial statements for
the year ended December 31, 2003 and this amended 10-Q for the nine months ended
September 30, 2003, fairly present, in all material respects, our financial
condition and results of operations.


                                       25
<PAGE>


                           PART II. OTHER INFORMATION


Item 1.      Legal Proceedings

         The Company is currently in arbitration against its co-defendant, Life
of the South, from a previously settled claim. Life of the South is seeking to
recover from the Company its share of the settlement totaling $17,500, its
unreimbursed fees of $27,825 plus interest, attorney fees and cost of
arbitration from the Company. The arbitration is in its initial stages and while
the outcome can not be predicted, the Company believes the arbitration will be
settled in favor of the Company.


Item 2.      Changes in Securities and Use of Proceeds

         During the three months ended September 30, 2003, there have been no
limitations or qualifications, through charter documents, loan agreements or
otherwise, placed upon the holders of the registrant's common or preferred stock
to receive dividends, except as described in Item 3 below.

       At a Board meeting September 4, 2003, the Board approved bonuses for
Donald J. Hommel, President and Chief Executive Officer and Jack I. Ehrenhaus,
Chairman and Chief Operating Officer, of the Company. Each of said individuals
were issued 1,956,521 shares of common stock. These issuances were exempt from
the registration requirements of the Securities Act of 1933, as amended.

       On September 1, 2003, the Company entered into employment agreements with
each of Donald J. Hommel, President and Chief Executive Officer and Jack I.
Ehrenhaus, Chairman and Chief Operating Officer, of the Company pursuant to
which, among other things, the Company issued 3,000,000 shares to each of said
individuals. The issuances were pursuant to an exemption from the registration
requirements of the Securities Act of 1933, as amended.


Item 3.      Defaults upon Senior Securities

         Dividends at an annual rate of $.85 per share are cumulative from the
date of original issue of the preferred stock. Dividends are payable quarterly
on the first day of January, April, July and October. The dividends payable on
January 1, April 1, July 1 and October 1, 2003 have not been declared or paid by
the Company. In addition, the dividend payable at January 1, 2004 has also not
been declared or paid by the Company. Dividends in arrears for the five quarters
as of January 1, 2004 total $74,205, $60,783 of which relates to the four
quarters of 2003.

         When the registrant is in arrears as to dividends or sinking fund
appropriations for the preferred stock, dividends to holders of the registrant's
common stock as well as purchases, redemptions or acquisitions by the registrant
of shares of its common stock are restricted. Since the registrant is in default
with respect to the payment of preferred dividends and the aggregate amount of
the deficiency is equal to four quarterly dividends, the holders of the
preferred stock are entitled, only while such arrearage exists, to elect two
additional members to the then existing Board of Directors.


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

         On August 7, 2003, the Company mailed an Information Statement to its
shareholders in connection


                                       26
<PAGE>


with a  special  meeting  of  shareholders  to be held on August  27,  2003 (the
Special  Meeting).  At the  Special  Meeting,  the  shareholders  were  asked to
consider  and  vote  upon  a  proposal  to  amend  the  Company's   Articles  of
Incorporation  (i) to effect a one-for-10  reverse  stock split of the Company's
common stock by reducing the number of issued and  outstanding  shares of common
stock from  5,276,781  to  approximately  527,678,  (ii) to authorize 50 million
shares of capital stock of the Company,  of which 40 million  shares will relate
to common stock and 10 million  shares will relate to preferred  stock and (iii)
to permit action upon the written  consent of less than all  shareholders of the
Company,  pursuant to section 2524 of the Pennsylvania  Business Corporation Law
of 1988.  CFC Partners owns a majority of the Company's  issued and  outstanding
shares of common  stock and has voted to approve the proposal  presented  above.
Although  the  meeting  occurred  and the three  actions  were  approved  by the
shareholders, at this time the Company's management has only effected two out of
three of such  authorized  actions.  On January 27,  2004,  an  amendment to the
Company's  Articles of Incorporation was filed with the Pennsylvania  Department
of State Corporation  Bureau which (i) increased the authorized share capital of
the Company to 50 million shares, divided into 40 million shares of common stock
and 10 million  shares of  preferred,  and (ii)  authorized  the Company to take
action upon the written  consent of  stockholders  holding the minimum number of
votes that would be necessary to authorize  the action at a meeting at which all
stockholders entitled to vote thereon were present and voting.


Item 5.      Other Information

         Effective  as of October  31,  2003,  the  Company  approved an amended
operating  agreement whereby Spartan would transfer to the Company 24.22% of its
interest  in Vaughn in  consideration  for  issuance  by the  Company of 250,000
shares of common stock.  This amended  operating  agreement  memorializing  this
arrangement  was not executed by members of Vaughn  holding 5% of the membership
interests and the 250,000  shares of common stock were not issued.  This amended
operating agreement has therefore not and will not be ratified.

         The Company is not directly or indirectly liable for any of the
obligations of Vaughn and its exposure is limited solely to its investment in
Vaughn which is carried at zero in these condensed consolidated financial
statements.

         The 47.5% equity interest in Vaughn is being accounted for under the
equity method in the Company's condensed consoldated financial statements at
September 30, 2003.

         On October 31, 2003, the Company filed a Registration Statement with
the Securities and Exchange Commission to register 330,000 shares of common
stock issued on October 31, 2003 to a consultant, Pinchus Gold. The agreement is
for services to be provided through January 31, 2004. In exchange for receipt of
the shares of common stock, the consultant would provide various services to the
Company, principally relating to the identification of suitable merger or
acquisition partners for the Company. The cost of these services, as measured by
the market value of the shares at time of issuance, was approximately $82,500.

         On March 1, 2004, the Company entered into a one-year consulting
agreement with Corporate Communications Group ("CCG") whereby CCG would provide
business development and marketing services in exchange for 300,000 shares of
the common stock of the Company. The value of these shares on March 1, 2004 was
$21,000.

         On March 19, 2004 the Company executed a loan agreement with Thomas
Willemsen in the amount of $50,000 for operating capital. This is an unsecured
loan, due on June 19, 2004 as to both interest in the amount of $5,000 and
principal.

         On March 22, 2004 the Company executed a loan agreement with Adar
Ulster Realty in the amount of $40,000 for operating capital. This is an
unsecured loan due on May 22, 2004 as to both interest in the amount of $1,200
and principal.


                                       27
<PAGE>


         On March 31, 2004, the Company issued 1,540,800 shares of common stock
each to Mr. Ehrenhaus and Mr. Hommel that was accrued at December 31, 2003 for
unpaid compensation.

         In November 2003, an investor executed a subscription agreement to
purchase 1,000,000 shares of the Company's common stock for ten cents ($0.10)
per share. As of December 31, 2003, the investor has only paid $20,000 toward
the aggregate purchase price of $100,000; no additional amounts have been
received to date. This amount has been recorded as a current liability as the
Private Placement has been cancelled.


Item 6.      Exhibits and Reports on Form 8-K

         (a) Exhibits:

                  4.1      Employment Agreement effective September 1, 2003, by
                           and between Consumers Financial
                           Corporation and Donald J. Hommel
                  4.2      Employment Agreement effective September 1, 2003, by
                           and between Consumers Financial
                           Corporation and Jack Ehrenhaus
                  4.3      Agreement dated October 27, 2003 between Consumers
                           Financial Corporation and David Sassoon & Co. PLC
                  4.4      Agreement dated as of September 10, 2003 by and
                           between Hudson Valley Home Builders & Developers
                           Corp. and Consumers Financial Corp.
                           31 Rule 13a-14(a)/15d-14(a) Certifications

            31.1 Section 302 certification by Chief Executive Officer
            31.2 Section 302 certification by Chief Financial Officer

         32 Section 1350 Certifications

            32.1 Section 906 certification by Chief Executive Officer
            32.1 Section 906 certification by Chief Financial Officer



         (b) Reports on Form 8-K

             On September 25, 2003, the Company filed a Current Report on Form
8-K under Item 4 to announce the resignation of Stambaugh Ness, PC as the
Company's independent accountants and the engagement of Marcum & Kliegman LLP
engaged as the new principal independent accountants, commencing with the
interim financial statement review for the third quarter ending September 30,
2003, and the audit for the year ending December 31, 2003.


                                       28
<PAGE>


                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                     CONSUMERS FINANCIAL CORPORATION
                                     Registrant




Date    May 20, 2004           By /s/   Donald J. Hommel
       -------------             --------------------------------------
                                           Donald J. Hommel
                                           President and Chief Executive Officer




Date  May 20, 2004             By /s/   Donald J. Hommel
    --------------               --------------------------------------
                                           Donald J. Hommel
                                           Chief Financial Officer


                                       29