SAN JUAN FINANCIAL, INC.



                               Filing Type: 10QSB
                          Description: Quarterly Report
                          Filing Date: February 21, 2001
                          Period End: December 31, 2000


                              Primary Exchange: N/A
                                   Ticker: N/A




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SAN JUAN FINANCIAL, INC - 10QSB - Quarterly Report          Date Filed:2/21/2001
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                                Table of Contents



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             To jump to a section, double-click on the section name.


                                      10QSB

PART I.........................................................................1
Item 1.........................................................................1
Balance Sheet..................................................................2
Income Statement...............................................................3
Cash Flow Statement............................................................4
Item 2.........................................................................9
PART II.......................................................................10
Item 1........................................................................10
Item 2........................................................................10
Item 3........................................................................10
Item 4........................................................................10
Item 5........................................................................10
Item 6........................................................................10


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SAN JUAN FINANCIAL, INC - 10QSB - Quarterly Report          Date Filed:2/21/2001
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                                      10QSB

                       Securities and Exchange Commission
                                Washington, D.C.

(Mark One)

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
       For the quarterly period ended December 31, 2000



[ ] 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)


San Juan Financial, Inc.
(Exact name of small business issuer as specified in its charter)



              Colorado                      94-3363969
 (State or other jurisdiction               (IRS Employer
 of incorporation or organization)          Identification No.)




    4410 Newton Street                               80211
    Denver, CO                                      (Zip Code)
  (Address of principal executive offices)



(303) 694-4895
(Issuer's telephone number)

 Not Applicable
(Former name, former address and former fiscal year, if changed since last
 report)

                      APPLICABLE ONLY TO CORPORATE ISSUERS

             State  the  number of shares  outstanding  of each of the  issuer's
classes of common equity,  as of latest  practicable  date:  5,065,800 shares of
Common Stock, no par value per share, as of December 31, 2000.

Transitional Small Business Disclosure Format (Check one):Yes [] No [x]


                                                                          Page 1
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SAN JUAN FINANCIAL, INC - 10QSB - Quarterly Report          Date Filed:2/21/2001
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                          PART I. FINANCIAL INFORMATION

Item 1.          Financial Statements

<TABLE>
<CAPTION>

                            SAN JUAN FINANCIAL, INC.
                          (A Development Stage Company)

                                  Balance Sheet
                                   (Unaudited)
                                December 31, 2000


                                     ASSETS

                                                                                       Dec. 31, 2000      June 30, 2000
                                                                                        (Unaudited)          (Audited)

<S>                                                                                        <C>               <C>
CASH...............................................................................        $ 6,288           $41,585
EQUIPMENT, less accumulated depreciation of $.00...................................              0                 0
                                                                                           -------         ---------
                                                                                           $ 6,288           $41,585
                                                                                           =======           =======

                              SHAREHOLDERS' EQUITY

PREFERRED STOCK,  no par value, 10,000,000 shares authorized;
- 0 shares issued and outstanding..................................................           -                  -

COMMON STOCK, no par value; 750,000,000 shares authorized;
- 5,063,000 shares issued and outstanding (Note C).................................        103,000           100,200
ACCUMULATED RETAINED DEFICIT ($96,711 accumulated during the development stage)....        (96,711)          (58,615)

ADDITIONAL PAID CAPITAL ...........................................................
                                                                                          $  6,288          $ 41,585
                                                                                          ========          ========
</TABLE>



        See accompanying summary of significant accounting policies and
                         Notes to financial Statements


                                                                          Page 2
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SAN JUAN FINANCIAL, INC - 10QSB - Quarterly Report          Date Filed:2/21/2001
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<TABLE>
<CAPTION>
                            SAN JUAN FINANCIAL, INC.
                          (A Development Stage Company)

                             Statement of Operations
                                   (Unaudited)

                    October 1, 2000 Through December 31, 2000


                                                    Dec. 31, 2000  Dec. 31, 1999
                                                    -------------  -------------
<S>                                                     <C>           <C>
OPERATING EXPENSES
         Supplies..................................     $99           $   0
         Filing Fees...............................     173               0
         Postage and Delivery......................      46               0
         Registration and Filing Fees..............     260               0
         Other.....................................                       0
                                                      --------         -----
                           TOTAL OPERATING EXPENSES   $ 579           $   0
                                                      --------         -----
                               LOSS FROM OPERATIONS   ($579)         ($   0)


INCOME TAX EXPENSE                                        0               0
                                                      --------         -----

                                           NET LOSS   ($ 579)         $   0
                                                      ========         =====


Basis loss per common share........................    $  *           $  *
                                                      --------         -----

Basic weighted average common shares outstanding... 5,046,866     5,046,866
                                                    ==========    ==========

*  Less than $.01 per share
</TABLE>



        See accompanying summary of significant accounting policies and
                         Notes to financial Statements


                                                                          Page 3
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SAN JUAN FINANCIAL, INC - 10QSB - Quarterly Report          Date Filed:2/21/2001
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                            SAN JUAN FINANCIAL, INC.
                          (A Development Stage Company)

                             Statement of Cash Flows
                                   (Unaudited)

                    October 1, 2000 Through December 31, 2000


                                               Dec. 31, 2000       Dec. 31, 1999
OPERATING ACTIVITIES
      Net loss............................       $      (579)       $         0
                                                 ------------       ------------
                        NET CASH (USED IN)
                      OPERATING ACTIVITIES              (579)                 0
                                                 ------------       ------------

FINANCING ACTIVITIES
      Proceeds from the Sale of
         Common Stock.....................                 0                  0
      Payments for offering costs.........                 0                  0
                                                 ------------        -----------
                      NET CASH PROVIDED BY
                      FINANCING ACTIVITIES                 0                  0
                                                 ============        ===========
                                                       (579)

Cash and cash equivalents, beginning of period        6,867                   0
  CASH AND CASH EQUIVALENTS, END OF PERIOD            6,288                   0
                                                 -----------         -----------
       CHANGE IN CASH AND CASH EQUIVALENTS             (579)                  0
                                                 ===========         ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
         Interest.........................                0                   0
                                                 ============        ===========
         Income taxes.....................                0                   0
                                                 ------------        -----------




        See accompanying summary of significant accounting policies and
                         Notes to financial Statements


                                                                          Page 4
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SAN JUAN FINANCIAL, INC - 10QSB - Quarterly Report          Date Filed:2/21/2001
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                            SAN JUAN FINANCIAL, INC.
                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS


NOTE A:  NATURE OF ORGANIZATION

                                   Background
The  company  was  incorporated  under  the laws of  Colorado  on June 6,  1989.
Following   incorporation  the  Company  remained  an  inactive  shell  company.
Effective  April  10,  2000,  the  Company  entered  the  development  stage  in
accordance with SFAS No. 7. The Company's  principal  activities since April 10,
2000 have  consisted of  organizational  maters and the sale of its no par value
common stock.

                              Amendment to Articles
On April 10, 2000, the Company filed amended articles of incorporation  with the
State of  Colorado,  at which time the  Company  revised  Article  XI,  Board of
Directors.  The Board  consists of one director who is also the President of the
Company.

NOTE B:  INCOME TAXES

A reconciliation of the U.S. statutory federal income tax rate to the effective
rate is as follows:


                                                             Dec. 31, 2000
                                                             ---------------
        U.S. federal statutory graduated rate................     15.00%
        State income tax rate, net of federal benefit........      7.51%
        Offering costs.......................................     13.13%
        Net operating loss for which no tax benefit
           is currently available............................    -35.64%
                                                             ---------------
                                                                   0.00%
                                                             ===============


At December 31, 2000, deferred taxes consisted of a net tax asset of $34,467 due
to operating loss  carryforwards of $96,711,  which was fully allowed for in the
valuation  allowance of $34,467.  The  valuation  allowance  from April 10, 2000
(inception)  through  September  30,  2000  was  $34,467.   Net  operating  loss
carryforwards will expire through 2020.

The valuation  allowance will be evaluated at the end of each year,  considering
positive and negative evidence about whether the asset will be realized. At that
time, the allowance will either be increased or reduced;  reduction could result
in the complete elimination of the allowance if positive evidence indicates that
the value of the deferred tax asset is no longer  impaired and the  allowance is
no longer required.


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SAN JUAN FINANCIAL, INC - 10QSB - Quarterly Report          Date Filed:2/21/2001
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NOTE C:  SHAREHOLDERS' EQUITY

Common stock

In May 2000, the Company conducted a private placement  offering whereby it sold
63,000  shares of its no par value common stock for $1.00 per share  pursuant to
an exemption  from  registration  claimed  under  Sections  4(2) and 4(6) of the
Securities Act of 1933, as amended, and Regulation D promulgated thereunder. The
Company received net proceeds of $60,000 after deducting offering costs totaling
$3,000.

On August 9, 2000 the Company  sold an  additional  2,800 shares for $1.00 for a
net proceed of $2,800.

Following its original incorporation in June 1989, the Company issued 40,000,000
shares of its no par value  common  stock to an officer as payment for  services
related  to the  organization  and  start-up  of the  Company.  The value of the
transaction could not be objectively measured as the services were rendered by a
related party. The transaction was recorded at a nominal value of $40,000 ($.001
per share) as there was no market  price for the  Company's  common stock on the
date of issuance.

Reverse stock split

On April 7, 2000,  the Board of Directors  authorized an 8 to 1 reverse split of
the Company's no par value common stock,  effective on that date. As a result of
the split, the Company's  outstanding common shares were reduced from 40,000,000
to  5,000,000.  All per share and shares  outstanding  data in the  accompanying
financial statements have been restated to reflect the reverse split.


                                                                          Page 6
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                            SAN JUAN FINANCIAL, INC.
                          (A Development Stage Company)

                   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

                            Development stage company

San Juan  Financial,  Inc.  (the  "Company")  entered the  development  stage in
accordance with Financial  Accounting  Standards  Board  Statements of Financial
Accounting Standards (SFAS) No. 7 "Accounting and Reporting by Development Stage
Enterprises"  in 1989 upon  incorporation.  The  Company  operates as a mortgage
banking and brokerage company over the internet.

                                Use of estimates

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

                                Cash equivalents

For the  purposes of the  statement  of cash flows,  the Company  considers  all
highly  liquid debt  instruments  purchased  with an original  maturity of three
months or less to be cash equivalents.

                           Equipment and depreciation

Equipment is stated at cost.  Equipment is depreciated over its estimated useful
life using the straight-line method.

Upon  retirement or  disposition  of the furniture and  equipment,  the cost and
accumulated depreciation are removed from the accounts and any resulting gain or
loss is reflected in operations.  Repairs and maintenance are charged to expense
as incurred and expenditures for additions and improvements are capitalized.

                              Web site development

The  Company  expenses  all  internal  and  external  costs  incurred to develop
internal-use computer software.  As a development stage company,  management has
determined  there is no  assurance  that the web site will  provide  substantive
service potential to the Company.

                                  Income taxes

Income taxes are provided  for the tax effects of  transactions  reported in the
financial  statements  and consist of taxes  currently due plus  deferred  taxes
related  primarily to  differences  between the recorded  book basis and the tax
basis of assets and  liabilities  for  financial and income tax  reporting.  The
deferred tax assets and liabilities represent the future tax return consequences
of those differences, which will either be taxable or deductible when the assets
and liabilities are recovered or settled. Deferred taxes are also recognized for
operating  losses that are  available to offset  future  taxable  income and tax
credits that are available to offset future federal income taxes.


Income taxes are  computed  under the  provisions  of the  Financial  Accounting
Standards  Board  (FASB)  Statement  109 No. (SFAS 109),  Accounting  for Income
Taxes. SFAS 109 is an asset and liability approach that requires the recognition


                                                                          Page 7
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SAN JUAN FINANCIAL, INC - 10QSB - Quarterly Report          Date Filed:2/21/2001
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of deferred tax assets and liabilities for the expected future tax  consequences
of the difference in events that have been recognized in the Company's financial
statements compared to the tax returns.

                            Earnings/(loss) per share

The  Company  reports  loss per  share  using a dual  presentation  of basic and
diluted loss per share. Basic loss per share excludes the impact of common stock
equivalents.  Diluted loss per share utilizes the average market price per share
when applying the treasury stock method in determining common stock equivalents.
However,  the Company has a simple  capital  structure for the period  presented
and,  therefore,  there is no variance  between  the basic and diluted  loss per
share.

                       Fair value of financial instruments

SFAS 107,  "Disclosure  About Fair  Value of  Financial  Instruments,"  requires
certain  disclosures  regarding  the fair value of  financial  instruments.  The
Company's only financial instrument at December 31, 2000 was cash.

                           Cash and Cash Equivalents.

For purposes of the statements of cash flows,  The Company  considers all highly
liquid debt  securities  purchased  with  maturity of three months or less to be
cash equivalents.

                         Investment in Equity Securities

Equity  securities  are considered  available-for-sale,  and are carried at fair
value,  with  unrealized  gains and losses  reported in a separate  component of
stockholders' equity under Accumulated Other Comprehensive Income.

                          Concentrations of Credit Risk

Financial instruments,  which potentially subject the Company to a concentration
of credit risk, are cash and cash equivalents and accounts receivable.

                             Property and Equipment

Property and  equipment,  consisting of  furnishings  and equipment  used in its
current   operations,   is  stated  at  cost,  less  accumulated   depreciation.
Depreciation  is begun when the assets are placed in service and computed  using
the  straight-line  method over the estimated useful lives of the assets,  which
range from five to seven years.

                                Long-Lived Assets

Long-lived  assets  to be held and used are  reviewed  for  impairment  whenever
events or changes in circumstances indicate that the related carrying amount may
not be recoverable.  When required,  impairment  losses on assets to be held and
used are recognized based on the fair value of the asset.  Long-lived  assets to
be disposed  of, if any,  are  reported at the lower of carrying  amount or fair
value less cost to sell.

                                  Sales Revenue

Revenues  from sales are  recorded  when the  collection  of sales  proceeds  is
reasonably  assured  and all  other  material  conditions  of the sales are met.
Income on contracts in excess of one month is deferred and  recognized  monthly,
pro-rata, over the term of the agreement.


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                                   Advertising

Advertising costs are charged to operations in the year incurred.

                        Basic Net Income (Loss) per Share

Basic net income  (loss) per common share is computed by dividing the net income
or loss  available  to Common  stockholders  by the weighted  average  number of
Common  shares  outstanding  during  each  period.  There  were no common  stock
equivalents as of the periods ended December 31, 2000 and December 31, 1999. Net
income or loss per share for the periods presented above are based on a weighted
average number of shares outstanding of 5,063,000 and 5,000,000  (adjusted for a
one-for-eight  reverse  split)  during the three  months  ended,  2000 and 1999,
respectively.

                                Use of Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting  principles  requires  management to make estimates and  assumptions.
These  estimates  and  assumptions  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 those estimates.


Item 2.   Management's Discussion and Analysis or Plan of Operation
-------------------------------------------------------------------

Safe Harbor Statement

         Certain statements in this Form 10-QSB, including information set forth
under Item 2.  Management's  Discussion and Analysis of Financial  Condition and
Results of Operations constitute `forward-looking statements' within the meaning
of  the  Private   Securities   Litigation  Reform  Act  of  1995  (the  "Act").
Forward-looking  statements  in this Form 10-QSB or hereafter  included in other
publicly available documents filed with the Securities and Exchange  Commission,
reports to our stockholders and other publicly  available  statements  issued or
released by us involve known and unknown risks,  uncertainties and other factors
which could cause our actual  results,  performance  (financial or operating) or
achievements  to differ  from the  future  results,  performance  (financial  or
operating)  or  achievements   expressed  or  implied  by  such  forward-looking
statements. Such future results are based upon management's best estimates based
upon current conditions and most recent results of operations.

Plan of Operation

The  Company's  management  intends  to seek  funding  from a variety of sources
including  private  placements of its stock,  public  offerings of its stock, as
well as debt financing.  Additionally,  business combinations with entities with
significant  cash  will  be  considered.  However,  there  can  be no  assurance
management will be successful in these endeavors.

For the twelve  month  period from  January 1, 2001 to  December  31, 2001 it is
anticipated,  absent the  Company's  obtaining  other  sources of  liquidity  as
described above, the Company's primary funding for ongoing  corporate  expenses,
such as legal and  accounting  fees and filing  fees,  will be  provided  by the
private sale of the Company's securities.

The Company's  management  is commencing  discussions  with  investment  bankers
pertaining to a stair step  financing  plan.  This will  encompass  initial seed
capital,  a first and second  level of  private  placements,  bridge  financing,
mezzanine financing and an eventual initial public offering.  However, there can
be no assurance management will be successful in these endeavors.


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SAN JUAN FINANCIAL, INC - 10QSB - Quarterly Report          Date Filed:2/21/2001
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Liquidity and Capital Resources

Going Concern. The accompanying financial statements have been prepared assuming
the Company will continue as a going concern. The Company has suffered recurring
losses from operations and at December 31, 2000, had a working capital  deficit.
The financial  statements do not include any adjustments  that might result from
the outcome of this uncertainty.

                           PART II. OTHER INFORMATION


Item 1       Legal Proceedings

         The Company is not engaged in any legal  proceedings  except litigation
in the ordinary course of its business. In the opinion of management, the amount
of ultimate  liability with respect to any such proceedings will not be material
to the Company's financial position or results of operations.

Item 2       Changes in Securities

         None

Item 3       Defaults Upon Senior Securities

         None

Item 4       Submission of Matters to a Vote of Securities Holders

         No matters  were  submitted  to a vote of the  security  holders of the
Company during its fiscal quarter ended December 31, 2000.

Item 5       Other Information

         None.

Item 6       Exhibits and Reports on Form 8-K

              (a)  Exhibits

                   None

              (b)  Reports on Form 8-K.

                   No reports on Form 8-K were  filed by the  Company  during
              the fiscal quarter ended December 31, 2000.

                                   SIGNATURES

         In accordance with the requirements of the Securities Exchange Act, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


 San Juan Financial, Inc.


 Date: February 21, 2001   By: /s/______________________________
                                 Steven G. Slater
                                 Chairman, Chief Executive Officer and President


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