U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

(Mark One)

   [X]   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
         OF 1934

                   For the fiscal year ended December 31, 2002

   [ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
         ACT OF 1934

 For the transition period from ______________________ to _____________________.

                        Commission File Number 000-25253

                             SUMMIT LIFE CORPORATION
                  ---------------------------------------------
                 (Name of small business issuer in its charter)

          OKLAHOMA                                       73-1448244
          --------                                       ----------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

3021 Epperly Dr., P.O. Box 15808, Oklahoma City, Oklahoma            73155
---------------------------------------------------------            -----
              (Address of principal executive offices)             (Zip Code)

                    Issuer's telephone number: (405) 677-0781

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

Securities registered pursuant to Section 12 (g) of the Act:
                                          Common Stock, $.01 par value per share
                                          --------------------------------------
                                                     (Title of class)

         Check whether the issuer (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days.

                                 Yes X    No
                                    ---     ---

         Check if  disclosure  of  delinquent  filers in response to Item 405 of
Regulation S-B is not contained in this form, and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB. ___

         Issuer's revenues for its most recent fiscal year were $763,045.

         The aggregate market value of the registrant's  common stock,  $.01 par
value,  held by  non-affiliates  of the  registrant  as of  March  18,  2003 was
$956,417.60  based  on the  closing  price of $.80  per  share  on that  date as
reported by the OTC Bulletin  Board. As of March 18, 2003,  2,691,255  shares of
the registrant's common stock, $.01 par value, were outstanding.

         Transitional Small Business Disclosure Format (check one): Yes    No X
                                                                       ---   ---

DOCUMENTS  INCORPORATED BY REFERENCE:  Registrant's Proxy Statement for the 2003
Annual Meeting of Stockholders is incorporated by reference in Part III, Items 9
through 12, of this Form 10-KSB.


<PAGE>

                             SUMMIT LIFE CORPORATION
                                   FORM 10-KSB
                   For the Fiscal Year Ended December 31, 2002

                                TABLE OF CONTENTS

Part I.

Item 1.    Description of Business..........................................   1
Item 2.    Description of Property..........................................  10
Item 3.    Legal Proceedings................................................  11
Item 4.    Submission of Matters to a Vote of Security Holders..............  11

Part II.

Item 5.    Market for Common Equity and Related Stockholder Matters.........  11
Item 6.    Management's Discussion and Analysis or Plan of Operation........  12
Item 7.    Financial Statements.............................................  19
Item 8.    Changes In and Disagreements With Accountants on Accounting
           and Financial Disclosure.........................................  20

Part III.

Item 9.    Directors, Executive Officers, Promoters and Control Persons;
           Compliance With Section 16(a) of the Exchange Act................  21
Item 10.   Executive Compensation...........................................  21
Item 11.   Security Ownership of Certain Beneficial Owners and Management...  21
Item 12.   Certain Relationships and Related Transactions...................  21
Item 13.   Exhibits and Reports on Form 8-K.................................  21
Item 14.   Controls and Procedures..........................................  23

Signatures .................................................................  24













                                       -i-






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           CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

         This Annual Report on Form 10-KSB includes "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities  Act"),  and Section 21E of the Securities  Exchange Act of 1934, as
amended.  All statements  other than statements of historical  facts included in
this Report, including,  without limitation,  statements regarding the Company's
future financial position, business strategy, budgets, projected costs and plans
and  objectives  of  Management  for  future  operations,   are  forward-looking
statements. In addition,  forward-looking statements generally can be identified
by the use of  forward-looking  terminology  such as  "may,"  "will,"  "expect,"
"intend,"  "estimate,"  "anticipate"  or "believe"  or the  negative  thereof or
variations  thereon or similar  terminology.  Although the Company believes that
the expectations reflected in such forward-looking statements are reasonable, it
can give no assurance  that such  expectations  will prove to have been correct.
Such  statements  are based upon numerous  assumptions  about future  conditions
which may ultimately  prove to be inaccurate,  and actual events and results may
materially  differ  from  anticipated  results  described  in  such  statements.
Important  factors that could cause actual results to differ materially from the
Company's  expectations  ("cautionary  statements")  include the risks  inherent
generally in the  insurance  and financial  services  industries,  the impact of
competition and product pricing, changing market conditions, the risks disclosed
herein  under  "ITEM   6--Management's   Discussion  and  Analysis  or  Plan  of
Operation,"  and  elsewhere  in this  Report.  All  subsequent  written and oral
forward-looking statements attributable to the Company, or persons acting on its
behalf,   are  expressly   qualified  in  their  entirety  by  these  cautionary
statements.  The Company assumes no duty to update or revise its forward-looking
statements based on changes in internal  estimates or expectations or otherwise.
As  a  result,   the  reader  is  cautioned  not  to  place  reliance  on  these
forward-looking statements.

                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

General

         Summit Life Corporation,  an Oklahoma corporation formed in 1994, is an
insurance  holding  company.  The Company's  primary focus is its life insurance
operations.  As used  in this  report,  the  "Company"  refers  to  Summit  Life
Corporation  and its  subsidiary,  Great Midwest Life Insurance  Company ("Great
Midwest"), unless the context requires otherwise.

         The Company's  growth has been fueled primarily  through  acquisitions,
starting in 1994 when it acquired an Oklahoma-chartered  life insurance company.
The Company  acquired three  additional  life  insurance  companies in Texas and
Louisiana in 1997,  1998 and 1999.  The Company  consolidated  its operations in
1999 by  combining  three of the  companies  into  one  company.  The  resulting
combined company was Great Midwest, an Oklahoma-domiciled life insurance company
operating in both Texas and  Oklahoma.  The fourth  company,  which  operated in
Louisiana, was sold in 1999.

         On August  1,  2001,  the  Company's  wholly  owned  subsidiary,  Great
Midwest,  acquired from  Presidential  Life Insurance  Company of Dallas,  Texas
("Presidential"),  a block of approximately  1,400 life insurance  policies with
estimated  annual  premium of  $120,000.  Liabilities  of $712,000 and assets of
$634,392 were transferred to Great Midwest for a purchase price of $77,608.

         On February  14,  2003,  the Company  acquired  Security  General  Life
Insurance  Company,  an  Oklahoma-domiciled  life insurance  company  ("Security
General"), for a net purchase price of $495,000. Security General is licensed to
operate as a life  insurance  company in  multiple  states.  The  purpose of the
acquisition was to acquire these licenses,  which constituted  substantially all
of the  assets of  Security  General  on the  closing  date.  As a result of the
acquisition,  the Company intends that Security  General will become its primary
operating  subsidiary.  In  connection  therewith,  the Company has obtained the


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<PAGE>

necessary regulatory approval to transfer the entire block of insurance policies
of Great Midwest to Security  General and to thereafter  liquidate the remaining
assets  of Great  Midwest  through a  distribution  to the  Company  as its sole
shareholder.  Subsequent to such transfer, Security General will become the sole
insurance  subsidiary of the Company and will operate in approximately 15 states
throughout the southeastern and western United States.  The Company expects that
the  transfer  of  business  from Great  Midwest to  Security  General,  and the
liquidation  of Great  Midwest,  should  be  completed  by the end of the  first
quarter of 2003.  SEE "ITEM  6-MANAGEMENT'S  DISCUSSION  AND ANALYSIS OR PLAN OF
OPERATION."

         The Company's operating strategy is to continue to make acquisitions of
small,  marginally profitable or unprofitable  insurance companies,  consolidate
and streamline the  administrative  functions of these small companies,  improve
their  investment  yields  through  active  asset  management  in a  centralized
investment operation and eliminate their unprofitable  products and distribution
channels.  The Company believes that it is particularly well suited to make such
acquisitions  and to  capitalize  on the cost  savings  that can be  realized by
consolidating the administrative functions of the acquired companies.

         The  Company's  total  revenue  increased  25% from $609,614 in 2001 to
$763,045 in 2002.  The Company  believes  that  internal  growth,  coupled  with
strategic  acquisitions  made  available  by the  current  consolidation  of the
insurance industry,  presents the Company with good opportunities to achieve its
operating strategy. In particular,  the Company anticipates that the acquisition
of Security General will provide it with additional opportunities for the growth
of the  Company.  SEE "ITEM  6-MANAGEMENT'S  DISCUSSION  AND ANALYSIS OR PLAN OF
OPERATION."

         As of December  31,  2002,  the Company  had  approximately  2,051 life
insurance  policies  and  annuity  contracts  outstanding  and  individual  life
insurance in force of  approximately  $22 million.  As of December 31, 2002, the
Company had total assets of approximately  $7.06 million and total shareholders'
equity of approximately $980,000.

         The Company's principal office is located at 3021 Epperly Dr., P.O. Box
15808,  Oklahoma  City,  Oklahoma,  73155,  and its  telephone  number  is (405)
677-0781.

Operations

Insurance Products

         General

         Through its  insurance  subsidiary,  the Company  offers a portfolio of
permanent and term life products as well as flexible  premium and single premium
annuities  designed  to  meet  the  needs  of  its  customers  for  supplemental
retirement  income,  estate planning and protection from unexpected  death.  The
target  niche is  middle  income  individuals,  families  and  small  businesses
throughout  its  marketing  territory.  The  Company's  business  strategy is to
continue to expand its  marketing  territory  through  subsidiary  growth and/or
company  acquisition,  and to increase  shareholder  value by  managing  certain
operating  fundamentals inherent to the insurance business.  The Company intends
to utilize  these  operating  fundamentals  to  differentiate  its  products  by
maintaining  its  position  as a  low-cost  producer  that  provides  high-value
products to its life  insurance  and  annuity  customers,  while also  providing
superior service to both agents and customers.  In addition, the Company intends
to continue to seek new business opportunities through mergers, acquisitions and
strategic alliances.

         The Company has realized very low entry costs in its purchases of small
insurance  companies.  The Company minimizes operating expenses by centralizing,
standardizing and more efficiently performing many functions common to most life
insurance   companies.   The  operations   performed  by  the  Company   include
underwriting  and policy  administration,  accounting  and financial  reporting,
marketing, regulatory compliance and asset management. The Company believes that
it is currently  utilizing just over 5% of its  information  technology  systems
capability in the administration of these back office operations.



                                       2
<PAGE>

         Factors Affecting Insurance Operations

         The Company  believes that its operating  performance is  significantly
impacted by four basic elements: mortality, persistency,  operating expenses and
investment  yield.  The Company believes that its results for each of these four
elements for the last several years have been good.

         The Company believes its conservative risk selection  practices and its
disciplined field underwriting have resulted in the Company realizing  favorable
mortality  experience for the last several years. The Company fully  underwrites
each regular application and has no group underwriting and maintains very little
guaranteed issue business.

         The Company has consistently achieved favorable persistency on its life
insurance  products (i.e.,  lower lapse rates).  This high  persistency has been
achieved by providing quality service to its policyholders, incentives to agents
by, among other things, grading production bonuses by actual persistency, paying
persistency bonuses,  awarding recognition for both agency and agent persistency
achievements, and monitoring agency persistency on a quarterly and annual basis.
Persistency is the extent to which policies sold remain in force.  Policy lapses
over those actuarially anticipated could have an adverse effect on the financial
performance of the Company.  Policy  acquisition costs are deferred and expensed
over the premium-paying period of a policy. Excess policy lapses, however, cause
the  immediate  expensing or amortizing of deferred  policy  acquisition  costs.
Provided  the Company  maintains  lapse and  surrender  rates within its pricing
assumptions for its insurance  policies,  the Company  believes that the present
lapse and  surrender  rate  should  not have a  material  adverse  effect on the
Company's financial results. For the years ended December 31, 2002 and 2001, the
Company's lapse ratio on ordinary business was 2% and 3%, respectively.

         The  Company  has  aggressively  managed  its  cost  structure,   while
realizing  certain  operating  efficiencies  from minimal  personnel and reduced
overall  costs as a result of the various  acquisitions  it has  effected  since
1994. Other factors  contributing to the Company's lower cost structure include:
a flat  organizational  structure  which allows the Company to be  responsive to
changing business  conditions;  the location of the Company in a geographic area
which  provides  lower cost  operations  than  found in many other  areas of the
country; a well-trained, experienced workforce; and efficient use of technology.

         The Company attempts to maintain competitive portfolio yields, while at
the same time maintaining a conservative approach with respect to its investment
criteria.  Ultimately,  the  Company's  objective  with respect to its insurance
operations is to price each of its products to earn an adequate  margin  between
the  return to the  policyholder  and the  return  earned by the  Company on its
investments.  To the extent that the Company is able to realize higher portfolio
yields on its  investments,  it will be in a position  to offer more  attractive
pricing on its insurance products.

Fixed Rate Annuities

         Annuities  are  long  term  savings   vehicles  that  are  particularly
attractive  to  customers  over  the  age of 50 who are or may be  planning  for
retirement  and seek a secure,  tax deferred  savings  product.  The  individual
annuity  business is a growing segment of the savings and retirement  market and
among the fastest  growing  segments  of the life  insurance  industry.  Annuity
products  currently  enjoy an advantage  over certain other  retirement  savings
products  because the payment of federal  income  taxes on interest  credited on
annuity policies is deferred during the investment accumulation period.

         Through Great Midwest,  the Company  markets,  issues and administers a
variety of fixed rate deferred  annuity  products,  including single premium and
flexible  premium  deferred  annuities.  In a fixed rate deferred  annuity,  the
insurance  company assumes the risk of interest  fluctuations and pays a minimum
fixed rate of interest, usually 3% to 4% per year, with an excess amount payable
based on investment yields of its investment portfolio.  Single premium deferred
annuities ("SPDAs"),  in general, are savings vehicles in which the policyholder
makes a single premium payment to an insurance  company.  The insurance  company


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<PAGE>

credits  the account of the  annuitant  with  earnings at an interest  rate (the
"crediting rate"),  which is declared by the insurance company from time to time
and may exceed but may not be lower than any  contractually  guaranteed  minimum
crediting  rate.  All of the  Company's  annuities  have  a  minimum  guaranteed
crediting  rate. The Company also offers  flexible  premium  deferred  annuities
("FPDAs").  FPDAs are deferred  annuities in which the policyholder may elect to
make  more  than one  premium  payment.  The  Company  currently  does not offer
variable annuity products.

         The Company periodically establishes an interest crediting rate for its
new annuity policies.  In determining the Company's  interest  crediting rate on
new  policies,  management  considers the  competitive  position of the Company,
prevailing  market  rates and the  profitability  of the  annuity  product.  The
Company  maintains the initial  crediting rate for a minimum period of one year.
Thereafter,  the  Company  may  adjust  the  crediting  rate at its  discretion,
although  historically  such adjustments have generally been made on a quarterly
basis. In establishing  renewal crediting rates, the Company primarily considers
the anticipated  yield on its investment  portfolio.  Interest rates credited on
the Company's in force annuity  policies  ranged from 3.00% to 6.50% at December
31,  2002.  All  of the  Company's  annuity  products  have  minimum  guaranteed
crediting  rates of 3.0% for the life of the policy.  At December 31, 2002, more
than 98% of the  Company's  in force  annuity  policies  were beyond the initial
crediting rate period.

         Certain of the Company's  annuity  policies have a bonus crediting rate
for the first year of the policy,  which typically  exceeds the annual crediting
rate by 1% to 3%. The bonus and the base crediting  rates are fully disclosed in
the  annuity  contract.  The  Company  incorporates  a number of features in its
annuity  products  designed to reduce the early  withdrawal  or surrender of the
policies  and  to  partially   compensate   the  Company  for  lost   investment
opportunities  and  costs  if  policies  are  withdrawn  early.  Certain  of the
Company's   deferred  annuity   contracts   provide  for  penalty  free  partial
withdrawals,  typically up to 10% of the accumulation value annually.  Surrender
charge periods on annuity  policies  currently range from five years to the term
of the policy,  with the majority of such policies being issued with a surrender
charge  period of more than seven  years.  The average  length of the  surrender
period on the Company's  deferred  annuity  policies issued during 2002 and 2001
was eight years. The initial  surrender charge on annuity policies  generally is
8% of the premium and decreases over the surrender  charge period (of up to nine
years).  At December 31, 2002,  15% of the Company's  annuity  liabilities  were
subject to a surrender charge of 5% or more.

         Tax Qualified Annuities

         General.  The Company also  markets to employees of public  schools and
certain  other  tax  exempt  organizations   certain  tax  qualified  retirement
annuities that meet the  requirements of Section 403(b) of the Internal  Revenue
Code of 1986 and are known as "tax  sheltered  annuities" or "403(b)  annuities"
("TSAs").   Teachers,  school  employees  and  employees  of  other  tax  exempt
organizations  purchase TSAs through automatic payroll deductions.  TSA products
tend to be  purchased  by  customers  who are  younger  than  purchasers  of the
Company's  other  annuity  products.  Therefore,  the  Company's  specialty  TSA
products tend to  incorporate  features that are attractive to customers in this
younger age bracket who have longer to  accumulate  before  retirement,  such as
combining  a more  competitive  crediting  interest  rate  offset  with a longer
surrender  charge  period.  The  Company  believes  that the  market for TSAs is
attractive  because TSAs broaden its customer base and provide an ongoing source
of premium  renewals.  Additionally,  because of their tax features and transfer
restrictions,  TSAs are less likely to be surrendered, making them a more stable
and  dependable  source of profits for the  Company.  In  addition to TSAs,  the
Company also sells other tax qualified  retirement  annuities such as Individual
Retirement  Annuities and other Employee  Pension type  programs.  Tax qualified
retirement  annuity values totaled almost $1,100,000 or approximately 27% of the
total annuities currently held by the Company.

         Favorable  Tax  Treatment.  Under the Internal  Revenue Code  ("Code"),
income taxes otherwise  payable on investment  earnings are deferred on earnings
unpaid  during the  accumulation  period of certain life  insurance  and annuity
policies. This favorable tax treatment may give the Company's annuity policies a


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<PAGE>

competitive  advantage  over other  investment  or savings  vehicles that do not
offer this  benefit.  To the extent that the Code may be revised to eliminate or
reduce the tax deferred status of life deferred payment annuity products,  or to
establish  a tax  deferred  status  to any  competing  policies,  the  Company's
competitive advantage may be adversely affected.

         Traditional Life Insurance

         Term Life. The Company's subsidiary,  Great Midwest,  offers a low cost
10 year level term life insurance product with level premiums for periods of ten
years and an annually renewable level term product which provides for increasing
premiums in five year  durations,  both  utilizing a low  indeterminate  premium
structure  afforded  to it by  its  primary  reinsurance  company.  The  Company
generally  retains a small fixed  portion of the insurance  risk,  then sells or
cedes a portion of its risks to its  reinsurer,  who in turn pays an  additional
allowance or  commission  to the Company.  This allows the Company to transfer a
portion of its risk and continue to grow its premium revenues and surplus. These
term  products are designed for and sold to  individuals  ages 20 through 60 and
terminate at age 70. While term life  normally is bought very  inexpensively  by
consumers, it is also priced by companies using historical data that illustrates
certain of these coverages, when using adequate reinsurance,  will not result in
adverse claims.

         Whole Life. The Company's subsidiary,  Great Midwest,  markets low cost
guaranteed  premium  products in which  premiums are payable for the life of the
insured and insurance protection (upon certain conditions being met) is afforded
for the insured's  lifetime.  The premiums paid for such whole life policies are
generally  higher than the premiums for comparable  amounts of term insurance in
the policies  early years but is generally  lower in the later years of the life
of the policies. The policyholder may borrow against the policy,  provided there
is  sufficient  cash values,  at a rate that is  comparable  or lower than other
conventional lending sources. The Company generally holds all cash values and if
a death occurs it pays death claims then  collects from the reinsurer to recover
the excess of its retention limits and benefits paid.

         Insurance Underwriting

         The  Company  follows  detailed,  uniform  underwriting  practices  and
procedures in its insurance  business  which are designed to assess risks before
issuing  coverage  to  qualified   applicants.   The  Company  has  professional
underwriters  who  evaluate  policy  applications  on the  basis of  information
provided by applicants and others. Management believes that its actual mortality
results are attributable to, among other things, the geographic  location of its
customer base in rural and suburban  areas (as opposed to urban areas),  as well
as its  consistent  application  of  appropriate  underwriting  criteria  to the
processing of new customer applications.

Reinsurance

         Consistent  with the general  practice of the life insurance  industry,
the  Company's  subsidiary  reinsures  portions  of  coverage  provided by their
insurance products with other insurance  companies under agreements of indemnity
reinsurance.

         Indemnity reinsurance agreements are intended to limit a life insurer's
maximum  loss on a large or  unusually  hazardous  risk or to  obtain a  greater
diversification of risk.  Indemnity  reinsurance does not discharge the original
insurer's primary liability to the insured.  The Company's reinsured business is
ceded to numerous  reinsurers,  and the Company believes the assuming  companies
are able to honor all contractual  commitments,  based on the Company's periodic
reviews of their financial  statements,  insurance  industry reports and reports
filed with state insurance departments.

         As of  December  31,  2002,  the  policy  risk  retention  limit of the
Company's  subsidiary on the life of any one  individual  did not exceed $5,000;
reinsurance  ceded by the  Company's  subsidiary  represented  56% of the  gross
combined life insurance in force.  At December 31, 2002,  the Company's  largest
reinsurer,  Optimum Re Insurance Company, accounted for approximately 98% of the
$12 million of reinsurance ceded by the Company.



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Investments

         Investment  activities are an integral part of the Company's  business;
investment income is a significant component of the Company's revenues. Upon the
purchase by a  policyholder  of an annuity or life  contract  and payment of the
premium,  the policy is issued and delivered to the new policyholder.  The funds
are  then  invested  as the  Company  determines  based  on  certain  guidelines
including  those set by the  National  Association  of  Insurance  Commissioners
("NAIC") as to the percentage of investment  that are placed in any one category
of  investments.  The  Company  has  historically  invested  a  majority  of its
available assets in securities that are issued, secured, guaranteed or backed by
federal, state or local governments, their agencies or instrumentalities.

         Profitability  is  significantly  affected by spreads between  interest
yields on investments and rates credited on insurance liabilities.  Although all
credited  rates on  single  premium  deferred  annuities  and  flexible  premium
deferred annuities may be changed as often as quarterly, after their first year,
changes in credited rates may not be sufficient to maintain targeted  investment
spreads in all economic and market  environments.  In addition,  competition and
other factors,  including the impact of the level of surrenders and withdrawals,
may limit the Company's ability to adjust or maintain  crediting rates at levels
necessary to avoid narrowing of spreads under certain market conditions. For the
year ended December 31, 2002, the average gross yield of the Company's  invested
assets was approximately 8.7% and the average credited rate was 4.5%.  Excluding
the sale of the  communication  tower  lease,  the  average  gross  yield of the
Company's  invested assets was  approximately  4.8% for the year 2002. SEE "ITEM
2-DESCRIPTION OF PROPERTY."

         The  Company  balances  the  duration of its  invested  assets with the
expected  duration of benefit  payments arising from insurance  liabilities.  At
December 31, 2002, the adjusted  modified  duration of debt securities and short
term  investments was 6.0 years.  At December 31, 2002, the average  duration of
the Company's insurance liabilities was 7.0 years.

         For information  regarding the composition and  diversification  of the
investment  portfolio of the Company,  see Note B to the Company's  Consolidated
Financial Statements.

Acquisitions and Consolidations

General

         The Company's operating strategy is to continue to make acquisitions of
small,  marginally profitable or unprofitable  insurance companies,  consolidate
and streamline the  administrative  functions of these small companies,  improve
their  investment  yields  through  active  asset  management  by a  centralized
investment operation and eliminate their unprofitable  products and distribution
channels.  Because of their small size,  such companies are often  overlooked as
potential acquisition candidates by other companies in the industry. The Company
believes that it is particularly  well suited to make such  acquisitions  and to
capitalize  on the cost  savings  which can be  realized  by  consolidating  the
administrative functions of the acquired companies.

Historical Acquisitions

         The  Company's  growth  to  date  has  been  fueled  primarily  through
acquisitions.   Since  1994,  the  Company  has  acquired  five  life  insurance
companies. During 1999, three of these companies were combined, either by merger
or through  transfer of operations,  to create Great Midwest,  which operates in
Texas and  Oklahoma,  while a fourth  company  was sold.  In  addition  to stock
acquisitions, the Company has also made asset acquisitions. In 2001, the Company
's wholly owned  subsidiary,  Great Midwest,  acquired a block of  approximately
1,400 life  insurance  policies with estimated  annual premium of $120,000.  SEE
"ITEM  1-BUSINESS--General."  The Company  intends to continue  its  strategy of


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pursuing  similar  acquisitions  of  blocks  of  insurance  business  and  small
insurance  companies  and  other  insurance-related  opportunities.   Management
believes that such  acquisitions will continue to lower unit costs by increasing
the number of policies and the amount of premiums over which fixed  expenses are
spread.

Targeted Future Acquisitions

         The Company has typically  sought  companies  that are  underdeveloped,
overly burdened with expenses or owned by financially  troubled  companies.  The
Company  believes  that  the  small  insurance  company  marketplace  is  highly
fragmented and faces numerous hurdles to its survival and growth over the coming
years. Some of those hurdles include  technological  obsolescence,  the need for
additional  capital and surplus due to the changing  regulatory  environment and
lack of sufficient exit strategies for owners of small,  closely-held companies.
The Company believes these factors have created acquisition  opportunities often
overlooked by the large insurance  companies.  The Company intends to capitalize
on these  opportunities as it continues to execute its growth plans. The Company
has no  agreements,  understandings  or  arrangements  with respect to any other
acquisitions  at this time,  with the exception of the  acquisition  of Security
General previously noted.

Employees

         As of December 31, 2002,  the Company had two  full-time  employees who
perform both managerial and  administrative  functions.  Great Midwest has three
employees who perform administrative services. The Company's controller function
is outsourced.  It can be anticipated that the Company will have a need for more
employees as the size of its business grows. None of the Company's  employees is
represented by a labor union.  Management  believes that the Company's relations
with its employees are good.

Marketing

         The Company's  target markets are individuals in middle income brackets
in addition to small businesses in the states of Texas and Oklahoma. The Company
believes that this market is severely underserved as more major companies target
their  products and agency force toward the upper income and large policy sales.
Many large  companies no longer offer  insurance in face amounts under $100,000.
Although the Company does write multi-million dollar policies,  its average life
policy is approximately $13,000.

         The  pricing of the  Company's  products  is  generally  determined  by
reference to actuarial  calculations  and  statistical  assumptions  principally
relating to mortality, persistency,  investment yield assumptions,  estimates of
expenses and management's judgment as to market and competitive conditions.  The
premiums and deposits received,  together with assumed investment earnings,  are
designed to cover policy  benefits,  expenses  and  policyowner  dividends  plus
return a profit to the  Company.  These  profits  arise from the margin  between
mortality  charges  and  insurance  benefits  paid,  the margin  between  actual
investment  results and the  investment  income  credited  to  policies  (either
directly or through  dividends to  policyowners)  and the margin between expense
charges and actual  expenses.  The level of profits  also depend on  persistency
because policy acquisition costs, particularly agent commissions,  are recovered
over the life of the policy.  Dividends  and  interest  credited on policies may
vary from time to time reflecting changes in investment, mortality, persistency,
expenses  and  other  factors.  Interest  rate  fluctuations  have an  effect on
investment  income  and may have an impact on  policyowner  behavior.  Increased
lapses in policies may be experienced if the Company does not maintain  interest
rates and  dividend  scales  that are  competitive  with other  products  in the
marketplace.

         The Company markets its products  primarily through personal  producing
general agents ("PPGAs") and small independent  property and casualty  agencies.
The PPGAs include the Company's  founders and principal  stockholders,  James L.
Smith and  Charles L.  Smith.  James L. Smith and  Charles L. Smith are the sole
stockholders of the Smith Agency,  which undertakes life insurance and financial


                                       7
<PAGE>

planning  for  estates,  trusts and  corporations.  The Smith  Agency was and is
presently, a general agent for several insurance companies. The Smith Agency has
sold  a  majority  of the  Company's  deferred  annuities  since  the  Company's
inception. Additionally, the companies acquired by the Company generally have in
place PPGAs who are capable and  qualified to generate the sales  desired by the
Company,  thereby  eliminating  part of the expense of recruiting and training a
new agency force.

Competition

         The life  insurance  business is highly  competitive  and consists of a
number of  companies,  many of which have greater  financial  resources,  longer
business  histories and more  diversified  lines of insurance  products than the
Company.   The  Company  may  encounter  increased   competition  from  existing
competitors or new market entrants,  some of which may be  significantly  larger
and  have  greater  business   resources.   Companies   typically   compete  for
policyholders on the basis of benefits,  rates,  financial strength and customer
service  and  compete  for  agents  and  brokers  on the  basis of  commissions,
financial strength and customer service. The Company, although smaller than most
of its  competitors,  provides  competitive  benefits  and  rates.  The  Company
believes  that its ability to  administer  its  functions at a much reduced rate
allows it to maintain low internal cost products.

         The Company has  identified  additional  areas where it has very little
competition  due to the size of the  Company as well as the size of its  target.
That  area is the  consolidation  field.  The  Company's  strategy  has  been to
consolidate and streamline the administrative  functions of small life insurance
companies.  Most large life  companies  have high  fixed  costs when  performing
acquisitions  restricting  them in the minimum size of purchase they can pursue.
The Company believes that the  consolidation of the industry will continue,  and
the Company intends to participate in the process.

Regulation

         The  Company's  insurance  subsidiary  is  subject  to  regulation  and
supervision  by the  states in which it  transacts  business.  The laws of these
jurisdictions  generally  establish  agencies with broad  regulatory  authority,
including  powers to: (1) grant and revoke  licenses to transact  business;  (2)
regulate  and  supervise  trade  practices  and market  conduct;  (3)  establish
guaranty associations; (4) license agents; (5) approve policy forms; (6) approve
premium rates for some lines of business; (7) establish reserving  requirements;
(8) prescribe the form and content of required financial statements and reports;
(9) determine the  reasonableness and adequacy of statutory capital and surplus;
and (10)  regulate the type and amount of permitted  investments.  Because Great
Midwest is licensed to sell  insurance in Oklahoma  and Texas,  it is subject to
regulation by the insurance  regulatory agencies of both states. With the recent
acquisition of Security  General,  which is licensed as a life insurance company
in  multiple  states,  the  Company  will also be subject to  regulation  by the
insurance  regulatory  agencies  of the  states  in which  Security  General  is
licensed and in which the Company intends to conduct business.

         Most states also have  enacted  legislation  that  regulates  insurance
holding company groups,  including acquisitions,  extraordinary  dividends,  the
terms of  surplus  debentures,  the terms of  affiliate  transactions  and other
related  matters.  Currently,  the  Company  and its  insurance  subsidiary  are
registered as a holding company group pursuant to such  legislation in Texas and
Oklahoma.

         The  federal  government  does  not  directly  regulate  the  insurance
business.  However,  federal legislation and administrative  policies in several
areas,  including  pension  regulation,  age and sex  discrimination,  financial
services  regulation  and federal  taxation,  do affect the insurance  business.
Recently,  increased  scrutiny  has been  placed upon the  insurance  regulatory
framework,  and a number  of  state  legislatures  have  considered  or  enacted
legislative  proposals that alter, and in many cases increase,  the authority of
state agencies to regulate  insurance  companies and holding company groups.  In
addition,  legislation  has been  introduced  from time to time in recent  years
which, if enacted, could result in the federal government assuming a more direct
role in the regulation of the insurance industry.


                                       8
<PAGE>

         State insurance  regulators and the NAIC are  continually  re-examining
existing laws and regulations and their application to insurance companies. From
time to time the NAIC has adopted,  and  recommended  to the states for adoption
and implementation, several regulatory initiatives designed to decrease the risk
of  insolvency  of insurance  companies in general.  These  initiatives  include
risk-based  capital ("RBC")  requirements  for determining the levels of capital
and surplus an insurer must maintain in relation to its insurance and investment
risks. The NAIC regulatory  initiatives also impose restrictions on an insurance
company's ability to pay dividends to its stockholders. These initiatives may be
adopted by the various states in which the Company's subsidiary is licensed, but
the ultimate content and timing of any statutes and regulations to be adopted by
the states  cannot be determined at this time. It is not possible to predict the
future impact of changing state and federal regulations on the operations of the
Company,  and there can be no assurance that existing insurance related laws and
regulations  will not  become  more  restrictive  in the future or that laws and
regulations enacted in the future will not be more restrictive.

         Most  states  have  enacted   legislation  or  adopted   administrative
regulations  which affect the  acquisition of control of insurance  companies as
well as transactions  between insurance  companies and persons controlling them.
The nature and extent of such  legislation  and  regulations  vary from state to
state.  Most  states,  however,  require  administrative  approval  of:  (1) the
acquisition  of 10 percent  or more of the  outstanding  shares of an  insurance
company  incorporated in the state; or (2) the acquisition of 10 percent or more
of the  outstanding  stock  of an  insurance  holding  company  whose  insurance
subsidiary is incorporated  in the state.  The acquisition of 10 percent of such
shares is generally  deemed to be the acquisition of control for purposes of the
holding  company  statutes.   It  requires  not  only  the  filing  of  detailed
information  concerning the acquiring  parties and the plan of acquisition,  but
also the receipt of  administrative  approval prior to the acquisition.  In many
states, an insurance authority may find that control does not, in fact, exist in
circumstances  in which a person owns or controls 10 percent or a greater amount
of securities.

         Under the  solvency  or  guaranty  laws of most states in which they do
business,  the Company's insurance subsidiary may be required to pay assessments
(up to certain  prescribed limits) to fund policyowner losses or the liabilities
of insolvent or  rehabilitated  insurance  companies.  These  assessments may be
deferred  or  forgiven  under  most  guaranty  laws if they  would  threaten  an
insurer's  financial  strength.  In certain  instances,  the  assessments may be
offset against future premium  taxes.  The Company's  subsidiaries  historically
have not been  required  to pay  assessments  in any  significant  amounts.  The
likelihood and amount of any future assessments cannot be estimated, as they are
beyond the control of the Company.

         As part of their routine regulatory oversight process, insurance
departments conduct periodic detailed examinations of the books, records and
accounts of insurance companies domiciled in their states. Texas conducts such
examinations on a three to five year cycle under guidelines promulgated by the
NAIC.

Federal Income Taxation

         The  annuity and life  insurance  products  marketed  and issued by the
Company's  subsidiary  generally  provide  the  policyowner  with an income  tax
advantage,  as compared to other savings  investments  such as  certificates  of
deposit  and bonds,  in that  income  taxation  on the  increase in value of the
product is  deferred  until  receipt  by the  policyowner.  With  other  savings
investments, the increase in value is taxed as earned. Annuity benefits and life
insurance  benefits  which  accrue  prior to the  death of the  policyowner  are
generally  not taxed until paid.  Life  insurance  death  benefits are generally
exempt from income tax, but not estate tax. Also, benefits received on immediate
annuities  (other than structured  settlements) are recognized as taxable income
ratably as opposed to the economic  accrual  methods,  which tend to  accelerate
taxable income into earlier years and which are required for other  investments.
The tax advantage  for annuities and life  insurance is provided in the Internal
Revenue Code ("the  Code"),  and is  generally  followed in all states and other
United  States  taxing  jurisdictions.  Accordingly,  it is subject to change by
Congress and the legislatures of the respective taxing jurisdictions.


                                       9
<PAGE>

         The Company's  insurance company  subsidiary,  Great Midwest,  is taxed
under the life insurance company provisions of the Code.  Provisions in the Code
require a portion of the expenses incurred in selling  insurance  products to be
deducted over a period of years,  as opposed to immediate  deduction in the year
incurred.  This provision  increases the tax for statutory  accounting  purposes
which reduces statutory surplus and,  accordingly,  decreases the amount of cash
dividends that may be paid by the life insurance subsidiary.

ITEM 2.  DESCRIPTION OF PROPERTY

         The  Company's  administrative,  marketing  and  production  facilities
consist of  approximately  3,000  square feet at a single  location in Del City,
Oklahoma.  The Company owns and occupies this facility and owns the  approximate
30,000 square feet of raw land adjacent to the property.

         In March 2001, the Company leased 2,400 square feet of space within the
internal boundaries of its property to Nextel Westcorp, Inc., on which space the
lessee erected a communications tower. Terms of the lease agreement (the "Nextel
Lease  Agreement"),  which was entered into in March 2001,  provided for monthly
payments to the  Company  during the initial  five-year  term of the lease.  The
lease was  renewable at the option of the lessee for five  additional  five-year
terms.

         On March 6, 2001,  the  Company  sold the Nextel  Lease  Agreement.  In
connection  with the sale, the Company had a disagreement  with Grant  Thornton,
LLP, its then auditors, regarding the Company's proposed accounting treatment of
the  sale.  SEE "ITEM 8 -  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON
ACCOUNTING AND FINANCIAL DISCLOSURE." The Company interpreted certain provisions
relating to Statement of Financial  Accounting Standards ("FAS") 13 to allow the
recording  of a gain  on  the  sale  of the  Nextel  Lease  Agreement  as of the
effective  date of the sale in the amount of  $186,000,  because the Company did
not  retain  any  ownership  in the lease  revenue  stream  and the buyer had no
recourse against the Company if the lease revenue stream did not continue. Grant
Thornton  LLP's  review  of the  transaction  indicated  that the  Nextel  Lease
Agreement  was an operating  lease and that pursuant to FAS 13 paragraph 22, the
sale or assignment by the lessor of lease payments due under an operating  lease
should be accounted for as a borrowing.  As such, Grant Thornton LLP recommended
that the Company record the sale of the Nextel Lease Agreement as a borrowing as
of the effective  date of the sale.  The effect on the  Company's  first quarter
2001  financial  statements  was to eliminate  $186,000 from income and record a
like amount as a liability.

         During the Company's  discussions  with Grant Thornton LLP, the Company
was informed of certain  requirements  that had to be satisfied in order for the
gain on the sale of the  Nextel  Lease  Agreement  to be  recognized  as income.
Pursuant to the  information  provided by Grant  Thornton  LLP, in June 2001 the
Company sold, to the purchaser of the Nextel Lease Agreement,  the real property
underlying the  communication  tower lease,  which structured the transaction to
meet the  requirements  necessary  for the gain on the sale to be  recognized as
income.  Accordingly,  the Company recorded a gain of $186,000 in June 2001. The
effect on the Company's financial  statements was to delay recording $186,000 of
income from the first quarter of 2001 to the second quarter of 2001.

         As a result of events  subsequent to the sale,  the Company came to the
conclusion the tower property and lease were more  attractive  investments  than
when they initially were sold by the Company. Accordingly, on December 17, 2001,
the Company repurchased the property, together with the underlying communication
tower lease, for $213,500.

         As a part of the  regulatory  process in connection  with the filing of
the Company's 10-KSB for the year ended December 31, 2001, the Company requested
a review by the Securities and Exchange Commission (the "SEC") of its accounting
treatment  of  the  sale  and   repurchase  of  the  property   underlying   the
communication  tower  lease.  After  review,  the SEC advised the Company  that,
although the Company's  proposed  accounting  treatment was consistent  with the


                                       10
<PAGE>

literal application of the applicable accounting principles, the SEC nonetheless
believed it to be appropriate  for the Company to restate certain items relating
to the transactions. The effect of such restatement was to reverse the reporting
of the $186,000 of income on the original sale of the real estate subject to the
Nextel Lease Agreement, which previously had been reported in the second quarter
of 2001.

         On  June  29,  2002,   the  Company  sold  the  subject   property  and
accompanying  communication tower for $211,000.  The Company reported investment
income of $211,000 as a result of the sale.

         On July 31,  2002,  the  Company  purchased  an office  and  warehouse,
consisting of approximately 15,000 square feet at a single location in Del City,
Oklahoma.   The  Company   intends  in  the  next  few  years  to  relocate  its
administrative,  marketing and production  facilities to this location.  In such
event,  the  Company  may sell or lease  the  property  where  its  offices  are
currently located. The purchase price was $529,871 and the Company renovated the
warehouse  and  adjacent  land  into  climate  controlled  and  regular  storage
facilities at an additional  cost of $622,850.  When the property  becomes fully
leased,  the Company expects to recognize  investment  income from the property.
The purchase of the property and the  renovations  have been paid from  existing
cash flow from operations.

ITEM 3.  LEGAL PROCEEDINGS

         The Company is involved from time to time in various legal  proceedings
and claims incident to the normal conduct of its business.  The Company believes
that such legal proceedings and claims,  individually and in the aggregate,  are
not likely to have a  material  adverse  effect on its  financial  condition  or
results of operations.

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

         No matters were submitted to a vote of the security  holders during the
fourth quarter of the fiscal year covered by this report.

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Trading Market

         There  is  currently  a  limited  market  for the  common  stock of the
Company,  which has been quoted on the OTC Bulletin Board since October 27, 1999
under  the  symbol  SUMC.  The  following  table  sets  forth,  for the  periods
indicated,  the high and low  quoted  prices of the  Company's  common  stock as
published by the OTC Bulletin Board:


                                            2001                   2002
                                    ---------------------   --------------------
                                      High         Low        High        Low
                                    ---------   ---------   ---------   --------
First Quarter....................    $ .53        $ .25      $ .95       $ .23
Second Quarter...................    $1.05        $ .10      $1.01       $ .30
Third Quarter....................    $ .80        $ .75      $1.00       $ .51
Fourth Quarter...................    $ .90        $ .10      $ .90       $ .51

         OTC Bulletin  Board  quotations  reflect  interdealer  prices,  without
retail   mark-up,   mark-down  or  commission  and  may  not  represent   actual
transactions.  The Company intends to make  application to list the common stock
on the NASDAQ Bulletin Board Exchange when it qualifies for listing.


                                       11
<PAGE>

Number of stockholders

         As of the close of  business  on March 18,  2003,  2,691,255  shares of
common  stock were issued and  outstanding,  5,000  shares of Series A preferred
stock were issued and outstanding and 350,000 shares of Series B preferred stock
were  issued and  outstanding.  At such date,  there  were  approximately  1,400
stockholders of record of the common stock.

Dividend Policy

         To date,  the Company  has  declared  no cash  dividends  on its common
stock,  and does not expect to pay cash  dividends in the near term. The Company
intends to retain future  earnings,  if any, to provide funds for operations and
the continued expansion of its business.

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

         The following  discussion and analysis reviews the Company's operations
for the years ended December 31, 2002 and 2001. Certain statements  contained in
this  discussion  are not based on historical  facts,  and are  "forward-looking
statements"  within the meaning of Section 27A of the Securities Act of 1933, as
amended (the "Securities  Act"), and Section 21E of the Securities  Exchange Act
of 1934, as amended.  All statements  other than statements of historical  facts
included in this discussion, including, without limitation, statements regarding
the Company's future financial position,  business strategy,  budgets, projected
costs and  plans  and  objectives  of  Management  for  future  operations,  are
forward-looking  statements. In addition,  forward-looking  statements generally
can be  identified  by the use of  forward-looking  terminology  such as  "may,"
"will,"  "expect,"  "intend,"  "estimate,"  "anticipate"  or  "believe"  or  the
negative  thereof or  variations  thereon or similar  terminology.  Although the
Company  believes  that  the  expectations  reflected  in  such  forward-looking
statements are reasonable,  it can give no assurance that such expectations will
prove to have been correct.  Such statements are based upon numerous assumptions
about future conditions which may ultimately prove to be inaccurate,  and actual
events and results may materially  differ from anticipated  results described in
such  statements.  Important  factors that could cause actual  results to differ
materially from the Company's expectations ("cautionary statements") include the
risks inherent generally in the insurance and financial services industries, the
impact of competition and product pricing, changing market conditions, the risks
disclosed herein under  "--Business  Outlook and Risk Factors," and elsewhere in
this  Report.  All  subsequent  written  and  oral  forward-looking   statements
attributable  to the Company,  or persons  acting on its behalf,  are  expressly
qualified in their entirety by these cautionary statements.  The Company assumes
no duty to update or revise its  forward-looking  statements based on changes in
internal  estimates or  expectations  or otherwise.  As a result,  the reader is
cautioned  not to  place  reliance  on  these  forward-looking  statements.  The
following  discussion  and  analysis  should  be read in  conjunction  with  the
financial  statements  of the Company  and the notes  related  thereto  included
elsewhere in this Report.

         The Company's only business segment is its life insurance operations.

Operating Data

         The following table sets forth selected information regarding operating
results for the periods indicated:

                                                        Year Ended December 31,
                                                        -----------------------
                                                           2002          2001
                                                        ---------     ---------
                                                        (dollars in thousands)
         Statement of Operations Data:
                  Revenues                              $     763    $     610
                  Benefits and expenses                       858          933
                                                        ---------     ---------
                           Net loss                     $     (95)    $    (324)
                                                        =========     =========

         Balance Sheet Data:
                  Cash and cash equivalents             $   2,109    $   1,661
                  Total assets                          $   7,063    $   6,629
                  Total liabilities                     $   6,083    $   5,572
                  Stockholders equity                   $     980    $   1,057




                                       12
<PAGE>

Results of Operations

      Year Ended December 31, 2002 Compared to Year Ended December 31, 2001

         Assets/Liabilities/Stockholders'  Equity.  Total assets were $7,062,950
at December 31, 2002,  compared to  $6,629,095 at December 31, 2001, an increase
of 7%. The increase was due to an increase in the sales of the Company's annuity
products which are booked as deposits.

         Total liabilities (primarily insurance reserves for future policyholder
benefits)  were  $6,083,251  at December 31,  2002,  compared to  $5,572,208  at
December  31, 2001,  an increase of 9%. The  increase  was due  primarily to the
increase in sales of the Company's annuity products as noted above.

         Total stockholders'  equity was $979,699 at December 31, 2002, compared
to $1,056,887 at December 31, 2001, a decrease of 7%. The decrease was primarily
due to the  Company's  net loss from  operations.  Equity was also  impacted  by
public  offering  costs (a decrease of $56,522)  incurred in  connection  with a
public offering of the Company's  common stock that was completed in March 2002,
sale of the  Company's  stock held by its  subsidiary  (an increase of $95,000),
preferred dividends (a decrease of $50,000) and unrealized gains (an increase of
$28,018) on its available for sale security portfolio.

         Average  rate  of  return  on  investments,  including  cash  and  cash
equivalents,  was  approximately  8.7% for 2002 (4.8%  excluding the sale of the
communication tower lease) and 6.1% for 2001, while the average rate credited to
policyowner accounts was approximately 4.5% and 5.0%, respectively.

         At December 31, 2002,  the  Company's  net deferred tax assets  totaled
$31,800  and  related   primarily  to  net  operating   loss  and  capital  loss
carryforwards.  Realization of net operating and capital loss  carryforwards  is
dependent on generating  sufficient future taxable income.  The Company believes
its  operating  strategy  to continue to make  acquisitions  of small  insurance
companies,  consolidate  and  streamline the  administrative  functions of these
small companies,  improve unprofitable  products and distribution  channels will
generate future taxable income.  Although realization of net deferred tax assets
is not assured,  the Company  believes  these sources will  generate  sufficient
future taxable income during the available  carryforward  period and believes it
is more  likely  than not that the  recorded  net  deferred  tax assets  will be
realized.

         Revenue.  Total  revenues  increased  25% from  $609,614 for the twelve
months ending  December 31, 2001 to $763,045 for the same period ending December
31, 2002. Revenue increases were reported for investment income and net gains on
trading securities while other categories decreased.

         Revenues  attributable to premium income decreased 25% from $359,533 to
$268,721  for the year  ended  December  31,  2002,  compared  to the year ended
December 31, 2001.  Revenues  attributable to life insurance  increased 21% from
year to year,  however,  revenues  attributable to certain annuitized  contracts
dropped  by 69% from year to year and  offset  the  increase  in life  insurance
premiums.

         Investment  income  increased  39%,  from  $338,670  for the year ended
December 31, 2001 to $469,680 for the year ended December 31, 2002,  $211,000 of
which was  attributable to the sale of certain real property and an accompanying
lease agreement. Excluding the income from the sale of such property, investment
income  decreased  24%,  due in part to  historically  low  interest  rates that
impacted  the  Company's  entire  investment  portfolio by lowering the rates of
return received on its investments and accelerating principal prepayments on its
higher-return investments.

         Realized  losses on the sale of  investments  increased from $7,792 for
the year ended  December  31,  2001 to $26,661 for the year ended  December  31,
2002,  due to a loss suffered on one security  connected  with the bankruptcy of
the issuer during 2002.


                                       13
<PAGE>

         The Company reported a net gain on trading securities of $5,091 for the
year ended  December 31, 2002,  compared to a net loss on trading  securities of
$139,527 for the year ended December 31, 2001. The Company substantially reduced
its exposure during 2002.

         Other income  decreased  21%, from $58,730 for the year ended  December
31, 2001 to $46,214 for the year ended December 31, 2002,  primarily as a result
of the  discontination of a contract for  administrative  services performed for
another company.

         Costs and  Expenses.  Total  expenses  decreased  9% from  $933,818  to
$852,758  for the years ended  December  31, 2001 and 2002,  respectively.  Such
decrease  was  primarily  attributable  to a decrease  of  $93,926  in  general,
administrative  and  operating  expenses,   including  the  outsourcing  of  the
Company's  controller  position.  This was partially offset by increases in most
categories related to policy service and benefits as well as the amortization of
the value of  purchased  insurance  business  relating to the Great  Midwest and
Presidential blocks of business.  Such amortization is expected to continue over
the premium-paying life of the acquired policies.

         Policy  benefits  increased  28%  from  $142,413  to  $182,430  for the
comparable  periods,  due to the  inclusion  of the  Presidential  block  in the
Company's operations for a full year. Interest expense decreased by $13,393 from
2002  compared to 2001 due to the payment of debt by the  Company  during  2001.
Taxes,  licenses and fees also decreased on a year to year basis by $11,490 as a
result of the  Company  paying  for the  costs  associated  with the  regulatory
examination of Great Midwest during 2001. These costs are incurred on a periodic
basis  ranging  from  three  to five  years  and the  Company  expects  to incur
additional expenses in either 2004 or 2005.

         Losses. The Company reported a net loss for the year ended December 31,
2002 of $95,154,  compared to a net loss for the year ended December 31, 2001 of
$324,204, a 71% decrease. The decrease in net loss was due primarily to the sale
of the  communication  tower lease and underlying real property,  which provided
income of $211,000,  as well as  cost-cutting  initiatives  taken by  management
during 2002 to reduce  operating  expenses.  Net loss  decreased 61%, with a net
loss of $145,154 for the year ended December 31, 2002, compared to a net loss of
$374,204  for the year ended  December 31,  2001,  primarily  due to the factors
stated above. Net loss per share for the comparable  periods was $0.05 and $0.15
per share, respectively.

Liquidity and Capital Resources

      Liquidity

         The  principal  requirements  for  liquidity  in  connection  with  the
Company's  operations  are  in  contractual   obligations  to  policyowners  and
annuitants.  The Company's contractual obligations include payments of surrender
benefits, contract withdrawals,  claims under outstanding insurance policies and
annuities,  and policy  loans.  Payment of  surrender  benefits is a function of
"persistency", which is the extent to which insurance policies are maintained by
the policyowner.  Policyowners sometimes do not pay premiums, thus causing their
policies to lapse,  or  policyowners  may choose to surrender their policies for
their  cash  surrender  value.  If  actual  experience  of a policy  or block of
policies is different from the initial or acquisition date  assumptions,  a gain
or loss could result.  Depending on the nature of the underlying policy, a lapse
or  surrender  may  result in  surrender  charge  revenue or  surrender  benefit
expense. Such amounts may be less than, or greater than, unamortized acquisition
expenses  and/or  the  related  policy  reserves;  accordingly,  current  period
earnings  may either  increase  or  decrease.  Additionally,  policy  lapses and
surrenders  may  result  in lost  future  revenues  and  possible  profitability
associated with the policy.

      Capital Resources

         On March 31, 2001, a principal  shareholder and director of the Company
entered  into an  agreement  with the  Company to provide  the  Company  with an
unsecured  revolving  line of credit in the  aggregate  amount of $500,000  (the
"Revolving  Line of  Credit").  The  Revolving  Line of Credit,  which  bears no


                                       14
<PAGE>

interest,  is due and  payable  upon demand by the  creditor.  See Note C to the
Company's  Consolidated  Financial  Statements.  The  Revolving  Line of  Credit
replaced  the  Company's  bank line of credit,  which was repaid in its entirety
with  borrowings  under the Revolving  Line of Credit,  and has been and will be
utilized as  necessary  to fund the  Company's  operations  if other  sources of
funding are not available.  See  "--Business  Outlook and Risk Factors,"  below,
under the heading  "The  Company  may not have  alternate  sources of  financing
available if the  Revolving  Line of Credit is  terminated."  As of December 31,
2002, the Company has been advanced $245,629.

         The  Company  has made and  intends  to make  ongoing  expenditures  in
connection with its subsidiary's marketing programs.  Historically,  the Company
has funded these expenditures from cash flow from operations.

         On February  14,  2003,  the Company  acquired  Security  General  Life
Insurance  Company,  an  Oklahoma-domiciled  life insurance  company  ("Security
General"),  for a net purchase price of $495,000.  The purchase price was funded
with cash from  operations.  Because the  transaction was structured so that the
only assets to be retained by Security General were the regulatory licenses held
by it,  under the  terms of the  acquisition  agreement  the  Company  agreed to
reimburse  the seller for the  statutory  capital  and  surplus  required  to be
retained by Security  General.  In connection with this  provision,  the Company
obtained a three-month  bridge loan in the amount of $1,500,000 to reimburse the
seller for the  approximately  $1.5 million of statutory  capital and surplus in
Security  General.  The  Company  intends  to repay the bridge  loan,  which was
obtained  from a bank at an  interest  rate of 3.25% per  annum,  as soon as the
liquidation of Great Midwest is completed, and its remaining capital and surplus
is permitted by regulators to be released for distribution to the Company as its
sole  shareholder.  In the event that  proceeds  from the  liquidation  of Great
Midwest are insufficient  for such purposes,  the Company may sell shares of its
preferred  stock.  If the Company decides to not sell its preferred stock or the
sale of preferred stock is not fully completed, the Company could be required to
obtain  funds by  extending  and  increasing  the  bridge  loan or by  obtaining
financing from other sources.

         The Company believes that  anticipated cash from continuing  operations
and its Revolving Line of Credit should be sufficient to fund its operations and
the annual 10%  dividend on the Series A  Preferred  Stock for at least the next
twelve months. The Company may not, however,  generate  sufficient cash flow for
these  purposes.  The  Company's  ability  to fund  its  operations  and to make
scheduled dividend payments will depend on its future  performance,  which, to a
certain  extent,  is  subject  to  general  economic,  financial,   competitive,
legislative,  regulatory  and other  factors that are beyond its control and the
ability of the principal  shareholder to advance additional funds to the Company
under the Revolving  Line of Credit if other sources of funds are not available.
The risk  factors to which the  Company's  operations  are  subject  include the
following:

Business Outlook and Risk Factors

         The  Company's  future  operating  results  may be  affected by various
trends,  developments and factors that the Company must  successfully  manage in
order to achieve favorable  operating  results.  In addition,  there are trends,
developments  and  factors  beyond  the  Company's  control  that may affect its
operations.  In  accordance  with  the  provisions  of  the  Private  Securities
Litigation  Reform Act of 1995, the  cautionary  statements and risk factors set
forth below and in the Company's  other filings with the Securities and Exchange
Commission,  identify important trends, factors and currently known developments
that  could  cause  actual  results  to  differ  materially  from  those  in any
forward-looking  statements  contained in this Report and in any written or oral
statements of the Company.  Forward-looking  statements  in this Report  include
revenue,  expense and earnings analysis for the remainder of 2003 as well as the
Company's  expectations relating to its business strategy.  Risk factors include
the following:

         The Company  operates  in a highly  competitive  industry,  which could
         limit its ability to gain or maintain its position.


                                       15
<PAGE>

         The Company is in direct  competition  with a large number of insurance
companies,  many of which offer a greater  number of products  through a greater
number of agents and have greater resources than the Company.  In addition,  the
Company may be subject,  from time to time, to new  competition  resulting  from
additional  private  insurance  carriers  introducing  products similar to those
offered by it. Moreover,  as a result of recent federal legislation,  commercial
banks,  insurance  companies,  and  investment  banks may now combine,  provided
certain  requirements  are  satisfied,  and the  Company  expects  to  encounter
increased   competition  from  these  providers  of  financial  services.   This
competitive   environment  could  results  in  lower  premiums,  less  favorable
underwriting terms and conditions, loss of sales and reduced profitability.

         Over the past four fiscal  years,  substantially  all of the  Company's
premiums  were from sales of  policies  in  Oklahoma  and Texas.  The  Company's
ability to compete  successfully  may suffer from  competitive  changes in these
particular markets.

         The Company's  lack of a rating could  adversely  affect its ability to
         compete.

         Ratings of insurance companies are typical with the industry. Increased
public and regulatory  concerns  regarding the financial  stability of insurance
companies have resulted in  policyholders  placing greater emphasis upon company
ratings and have created some measure of  competitive  advantage  for  insurance
carriers  with higher  ratings.  Rating  organizations  assign  ratings based on
several  factors.  While  most of the  considered  factors  relate  to the rated
company,  some  of  the  factors  relate  to  general  economic  conditions  and
circumstances  outside the rated  company's  control.  As of March 27, 2003, the
Company has not been rated by any rating  organization.  The absence of a rating
could  adversely  affect the  Company's  ability to sell its  products or retain
existing  business,  and could  adversely  affect its  ability  to  compete  for
attractive acquisition opportunities.

         The  Company  may not be  able to  compete  successfully  if it  cannot
         recruit and retain insurance agents.

         The Company  continuously  recruits  and trains  independent  agents to
market and sell its products. The Company may not be able to continue to attract
and retain  independent  agents to sell its  products.  The Company also engages
marketing  general  agents from time to time to recruit  independent  agents and
develop networks of agents in various states. The Company's business and ability
to compete may suffer from the inability to recruit and retain  insurance agents
and from the loss of services provided by its marketing agents.

         The Company's  policy claims  fluctuate  from year to year,  and future
         benefit payments may exceed reserves.

         The  Company's   results  may  fluctuate  from  year  to  year  due  to
fluctuations in policy claims received by its life insurance  subsidiary.  Great
Midwest has established  reserves for claims and future policy benefits based on
accepted actuarial  practices.  By care in underwriting new policies and sharing
risk with reinsurance  companies,  Great Midwest has attempted to limit the risk
that its actual  payments of death and other  benefits will exceed its reserves.
The reserves  are,  however,  only  actuarial  estimates and it is possible that
Great Midwest's claim  experience could be worse than  anticipated,  so that its
reserves may prove to be insufficient.  If this were to happen,  it could result
in increased operating losses.

         The Company could be forced to sell illiquid  investments  at a loss to
         cover policyholder withdrawals.

         Many of the products offered by Great Midwest allow  policyholders  and
contractholders  to  withdraw  their funds under  defined  circumstances.  Great
Midwest manages its liabilities and configures its investment portfolio so as to
provide and  maintain  sufficient  liquidity to support  anticipated  withdrawal


                                       16
<PAGE>

demands,   contract  benefits  and  maturities.   While  Great  Midwest  owns  a
significant  amount of  liquid  assets,  a certain  portion  of its  assets  are
relatively illiquid. Unanticipated withdrawal or surrender activity could, under
some  circumstances,  compel  Great  Midwest to dispose  of  illiquid  assets on
unfavorable terms, which could have an adverse effect on the Company.

         Interest rate fluctuations could negatively affect the spread income.

         Significant changes in interest rates expose insurance companies to the
risk of not earning  anticipated  spreads  between the  interest  rate earned on
investments and the credited rates paid on outstanding policies. Both rising and
declining  interest  rates can  negatively  affect the Company's  spread income.
While the Company develops and maintains asset/liability management programs and
procedures designed to preserve spread income in rising or falling interest rate
environments, changes in interest rates could adversely affect such spreads.

         Lower  interest  rates may  result  in lower  sales of  certain  of the
Company's  insurance  and  investment  products.  In  addition,  certain  of the
Company's insurance products guarantee a minimum credited interest rate.

         The Company's  insurance  subsidiary is highly regulated and government
         regulation may affect profitability or market value.

         The Company's insurance subsidiary is subject to government  regulation
in each of the states in which it conducts  business.  Such regulation is vested
in state agencies having broad administrative power dealing with many aspects of
the insurance  business which may include  premium rates,  marketing  practices,
advertising,  policy forms and capital adequacy, and is concerned primarily with
the  protection  of  policyholders  rather than share  owners.  Changes in these
regulations could affect the Company's  profitability or the market value of its
shares.

         The Company's  insurance  subsidiary acts as a fiduciary and is subject
to regulation by the United States  Department of Labor when providing a variety
of products and services to employee  benefit plans  governed by the  Employment
Retirement  Income  Security  Act  ("ERISA").  Severe  penalties  are imposed on
insurers  that breach their  fiduciary  duties to the plans under ERISA.  If the
Company  were  fined or a penalty  was  imposed on the  Company by a  government
agency  having  jurisdiction  over it, the Company  might not have the financial
resources to pay the fine or penalty.

         The Company  cannot predict the effect of recent  insurance  regulatory
         changes.

         The  National  Association  of  Insurance  Commissioners,  or the NAIC,
adopted the  Codification of Statutory  Accounting  Principles  ("Codification")
effective on January 1, 2001. The Company  determined that the primary effect of
Codification  is that  goodwill  and  deferred tax assets can now be recorded as
admitted  assets,  subject  to  limitations,   on  it's  subsidiary's  statutory
financial statements.

         A tax law  change  could  adversely  affect  the  Company's  ability to
         compete with non-insurance products.

         Under the  Internal  Revenue  Code of 1986,  as amended  (the  "Code"),
income tax payable by  policyholders  on investment  earnings is deferred during
the  accumulation  period of certain life insurance and annuity  products.  This
favorable tax treatment may give certain of the Company's products a competitive
advantage  over other  non-insurance  products.  To the extent  that the Code is
revised to reduce or eliminate  the  tax-deferred  status of life  insurance and
annuity products,  or to increase the tax-deferred status of competing products,
all life  insurance  companies,  including  Great  Midwest,  would be  adversely
affected with respect to their ability to sell such products,  and, depending on
grandfathering provisions, the surrenders of existing annuity contracts and life
insurance policies. In addition,  life insurance products are often used to fund
estate  tax  obligations.  If the  estate  tax were  eliminated,  the demand for
certain life insurance products could be adversely affected.  The Company cannot
predict what tax initiatives may be enacted which could adversely affect us.


                                       17
<PAGE>

         The Company's investments are subject to risks.

         The Company's  invested assets are subject to customary risks of credit
defaults and changes in market  values.  The value of the  Company's  investment
portfolio  depends in part on the financial  condition of the companies in which
it has made investments. Factors that may affect the overall market value of the
Company's  invested  assets  include  interest  rate  levels,  financial  market
performance,   and  general   economic   conditions,   as  well  as   particular
circumstances affecting the businesses of individual companies.

         The Company's growth from acquisitions involves risks.

         The Company's  acquisitions have benefited it in part by allowing it to
enter new  markets  and to position  the  Company to realize  certain  operating
efficiencies  associated  with  economies of scale.  There can be no  assurance,
however,  that the Company will realize the anticipated  financial  results from
its acquisitions or that suitable  acquisitions,  presenting  opportunities  for
continued  growth and operating  efficiencies,  or capital to fund  acquisitions
will continue to be available to it.

         The Company is dependent on the performance of others.

         The  Company's  results may be affected  by the  performance  of others
because the Company has entered into various agreements involving other parties.
For  instance,  many of the  Company's  products  are sold  through  independent
distribution channels.  Additionally,  a portion of the Company's life insurance
sales comes from arrangements with unrelated  marketing  organizations.  As with
all financial services  companies,  the Company's ability to conduct business is
dependent upon consumer confidence in the industry and its products.  Actions of
competitors,  and  financial  difficulties  of other  companies in the industry,
could undermine consumer confidence and adversely affect the Company's business.

         A decline in the  Company's  stock price may limit our ability to raise
         capital.

         During the past few years, many financial services companies, including
the Company,  experienced  a decrease in the market price of their common stock.
Although the Company believes it has sufficient,  internally generated cash flow
to fund its day-to-day operations,  a lower stock price may limit its ability to
raise capital to fund other growth opportunities and acquisitions.  In fact, the
lower stock prices suffered by the Company's stock in 2001 had an adverse effect
on its ability to fully sell all 1,000,000 shares offered in its public offering
that commenced in May 2001.

         The Company's reinsurance program involves risks.

         Great Midwest is able to assume  insurance risks beyond the level which
its capital and surplus would support by  transferring  substantial  portions of
such  risks  to other  larger  insurers  through  reinsurance  contracts.  These
reinsurance  arrangements,  which  are  the  usual  practice  in  the  insurance
industry, leave Great Midwest exposed to two risks:

         --       The credit risk,  which exists  because  reinsurance  does not
         fully  relieve  Great  Midwest of its liability to its insureds for the
         portion of the risks ceded to reinsurers. Although Great Midwest places
         its reinsurance with reinsurers it believes to be financially stable, a
         reinsurer's  subsequent  insolvency or inability to make payments under
         the terms of a  reinsurance  treaty  could  have a  materially  adverse
         effect on the Company's financial condition.

         --       The amount and cost of reinsurance  available to Great Midwest
         is subject,  in large part, to prevailing  market conditions beyond its
         control.  Non-renewal  or  cancellation  of a  reinsurance  arrangement
         affects only new business and the reinsurer  remains liable on business
         reinsured prior to


                                       18
<PAGE>

                  non-renewal  or  cancellation.  If  Great  Midwest  were to be
                  unable to maintain or replace its  reinsurance  facilities  on
                  acceptable  terms upon their  expiration and were unwilling or
                  unable to bear the  associated  increase  in  exposure  on new
                  business,  it  would  have to  reduce  the  amount  of its new
                  business.

         The Company is  dependent  on dividends  and  management  fees from its
         insurance subsidiary, Great Midwest, to fund its operations.

         The Company's ability to fund its operations is affected by the ability
of its insurance  company  subsidiary,  Great Midwest to declare and  distribute
dividends to the Company as its sole  shareholder,  as well as on its ability to
pay the Company  management  fees for the  administrative  services  the Company
provides to it. Insurance company subsidiaries,  like Great Midwest, are subject
to various state statutory and regulatory restrictions,  applicable to insurance
companies generally, that limit the amount of cash dividends, loans and advances
that those subsidiaries may pay to their parent companies. Under Texas insurance
laws,  Great  Midwest,  generally may pay dividends  only out of its  unassigned
surplus as reflected in its statutory financial  statements filed in that state.
In  addition,  the  Texas  Commissioner  of  Insurance,  must  approve,  or  not
disapprove within 30 days of notice, payment of an "extraordinary" dividend from
Great Midwest.  Under Texas  insurance  laws,  that term  generally  refers to a
dividend that exceeds,  together with all dividends paid by Great Midwest within
the  previous  12 months,  the  greater of 1) 10% of Great  Midwest's  statutory
capital  and  surplus  at the  preceding  December  31,  or 2) the net gain from
operations  of Great  Midwest for the 12 months ended on such  December 31. With
the  recent  acquisition  of  Security  General,  which  is  licensed  as a life
insurance  company  in  multiple  states,  the  Company  will also be subject to
regulation by the insurance  regulatory agencies of the states in which Security
General is licensed and in which the Company intends to conduct business.

         It is possible that more  stringent  restrictions  will be adopted from
time to time,  which  could have the effect,  under  certain  circumstances,  of
significantly  reducing dividends or other amounts payable to the Company by its
insurance  subsidiary  without  affirmative  prior  approval by state  insurance
regulatory authorities.

         In  the   event  of  the   insolvency,   liquidation,   reorganization,
dissolution or other winding-up of an insurance  subsidiary of the Company,  all
creditors of the subsidiary, including holders of life insurance policies, would
be entitled to payment in full out of the assets of such  subsidiary  before the
Company, as shareholder, would be entitled to any payment.

         The Company may not have  alternate  sources of financing  available if
the Revolving Line of Credit is terminated.

         The Company is also  dependent,  in the absence of sufficient cash from
operations  or other  sources,  upon the  Revolving  Line of  Credit to fund its
operations.  The amounts  advanced to the Company  under the  Revolving  Line of
Credit totaled  $245,629 and $79,000 at December 31, 2002 and December 31, 2001,
respectively.  The  Revolving  Line of  Credit  is  terminable  on demand of the
creditor,  and it is possible that the credit line could be terminated at a time
when other  sources of funds may not be  available  to the  Company.  In such an
event, or if the creditor  becomes unable to advance  additional funds under the
line, the Company may not be able to adequately fund its operations.

ITEM 7.  FINANCIAL STATEMENTS

The  consolidated  financial  statements  of the  Company  are  incorporated  by
reference from pages F-1 through F-18 of the attached Appendix,  and include the
following:

         Consolidated  Financial  Statements  of  Summit  Life  Corporation  and
         Subsidiaries

         (1)      Report of Independent Certified Public Accountants;


                                       19
<PAGE>

         (2)      Consolidated Balance Sheets as of December 31, 2002 and 2001;
         (3)      Consolidated Statements of Operations for Years Ended December
                  31, 2002 and 2001;
         (4)      Consolidated  Statements  of  Stockholders'  Equity  for Years
                  Ended December 31, 2002 and 2001;
         (5)      Consolidated Statements of Cash Flows for Years Ended December
                  31, 2002 and 2001; and
         (6)      Notes to Consolidated Financial Statements.

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

         As of June 29, 2001, the Company's  Board of Directors  dismissed Grant
Thornton  LLP  as the  Company's  independent  accountants  and  appointed  Gary
Skibicki CPA, PC as the Company's independent accountants.

         The  reports  of  Grant  Thornton  LLP  on the  Company's  consolidated
financial  statements  as of and for the years ended  December 31, 2000 and 1999
did not contain any adverse opinion or disclaimer of opinion, and neither report
was  qualified  or  modified  as  to  uncertainty,  audit  scope  or  accounting
principles.

         The decision to change  independent  accountants was recommended by the
Company's Audit  Committee,  and approved by the Company's Board of Directors on
June 29, 2001.

         During the two most  recent  fiscal  years and through the date of this
report,  the  Company has not had any  disagreements  with Grant  Thornton  LLP,
except  as set  forth  below in this  paragraph,  on any  matter  of  accounting
principles or practices,  financial  statement  disclosure or auditing  scope or
procedure,  which disagreement(s),  if not resolved to the satisfaction of Grant
Thornton LLP would have caused Grant Thornton LLP to make  reference  thereto in
their report on the  consolidated  financial  statements of the Company for such
periods.  During the two most recent  fiscal  years and through the date of this
report,  the Company has had one disagreement  with Grant Thornton LLP regarding
the Company recording a gain on the March 6, 2001 sale of a communications  site
lease agreement (the "Lease Agreement"). SEE "ITEM 2 - DESCRIPTION OF PROPERTY."
The Company  interpreted  certain provisions  relating to Statement of Financial
Accounting  Standards ("FAS") 13 to allow the recording of a gain on the sale of
the Nextel Lease Agreement as of the effective date of the sale in the amount of
$186,000  because the Company did not retain any  ownership in the lease revenue
stream and the buyer had no recourse  against  the Company if the lease  revenue
stream  did  not  continue.  Grant  Thornton  LLP's  review  of the  transaction
indicated that the lease  agreement was an operating  lease and that pursuant to
FAS 13 paragraph 22, the sale or assignment by the lessor of lease  payments due
under an operating lease should be accounted for as a borrowing.  As such, Grant
Thornton LLP recommended that the Company record the sale of the lease agreement
as a borrowing as of the effective date of the sale.

         The  Company's  Audit  Committee  was informed of the  disagreement  by
letter from Grant  Thornton  LLP.  After  considerable  discussion,  the Company
accepted the  recommendations  of Grant Thornton LLP and did not record the gain
as of the effective date of the sale of the Nextel Lease  Agreement.  The matter
was resolved to the satisfaction of Grant Thornton LLP. The discussions  between
the  Company  and Grant  Thornton  LLP covered  the  accounting  principles  and
literature related to the different types of leases and revenue recognition. The
effect on the Company's  first  quarter  financial  statements  was to eliminate
$186,000 from income and record a like amount as a liability.

         The  Company,  during the course of  evaluating  Grant  Thornton  LLP's
recommendation,  discussed  the  recording of the gain on the sale of the Nextel
Lease Agreement with Gary Skibicki CPA, PC. The discussions  between the Company
and Gary  Skibicki  CPA, PC covered the  accounting  principles  and  literature
related to the different types of leases and revenue recognition.  Gary Skibicki
CPA, PC concurred with the  recommendations  of Grant Thornton LLP regarding the


                                       20
<PAGE>

manner in which the sale should be recorded  and, as stated  above,  the Company
did record the sale of the Nextel Lease  Agreement as a borrowing in  accordance
with the  recommendations  of Grant Thornton LLP. The Company  authorized  Grant
Thornton LLP to respond fully to inquiries of Gary  Skibicki CPA, PC,  regarding
the subject matter of the disagreement.

         The  Company  has  requested  Gary  Skibicki  CPA,  PC  to  review  the
disclosure  required by this Item 8 and Gary  Skibicki  CPA, PC has informed the
Company  that it  concurs  with  the  disclosure  as set  forth  in this  Item 8
concerning Gary Skibicki CPA, PC.

         Other than the disagreement  set forth above,  during the Company's two
most recent  fiscal years and through the date of this  report,  the Company has
not had any  reportable  events as defined in Item 304  (a)(l)(iv) of Regulation
S-B and there has not been a transaction similar to the sale of the Nextel Lease
Agreement  during the two most recent  fiscal  years or the  subsequent  interim
period.

         The Company  requested that Grant Thornton LLP furnish it with a letter
addressed to the Securities and Exchange  Commission  stating  whether it agrees
with the above statements.  A copy of the letter dated July 13, 2001 is filed as
Exhibit 16 to Form 8-K/A filed on July 13, 2001.


                                    PART III

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

         The  information  required  will be  contained in the  Company's  Proxy
Statement for the 2003 Annual Meeting of Stockholders and is incorporated herein
by reference.

ITEM 10. EXECUTIVE COMPENSATION

         The  information  required  will be  contained in the  Company's  Proxy
Statement for the 2003 Annual Meeting of Stockholders and is incorporated herein
by reference.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The  information  required  will be  contained in the  Company's  Proxy
Statement for the 2003 Annual Meeting of Stockholders and is incorporated herein
by reference.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The information required will be contained in the Company's Proxy
Statement for the 2003 Annual Meeting of Stockholders and is incorporated herein
by reference.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

     (a)  The following documents are filed as part of this report:

                  (1)      Financial  Statements are attached hereto as Appendix
A and included herein on pages F-1 through F-18.

                  (2)      The exhibits set forth on the following Exhibit Index
are  filed  with this  Report  or are  incorporated  by  reference  as set forth
therein.



                                       21
<PAGE>

Exhibit
Number                                      Name of Exhibit
------                                      ---------------

3.1*     First  Amended and  Restated  Certificate  of  Incorporation  (filed as
         Exhibit 3.1 to the Company's  Registration Statement on Form SB-2, file
         number 333-65097 and incorporated herein by reference).

3.2*     First  Amended  and  Restated  Bylaws  (filed  as  Exhibit  3.2  to the
         Company's  Registration  Statement on Form SB-2, file number  333-65097
         and incorporated herein by reference).

4.1*     Specimen  Certificate  of the common stock (filed as Exhibit 4.1 to the
         Company's  Registration  Statement on Form SB-2, file number  333-65097
         and incorporated herein by reference).

4.2*     See Articles V and X of the Company's  Certificate of Incorporation and
         Article  VI of  the  Company's  Bylaws  (filed  as  Exhibit  4.2 to the
         Company's  Registration  Statement on Form SB-2, file number  333-65097
         and incorporated herein by reference).

4.3*     Specimen  Certificate of the Series A Preferred Stock (filed as Exhibit
         4.1 to the  Company's  Quarterly  Report on Form 10-QSB for the Quarter
         ended June 30, 1999 and incorporated herein by reference).

4.4*     Certificate  of  Designation  of  Series A  Preferred  Stock  (filed as
         Exhibit 4.2 to the  Company's  Quarterly  Report on Form 10-QSB for the
         Quarter ended June 30, 1999 and incorporated herein by reference).

4.5*     Certificate  of  Designation  of Series B Convertible  Preferred  Stock
         (filed as Exhibit 4.1 to the Company's  Quarterly Report on Form 10-QSB
         for the Quarter  ended  September 30, 2000 and  incorporated  herein by
         reference).

10.1*    Employment  Agreement  by and  between  the  Company and James L. Smith
         (filed as Exhibit 10.1 to the Company's  Registration Statement on Form
         SB-2, file number 333-65097 and incorporated herein by reference).

10.2*    Employment  Agreement  by and  between the Company and Charles L. Smith
         (filed as Exhibit 10.2 to the Company's  Registration Statement on Form
         SB-2, file number 333-65097 and incorporated herein by reference).

10.3*    Escrow  Agreement  between  the  Company and UMB Bank (filed as Exhibit
         10.5 to the Company's  Registration Statement on Form SB-2, file number
         333-55722 and incorporated herein by reference).

10.4*    Designated  Agency  Officer  Agreement  (filed as  Exhibit  10.7 to the
         Company's  Registration  Statement on Form SB-2, file number  333-65097
         and incorporated herein by reference).

10.5*    Communications  Site Lease  Agreement  dated March 6, 2001  between the
         Company and Nextel West Corp.  and Amendment  No. 1 thereto.  (filed as
         Exhibit 10.8 to the Company's Annual Report on Form 10-KSB for the year
         ended December 31, 2001 and incorporated herein by reference).

10.6     Agreement    dated   June   29,   2002    between   the   Company   and
         ______________________.

16*      Letter to SEC from Grant  Thornton  LLP dated July 13,  2001  (filed as
         Exhibit 2.1 to the Company's  Current Report on Form 8-K filed July 13,
         2001 and incorporated herein by reference).


                                       22
<PAGE>

Exhibit
Number                                      Name of Exhibit
------                                      ---------------

21.1     List of subsidiaries.

99.1     Certification of Periodic  Financial Report by Chief Financial  Officer
         Pursuant to 18 U.S.C.ss. 1350.

99.2     Certification of Periodic  Financial Report by Chief Executive  Officer
         Pursuant to 18 U.S.C.ss. 1350.

99.3     Certification of Periodic  Financial Report by Chief Accounting Officer
         Pursuant to 18 U.S.C.ss. 1350.

* Previously filed.

     (b)  There was no Form 8-K filed by the Company  during the fourth  quarter
          of 2002.

ITEM 14. CONTROLS AND PROCEDURES

         The Company's  principal  executive  officers and  principal  financial
officers have concluded,  based on their  evaluation as of a date within 90 days
of the filing of this Form 10-KSB that its  disclosure  controls and  procedures
(as defined in Rules  13a-14 and 15d-14  under the  Securities  Exchange  Act of
1934) are effective. There have been no significant changes in internal controls
or in other factors that could significantly affect these controls subsequent to
the date of their  evaluation,  including any corrective  actions with regard to
significant deficiencies and material weaknesses.


























                                       23
<PAGE>


                                   SIGNATURES

         In  accordance  with the  requirements  of  Section  13 or 15(d) 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.

March 27, 2003                                    SUMMIT LIFE CORPORATION
                                                  an Oklahoma corporation

                                                  By:/s/ Charles L. Smith
                                                     ---------------------------
                                                     Charles L. Smith, President

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

          NAME AND TITLE                                              DATE
          --------------                                              ----

/s/ James L. Smith                                                March 27, 2003
---------------------------
James L. Smith,
Chairman of the Board of Directors
Chief Executive Officer and Secretary
(Principal Executive Officer)


/s/ Charles L. Smith                                              March 27, 2003
---------------------------
Charles L. Smith,
President, Chief Operating Officer
Chief Financial Officer and Director
(Principal Financial Officer)

/s/ Quinton L. Hiebert                                            March 27, 2003
---------------------------
Quinton L. Hiebert,
Chief Accounting Officer


/s/ Gary Ellis                                                    March 27, 2003
---------------------------
Gary Ellis,
Director


/s/ Dean Brown                                                    March 27, 2003
---------------------------
Dean Brown,
Director


/s/ Thomas D. Sanders                                             March 27, 2003
---------------------------
Thomas D. Sanders,
Director



                                       24
<PAGE>


                                 CERTIFICATIONS

I, Charles L. Smith, President, Chief Operating Officer, Chief Financial Officer
and a Director of Summit Life Corporation certify that:

1. I have reviewed this annual report on Form 10-KSB of Summit Life Corporation;

2.  Based on my  knowledge,  this  annual  report  does not  contain  any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included  in this  annual  report  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

         (a) designed  such  disclosure  controls and  procedures to ensure that
material  information  relating to the  registrant,  including its  consolidated
subsidiaries, is made known to us by others within those entities,  particularly
during the period in which this annual report is being prepared;

         (b) evaluated the effectiveness of the registrant's disclosure controls
and  procedures  as of a date  within 90 days prior to the  filing  date of this
annual report (the "Evaluation Date"); and

         (c)  presented  in  this  annual  report  our  conclusions   about  the
effectiveness of the disclosure  controls and procedures based on our evaluation
as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's   board  of  directors  (or  persons   performing   the  equivalent
functions):

         (a) all significant deficiencies in the design or operation of internal
controls  which  could  adversely  affect  the  registrant's  ability to record,
process,  summarize  and  report  financial  data  and have  identified  for the
registrant's auditors any material weaknesses in internal controls; and

         (b) any fraud,  whether or not material,  that  involves  management or
other  employees  who  have a  significant  role  in the  registrant's  internal
controls; and

6. The  registrant's  other  certifying  officers  and I have  indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

                                           Date:  March 27, 2003

                                            /s/ Charles L. Smith
                                           -------------------------------------
                                           Charles L. Smith
                                           President, Chief Operating Officer,
                                           Chief Financial Officer, and Director





                                       25
<PAGE>

I,  Quinton L.  Hiebert,  Chief  Accounting  Officer of Summit Life  Corporation
certify that:

1. I have reviewed this annual report on Form 10-KSB of Summit Life Corporation;

2.  Based on my  knowledge,  this  annual  report  does not  contain  any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included  in this  annual  report  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

         (a) designed  such  disclosure  controls and  procedures to ensure that
material  information  relating to the  registrant,  including its  consolidated
subsidiaries, is made known to us by others within those entities,  particularly
during the period in which this annual report is being prepared;

         (b) evaluated the effectiveness of the registrant's disclosure controls
and  procedures  as of a date  within 90 days prior to the  filing  date of this
annual report (the "Evaluation Date"); and

         (c)  presented  in  this  annual  report  our  conclusions   about  the
effectiveness of the disclosure  controls and procedures based on our evaluation
as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's   board  of  directors  (or  persons   performing   the  equivalent
functions):

         (a) all significant deficiencies in the design or operation of internal
controls  which  could  adversely  affect  the  registrant's  ability to record,
process,  summarize  and  report  financial  data  and have  identified  for the
registrant's auditors any material weaknesses in internal controls; and

         (b) any fraud,  whether or not material,  that  involves  management or
other  employees  who  have a  significant  role  in the  registrant's  internal
controls; and

6. The  registrant's  other  certifying  officers  and I have  indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

                                                        Date:  March 27, 2003

                                                        /s/ Quinton L. Hiebert
                                                        ------------------------
                                                        Quinton L. Hiebert
                                                        Chief Accounting Officer







                                       26
<PAGE>

I,  James L.  Smith,  Chief  Executive  Officer  and a Director  of Summit  Life
Corporation certify that:

1. I have reviewed this annual report on Form 10-KSB of Summit Life Corporation;

2.  Based on my  knowledge,  this  annual  report  does not  contain  any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included  in this  annual  report  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

         (a) designed  such  disclosure  controls and  procedures to ensure that
material  information  relating to the  registrant,  including its  consolidated
subsidiaries, is made known to us by others within those entities,  particularly
during the period in which this annual report is being prepared;

         (b) evaluated the effectiveness of the registrant's disclosure controls
and  procedures  as of a date  within 90 days prior to the  filing  date of this
annual report (the "Evaluation Date"); and

         (c)  presented  in  this  annual  report  our  conclusions   about  the
effectiveness of the disclosure  controls and procedures based on our evaluation
as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's   board  of  directors  (or  persons   performing   the  equivalent
functions):

         (a) all significant deficiencies in the design or operation of internal
controls  which  could  adversely  affect  the  registrant's  ability to record,
process,  summarize  and  report  financial  data  and have  identified  for the
registrant's auditors any material weaknesses in internal controls; and

         (b) any fraud,  whether or not material,  that  involves  management or
other  employees  who  have a  significant  role  in the  registrant's  internal
controls; and

6. The  registrant's  other  certifying  officers  and I have  indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

                                              Date:  March 27, 2003

                                               /s/ James L. Smith
                                              ----------------------------------
                                              James L. Smith
                                              Chief Executive Officer and
                                              Chairman of the Board of Directors










                                       27
<PAGE>
Exhibit
Number                                      Name of Exhibit
------                                      ---------------

3.1*     First  Amended and  Restated  Certificate  of  Incorporation  (filed as
         Exhibit 3.1 to the Company's  Registration Statement on Form SB-2, file
         number 333-65097 and incorporated herein by reference).

3.2*     First  Amended  and  Restated  Bylaws  (filed  as  Exhibit  3.2  to the
         Company's  Registration  Statement on Form SB-2, file number  333-65097
         and incorporated herein by reference).

4.1*     Specimen  Certificate  of the common stock (filed as Exhibit 4.1 to the
         Company's  Registration  Statement on Form SB-2, file number  333-65097
         and incorporated herein by reference).

4.2*     See Articles V and X of the Company's  Certificate of Incorporation and
         Article  VI of  the  Company's  Bylaws  (filed  as  Exhibit  4.2 to the
         Company's  Registration  Statement on Form SB-2, file number  333-65097
         and incorporated herein by reference).

4.3*     Specimen  Certificate of the Series A Preferred Stock (filed as Exhibit
         4.1 to the  Company's  Quarterly  Report on Form 10-QSB for the Quarter
         ended June 30, 1999 and incorporated herein by reference).

4.4*     Certificate  of  Designation  of  Series A  Preferred  Stock  (filed as
         Exhibit 4.2 to the  Company's  Quarterly  Report on Form 10-QSB for the
         Quarter ended June 30, 1999 and incorporated herein by reference).

4.5*     Certificate  of  Designation  of Series B Convertible  Preferred  Stock
         (filed as Exhibit 4.1 to the Company's  Quarterly Report on Form 10-QSB
         for the Quarter  ended  September 30, 2000 and  incorporated  herein by
         reference).

10.1*    Employment  Agreement  by and  between  the  Company and James L. Smith
         (filed as Exhibit 10.1 to the Company's  Registration Statement on Form
         SB-2, file number 333-65097 and incorporated herein by reference).

10.2*    Employment  Agreement  by and  between the Company and Charles L. Smith
         (filed as Exhibit 10.2 to the Company's  Registration Statement on Form
         SB-2, file number 333-65097 and incorporated herein by reference).

10.3*    Escrow  Agreement  between  the  Company and UMB Bank (filed as Exhibit
         10.5 to the Company's  Registration Statement on Form SB-2, file number
         333-55722 and incorporated herein by reference).

10.4*    Designated  Agency  Officer  Agreement  (filed as  Exhibit  10.7 to the
         Company's  Registration  Statement on Form SB-2, file number  333-65097
         and incorporated herein by reference).

10.5*    Communications  Site Lease  Agreement  dated March 6, 2001  between the
         Company and Nextel West Corp.  and Amendment  No. 1 thereto.  (filed as
         Exhibit 10.8 to the Company's Annual Report on Form 10-KSB for the year
         ended December 31, 2001 and incorporated herein by reference).

10.6     Agreement    dated   June   29,   2002    between   the   Company   and
         ______________________.

16*      Letter to SEC from Grant  Thornton  LLP dated July 13,  2001  (filed as
         Exhibit 2.1 to the Company's  Current Report on Form 8-K filed July 13,
         2001 and incorporated herein by reference).



                                       28
<PAGE>

Exhibit
Number                                      Name of Exhibit
------                                      ---------------

21.1     List of subsidiaries.

99.1     Certification of Periodic  Financial Report by Chief Financial  Officer
         Pursuant to 18 U.S.C.ss. 1350.

99.2     Certification of Periodic  Financial Report by Chief Executive  Officer
         Pursuant to 18 U.S.C.ss. 1350.

99.3     Certification of Periodic  Financial Report by Chief Accounting Officer
         Pursuant to 18 U.S.C.ss. 1350.

*        Previously filed.







                      [THIS PAGE LEFT BLANK INTENTIONALLY]

























                                       29
<PAGE>

                                   APPENDIX A








                    Consolidated Financial Statements

                    Summit Life Corporation and Subsidiaries

                    Years ended December 31, 2001 and 2002
                    with Report of Independent Auditors



























                                       30
<PAGE>




                      [THIS PAGE LEFT BLANK INTENTIONALLY]
































                                       31
<PAGE>


                    Summit Life Corporation and Subsidiaries

                        Consolidated Financial Statements

                     Years ended December 31, 2001 and 2002




                                    Contents

Report of Independent Certified Public Accountants...........................F-1

Consolidated Financial Statements:
   Consolidated Balance Sheets...............................................F-2
   Consolidated Statements of Operations.....................................F-4
   Consolidated Statements of Stockholders' Equity...........................F-5
   Consolidated Statements of Cash Flows.....................................F-6
   Notes to Consolidated Financial Statements................................F-7




































                                       32
<PAGE>








                      [THIS PAGE LEFT BLANK INTENTIONALLY]
































                                       33



<PAGE>

                REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT




To the Board of Directors
And Shareholders of Summit Life Corporation

I have  audited  the  accompanying  consolidated  balance  sheet of Summit  Life
Corporation and its  Subsidiary,  as of December 31, 2002 and December 31, 2001,
and the related consolidated statements of operations, stockholders' equity, and
cash  flows  for the  years  then  ended.  These  financial  statements  are the
responsibility of the Company's  management.  My responsibility is to express an
opinion on these financial statements based on my audit.

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

In my opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Summit
Life Corporation and its Subsidiary, as of December 31, 2002 and December 31,
2001, and the consolidated results of their operations and their consolidated
cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.






Gary Skibicki, CPA, PC
Oklahoma City, Oklahoma
March 25, 2003


                                      F-1
<PAGE>

                     Summit Life Corporation and Subsidiary

                           CONSOLIDATED BALANCE SHEETS
                                  December 31,



                  ASSETS

                                                         2002           2001
                                                     -----------    -----------
INVESTMENTS
   Debt and equity securities                        $ 1,843,649    $ 2,903,470
   Notes receivable                                    1,048,714        992,033
   Policy loans                                          113,020        113,865
   Investments in limited partnerships                    32,404         30,800
                                                     -----------    -----------
                                                       3,037,787      4,040,168


CASH AND CASH EQUIVALENTS                              2,109,388      1,661,410

RECEIVABLES
   Accrued investment income                              41,689         54,993
   Other                                                  13,305         37,583
                                                     -----------    -----------
                                                          54,994         92,576


PROPERTY AND EQUIPMENT - AT COST
   Building and improvements                           1,017,140        129,419
   Furniture and equipment                               120,848        119,198
   Automobiles                                            22,015         22,015
                                                     -----------    -----------
                                                       1,160,003        270,632
     Less accumulated depreciation                      (153,738)      (130,870)
                                                     -----------    -----------
                                                       1,006,265        139,762
   Land                                                  321,000         56,000
                                                     -----------    -----------
                                                       1,327,265        195,762


OTHER ASSETS
Cost in excess of net assets of business acquired,
   less accumulated amortization of $20,000 in 2002
   and $15,000 in 2001                                    30,000         35,000
Deferred policy acquisition costs                        145,960        107,765
Value of purchased insurance business, less
   accumulated amortization of $231,023 in 2002
   and $145,364 in 2001                                  282,006        355,966
Deferred income taxes                                     31,800         37,240
Public offering costs                                          0         56,653
Other                                                     43,750         46,555
                                                     -----------    -----------
                                                         533,516        639,179
                                                     -----------    -----------

                                                     $ 7,062,950    $ 6,629,095
                                                     ===========    ===========

        The accompanying notes are an integral part of these statements.

                                      F-2
<PAGE>
<TABLE>
<CAPTION>

                     Summit Life Corporation and Subsidiary

                     CONSOLIDATED BALANCE SHEETS - CONTINUED
                                  December 31,




                  LIABILITIES AND STOCKHOLDERS' EQUITY

                                                                    2002           2001
                                                                -----------    -----------
<S>                                                             <C>            <C>
LIABILITIES
   Policy reserves and policyholder funds                       $ 5,777,027    $ 5,364,682
   Unpaid claims                                                     10,000         24,971
   Accounts payable                                                   8,910         63,116
   Accrued and other liabilities                                      9,950          8,233
   Notes payable                                                    277,364        111,206
                                                                -----------    -----------
                                                                  6,083,251      5,572,208

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
Common stock, $.01 par value - authorized, 5,000,000;
   issued 2,691,255 in 2002, and 2,267,605 shares in 2001            26,913         22,676
Equity of holder's common stock equivalents                               0        422,200
Series A cumulative nonvoting preferred stock, $.001 par
   value - authorized, issued, and outstanding, 5,000 shares;
   stated at liquidation value                                      500,000        500,000
Series B noncumulative, nonvoting, convertible preferred
   stock, $.001 par value - authorized, 1,000,000 shares;
   issued and outstanding, 350,000 shares; stated at
   liquidation value                                                350,000        350,000
Additional paid-in capital                                        3,286,507      2,923,596
Common stock of parent held by subsidiary - 19,000 shares                 0        (95,000)
Accumulated other comprehensive income (loss)                        41,727         13,709
Accumulated deficit                                              (3,225,448)    (3,080,294)
                                                                -----------    -----------
                                                                    979,699      1,056,887
                                                                -----------    -----------

                                                                $ 7,062,950    $ 6,629,095
                                                                ===========    ===========

</TABLE>









        The accompanying notes are an integral part of these statements.

                                      F-3
<PAGE>
<TABLE>
<CAPTION>

                     Summit Life Corporation and Subsidiary

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                             Year ended December 31,


                                                                         2002           2001
                                                                     -----------    -----------
<S>                                                                  <C>            <C>
Revenues
   Insurance premiums and other considerations, net of reinsurance   $   268,721    $   359,533
   Investment income                                                     469,680        338,670
   Net realized (losses) on sale of available for sale securities        (26,661)        (7,792)
   Net realized gains (losses) on trading securities                       5,091       (139,527)
   Other                                                                  46,214         58,730
                                                                     -----------    -----------
                                                                         763,045        609,614


Benefits, losses, and expenses
   Policy benefits                                                       182,430        142,413
   Increase in policy reserves                                           209,254        220,251
   Interest                                                                  265         13,658
   Taxes, licenses, and fees                                              23,800         35,290
   Depreciation and amortization                                         110,041        101,312
   General, administrative, and other operating                          326,968        420,894
                                                                     -----------    -----------
                                                                         852,758        933,818

         Loss before income tax                                          (89,713)      (324,204)

Provisions for income taxes                                                5,441           --
                                                                     -----------    -----------

         Net loss                                                        (95,154)      (324,204)

Preferred stock dividends                                                 50,000         50,000
                                                                     -----------    -----------

         NET LOSS TO COMMON STOCKHOLDERS                             $  (145,154)   $  (374,204)
                                                                     ===========    ===========

Basic and diluted net loss per common share                                (0.05)         (0.15)
                                                                     ===========    ===========

Weighted average outstanding common shares, basic and diluted          2,681,523      2,419,037
                                                                     ===========    ===========
</TABLE>







        The accompanying notes are an integral part of these statements.

                                      F-4





<PAGE>
<TABLE>
<CAPTION>
                    Summit Life Corporation and Subsidiary

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                     Years ended December 31, 2002 and 2001



                                                                                  Series A cumulative         Series B convertible
                                                          Common stock              preferred stock             preferred stock
                                                   -------------------------   -------------------------   -------------------------
                                                     Shares                      Shares      Liquidation     Shares      Liquidation
                                        Total        issued       Par value      issued          value       issued         value
                                     -----------   -----------   -----------   -----------   -----------   -----------   -----------
<S>                                  <C>             <C>         <C>           <C>           <C>           <C>           <C>
Balance at January 1, 2001           $   975,300     2,267,605   $    22,676         5,000   $   500,000       350,000   $   350,000

Common stock subscribed, not issued      422,200          --            --            --            --            --            --

Cancellation of preferred stock             --            --            --            --            --            --            --
   subscription

Dividends on Series A preferred          (50,000)         --            --            --            --            --            --
   stock
Comprehensive loss
   Net loss                             (324,204)         --            --            --            --            --            --
   Other comprehensive income
     Unrealized gain on investment,
        net                               33,591          --            --            --            --            --            --
                                     -----------
           Comprehensive loss           (290,613)
                                     -----------   -----------   -----------   -----------   -----------   -----------   -----------

Balance at December 31, 2001           1,056,887     2,267,605        22,676         5,000       500,000       350,000       350,000

Common stock subscribed                    1,500          --            --            --            --            --            --

Close of public offering less
   Expense of $56,652                    (56,552)      423,700         4,237          --            --            --            --

Sale of stock held by subsidiary          95,000          --            --            --            --            --            --

Dividends on preferred stock             (50,000)         --            --            --            --            --            --

Adjustment                                  --             (50)         --            --            --            --            --

Comprehensive income
   Net loss                              (95,154)         --            --            --            --            --            --
   Other comprehensive income
   (loss)
     Unrealized gain on investments       28,018          --            --            --            --            --            --
                                     -----------

           Comprehensive loss            (67,136)

Balance at December 31, 2002         $   979,699     2,691,255   $    26,913         5,000   $   500,000       350,000   $   350,000
                                     ===========   ===========   ===========   ===========   ===========   ===========   ===========








        The accompanying notes are an integral part of these statements.

                                      F-5


<PAGE>

                    Summit Life Corporation and Subsidiary

            CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY CONTINUED
                     Years ended December 31, 2002 and 2001




                                                      Common                   Accumulated
                                                     stock of                     other
                                     Additional       parent                  comprehensive                   Stock
                                       paid-in       held by        Stock        income      Accumulated  subscriptions
                                       capital      subsidiary    subscribed     (loss)        deficit      receivable
                                     -----------   -----------   -----------   -----------   -----------   -----------


Balance at January 1, 2001           $ 2,923,596   $   (95,000)  $   650,000   $   (19,882)  $(2,706,090)  $  (650,000)

Common stock subscribed, not issued         --            --         422,200          --            --            --

Cancellation of preferred stock             --            --        (650,000)         --            --         650,000
   subscription

Dividends on Series A preferred             --            --            --            --         (50,000)         --
   stock
Comprehensive loss
   Net loss                                 --            --            --            --        (324,204)         --
   Other comprehensive income
     Unrealized gain on investment,
        net                                 --            --            --          33,591          --            --

           Comprehensive loss
                                     -----------   -----------   -----------   -----------   -----------   -----------

Balance at December 31, 2001           2,923,596       (95,000)      422,200        13,709    (3,080,294)            0

Common stock subscribed                     --            --           1,500          --            --            --

Close of public offering less
   Expense of $56,652                    362,911          --        (423,700)         --            --            --

Sale of stock held by subsidiary            --          95,000          --            --            --            --

Dividends on preferred stock                --            --            --            --         (50,000)         --

Adjustment                                  --            --            --            --            --            --

Comprehensive income
   Net loss                                 --            --            --            --         (95,154)         --
   Other comprehensive income
   (loss)
     Unrealized gain on investments         --            --            --          28,018          --            --


           Comprehensive loss

Balance at December 31, 2002         $ 3,286,507   $         0   $         0   $    41,727   $(3,225,448)            0
                                     ===========   ===========   ===========   ===========   ===========   ===========
</TABLE>




        The accompanying notes are an integral part of these statements.

                                      F-5

<PAGE>
<TABLE>
<CAPTION>

                     Summit Life Corporation and Subsidiary

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     Years ended December 31, 2002 and 2001

                                                                            2002           2001
                                                                        -----------    -----------
<S>                                                                     <C>            <C>
Increase (Decrease) in Cash and Cash Equivalents

Cash flows from operating activities
    Net loss                                                            $   (95,154)   $  (324,204)
    Adjustments to reconcile net loss to net cash
      used in operating activities
         Depreciation and amortization                                      110,041         75,133
         Deferral of policy acquisition costs                               (52,522)       (60,323)
         Amortization of deferred policy acquisition costs                   14,327         26,179
         Interest credited to policyholder account balances                 159,433        183,144
         Gain on sale of investment securities, other than trading          (26,661)          --
         Other                                                               25,299        (23,608)
         (Increase) decrease in
             Trading securities                                               5,091       (139,527)
             Accrued investment income                                       13,304        (13,009)
             Other receivables                                               21,218        (27,655)
             Other assets                                                    (2,905)       (22,408)
         Increase (decrease) in
             Policy reserves                                                 66,277        (81,491)
             Unpaid claims                                                  (14,971)      (150,980)
             Accounts payable                                               (54,206)        23,658
             Accrued and other liabilities                                    1,717         (7,191)
                                                                        -----------    -----------
                  Net cash used in operating activities                     176,098       (542,282)

Cash flows from investing activities
    Purchases of investment securities, other than trading                 (192,505)      (897,584)
    Proceeds from disposition or maturities of investment securities,
      other than trading                                                  1,275,253      1,231,025
    Net investment in limited partnerships                                   (1,604)        26,500
    Issuance of notes receivable                                           (160,000)      (250,000)
    Payments received on notes receivable                                   103,319        199,845
    Increase (decrease) in policy loans                                         845         80,483
    Purchase of property and equipment                                   (1,152,721)        (2,628)
    Proceeds from sale of assets                                               --           16,713
                                                                        -----------    -----------
                  Net cash provided by investing activities                (127,413)       404,354

Cash flows from financing activities
    Deposits to policyholder account balances                               401,797        166,783
    Withdrawals from policyholder account balances                         (215,162)      (415,675)
    Payments on notes payable                                                  --         (475,395)
    Proceeds from issuance of notes payable                                 166,158        338,347
    Proceeds from acquisition of business                                      --          433,392
    Proceeds from sale of common and preferred stock                         96,500        422,200
    Dividends paid on preferred stock                                       (50,000)       (50,000)
    Public offering costs                                                      --          (56,652)
                                                                        -----------    -----------
                  Net cash provided by (used in) financing activities       399,293        363,000
                                                                        -----------    -----------

         NET INCREASE IN CASH AND CASH EQUIVALENTS                          447,978        225,072

Cash and cash equivalents at beginning of year                            1,661,410      1,436,338
                                                                        -----------    -----------

Cash and cash equivalents at end of year                                $ 2,109,388    $ 1,661,410
                                                                        ===========    ===========
</TABLE>



        The accompanying notes are an integral part of these statements.

                                      F-6

<PAGE>

                     SUMMIT LIFE CORPORATION AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           DECEMBER 31, 2002 AND 2001

NOTE A - NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES



         1.       Basis of Consolidation and Nature of Operations
                  -----------------------------------------------

Summit Life Corporation  ("SLC") is an Oklahoma  corporation  chartered on April
12, 1994 that primarily  markets life insurance and annuity policies through its
wholly owned insurance subsidiary,  Great Midwest Life Insurance Company ("Great
Midwest"),  a Texas  corporation  acquired on January 13, 1999. The consolidated
financial  statements  include the accounts of each of these  corporations  with
inter-company  transactions and balances  eliminated.  Subsequent  references to
"the Company" pertain to the consolidated financial statements.

SLC is a holding  company and manages its operations as well as Great  Midwest's
which primarily include  marketing/servicing life insurance and annuity products
in Texas and  Oklahoma.  Great  Midwest is required  to  maintain an  investment
portfolio to cover potential claims plus preserve a minimum  $800,000  statutory
capital and surplus.  In 2002,  Great  Midwest paid SLC $114,588 for  management
services.

         2.       Use of Estimates
                  ----------------

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect financial statements and disclosures;  accordingly,  actual results could
differ from those estimates.

         3.       Accounting Pronouncements Adopted in 2002
                  -----------------------------------------

During 2002,  the  Financial  Accounting  Standards  Board issued the  following
statements  of  financial  accounting  standards  ("SFAS").  Adoption  of  these
standards did not have a material effect on the financial  position,  results of
operations, or on discloses within the financial statements.

                  (1) SFAS No 142 - Goodwill and Intangible Assets
                  (2) SFAS No 143 - Retirement of Tangible Long Lived Assets
                  (3) SFAS No 144 - Impairment on Disposal of Long Lived Assets

         4.       Accounting Pronouncements Adopted in 2001
                  -----------------------------------------

During 2001,  the  Financial  Accounting  Standards  Board issued the  following
statements of financial accounting standards ("SFAS"). Adoption of this standard
did not have a material effect on the financial position, results of operations,
or on disclosures within the financial statements.

                  (1)      SFAS No. 141 - Business Combinations

         5.       Cash and Cash Equivalents
                  -------------------------

Cash  equivalents  include  time  deposits  and  certificates  of  deposit  with
maturities when acquired of three months or less, and money market funds.

The Company  maintains its cash and cash equivalents in accounts that may not be
federally  insured.  The Company has not experienced any losses in such accounts
and  believes  it is not  exposed  to any  significant  credit  risks  on  these
accounts.

         6.       Investments
                  -----------

The Company  accounts for certain  investments in debt and equity  securities as
follows:


                                      F-7
<PAGE>

                     SUMMIT LIFE CORPORATION AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           DECEMBER 31, 2002 AND 2001

NOTE A - NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES - (CONTINUED)


         a)       Debt  securities  that the Company has the positive intent and
                  ability to hold to maturity are classified as held-to-maturity
                  securities and reported at amortized cost.
         b)       Debt  and   equity   securities   that  are  bought  and  held
                  principally  for the  purpose  of selling in the near term are
                  classified as trading  securities  and reported at fair value,
                  with unrealized gains and losses included in earnings.
         c)       Debt and equity  securities  not  classified as either held to
                  maturity  securities or trading  securities  are classified as
                  available-for-sale securities and reported at fair value, with
                  unrealized   gains  and  losses  excluded  from  earnings  and
                  reported  in a separate  component  of  shareholder  equity as
                  other comprehensive income (loss).

For individual  securities classified as available-for-sale or held-to-maturity,
non-temporary  declines  in  specifically  identified  securities  below cost or
amortized  cost result in  write-downs  included  in  operations.  The  specific
identification method is followed for determining the cost of securities sold.

Notes  receivable  and policy  loans are stated at the total of unpaid  balances
less estimated uncollectible amounts.

Investments  in limited  partnerships  are accounted  for on the equity  method.
Accordingly,  the Company's  share of the  partnerships'  earnings or losses are
included in the consolidated operating statement with corresponding  adjustments
made to the carrying amounts on the balance sheet.

Investments in real estate are carried at depreciated cost.

         7.       Property and Equipment
                  ----------------------

Depreciation  is allocated  to assets over  estimated  economic  lives using the
straight-line  method.  Estimates  of  economic  lives  range from five to forty
years.

Investment  and operating  assets are reviewed for impairment  whenever  events,
circumstances,  or changes in market value  indicate  that the related  carrying
amount(s) may not be  recoverable.  Any required  write-downs are based upon the
current fair value of the asset.

An office and  warehouse  property  was  acquired on July 31, 2002 for  $529,871
approximately two blocks from the existing  corporate office.  During the fourth
quarter of 2002 additional  storage units housed within three new buildings were
constructed for another $622,850.  Approximately $13,000 in office rental income
was received from existing tenants in 2002, which is included in the $469,680 in
investment  income,  while  storage unit rentals are not expected to occur until
2003.

         8.       Cost in Excess of Net Assets of Business Acquired
                  -------------------------------------------------

Cost in excess of net assets of business acquired is amortized for 10 years on a
straight-line  basis.  In  1999  Great  Midwest  was  purchased  with a  $50,000
commission being amortized at $5,000 per year.  Management reviews  acquisition,
amortization, and valuation amounts for impairment by evaluating future benefits
of the net income earned to determine whether impairment has occurred.


                                      F-8
<PAGE>

                     SUMMIT LIFE CORPORATION AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           DECEMBER 31, 2002 AND 2001

NOTE A - NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES - (CONTINUED)


         9.       Income Taxes
                  ------------

For the year ended  December 31, 2002,  SLC and Great Midwest will elect to file
consolidated  income tax returns. In 2003 Great Midwest will dissolve as part of
the acquisition of Security General Life Insurance Company ("Security General").
By filing a  consolidated  tax return the combined  entities  will  maximize the
preservations  of existing net operating  losses.  SLC has a net operating  loss
carryforward of $1,777,561,  and by filing a 2002 consolidated  return a portion
will be available in future years.

Current tax expense is based on estimated taxes payable or refundable on current
year tax returns.  Deferred tax  liabilities  or assets are  recognized  for the
estimated  future tax effects  attributable  to temporary  differences  and loss
carryforward.  The  measurement of deferred tax assets is based on provisions of
enacted  laws and are  reduced  by the  amount  of tax  benefits  that  based on
available  evidence may not be realized.  For the year ended December 31, 2002 a
deferred tax asset of $31,800 is  recognized  which is the amount of tax benefit
management calculates beyond any reasonable doubt will be utilized in 2003.

         10.      Deferred Policy Acquisition Costs
                  ---------------------------------

Deferred  acquisition  costs are those costs that vary with,  and are  primarily
related to, the acquisition of new and renewal insurance contracts.  Commissions
and other costs such as underwriting  and medical exam fees that are principally
related to insurance  contracts issued or renewed during the year are considered
acquisition costs.  Acquisition costs are capitalized and amortized to operating
expenses in proportion to premium revenue recognized over the estimated lives of
the policies.  Deferred policy acquisition costs for investment products, mainly
single premium deferred annuities,  are amortized with interest in proportion to
the value of  expected  gross  profits as  determined  by  estimated  investment
yields, mortality, surrender expenses, and persistency experience over the lives
of the policies.  Deferred policy acquisition costs are examined periodically to
insure  that the  unamortized  balance  does not exceed  amounts  expected to be
recovered  from  future  profits.  Acquisition  costs  that  vary in a  constant
relationship  to premiums or insurance  in force,  are  recurring in nature,  or
incurred in level  amounts  from period to period are charged to expense in that
period.

         11.      Value of Purchased Insurance Business
                  -------------------------------------

Value of purchased  insurance  business  represents the  actuarially  determined
present  value of  estimated  net cash  flows  embedded  in  existing  insurance
contracts when acquired.  The Company estimates that insurance contracts have an
average  economic life of twenty years,  and purchased  insurance  contracts are
amortized  over that time period in  proportion  to the expected  decline in net
cash flows of that year.  Interest is  calculated on  unamortized  values at the
annual rate of 6.5%. At December 31, 2002  approximately  13% of the unamortized
value of purchased insurance business is expected to be amortized in each of the
next five years based on current  conditions and assumptions as to future events
on acquired policies in force.

A summary  of the value of  purchased  insurance  business  for the years  ended
December 31:

                                                           2002         2001
                                                         ---------    ---------
         Balance, beginning of year                      $ 355,966    $ 321,851
         6.5% on Unamortized Balance                        15,678       20,920
         Amortization on Beginning Balance                 (85,659)     (62,649)
         Cost of Acquired Policies From
              Presidential Life Insurance Co - 2001           --         77,608
         Presidential Amortization                          (3,979)      (1,764)
                                                         ---------    ---------
         Balance, end of year                            $ 282,006    $ 355,966



                                       F-9
<PAGE>

                     SUMMIT LIFE CORPORATION AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           DECEMBER 31, 2002 AND 2001

NOTE A - NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES - (CONTINUED)


         12.      Revenues, Policy Reserves and Policyholder Funds
                  ------------------------------------------------

Premiums received on deferred annuities and annuities without life contingencies
are recorded as liabilities (deposits) into policyholder account balances. Great
Midwest earns revenues from these contracts primarily from surrender charges and
administrative  fees.  Premiums for life  insurance  products and annuities with
life  contingencies,   including  annuities  with  life  contingency  settlement
options, are recognized when due.

Policyholder account balances include amounts received from policyholders,  plus
interest credited,  less withdrawals and  administrative  fees deducted by Great
Midwest.  The  liabilities  for future policy  benefits for annuities  with life
contingencies  are actuarially  computed at the present value of future benefits
which includes investment yields and mortality assumptions.

Policy  reserves for life  insurance  contracts are computed based on mortality,
morbidity,  withdrawals,   investment  yields  and  prior  experience  or  other
contingencies  that  could  unfavorably  increase  reserves.   Reserve  interest
assumptions range from 3.0% to 5.5%. Policy reserves for life insurance products
are the same for financial  and statutory  reporting  purposes.  Life  insurance
benefit  claims are charges to operating  expenses in the period that the claims
are incurred. All life insurance related benefits,  claims, losses, and expenses
are reported net of reinsurance ceded.

         13.      Earnings (Loss) Per Share Common

Earnings (loss) per common share is computed based upon net earnings (loss)
after deduction of preferred stock dividends, divided by the weighted average
number of common shares during each period. For both 2002 and 2001, Series B
convertible preferred stock (see Note D) is antidilutive and therefore basic and
diluted loss per common share are the same.

         14.      Other Comprehensive Income (Loss)
                  ---------------------------------

Accumulated other comprehensive  income (loss) consists solely of net unrealized
investment gains (losses) on debt and equity securities not classified as either
held to maturity or trading securities.


Unrealized  gain (loss) on  investments  consists of the following for the years
ended December 31:

                                                              2002       2001
                                                            --------   --------

Beginning Other Comprehensive Income (Loss)                 $ 13,709   $(19,882)
Unrealized Appreciation Of Securities                         31,000     33,591
                                                            --------   --------
Accumulated Other Comprehensive Income (Loss)               $ 44,709   $ 13,709




                                      F-10


<PAGE>

                     SUMMIT LIFE CORPORATION AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           DECEMBER 31, 2002 AND 2001

NOTE B - INVESTMENTS

Investments in securities are summarized as follows for December 31, 2002.

                                 COST/       GROSS         GROSS
                               AMORTIZED   UNREALIZED   UNREALIZED     ESTIMATED
TYPE OF INVESTMENT               COST        GAINS        LOSSES      FAIR VALUE
--------------------------------------------------------------------------------

Debt Securities -
    Held to Maturity
    US Treasury and Federal
    Mortgage Assoc. Bonds     $  379,841   $   42,832   $     --      $  422,673
    Corporate Bonds               43,219         --         (2,474)       40,745
Debt Securities -
    Available For Sale
    US Treasury & Other
    US Govt. Agencies            986,983       48,241         --       1,035,224
Industrial and
    Miscellaneous                 75,000        3,695         --          78,695
                              --------------------------------------------------
Total Debt Securities
    Available For Sale        $1,485,043   $   94,768   $   (2,474)   $1,577,337
                              ==================================================
Equity Securities -
    Trading                         --           --           --      $   66,353
Equity Securities -
    Available For Sale              --           --           --      $  159,740
Equity Securities -
    Other                     $   66,788   $   12,487         --      $   79,275



Investments in securities are summarized as follows for December 31, 2001.

                                 COST/       GROSS         GROSS
                               AMORTIZED   UNREALIZED   UNREALIZED     ESTIMATED
TYPE OF INVESTMENT               COST        GAINS        LOSSES      FAIR VALUE
--------------------------------------------------------------------------------

 Debt Securities -
    Held to Maturity          $  279,871   $   13,115   $     --      $  292,986

Debt Securities -
    Available For Sale
    US Treasury & Other
    US Govt. Agencies          2,018,884       17,682         --       2,036,566
Industrial and
    Miscellaneous                148,036         --         (3,973)      144,063
                              --------------------------------------------------
Total Debt Securities
    Available For Sale        $2,166,920   $   17,682   $   (3,973)   $2,180,629
                              ==================================================
Equity Securities -
    Available For Sale        $  292,451         --     $   (1,105)   $  291,346
Equity Securities -
    Other                     $   66,788         --           --      $   66,788



                                      F-11
<PAGE>

                     SUMMIT LIFE CORPORATION AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           DECEMBER 31, 2002 AND 2001

NOTE B - INVESTMENTS (CONTINUED)


Equity  Securities  - Other -  consists  of  26,250  shares  of  First  Alliance
Corporation  (FAC) common stock which thru December 31, 2001 was carried at cost
plus  stock  dividends  received  through  December  30,  2001.  The  stock  was
restricted as to sale or transfer and FAC retained the right of first refusal to
purchase the shares  through  December 30, 2001. On November 8, 2002 FAC entered
into an agreement  to exchange  all  outstanding  shares for  Citizens,  Inc., a
Colorado corporation at an exchange value of $3.02 per share which increases the
stock value to $79,275.  The agreement was approved by the  shareholders  of FAC
and during the first  quarter  of 2003 the actual  exchange,  1 share of FAC for
..449806 shares of Citizens, Inc., will take place.

The amortized cost and estimated fair values of debt securities, by contractual
maturity, at December 31, 2002 are summarized below. Actual maturities may
differ from contractual maturities because borrowers may have the right to call
or prepay indebtedness without prepayment penalties.

                                   Held to Maturity         Available for Sale
                               -----------------------   -----------------------
                               Amortized    Estimated    Amortized    Estimated
                                  Cost      Fair Value      Cost      Fair Value
                               -------------------------------------------------

Due Six to Ten Years           $     --     $     --     $     --     $     --

Due after Ten Years               222,562      250,685       75,000       78,695

Mortgage Backed Securities        200,498      212,733      986,983    1,035,224
                               -------------------------------------------------

Total                          $  423,060   $  463,418   $1,061,983   $1,113,919
                               =================================================

The amortized cost and estimated fair value of debt securities, by contractual
maturity, at December 31, 2001 are summarized below.


                                   Held to Maturity         Available for Sale
                               -----------------------   -----------------------
                               Amortized    Estimated    Amortized    Estimated
                                  Cost      Fair Value      Cost      Fair Value
                               -------------------------------------------------

Due Six to Ten Years           $     --     $     --     $     --     $     --

Due after Ten Years               178,566      187,906         --           --

Mortgage Backed Securities        101,305      105,080    2,018,884    2,036,566
                               -------------------------------------------------

Total                          $  279,871   $  292,986   $2,018,884   $2,036,566
                               =================================================



Proceeds from sales of available-for-sale-securities  approximated $1,129,081 in
2002 and $1,231,000 in 2001. Gross gains on  available-for-sale-securities  were
$1,983 in 2002 and $4,310 in 2001 while gross losses were $32,518 in 2002 and $0
for 2001.

Trading  securities gains were $5,091 for 2002 while trading  securities  losses
were $139,527 in 2001.

Included  in 2002  investment  income is $211,000  deposited  from the sale of a
communication  tower  lease on June 28,  2002.  On March 6, 2001  Great  Midwest
entered into a five-year  lease with Nextel  Corporation to lease  approximately
1,500 square feet of land to construct a communication  tower. The lease,  which
was renewable for five successive five-year terms, was purchased for $211,000 by
an unaffiliated party.


                                      F-12
<PAGE>
<TABLE>
<CAPTION>


Notes receivable consist of the following at December 31:

                          Original       Pct                                2002       2001
Type of Loan    Date       Amount        Int      Term    Status           Balance    Balance
------------    ----       ------        ---      ----    ------           -------    -------
<S>             <C>        <C>           <C>      <C>     <C>              <C>        <C>
Secured
Real Estate    1/5/98     $240,000      8.00%    10 yrs   Current         $145,550   $167,870

Secured
Real Estate    7/30/98      59,200      9.75%    10 yrs   Current              -0-     38,495

Secured
Real Estate    4/29/00      47,000      6.50%    30 yrs   Current           43,011     46,152

Secured
Real Estate    4/29/00      47,000      6.50%    30 yrs   Current           43,011     46,152

Secured
Real Estate    11/10/00     42,000      7.00%    10 yrs   Current           35,489     38,733

Secured
Real Estate    7/11/00     225,000      6.25%    3 yrs    Current          225,000    225,000

Secured
Real Estate    2/1/00      100,000      6.25%    10 yrs   Current          100,000    100,000

Secured
Real Estate    1/5/98       50,000      8.00%    10 yrs   Current           30,322     34,973

Unsecured
Individual     11/1/00      41,345      7.00%    4 yrs    3 mo past due     26,681     32,065

Unsecured
Corporate      3/3/02       12,500      8.00%    1 yr     Current           12,500     12,593

Unsecured
Corporate      12/5/02     100,000      5.75%    1 yr     Current           77,150    100,000

Unsecured
Corporate      8/23/02     150,000      7.00%    1 yr     Current          150,000    150,000

Unsecured
Limited
Liability Co   5/31/02     160,000      5.75%    66 mo    Current          160,000       --
                         ----------                                      ----------   ----------

                         $1,274,045                                      $1,048,714    $992,033
</TABLE>


                                      F-13
<PAGE>

                     SUMMIT LIFE CORPORATION AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           DECEMBER 31, 2002 AND 2001

NOTE C - NOTES PAYABLE

Note payable consisted of the following at December 31:
                                                               2002       2001
                                                             --------   --------

Uncollateralized Loan From Shareholder                       $245,629   $ 79,000
Uncollateralized Loan From Corporation                         31,400     27,998
Bank Loan, Six and  95/100% note payable                          335      4,208
    collateralized by vehicle. Final payment
    January 2003                                             --------   --------
                  Total Notes Payable                        $277,364   $111,206

On March 31, 2001 the Company  entered into a $500,000 line of credit  agreement
with the principal shareholder and director of the corporation. The terms of the
agreement provide for the corporation to draw a maximum of $500,000 as needed at
0% interest without collateral.

NOTE D - STOCKHOLDERS' EQUITY

On April 23, 1999  non-voting  Series A Cumulative  Preferred  Stock was created
with 5,000 shares  issued and  outstanding  on December  31, 2001.  The Series A
Preferred  Stock  has  liquidation   priority  ($100  per  share  plus  dividend
arrearages, if any) over common stock upon dissolution.

On September  29, 2000 Series B  Convertible  Preferred  Stock was created.  The
Series B Preferred  Stock is  noncumulative,  non-voting and is convertible on a
one-to-one  basis into shares of common stock at the option of the holders after
March 31,  2003.  The  Series B  Preferred  Stock is senior to common  stock and
junior to Series A Preferred  Stock in dividend  priority.  At December 31, 2001
there were  350,000  shares of Series B  Preferred  Stock  outstanding  and upon
liquidation  is ranked  equivalent  to Series A Preferred  Stock as to per share
liquidation value ($1.00 per share) and unpaid dividends.

On June 30, 2002 the Company sold 19,000 shares of its common stock,  which were
owned  by  Great  Midwest,   to  an   unaffiliated   third  party  for  $95,000.
Additionally, in 2002 the Company finalized the sale of 423,700 shares of common
stock with the net effect being an increase in common stock at par of $4,237 and
an increase of $362,911 in additional paid in capital. Most of the proceeds were
received  in 2001 and  reported in the equity  section of the  balance  sheet as
common  stock  equivalents  of $422,200  which were set off by $56,653 in public
offerings  cost shown under  "Other  Assets" on the  December  31, 2001  balance
sheet.

NOTE E - INCOME TAX

The Company's net operating  loss  carryforward  for tax purposes,  which begins
expiring in 2010, are as follows:

                                                            2002          2001
                                                         ----------   ----------

               Summit Life Corporation                   $1,666,794   $1,834,653
               Great Midwest                                102,422       75,605
                                                         ----------   ----------
                                 Total                   $1,769,216   $1,910,258
                                                         ==========   ==========

In 2001 SLC and Great Midwest filed separate income tax returns while in 2002 an
election will be made to file consolidated  returns.  In 2003 Great Midwest will
dissolve and by filing a 2002  consolidated  tax return  existing net  operating
losses will be available.

                                      F-14
<PAGE>

                     SUMMIT LIFE CORPORATION AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           DECEMBER 31, 2002 AND 2001

NOTE E - INCOME TAX (CONTINUED)


         SLC and Great Midwest have both capital loss and net  operating  losses
available  with  the  deferred  tax  benefit  of  each  summarized   below.  The
calculations and assumptions  regarding the December 31, 2002 deferred tax asset
of $31,800 are based upon anticipated  known tax benefit resulting from the 2003
dissolution  of Great  Midwest and  accordingly  only part of the  capital  loss
carryforward is recognized. Additionally, none of the net operating loss benefit
is  recognized  inasmuch as is  reasonable  that those tax benefits  will not be
realized.

The  components of net deferred tax assets and the related  valuation  allowance
are as follows:

                                                           2002         2001
                                                         ---------    ---------
Deferred Tax Assets
    Net Operating Loss Carryforwards                     $ 283,457    $ 288,600
    Capital Loss Carryforwards                              89,992       63,650
    Policy Reserves and Policyholder Funds                    --          7,397
    Other                                                     --          1,167
    Valuation Allowance for Deferred Taxes                (299,348)    (263,258)
                                                         ---------    ---------
                                                            74,101       97,556
                                                         ---------    ---------
Tax Deferred Liabilities
    Value of Purchased Insurance Business                  (42,301)     (54,445)
             Depreciation                                     --           (832)
    Other                                                     --         (5,039)
                                                         ---------    ---------
                                                           (42,301)     (60,316)

Net Deferred Tax Asset                                   $  31,800    $  37,240
                                                         =========    =========

Increase (Decrease) in Valuation Allowance               $  36,070    $ (30,408)
                                                         =========    =========

In 2003 the Company has incurred on the sale and  liquidation of Great Midwest a
net capital  gain of  $212,000.  Using a statutory  tax rate of 15% actual taxes
will be $31,800 which reconciles to the December 31, 2002 tax benefit.

A  reconciliation  of income tax benefits at the statutory rate to the Company's
effective tax rate at December 31 is as follows:

                                                           2002         2001
                                                         ---------    ---------

Expected Statutory Rate                                        15%          34%
Small Life Insurance Company Deduction (60%)                    (9)         (20)
Net Effect Tax Loss Carryforwards                               (6)         (14)
                                                         ---------    ---------

Effective Tax Rate                                              0%           0%
                                                         =========    =========


NOTE F - RELATED PARTY TRANSACTIONS

From time to time,  the Company  makes  advances to and receives  advances  from
affiliates, generally officers and stockholders. Such advances have no specified
repayment terms but are generally  short-term in nature.  At the end of December
31, 2002 and December 31, 2001 there was $10,000 owed to the Company.

                                      F-15
<PAGE>

                     SUMMIT LIFE CORPORATION AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           DECEMBER 31, 2002 AND 2001


NOTE G - COMMITMENTS AND CONTINGENCIES

Under its annuity  contracts  Great  Midwest is committed to credit  interest on
policyholder  account balances at guaranteed  rates.  During the first year, the
guaranteed rates range up to 7.8%.  After the first year, the lowest  guaranteed
rate is 3%.

Most  states  have  established   guaranty  fund  associations  to  ensure  that
policyholders receive the benefit of the insurance products they have purchased.
The guaranty funds receive their funding  through  assessments to companies that
write  business  in the  respective  states.  Great  Midwest  is liable for such
mandatory assessments upon notification by the states; however, such assessments
may be partially recovered through a reduction in future premium tax.

Certain  investments  with carrying values of $320,610 and $279,871 were pledged
to regulatory authorities in accordance with regulatory requirements at December
31, 2002 and 2001 respectively.

The Company  leases certain  equipment  used in  operations.  Rent expense under
these leases approximated $800 in 2002 and $1,600 in 2001.

The Company is  involved in various  legal  actions  relating to its  operation.
Management  believes that losses,  if any, arising from such actions will not be
material to the Company's consolidated financial statements.

NOTE H - STATUTORY CAPITAL AND SURPLUS

Great Midwest prepares its  statutory-basis  financial  statements in accordance
with  accounting  practices  prescribed  or permitted by the  domiciliary  state
insurance department.  "Prescribed" statutory accounting practices include state
laws,  regulations,  and general  administrative  rules, as well as a variety of
publications  of the National  Association  of Insurance  Commissioners  (NAIC).
"Permitted"  statutory  accounting  practices encompass all accounting practices
that are not  prescribed;  such  practices  may differ from state to state,  may
differ from company to company within a state, and may change in the future. The
NAIC has approved the Codification of Statutory  Accounting  Practices effective
on January 1, 2001.  Great  Midwest has  determined  that the primary  effect of
Codification  is that  goodwill can now be recorded as an admitted  asset on its
statutory financial statements.

Great  Midwest  is  required  by the  Texas  Insurance  Commissioners  office to
maintain  statutory capital and surplus of at least $800,000 and at December 31,
2002 the amount  was  $810,142.  On  December  20,  2002 the  Company  signed an
agreement  to acquire  Security  General and in the first  quarter of 2003 Great
Midwest will  dissolved  with all  insurance and annuity  contracts,  assets and
liabilities sold to Security  General.  Security General is licensed in multiple
states  and with  operations  expected  to expand to  approximately  15 of these
states, no dividends are planned in 2003.

In 2001 the Company requested a review by the Securities and Exchange Commission
("SEC") of its accounting  treatment of the sale and repurchase of a real estate
lease.  The sale and repurchase of the lease  resulted in reporting  $186,000 of
income  during  2001 but upon the request of the SEC the gain was  reversed  and
accordingly the audited 2001 financial statements did not include it.

The transaction  also impacted  statutory  financial  reports  prepared by Great
Midwest  but  because in 2002 the same  lease was resold at a $211,000  gain the
issued ended.



                                      F-16


<PAGE>

                     SUMMIT LIFE CORPORATION AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           DECEMBER 31, 2002 AND 2001


NOTE I - REGULATORY MATTERS

At periodic  intervals,  the domiciliary  state insurance  department  routinely
examines the insurance company  subsidiary's  statutory financial  statements as
part of their legally prescribed  oversight of the insurance industry.  Based on
these  examinations,  the regulators can direct that the subsidiary's  statutory
financial statements be adjusted in accordance with their findings.

NOTE J - REINSURANCE

Great Midwest  reinsures that portion of insurance risk that is in excess of its
retention  limits,  generally under yearly  renewable term contracts.  Retention
limits range up to $5,000 on life policies.  Reinsurance premiums are recognized
as a reduction of insurance  premiums and other  considerations  over the policy
term and totaled $37,000 for 2002 and $47,000 for 2001.

Reinsurance does not discharge or diminish the primary  liability of the Company
on the risks reinsured;  however,  it does serve to limit the Company's  maximum
loss of risks.  The Company would be liable for the  reinsurance  risks ceded to
other  companies  in the  event  that  reinsurers  were  unable  to  meet  their
obligations.

At December 31, 2001 reinsurance  recoverables on policy claims were $25,000 and
was received January 2002. No recoverables  were due the Company at December 31,
2002.

NOTE K - EMPLOYMENT AGREEMENTS

The Company  has  employment  agreements  with its Chief  Executive  Officer and
President,  both Company stockholders.  The employment agreements provide, among
other things, for terms through March 2003, base and maximum salaries, increases
to base salaries  subject to Board of Director  approval,  annual  bonuses,  and
benefits.

The agreements may be terminated by mutual  consent,  by the Company at its sole
discretion  without  cause,  or by the  Company for cause,  as  defined.  If the
agreements are terminated for cause, as defined,  severance  payments of $50,000
are payable to each employee.  If the  agreements are terminated  without cause,
severance  payments to each employee  will be  equivalent to the maximum  salary
over the term of the agreements less amounts  previously paid, but not less than
$360,000 for the President and $450,000 for the Chief Executive Officer.

NOTE L - FAIR VALUE OF FINANCIAL INSTRUMENTS

The following  methods and  assumptions  were used to estimate the fair value of
each  class  of  financial   instruments  as  of  December  31,  2002  and  2001
respectively.  Such  information,  which  pertains  to the  Company's  financial
instruments,  does not purport to represent  the aggregate net fair value of the
Company.  The  carrying  amounts  in the  table  are the  amounts  at which  the
financial instruments are reported in the consolidated financial statements.

Except as identified,  all of the Company's  financial  instruments are held for
purposes other than trading.  The fair values of debt and equity  securities are
estimated  based on quoted market prices for those or similar  investments.  The
carrying  value of secured notes  receivable and policy loans  approximate  fair
value The carrying amounts of cash, cash  equivalents,  short-term  investments,
and receivables  approximate  fair values because of the short maturity of those
assets.  Net cash  surrender  value  is used in  determining  the fair  value of
investment  contracts.  Estimated  fair value of notes payable is the discounted
amount of future  cash flows using the  Company's  current  incremental  rate of
borrowing for similar liabilities.

                                      F-17
<PAGE>
<TABLE>
<CAPTION>

                     SUMMIT LIFE CORPORATION AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           DECEMBER 31, 2002 AND 2001


NOTE L - FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)


                                                   2002                      2001
                                          Carrying        Fair      Carrying      Fair
FINANCIAL ASSETS                           Amount        Value       Amount       Value
----------------                         ----------   ----------   ----------   ----------
<S>                                      <C>          <C>          <C>          <C>
Debt Securities - Held to Maturity       $  423,060   $  423,060   $  279,871   $  279,871
Debt Securities - Available For Sale      1,113,919    1,113,919    2,180,629    2,180,629
Equity Securities - Available For Sale      159,740      159,740      291,248      291,248
Equity Securities - Trading                  67,655       67,655       84,934       84,934
Equity Securities - Other                    79,275       79,275       66,788         --
Notes Receivables                         1,048,714      977,257      992,033      937,389
Policy Loans                                113,020      113,020      113,865      113,865
Cash and Cash Equivalents                 2,109,388    2,109,388    1,661,410    1,661,410
Other Receivables                            54,994       54,994       92,576       92,576

FINANCIAL LIABILITIES
---------------------
Policy Holder Account
Balances - Investment Contracts          $4,439,445   $4,319,537   $4,063,756   $3,933,403
Notes Payable                               277,364      277,364      111,206      111,206
</TABLE>


NOTE M - BUSINESS ACQUISITIONS

On December 20, 2002 the Company signed an agreement to acquire Security General
for  $1,990,000.  The  Company  intends to fund the  purchase  with  liquidation
proceeds from Great  Midwest and the sale of preferred  stock.  Great  Midwest's
insurance and annuity  business has been  transferred to Security General which,
beginning in 2003, will be the sole subsidiary of SLC. The Company paid $490,000
for Security  General's  state  charters and licenses and $1,500,000 for capital
and surplus.  No insurance or annuity contracts were included in the acquisition
but the additional charters will now permit operations in additional states. The
purchase  was closed on February  14, 2003 and the  transaction  did not have an
impact on the Company's 2002 financial statements.

















                                      F-18