<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-QSB


(Mark One)

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

 For the quarterly period ended MARCH 31, 2003
                                --------------

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHNAGE ACT
          For the transition period from _____________ to ___________.




                        Commission File Number: 333-60326


                       TEMPORARY FINANCIAL SERVICES, INC.
         ---------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

            Washington                                 91-2079472
-------------------------------------------------------------------------------
(State or other jurisdiction of           (IRS Employer Identification Number)
incorporation or organization)

           200 North Mullan Road, Suite 213, Spokane, Washington 99206
-------------------------------------------------------------------------------
                    (Address of principal executive offices)

                                 (509) 340-0273
-------------------------------------------------------------------------------
                           (Issuer's telephone number)

                                      N.A.
-------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all documents and
reports required to be filed by Section 13, or 15(d) of the Securities Exchange
Act of 1934 during the preceding twelve months (or for such shorter period as
the Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past ninety days.
                                                          Yes [X]    No  [ ]


The number of shares of common stock outstanding on April 10, 2003 was: 737,280


Transitional Small Business Disclosure Format.            Yes [ ]    No  [X]



                                  10-QSB Page 1
<PAGE>



                                   FORM 10-QSB
                                     PART I

ITEM 1.  FINANCIAL STATEMENTS.

TEMPORARY FINANCIAL SERVICES, INC. AND SUBSIDIARY
------------------------------------------------------------------------------


CONTENTS



                                                              PAGE
                                                              ----

Management Statement                                      10-QSB Page 3

CONSOLIDATED FINANCIAL STATEMENTS (Unaudited):

   Consolidated balance sheets                            10-QSB Page 4

   Consolidated statements of income                      10-QSB Page 5

   Consolidated statements of cash flows                  10-QSB Page 6

   Notes to consolidated financial statements             10-QSB Pages 7 - 12



                                  10-QSB Page 2

<PAGE>

                              MANAGEMENT STATEMENT





         The accompanying (unaudited) consolidated balance sheets of Temporary
Financial Services, Inc. and Subsidiary as of March 31, 2003 and December 31,
2002, and the related consolidated statements of income, and cash flows for the
three month periods ended March 31, 2003 and 2002, were prepared by Management
of the Company.

       The accompanying financial statements should be read in conjunction with
the audited financial statements of Temporary Financial Services, Inc. (the
"Company") as of and for the year ended December 31, 2002, and the notes thereto
contained in the Company's annual report on Form 10-KSB for the year ended
December 31, 2002, filed with the Securities and Exchange Commission.

Management
Temporary Financial Services, Inc.
April 10, 2003




                                  10-QSB Page 3


<PAGE>
TEMPORARY FINANCIAL SERVICES, INC.
--------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>


                                                                       March 31,    December 31,
                                                                      -----------  --------------
ASSETS                                                                   2003           2002
                                                                      -----------  --------------
<S>                                                                      <C>          <C>
                                                                      (Unaudited)
CURRENT ASSETS:
  Cash and cash equivalents                                           $  290,034   $     547,210
  Securities available for sale                                           80,600          80,600
  Accounts receivable                                                     13,601          13,452
  Prepaid Expenses                                                         1,877           1,877
  Loans receivable:
    Affiliates                                                         1,440,898       1,055,525
    Others                                                               155,271         413,768
                                                                      -----------  --------------
      Total current assets                                             1,982,281       2,112,432

OTHER ASSETS:
  Investment in affiliated company                                       626,865         618,635
  Investment in real estate contracts receivable                         965,000          90,250
                                                                      -----------  --------------
    Total Other Assets                                                 1,591,865         708,885

FURNITURE & EQUIPMENT, less accumulated
  depreciation of $8,648 and $7,114 , respectively                        27,639          29,173
                                                                      -----------  --------------
                                                                      $3,601,785   $   2,850,490
                                                                      ===========  ==============
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Line of credit, officer/stockholder                                 $1,304,997   $     542,425
  Accounts payable                                                         6,527           4,914
  Accrued expenses                                                         7,297           3,338
                                                                      -----------  --------------
    Total current liabilities                                          1,318,821         550,677
                                                                      -----------  --------------

STOCKHOLDERS' EQUITY
  Common stock - 100,000,000 shares, $0.001 par value, authorized;
    737,280 shares issued and outstanding                                    737             737
  Preferred stock - 5,000,000 shares, $0.001 par value, authorized;
    none issued                                                                -
  Additional paid-in capital                                           2,499,312       2,499,312
  Retained earnings (deficit)                                           (217,085)       (200,236)
                                                                      -----------  --------------
    Total stockholders' equity                                         2,282,964       2,299,813
                                                                      -----------  --------------

                                                                      $3,601,785   $   2,850,490
                                                                      ===========  ==============
</TABLE>


See accompanying notes to unaudited consolidated financial statements.

                                  10-QSB Page 4


<PAGE>

TEMPORARY FINANCIAL SERVICES, INC.
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                                    Three Months Ended March 31,
                                                                    ----------------------------
                                                                         2003        2002
                                                                       ---------  ----------
REVENUE:
<S>                                                                      <C>        <C>
  Loan and related fees:
    Affiliates                                                         $      -   $  12,084
    Other                                                                12,787      14,728
  Consulting and joint venture fees                                      21,150           -
  Interest and investment income                                         26,394       9,720
  Accounting fees and other income                                       11,000       5,500
                                                                       ---------  ----------
                                                                         71,331      42,032
                                                                       ---------  ----------
OPERATING EXPENSES:
  Advertising                                                               397       5,085
  Compensation and related expenses                                      37,279      20,659
  Rent                                                                    5,433       5,332
  Legal and professional                                                 27,373      42,335
  Interest expense - related party                                       12,702      10,326
  Office expense                                                          3,198       9,927
  Other expense                                                          10,028       8,344
                                                                       ---------  ----------
                                                                         96,410     102,008
                                                                       ---------  ----------
LOSS FROM OPERATIONS                                                    (25,079)    (59,976)

OTHER EXPENSE
  Equity in income (losses) of affiliates                                 8,230     (45,577)
                                                                       ---------  ----------

LOSS BEFORE INCOME TAXES                                                (16,849)   (105,553)

INCOME TAX BENEFIT                                                            -           -
                                                                       ---------  ----------

NET LOSS                                                               $(16,849)  $(105,553)
                                                                       =========  ==========

BASIC LOSS PER SHARE                                                   $  (0.02)  $   (0.28)
                                                                       =========  ==========

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING                              737,280     383,333
                                                                       =========  ==========



See accompanying notes to unaudited conolidated financial statements.


                                  10-QSB Page 5
</TABLE>
<PAGE>
TEMPORARY FINANCIAL SERVICES, INC.
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                                       Three Months Ended March 31,
                                                                       ----------------------------
INCREASE (DECREASE) IN CASH                                                 2003         2002
                                                                        ------------  ----------
<S>                                                                     <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                              $   (16,849)  $(105,553)
  Adjustments to reconcile net loss to net cash
    used in operating activities:
      Depreciation                                                            1,534         975
      Equity (income) losses in affiliates                                   (8,230)     45,577
      Decrease (increase) in accounts receivables                              (149)   (237,652)
      Decrease (increase) in deferred offering costs                              -      (8,036)
      Increase (decrease) in accounts payable                                 1,613      (8,644)
      Increase (decrease) in accrued expenses                                 3,959         480
                                                                        ------------  ----------
        Total adjustments                                                    (1,273)   (207,300)
                                                                        ------------  ----------
        Net cash provided (used) in operating activities                    (18,122)   (312,853)
                                                                        ------------  ----------

CASH FLOWS FROM INVESTING ACTIVITIES
  Investment in affiliates                                                        -    (200,350)

  Increase in loans receivable, net                                        (126,876)          -
  Increase in investments in real estate contracts receivable              (874,750)          -
  Additions to furniture and equipment                                            -      (5,436)
                                                                        ------------  ----------
    Net cash used in investing activities                                (1,001,626)   (205,786)
                                                                        ------------  ----------

CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from line of credit, net                                         762,572     409,918
                                                                        ------------  ----------

NET DECREASE IN CASH                                                       (257,176)   (108,721)
CASH, BEGINNING OF PERIOD                                                   547,210     262,072
                                                                        ------------  ----------
CASH, END OF PERIOD                                                     $   290,034   $ 153,351
                                                                        ============  ==========



SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION:
  Exchange of 50,000 shares of common stock for
    250,000 shares of Genesis Financial, Inc. common.                   $         -   $ 250,000
                                                                        ============  ==========
  Cash payments of Interest                                             $    10,854   $     408
                                                                        ============  ==========


See accompanying notes to unaudited consolidated financial statements.
----------------------------------------------------------------------


                                  10-QSB Page 6

</TABLE>
<PAGE>
TEMPORARY FINANCIAL SERVICES, INC.
-------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
-------------------------------------------------------------------------------

NOTE 1 -- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
-------------------------------------------------------------------------------

Organization:

The accompanying financial statements are those of Temporary Financial Services,
Inc., incorporated in Washington State on October 4, 2000, and its wholly-owned
subsidiary, Temps Unlimited, Incorporated, which was incorporated in Washington
State on October 31, 2000 (collectively referred to herein as the Company). Both
companies have established their fiscal year end to be December 31. The
Company's operations consist of three segments: the purchase of real estate
contracts receivable for the company's own account; financing the purchase of
real estate contracts receivable through an affiliated business; and financing
and other services for the temporary employment services industry.

The Company previously owned minority interests in two temporary staffing
businesses. During 2002, the Company sold its minority interests in the
temporary staffing businesses, and is no longer engaged in this segment of
business.

Summary of Significant Accounting Policies:

Principles of consolidation - The consolidated financial statements include the
accounts of the Company and its wholly-owned subsidiary. All material
intercompany accounts and transactions are eliminated in consolidation.

Basis of Presentation - The accompanying unaudited consolidated financial
statements have been prepared in conformity with generally accepted accounting
principles and reflect all normal recurring adjustments which, in the opinion of
Management of the Company, are necessary for a fair presentation of the results
for the periods presented. The results of operations for such periods are not
necessarily indicative of the results expected for the full fiscal year or for
any future period.

The accompanying unaudited financial statements should be read in conjunction
with the audited financial statements of the Company as of and for the year
ended December 31, 2002, and the notes thereto contained in the Company's Annual
Report on Form 10-KSB for the year ended December 31, 2002, filed with the
Securities and Exchange Commission.

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

Cash and cash equivalents - Such assets consist of demand deposits, including
interest-bearing money market accounts, held in three financial institutions.

                                 10-QSB Page 7
<PAGE>

TEMPORARY FINANCIAL SERVICES, INC.
-------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
-------------------------------------------------------------------------------

Securities available for sale - Investments in equity securities available for
sale are stated at cost, which approximates fair value.

Deferred stock offering costs - Legal and other fees and costs incurred in
connection with the Company's initial public stock offering were deferred in the
year ended December 31, 2001. The initial public offering closed in April, 2002,
and the costs incurred in connection with the offering, were deducted from the
offering proceeds and reduced additional paid-in capital.

Contracts receivable held for sale - Real estate contracts held for resale are
carried at the lower of cost (outstanding principal adjusted for net discounts
and capitalized acquisition costs) or aggregate market value. Gains or losses on
sales are recognized for financial reporting and income tax purposes at the time
of sale. Interest on these receivables is included in interest income during the
period held for resale.

Office furniture and equipment - Office furniture and equipment are stated at
cost. Depreciation is computed using the straight-line method over an estimated
useful life of seven years.

Revenue recognition - The Company generates revenues from interest earned on
loans, investment income from real estate contracts receivable, loan and related
fee income from loans to temporary staffing businesses, fee based accounting
services, and joint venture and consulting services.

Interest earned on loans and investment income form real estate contracts
receivable are recognized when earned based on the amount of the loan, the rate,
and the time outstanding. The Company recognizes loan and related fee income
from temporary staffing businesses at the time the loan amounts are advanced to
the borrowers. Loan advances are typically made on a weekly basis to temporary
staffing borrowers, and the amount of the advance is netted against the
applicable loan and related fee income. Fee based accounting services are
typically charged at a monthly fixed rate, and are invoiced as income at the end
of the month in which the services are performed.

Joint venture revenues result from the Company's participation in real estate
contract receivable purchases. After holding the interest in the joint venture
contract for a relatively short period, the contract is sold and the Company's
gain is determined by the excess of the sale price over the cost basis of the
contract. Joint venture contract revenues are recognized when the related
contract is sold. Consulting fees are recognized when billed for services
provided to affiliated companies.

Allowance for loan losses - The Company provides for estimated loan losses on
loans receivable at a level which, in management's opinion, is adequate to
absorb credit losses on such loans. The amount of the allowance is based on
management's evaluation of the collectibility of the loans receivable, including
the nature of the loans, adequacy of collateral, credit concentrations, trends
in loss experience, specific impaired loans, economic conditions, and other
risks inherent in the loans. At March 31, 2003 and December 31, 2002, management
determined that no allowance for loan losses was necessary.

                                 10-QSB Page 8
<PAGE>

TEMPORARY FINANCIAL SERVICES, INC.
-------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
-------------------------------------------------------------------------------


Investments in affiliates - The Company's investment in Genesis Financial, Inc.,
an affiliated company is reported using the equity method. The Company's share
of earnings and losses of the affiliate is reported as income or expense in the
period in which the earnings or losses are incurred. Genesis Financial, Inc. is
engaged in purchasing and selling real estate receivable contracts.

Income tax - The Company files a consolidated federal income tax return with its
subsidiary. Deferred taxes are provided, when material, on a liability method
whereby deferred tax assets are recognized for deductible temporary differences
and deferred tax liabilities are recognized for taxable temporary differences.
Temporary differences are the differences between the reported amounts of assets
and liabilities and their tax bases. There were no material temporary
differences for the periods presented. Deferred tax assets, subject to a
valuation allowance, are recognized for future benefits of net operating losses
being carried forward.

Earnings per share - Earnings (loss) per common share has been computed on the
basis of the weighted-average number of common shares outstanding during the
years presented. Common shares issuable upon exercise of warrants (Note 6) have
not been included in the calculation because their inclusion would be
antidilutive.

NOTE 2 -- RELATED-PARTY TRANSACTIONS:
------------------------------------------------------------------------------

During the quarter ended March 31, 2002, the Company purchased professional
services of an officer/director at a cost of $34,725. The officer/director did
not receive any amounts for professional services in the quarter ended March 31,
2003.

As discussed in note 3, the Company had loans receivable from affiliates
totaling $1,440,898 at March 31, 2003.

At March 31, 2003, the Company had a $1,500,000 line of credit with an
officer/stockholder (see note 5) on which interest expense of $12,702 was
incurred in the quarter ended March 31, 2003.

NOTE 3 -- LOANS RECEIVABLE:
-------------------------------------------------------------------------------

The Company provides short-term financing for an affiliated business engaged in
purchasing and selling real estate receivable contracts, and for temporary
staffing businesses.

The Company provides financing to its affiliated real estate contract receivable
borrower against a secured warehousing line of credit agreement. The Company has
established lending guidelines that limit loans to 80% of the borrowers cost of
the contracts purchased, and the Company periodically reviews the contract
receivable agreements and appraisals to maintain a comfort level regarding
adequacy of the borrower's collateral base. For the quarters ended March 31,
2003 and 2002, the Company incurred no loan losses and there were no impaired
loans outstanding at March 31, 2003 or 2002.

The temporary staffing business financing consists of notes receivable that are
generally collateralized by the borrower's accounts receivable, all assets of
the borrower, and the use of personal guarantees and pledges where appropriate.

                                 10-QSB Page 9
<PAGE>

TEMPORARY FINANCIAL SERVICES, INC.
-------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
-------------------------------------------------------------------------------

Lending criteria established to minimize credit risk include, among other
things, assessment of the operator's capabilities, minimum business
capitalization requirements, maintenance of an adequate accounts receivable
borrowing base, and a requirement for timely reporting of financial information
to demonstrate ongoing compliance with loan covenants. For the quarters ended
March 31, 2003 and 2002, the Company incurred no loan losses and there were no
impaired loans to temporary staffing businesses outstanding at March 31, 2003 or
2002..

At March 31, 2003, the Company had no outstanding commitments for undisbursed
loans.

NOTE 4 -- INVESTMENTS IN AFFILIATES:
--------------------------------------------------------------------------------

In January, 2002, the Company acquired an interest in Genesis Financial, Inc., a
company formed to engage in the business of purchasing and reselling seller
financed real estate receivable contracts. The Company acquired 350,000 shares
of common stock at $.001 per share, 200,000 shares at $1.00 per share, and
$200,000 of convertible debt with a conversion right at $1.00 per share. The
convertible debt was converted in 2002. The Company also exchanged 50,000 shares
of its common stock for 250,000 shares of Genesis Financial, Inc. common stock
with a fair value of $250,000. As a result of these transactions, at March 31,
2003, the Company owns 1,000,000 shares (45%) of the total outstanding stock of
Genesis Financial, Inc. The investment in Genesis is reported on the equity
method of accounting, and during quarters ended March 31, 2003 and 2002, the
Company recorded unrealized gains (losses) of $8,230 and ($45,557),
respectively, from its investment in Genesis.

At March 31, 2003, the carrying value of the investment in Genesis Financial,
Inc. exceeded the Company's share in Genesis' net assets by approximately
$220,000. This excess has been deemed to be equivalent to goodwill. As required
by Statement of Financial Accounting Standards No. 142, goodwill is not
amortized and is annually evaluated for impairment. Such evaluation did not
result in an impairment at March 31, 2003. See Note 9.


                                 10-QSB Page 10
<PAGE>


TEMPORARY FINANCIAL SERVICES, INC.
-------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
-------------------------------------------------------------------------------


Unaudited financial information about Genesis as of and for the quarter ended
March 31, 2003, follows:
<TABLE>
<CAPTION>
<S>     <C>                                                                                <C>

       Assets:
       Cash                                                                           $   239,135
       Inventory of contracts                                                           1,823,026
       Other current assets                                                                17,425
       Furniture and equipment, net                                                         7,320
       Investment in Temporary Financial Services, Inc.                                   250,000
       Deferred offering costs                                                             28,856
                                                                                  ---------------
          Total assets                                                               $  2,365,762
                                                                                  ---------------

       Liabilities:
       Line of credit, Temporary Financial Services, Inc.                            $  1,433,318
       Accrued expenses                                                                    23,694
                                                                                  ---------------
          Total liabilities                                                             1,457,012
         Stockholders' equity                                                             908,750
                                                                                  ---------------
               Total liabilities and stockholders' equity                            $  2,365,762
                                                                                  ---------------

         Revenues                                                                      $1,648,865
         Gross profit                                                                     122,917
         Expenses                                                                         104,892
         Net Income                                                                        18,025

</TABLE>

NOTE 5 -- LINE OF CREDIT:

THE COMPANY'S LINE OF CREDIT WITH A RELATED PARTY. At March 31, 2003 and
December 31, 2002, the Company had outstanding balances of $1,304,997 and
$542,425, respectively, payable against a $1,500,000 line-of-credit with an
officer/stockholder. The line-of-credit is unsecured and bears interest at 8%.
The line-of-credit agreement, due to expire on August 1, 2003 was renewed on
April 1, 2003 for twelve months. The Company incurred a renewal/commitment fee
of $20,000 for the extension agreement. The Company will pay this
renewal/commitment fee to the lender/officer/stockholder by assignment of the
commitment/renewal fee to be received by the Company from Genesis Financial,
Inc. (see "The Genesis Line of Credit," below). The agreement now expires on
March 31, 2004 and any outstanding balance is due on that date. In the quarters
ended March 31, 2003 and 2002, the Company incurred related party interest
expense of $12,702 and $10,326, respectively.

THE GENESIS LINE OF CREDIT. At March 31, 2003, the Company was owed $1,433,318
by Genesis Financial, Inc. against a $2,000,000 line of credit secured by all of
the assets of Genesis Financial, Inc. and personally guaranteed by two
principals of the borrower. Through March 31, 2003, the line of credit bore
interest at 2% over the Sterling Savings Bank prime rate. The rate was 6.25%
during the quarter ended March 31, 2003. In the quarters ended March 31, 2003
and 2002, the Company reported related party interest income of $20,921 and
$5,000, respectively.

The line of credit was due to expire on August 15, 2003, but was amended and
extended on April 1, 2003 through March 31, 2004. The renewed line of credit
bears interest at the rate of 8%. TFS charged a commitment/renewal fee of 1% of
the amount of the line of credit ($20,000) payable by issuance of 20,000 sharess
of Genesis Common Stock. As of March 31, 2003, the Company has not established
any reserve for losses on its line of credit with Genesis as no loss is
expected.

                                 10-QSB Page 11

<PAGE>


TEMPORARY FINANCIAL SERVICES, INC.
-------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
-------------------------------------------------------------------------------

NOTE 6 -- CAPITAL STOCK:

Exchange of Stock with Genesis.

In conjunction with the Company's investment in Genesis Financial, Inc. (see
Note 4), the Company exchanged 50,000 shares of its common stock valued at $5.00
per share, for 250,000 shares of Genesis common stock. The Genesis common shares
are restricted securities and were acquired for investment purposes.

NOTE 7 - INCOME TAX:
--------------------------------------------------------------------------------

The Company generated a tax-basis net operating loss of approximately $17,000
for the quarter ended March 31, 2003 and aggregate losses since inception of
approximately $217,000. These losses are available for carryover to offset
future taxable income through 2022.

At March 31, 2003 and December 31, 2002, the Company had a deferred tax asset of
$54,000 and $50,000, respectively. The deferred tax asset was fully offset by a
valuation allowance because of uncertainties if the Company will generate
sufficient taxable income to realize the tax benefit. For the quarters ended
March 31, 2003 and 2002, the income tax benefit differed from the expected
amounts of $4,000 and $26,000, respectively, primarily because of the impact of
recognizing the deferred tax asset valuation allowance.

NOTE 8 -- OPERATING LEASES:
--------------------------------------------------------------------------------

In June, 2001, the Company entered into an operating lease of its office
premises. Also in 2001, the Company leased certain office equipment under an
operating lease agreement. Following are the future commitments under the leases
as of March 31, 2003:

                  2003                                          12,750
                  2004                                           8,000


NOTE 9 - PROPOSED DIVIDEND DISTRIBUTION:
--------------------------------------------------------------------------------

On February 19, 2003, Genesis Financial, Inc. filed a registration statement on
Form SB-2 with the United States Securities and Exchange Commission to register
its securities for distribution to the public. At the request of management of
Temporary Financial Services, Inc., the Genesis registration statement includes
737,280 shares of Genesis common stock that is currently owned by Temporary
Financial Services, Inc. It is the intention of management to distribute the
737,280 shares of Genesis common stock being registered to shareholders of
Temporary Financial Services, Inc. in a spin-off distribution. Each shareholder
of Temporary Financial Services, Inc. will receive one share of Genesis common
stock in the distribution for each one share of Temporary Financial Services,
Inc. common stock held at the record date for the distribution. Upon completion
of the spin-off distribution, Temporary Financial Services, Inc. will then own
262,720 shares (12%) of Genesis common stock.


                                 10-QSB Page 12

<PAGE>

TEMPORARY FINANCIAL SERVICES, INC.
-------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
-------------------------------------------------------------------------------


NOTE 10 - LITIGATION:
--------------------------------------------------------------------------------

On October 17, 2002, Temporary Financial Services, Inc. (TFS) and Temps
Unlimited, Inc. were served with a lawsuit by Labor Ready, Inc. The suit
alleges, among other things, that TFS and our affiliated companies are illegally
conspiring to compete against Labor Ready in the temporary labor business and
seeks injunctions prohibiting actionable conduct and unspecified monetary
damages. Management has indicated its belief that the complaint contains a
number of inaccurate allegations, and that the claims are without foundation in
law or fact. The Company is vigorously defending the action but the expected
outcome cannot be determined at this time, and accordingly, no provision has
been made at March 31, 2003 for losses, if any, that could result from the
litigation. The cost of litigation will continue to be a drain on corporate
resources until the matter is resolved.




                                 10-QSB Page 13
<PAGE>

                                   FORM 10-QSB

PART I, ITEM 2.   MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS.

         The Company was organized in October, 2000, and began operations in the
second quarter of 2001. Since commencing operations, our business has evolved.

         BACKGROUND. We originally intended to focus our business on accounts
receivable financing for temporary staffing businesses. During the three months
ended March 31, 2002, over two-thirds of our loan business was concentrated in
this sector. On January 25, 2002, we invested in Genesis Financial, Inc.
(Genesis), a newly organized business engaged in the purchase and resale of
seller financed real estate receivable contracts. Since our investment in
Genesis, our business focus has gradually shifted away from lending to temporary
staffing businesses and toward providing loans to Genesis for the purchase of
seller financed real estate contracts. We have also started buying real estate
receivable contracts for our own account. At March 31, 2003, nearly 90% of our
loans receivable were concentrated in the real estate contract business and only
10% were to temporary staffing companies. At March 31, 2003, 89% of our total
assets were focused on the real estate contracts receivable sector. A table
summarizing our involvement in the real estate receivable and temporary staffing
sectors follows.
<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------------------------
                                 SELLER FINANCED REAL ESTATE RECEIVABLES BUSINESSES
----------------------------------------------------------------------------------------------------------------------
<S>                                                                                                         <C>
Genesis - contract's financed  (affiliated by 45% ownership)                                               $1,433,318
                                                                                                           ----------
----------------------------------------------------------------------------------- ----------------------------------
Investment in Genesis (net of equity losses in affiliates)                                                  $ 626,865
                                                                                                            =========
----------------------------------------------------------------------------------- ----------------------------------
Investments in real estate contract receivables.                                                            $ 965,000
                                                                                                            =========
----------------------------------------------------------------------------------------------------------------------
                                            TEMPORARY STAFFING BUSINESSES
----------------------------------------------------------------------------------- ----------------------------------
Independent businesses                                                                                     $  155,271
----------------------------------------------------------------------------------- ----------------------------------
Affiliated through common ownership                                                                             7,581
                                                                                                           ----------
----------------------------------------------------------------------------------- ----------------------------------
    Total Temporary Staffing Loans                                                                         $  162,852
                                                                                                           ==========

----------------------------------------------------------------------------------------------------------------------
</TABLE>


         We account for our investment in Genesis under the equity method of
accounting. Under the equity method, we recognize a pro rata portion of the
income or loss that Genesis realizes in the period under review. Genesis did not
commence active operations until the second quarter, 2002. As a result, we
reported a loss on our investment in Genesis of $45,577 in the three months
ended March 31, 2002. In the three months ended March 31, 2003, Genesis'
business generated a profit of approximately $18,000, and we reported $8,230 as
our share of the Genesis income.

         At this time, we are not soliciting any new business in the temporary
staffing sector and we expect in future periods that our loans to temporary
staffing businesses will continue to decline as a percentage of total loans
outstanding.

         In the quarter ended March 31, 2003, we also purchased interests in
real estate contracts receivable. At March 31, 2003, we held investments in real
estate contracts receivable of $965,000. These investments are secured by real
estate and will generate interest income of approximately $95,000 in the
remainder of 2003.

                                 10-QSB Page 14

<PAGE>

         FUTURE PLANS. The Company intends to continue its focus on the real
estate financing sector. It is expected that real estate loans receivable and
investments in real estate contracts will generate sufficient cash flows in
coming periods for the Company to operate with a positive cash flow. Future
profits from operations will depend on the ability of the Company to generate a
positive interest spread between the contracts it acquires and the loans it
makes compared to the Company's cost of funds. Currently, the Company has a
$1,500,000 line of credit with an officer director at the rate of 8% per annum.
The company's line of credit to Genesis also bears an 8% interest rate. To the
extent the company borrows on its line of credit to fund Genesis borrowing, the
interest income and interest expense will wash. As a result, revenues to meet
operating expenses and profit (if any), will come from the Company's equity
funds available for investment. Management expects to generate a return of 10%
to 20% on these funds, and over the past six months has been taking steps to
reduce overhead to bring operating expenses in line with expected revenue.

         In addition to real estate financing, the Company is now exploring
other business alternatives. The Company has been and expects it will continue
to be contacted by other companies interested in being acquired by or acquiring
TFS. No such acquisition or reverse acquisition transactions are planned at this
time, but Management has indicated that it will be open to discussions should an
attractive opportunity arise.

RESULTS OF OPERATIONS.

THREE MONTHS ENDED MARCH 31, 2003 AND 2002.

         REVENUES. In the three months ending March 31, 2003, the Company
generated total revenues of $71,331 from all sources, compared to $42,032 for
the comparable period in 2002. The increase in total revenues for the current
quarter reflects a higher level of activity brought about by completion of the
public offering on March 31, 2002. The proceeds from the public offering did not
become available to the Company until April, 2002. The Since completion of the
public offering, the Company has used the equity provided to increase loans
receivable and investments, and interest income and investment income has
increased substantially. In the current quarter, the Company also generated
$21,150 in consulting and joint venture fees from its participation in real
estate contracts receivable purchases. This source of revenue was not available
to the Company in the quarter ended March 31, 2002.

         Loan and related fees from the temporary staffing sector decreased to
$12,787 in the quarter ended March 31, 2003 compared to $26,812 in the
comparable period in 2002. This decrease is due to our move away from lending to
temporary staffing businesses.

         Interest and investment income increased to $26,394 in the quarter
ended March 31, 2003 compared to $9,720 in the quarter ended March 31, 2002.
This increase is due to the additional capital available for loans from the
public offering, and the repositioning of our revenue base in the real estate
contracts receivable sector from lending to the temporary staffing sector.


                                 10-QSB Page 15

<PAGE>

         In the quarter ended March 31, 2003, we generated $11,000 in accounting
fee and other income compared to $5,500 in the comparable period in 2002. The
net increase is attributable to the expansion of services provided to an
affiliated financial services customer in the quarter ended March 31, 2003.
Toward the end of 2002, and coincident with the reduction in our temporary labor
accounts receivable financing business, we saw a reduction in the number of
temporary staffing accounting services customers. At the same time, we entered
into an expanded agreement with Genesis for additional services, and the Genesis
revenue in this category more than offset the loss of temporary staffing
services accounting customers. In coming periods, we expect to see a further
reduction in accounting fee revenue from temporary staffing customers. We also
expect that Genesis will continue to grow in 2003 and will be in a position to
retain in house accounting services in the near term. When Genesis brings its
accounting services in house, we expect that our accounting services revenue
will drop off significantly. We do not expect to make accounting services a
significant part of our ongoing business strategy in the future.

         OPERATING EXPENSES. Operating expenses totaled $96,409 in the quarter
ended March 31, 2003 compared to $102,008 for the comparable period in 2002.
Compensation and related expenses increased substantially and legal and
professional decreased substantially in the first quarter of 2003 when compared
to the first quarter of 2002. Prior to April 1, 2002, Brad Herr provided
services to the Company as an independent contractor. Mr. Herr was employed by
the Company in April 2002, and this resulted in the elimination of legal and
professional expenses and the incurrence of additional compensation costs.

         Advertising expense decreased to $397 in the quarter ended March 31,
2003 from $5,085 in the quarter ended March 31, 2002. Included in the March 31,
2002 amount is $4,975 for listing our securities in the Standard & Poors
Securities Manual. The renewal of this manual listing, in the amount of $3,275
was paid in April, 2003. Other advertising expense consists of amounts spent for
the Company's yellow pages telephone book listing.

         The reduction in loans to temporary staffing businesses and the
refocusing of our business on real estate contract purchases and financing has
eliminated the need for much of the overhead we previously incurred in staffing
for our temp labor loan business. Between the first quarter 2002 and the first
quarter 2003, the decrease is not readily apparent in overall operating
expenses, but we expect a significant reduction in operating expenses for the
year ended December 31, 2003, compared to 2002.

         LOSS FROM OPERATIONS. We incurred loss from operations of $25,079 in
the first quarter 2003, compared to loss from operations of $59,976 in same
period in 2002. Of the current period loss, $10,000 related to litigation
expenses incurred in defending the Company against the Labor Ready lawsuit
previously reported. We continue to vigorously pursue the defense of this action
and continue to believe that Labor Ready's claims are baseless. We expect,
however, that the Company will continue to incur ongoing litigation expenses in
coming periods, and the amounts will be significant. We have filed a
counterclaim to recover damages including our costs of defense in this action,
but we cannot determine the likelihood or amount of any recovery at this time.


                                 10-QSB Page 16

<PAGE>


         In coming periods, we expect to eliminate the loss from operations
through ongoing reductions in overhead, and through increasing revenues from
real estate lending activities. A significant expense in the current period is
the rent, utilities, and telephone expense incurred for our corporate offices.
We are exploring ways to reduce this cost, and in any case, our lease expires in
May, 2004, at which time we will move to space suitable for our needs at that
time. We are also incurring substantial compensation expenses that we expect to
reduce in the coming periods. The work load has been lessened by the change in
business focus, and a corresponding adjustment in compensation expense will
follow in the second and third quarters.

         EQUITY IN GAINS (LOSSES) OF AFFILIATES. We currently own approximately
45% of Genesis Financial, Inc. We account for our investment under the equity
method of accounting and report our pro rata share of Genesis' net income or
loss in the period in which the income or loss is reported by Genesis. For the
first quarter 2003, Genesis generated gross revenues of $1,648,865 against cost
of sales of $1,525,948 for an operating margin of $122,917. Selling, general and
administrative expenses totaling $104,892 produced net income of $18,025 for
Genesis in the current quarter. For the quarter ended March 31, 2003, we
recorded gains from equity in affiliates of $8,230. This compared with a loss
from equity in affiliates in the first quarter 2002 of $45,577. Genesis
commenced operation on January 24, 2002, and did not generate any revenue until
the second quarter 2002, so the first quarter 2002 loss was attributable to
start-up expenses and is not comparable to the current quarter results. We are
now focusing much of our business development efforts on growing Genesis
business and expect that Genesis will continue to grow through the remainder of
2003.

LIQUIDITY AND CAPITAL RESOURCES.

                  At March 31, 2003, we have a secured warehousing line of
credit commitment to Genesis in the amount of $2,000,000, with an outstanding
balance of $1,433,318 and loans outstanding to temporary staffing businesses of
$162,852. We expect the amount of funds loaned to temporary staffing businesses
to continue to decrease in remainder of 2003, and the amount of funds loaned to
Genesis to stay within the credit limit of the secured warehousing line of
credit. The Genesis secured warehousing line of credit bears interest at 8% per
annum effective April 1, 2003and includes commitment and origination fees
totaling 1% of the loan commitment ($20,000) payable in stock of Genesis. The
Genesis line expires March 31, 2004.

         In addition to loans outstanding and lending commitments, the Company
has invested $965,000 in real estate contracts receivable. These contracts
generate cash flows of approximately $10,000 per month.

         In order to provide additional funds to meet lending commitments and
funding necessary for investments in real estate contracts receivable, the
Company has also negotiated a $1,500,000 line of credit from an
officer/director. The related party line of credit agreement bears interest on
outstanding amounts at the rate of 8% per annum and includes origination and
commitment fees of $20,000. The Company has agreed to pass the commitment and
origination fee to be received from Genesis on its line of credit through to the
officer/director in payment of the Company's commitment and origination fee on
its line of credit. The Company considers the terms of the line of credit
available from the officer/director to be at least as favorable as the terms
available to the Company from other sources.


                                 10-QSB Page 17

<PAGE>

         At March 31, 2003, cash and cash equivalents amounted to $290,034, and
we were holding securities available for sale of $80,600. We also had funds
available on our line of credit with an officer and director of $200,000. We
will continue to monitor our needs for capital to loan and will attempt to match
availability with demand. At this time, our existing cash position and our
availability under our line of credit are believed to be sufficient to support
our anticipated business operations foreseeable future.

         On October 17, 2002, Temporary Financial Services, Inc. (TFS) and Temps
Unlimited, Inc. were served with a lawsuit by Labor Ready, Inc. The suit
alleges, among other things, that TFS and our affiliated companies are illegally
conspiring to compete against Labor Ready in the temporary labor business. The
complaint contains a number of inaccurate allegations, and we believe the claims
are without foundation in law or fact. We intend to vigorously defend the
action. We cannot be certain that we will prevail on this litigation nor can we
be certain of the time frame for resolution. The cost of litigation may be a
serious drain on corporate resources for some time to come. We also believe
that, so long as the litigation is pending, it will impact our ability to obtain
future funding for Genesis and TFS. This could significantly impact the earnings
and liquidity positions of both Genesis and TFS in coming periods.

         Pending use of free cash for loans, investments, or operations, we will
place the funds in accessible interest or dividend bearing accounts and will
manage our surplus working capital position to provide current earnings.


                                   FORM 10-QSB
                                     PART II


PART II ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(A)      EXHIBITS.


Exhibit No.       Description

  10.1    Genesis Financial, Inc. Warehousing Line of Credit Extension Agreement
          dated February 15, 2003.

  10.2    Temporary Financial Services,  Inc. Line of Credit Extension Agreement
          dated February 15, 2003.

  99.1    Certification of CEO under SS906 of Sarbanes-Oxley

  99.2    Certification of CFO under SS906 of Sarbanes-Oxley

(B)      REPORTS ON FORM 8-K.  NONE



                                 10-QSB Page 18

<PAGE>



SIGNATURES

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

<TABLE>
<CAPTION>

TEMPORARY FINANCIAL SERVICES, INC.


<S>                                    <C>                                  <C>                           <C>

/s/John R. Coghlan                  President                          John R. Coghlan                May 1, 2003
-----------------------------------------------------------------------------------------------------------------------------
Signature                             Title                             Printed Name                       Date


/s/Brad E. Herr          Secretary, Principal Financial Officer         Brad E. Herr                  May 1, 2003
-----------------------------------------------------------------------------------------------------------------------------
Signature                             Title                             Printed Name                       Date



</TABLE>


                                 10-QSB Page 19

<PAGE>



                                 CERTIFICATIONS

I, John R. Coghlan, President, certify that:


1. I have reviewed this quarterly report on Form 10-QSB of Temporary Financial
Services, Inc.;


2. Based on my knowledge, this quarterly 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 quarterly
report;


3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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 quarterly 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 quarterly 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
quarterly report (the "Evaluation Date"); and


c) presented in this quarterly 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 function):


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
quarterly 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: May 1, 2003

/S/ JOHN R. COGHLAN
--------------------------
John R. Coghlan, President



                                 10-QSB Page 20
<PAGE>

                                 CERTIFICATIONS

I, Brad E. Herr, Chief Financial Officer, certify that:


1. I have reviewed this quarterly report on Form 10-QSB of Temporary Financial
Services, Inc.;


2. Based on my knowledge, this quarterly 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 quarterly
report;


3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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 quarterly 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 quarterly 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
quarterly report (the "Evaluation Date"); and


c) presented in this quarterly 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 function):


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
quarterly 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: May 1, 2003

/S/ BRAD E. HERR
Brad E. Herr, Chief Financial Officer


                                 10-QSB Page 21

<PAGE>