<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 June 30, 2003

[ ]      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE 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 July 18, 2002 was: 737,280

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



                                       1
<PAGE>




                                   FORM 10-QSB

Temporary Financial Services, Inc. and Subsidiary
--------------------------------------------------------------------------------

Contents
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
                                                                                Page
                                                                                ----
                                     PART I

Item 1.  Financial statements.

CONSOLIDATED FINANCIAL STATEMENTS (Unaudited):

<S>                                                                           <C>
   Consolidated balance sheets                                                10-QSB Page 3

   Consolidated statements of income                                          10-QSB Page 4

   Consolidated statements of cash flows                                      10-QSB Page 5

   Notes to consolidated financial statements                                 10-QSB Page 6 - 12

Item 2.  Managements discussion and analysis of financial condition
                         And results of operations.                           10-QSB Page 13 - 16


                                     PART II

Item 1.  Legal Proceedings.                                                   10-QSB Page 17

Item 2.  Changes in securities.                                               10-QSB Page 17

Item 3.  Defaults upon senior securities.                                     10-QSB Page 17

Item 4.  Submission of matters to a vote of security holders.                 10-QSB Page 17

Item 5.  Other information.                                                   10-QSB Page 17

Item 6.  Exhibits and reports on Form8-K.                                     10-QSB Page 17

Signatures                                                                    10-QSB Page 17
</TABLE>



                                       2
<PAGE>




Temporary Financial Services, Inc.
--------------------------------------------------------------------------------
Consolidated Balance Sheets (Unaudited)
================================================================================


<TABLE>
<CAPTION>
                                                                              June 30,        December 31,
Assets                                                                         2003              2002
                                                                            -----------       -----------
CURRENT ASSETS:
<S>                                                                         <C>               <C>
     Cash and cash equivalents                                              $    55,290       $   547,210
     Securities available for sale                                               20,340            80,600
     Accounts receivable                                                         15,746            13,452
     Federal income taxes                                                            --                --
     Prepaid Expenses                                                             1,877             1,877
     Loans receivable:
         Affiliates                                                           1,633,416         1,055,525
         Others                                                                 203,038           413,768
                                                                            -----------       -----------
            Total current assets                                              1,929,707         2,112,432

OTHER ASSETS:
     Investment in affiliated company                                           612,305           618,635
     Investment in real estate contracts receivable                           1,053,927            90,250
                                                                            -----------       -----------
         Total Other Assets                                                   1,666,232           708,885

FURNITURE & EQUIPMENT, less accumulated
     depreciation of $10,182 and $7,114 , respectively                           26,105            29,173
                                                                            -----------       -----------
                                                                            $ 3,622,044       $ 2,850,490
                                                                            ===========       ===========
Liabilities and Stockholders' Equity

CURRENT LIABILITIES:
     Line of credit, officer/stockholder                                    $ 1,360,325       $   542,425
     Accounts payable                                                               631             4,914
     Accrued expenses                                                             6,303             3,338
                                                                            -----------       -----------
         Total current liabilities                                            1,367,259           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)                                               (245,264)         (200,236)
                                                                            -----------       -----------
         Total stockholders' equity                                           2,254,785         2,299,813
                                                                            -----------       -----------

                                                                            $ 3,622,044       $ 2,850,490
                                                                            ===========       ===========
</TABLE>


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



                                       3
<PAGE>

Temporary Financial Services, Inc.
--------------------------------------------------------------------------------
Consolidated Statements of Income (Unaudited)
================================================================================

<TABLE>
<CAPTION>
                                           Three Months Ended June 30,      Six Months Ended June 30,
                                            -------------------------       -------------------------
                                              2003            2002            2003            2002
                                            ---------       ---------       ---------       ---------
REVENUE:
     Loan and related fees:
<S>                                         <C>             <C>             <C>             <C>
         Affiliates                         $      --       $      --       $      --       $      --
         Other                                  9,976          31,990          22,762          57,303
     Consulting and joint venture fees             --          21,150              --
     Interest and investment income            60,743          13,045          87,137          22,765
     Accounting fees and other income           5,500           8,000          16,500          15,000
                                            ---------       ---------       ---------       ---------
                                               76,219          53,035         147,549          95,068
                                            ---------       ---------       ---------       ---------
OPERATING EXPENSES:
     Advertising                            $   6,090       $      86       $   6,487       $   5,171
     Compensation and related expenses         29,266          47,693          66,545          68,352
     Rent                                       5,465           5,373          10,897          10,705
     Legal and professional                     8,116          11,323          20,016          53,658
     Interest expense - related party          24,358           1,656          37,061          16,756
     Office expense                             2,325           6,429           5,523          11,583
     Other expense                             14,218          14,086          39,718          22,430
                                            ---------       ---------       ---------       ---------
                                               89,838          86,646         186,247         188,655
                                            ---------       ---------       ---------       ---------
LOSS FROM OPERATIONS                          (13,619)        (33,611)        (38,698)        (93,587)

OTHER EXPENSE
     Equity in losses of affiliates           (14,559)        (10,154)         (6,329)        (55,731)
                                            ---------       ---------       ---------       ---------

LOSS BEFORE INCOME TAXES                      (28,178)        (43,765)        (45,027)       (149,318)

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

NET LOSS                                    $ (28,178)      $ (43,765)      $ (45,027)      $(149,318)
                                            =========       =========       =========       =========

BASIC LOSS PER SHARE                        $   (0.04)      $   (0.06)      $   (0.06)      $   (0.26)
                                            =========       =========       =========       =========

WEIGHTED AVERAGE COMMON
     SHARES OUTSTANDING                       737,280         737,280         737,280         568,640
                                            =========       =========       =========       =========
</TABLE>


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


                                       4
<PAGE>



Temporary Financial Services, Inc.
--------------------------------------------------------------------------------
Consolidated Statements of Cash Flows (Unaudited)
================================================================================

<TABLE>
<CAPTION>
                                                                  Three Months Ended June 30,          Six Months Ended June 30,
                                                                 -----------------------------       -----------------------------
Increase (Decrease) in Cash                                          2003              2002              2003              2002
                                                                 -----------       -----------       -----------       -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                              <C>               <C>               <C>               <C>
    Net loss                                                     $   (28,178)      $   (43,765)      $   (45,027)      $  (149,318)
    Adjustments to reconcile net loss to net cash
      used in operating activities:
        Depreciation                                                   1,534             1,102             3,068             2,077
        Equity losses in affiliates                                   14,559            10,154             6,329            55,730
        Increase (decr.) in accounts receivables                      (2,145)               --            (2,294)               --
        Increase (decr.) in prepaid expenses                              --              (962)               --            (2,838)
        Increase (decr.) in accounts payable                          (5,896)           (2,306)           (4,283)          (10,474)
        Increase (decr.) in accrued expenses                            (994)            8,844             2,965             9,324
        Decrease in income taxes                                          --                --                --              (297)
                                                                 -----------       -----------       -----------       -----------
           Total adjustments                                           7,058            16,832             5,785            53,522
                                                                 -----------       -----------       -----------       -----------
           Net cash provided (used) by operating activities          (21,120)          (26,933)          (39,242)          (95,796)
                                                                 -----------       -----------       -----------       -----------

CASH FLOWS FROM INVESTING ACTIVITIES
    Investment in affiliates                                              --           (21,750)               --          (222,100)
    Sale of securities available for sale                             80,600                --            80,600                --
    Purchase of securities available for sale                        (20,340)          (20,340)
    Increase in loans receivable, net                               (240,285)         (526,086)         (367,161)         (764,212)
    Increase in investments in R.E. contracts                        (88,927)               --          (963,677)               --
    Additions to furniture and equipment                                  --                --                --            (5,437)
                                                                 -----------       -----------       -----------       -----------
      Net cash used in investing activities                         (268,952)         (547,836)       (1,270,578)         (991,749)
                                                                 -----------       -----------       -----------       -----------

CASH FLOWS FROM FINANCING ACTIVITIES
    Stock sales for cash                                                  --         1,500,049                --         1,500,049
    (Increase) decrease in deferred offering costs                        --            62,081                --            56,218
    Proceeds from line of credit, net                                 55,328          (509,600)          817,900           (99,682)
                                                                 -----------       -----------       -----------       -----------
                                                                      55,328         1,052,530           817,900         1,456,585
                                                                 -----------       -----------       -----------       -----------

NET INCREASE (DECREASE) IN CASH                                     (234,744)          477,761          (491,920)          369,040
CASH, BEGINNING OF PERIOD                                            290,034           153,351           547,210           262,072
                                                                                   -----------       -----------       -----------
CASH, END OF PERIOD                                              $    55,290       $   631,112       $    55,290       $   631,112
                                                                 ===========       ===========       ===========       ===========

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                                    $    19,030       $     6,026       $    29,885       $     6,026
                                                                 ===========       ===========       ===========       ===========
</TABLE>


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


                                       5
<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.



                                       6
<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  from  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 June 30, 2003 and December 31, 2002,  management
determined that no allowance for loan losses was necessary.



                                       7
<PAGE>

Temporary Financial Services, Inc.
--------------------------------------------------------------------------------
Notes to Consolidated Financial Statements (Unaudited)
================================================================================

Investments in affiliates - The Company's investment in Genesis Financial, Inc.,
an  affiliate,  is reported  using the equity  method.  The  Company's  share of
earnings  and losses of the  affiliate  are 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 six  month  period  ended  June  30,  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
three month period ended June 30,  2002,  or in the three and six month  periods
ended June 30, 2003.

As  discussed  in note 3, the  Company  had  loans  receivable  from  affiliates
totaling $1,633,416 at June 30, 2003.

At  June  30,  2003,  the  Company  had a  $1,500,000  line  of  credit  with an
officer/stockholder (see note 5).

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 three and six month periods
ended June 30, 2003 and 2002, the Company incurred no loan losses and there were
no impaired loans outstanding at June 30, 2003 or 2002.

The company's temporary staffing business financing consists of notes receivable
that are generally  collateralized by the borrower's  accounts  receivable,  all
assets of the borrower,  and



                                       8
<PAGE>

Temporary Financial Services, Inc.
--------------------------------------------------------------------------------
Notes to Consolidated Financial Statements (Unaudited)
================================================================================

personal guarantees and pledges where appropriate.  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 three and six month periods ended June 30, 2003 and
2002,  the Company  incurred no loan losses and there were no impaired  loans to
temporary staffing businesses outstanding at June 30, 2003 or 2002..

At June 30, 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 June 30,
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 the three and six month periods ended June 30,
2003  and  2002,  the  Company  recorded  unrealized  gains  (losses)  from  its
investment in Genesis, as follows:

<TABLE>
<CAPTION>
------------------------------- ---------------------------- ---------------------------- ----------------------------
     3 Months - 06/30/2003         3 Months - 06/30/2002        6 Months - 06/30/2003        6 Months - 06/30/2002
------------------------------- ---------------------------- ---------------------------- ----------------------------
<S>                                                <C>                           <C>                         <C>
                      ($14,559)                    ($17,782)                     ($6,329)                    ($58,558)
------------------------------- ---------------------------- ---------------------------- ----------------------------
</TABLE>


At June 30, 2003,  the carrying  value of the  investment in Genesis  Financial,
Inc.  ($612,305)  exceeded  the  Company's  share  in  Genesis'  net  assets  by
approximately  $240,000.  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 June 30, 2003. See Note 9.




                                       9
<PAGE>

Temporary Financial Services, Inc.
--------------------------------------------------------------------------------
Notes to Consolidated Financial Statements (Unaudited)
================================================================================


Unaudited financial information about Genesis as of June 30, 2003, follows:

<TABLE>
       Assets:
<S>                                                                              <C>
       Cash                                                                      $   110,631
       Inventory of contracts                                                      2,110,456
       Other current assets                                                           17,341
       Furniture and equipment, net                                                    7,057
       Investment in Temporary Financial Services, Inc.                              192,500
       Deferred offering costs                                                        37,240
                                                                                 -----------
          Total assets                                                           $ 2,475,225
                                                                                 -----------

       Liabilities:
       Line of credit, Temporary Financial Services, Inc.                        $ 1,633,416
       Accrued expenses                                                               22,923
                                                                                 -----------
          Total liabilities                                                        1,656,339
         Stockholders' equity                                                        818,886
                                                                                 -----------
               Total liabilities and stockholders' equity                        $ 2,475,225
                                                                                 -----------

         Net Revenues                                                            $   216,466
         Expenses                                                                    230,805
         Net Loss                                                                   ($14,339)
</TABLE>


NOTE 5 -- LINE OF CREDIT:

The Company's Line of Credit with a Related Party. At June 30, 2003 and December
31, 2002,  the Company had  outstanding  balances of  $1,360,325  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 three and
six month periods  ended June 30, 2003 and 2002,  the Company  incurred  related
party interest expenses as follows:

<TABLE>
<CAPTION>
------------------------------- ---------------------------- ---------------------------- ----------------------------
     3 Months - 06/30/2003         3 Months - 06/30/2002        6 Months - 06/30/2003        6 Months - 06/30/2002
------------------------------- ---------------------------- ---------------------------- ----------------------------
<S>                                                   <C>                         <C>                          <C>
                        $10,324                       $6,429                      $22,887                      $16,347
------------------------------- ---------------------------- ---------------------------- ----------------------------
</TABLE>


The Genesis Line of Credit. At June 30, 2003, the Company was owed $1,633,416 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.  In the three and six month periods ended June 30,
2003 and 2002, the Company reported related party interest as follows:

<TABLE>
<CAPTION>
------------------------------- ---------------------------- ---------------------------- ----------------------------
     3 Months - 06/30/2003         3 Months - 06/30/2002        6 Months - 06/30/2003        6 Months - 06/30/2002
------------------------------- ---------------------------- ---------------------------- ----------------------------
<S>                                                   <C>                         <C>                           <C>
                        $29,696                       $2,706                      $50,617                       $2,729
------------------------------- ---------------------------- ---------------------------- ----------------------------
</TABLE>




                                       10
<PAGE>

Temporary Financial Services, Inc.
--------------------------------------------------------------------------------
Notes to Consolidated Financial Statements (Unaudited)
================================================================================


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  $5,000  in cash and by
issuance of 15,000 shares of Genesis Common Stock valued at $1.00 per share.  As
of June 30, 2003, the Company has not  established any reserve for losses on its
line of credit with Genesis as no loss is expected.

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. At June 30,
2003,  the  Company  evaluated  its  investment  in the  Genesis  shares and has
determined  that $1.00 per share is a  reasonable  estimate  of the fair  market
value of the Genesis common stock. No impairment adjustment has been made to the
carrying value of the Genesis common stock.

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

The Company  generated  tax-basis net operating losses of approximately  $28,000
and $45,000,  respectively,  for the three and six month  periods ended June 30,
2003 and  aggregate  losses since  inception of  approximately  $245,000.  These
losses are available for carryover to offset future taxable income through 2022.

At June 30, 2003 and December 31, 2002,  the Company had a deferred tax asset of
$61,250 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 three and six
month periods ended June 30, 2003 and 2002, the income tax benefit differed from
the expected amounts of $7,000 (3 mos. ended 06/30/2003),  $11,250 (6 mos. ended
06/30/2003),  $11,000  (3 mos.  ended  06/30/2002)  and  $37,000  (6 mos.  ended
6/30/2002),  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 June 30, 2003:

         2003 (six months)                                 $ 8,727
         2004                                                8,000


                                       11
<PAGE>

Temporary Financial Services, Inc.
--------------------------------------------------------------------------------
Notes to Consolidated Financial Statements (Unaudited)
================================================================================

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.

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 June 30,  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.



                                       12
<PAGE>


                                   FORM 10-QSB


Part I, Item 2.  Managements Discussion and Analysis of financial condition and
                 results of operations.

Background

         TFS was  organized  in  October  2000 to  provide  accounts  receivable
financing  for  temporary  labor  businesses.  Outstanding  loans to temp  labor
businesses reached a peak of nearly $800,000 in June, 2002. Even though the temp
labor  lending  business  showed  potential  for  further  growth,  management's
assessment of the risk  associated with temp labor loans and the level of effort
required for managing the loans and protecting TFS' rights to repayment made the
business opportunity less attractive than originally anticipated.

         In January, 2002, TFS acquired an interest in Genesis Financial,  Inc.,
a company  engaged in buying and selling real estate  receivable  contracts  and
other types of cash flow  instruments.  While management was evaluating the temp
labor loan business,  the real estate receivable contract business began to grow
and the company was presented with  opportunities  to acquire  interests in real
estate contracts with attractive yields. Upon review, management determined that
the real estate contract  business offered nearly the same return with less risk
and less requirement for management oversight. As a result, the Company began to
move out of the temp labor loan  business  and into the  business  of buying and
holding and/or reselling real estate  receivable  contracts for resale.  At this
time, TFS has phased out all but one of its temp labor loan  customers,  and has
shifted the  majority of its assets  into the real estate  receivable  contracts
business.

         In future  periods,  we expect that TFS will  continue to focus on real
estate  receivable  contracts,  and will phase out the remaining temp labor loan
business  over the next twelve  months.  We believe  that the change in business
direction  will require less overhead in future periods and that the revenues we
are able to generate  from the real estate  receivable  contracts  business will
begin to  generate  profits  toward  the end of 2003.  The  change  in  business
strategy  and its  affect on  operations  is  discussed  in the period to period
comparison set forth below.


Three Months Ended June 30, 2003 and 2002

         Results of  Operations.  For the three months ended June 30, 2003,  the
company  generated  gross  revenues  of  $76,219,  compared  to $53,035  for the
comparable  period in 2002. This  represents an aggregate  increase of 44%. More
significant,  temp labor loan and related fees  decreased to $9,976 from $31,990
(68%) in the three months ended June 30, 2003 compared to 2002,  while  interest
and investment  income  increased to $60,743 from $13,045,  an increase of 466%.
The  reduction  of temp  labor  loan  fees  and the  increase  in  interest  and
investment income are consistent with the company's current focus on real estate
receivables contract business.

         Total operating expenses increased slightly to $89,838 from $86,646 for
the three  month  period  ended June 30,  2003  compared  to 2002.  While  total
operating  expenses  remained  relatively  static,  the mix of expenses changed.
Interest  expense,  relating  primarily to the Company's  line of credit from an
officer and  director,  increased  to $24,358  from $1,656 for the three  months
ended June 30, 2003 compared to 2002.  The line of credit is used to fund a line
of credit that TFS provides to



                                       13
<PAGE>

Genesis,  and to fund a portion of the  inventory of contracts  held for resale.
Interest income earned by TFS from its' line of credit is offset by the interest
expense TFS pays to its officer  director,  and there is no interest rate spread
on this loan. The company's  investment  assets,  on the other hand, have yields
ranging from 12% to 15% or more and these  investment  yield  positive  interest
spreads of 6% or more to TFS.

         Compensation and related expenses  decreased to $29,266 from $47,693 in
the three  months  ended June 30,  2003  compared to 2002.  The  decrease is the
result of two  factors.  The  decision  to focus on the real  estate  receivable
contracts  business  reduced  personnel  needs of the company and the reductions
created savings in compensation costs.  Additionally,  an officer of the company
that was employed  full time by TFS in June 2002,  is now splitting his time 70%
to TFS and 30% to  Genesis.  We expect  that we will  continue to see a shift in
overhead from TFS to Genesis in coming  periods as Genesis grows and TFS further
shifts its focus and revenue  sources to real estate  receivable  contracts that
require less personnel and management oversight. In this regard, TFS and Genesis
are currently  reviewing plans to share phone and network costs, and consolidate
offices to further reduce overhead.

         As a publicly traded company subject to ongoing reporting  requirements
with the Securities and Exchange  Commission  (SEC),  TFS will continue to incur
significant expenses to maintain current status with the SEC. These expenses are
likely  to  increase  in  coming  periods  based  on  more  stringent  reporting
requirements  and  public  oversight  initiatives  that  have  been or are being
adopted by the SEC in response to corporate governance concerns caused by Enron,
Worldcom and other corporate  scandals and abuses.  Audit and professional  fees
will  increase as a result of these  changes and the  increases  will impact the
profitability of the company in future periods.

         In  connection  with  previously  described  litigation  filed by Labor
Ready,  TFS is continuing to incur legal expenses for defense costs.  We believe
the litigation is groundless and that TFS will ultimately prevail on the merits,
and we are hopeful that the court will eventually  award TFS at least a recovery
of expenses. No assurances can be given,  however,  regarding the outcome of the
matter,  the time frame of the resolution or if any recovery will be received by
TFS. To date, the company has incurred  $$28,440 in defense of this  litigation.
For the three month periods ended June 30, 2003, March 31, 2003 and December 31,
2002 litigation expenses amounted to $15,473,  $6,692 and $6,276,  respectively.
The trend of  litigation  expenses has been  increasing  as the case  progresses
through  discovery.  We expect  that  litigation  expenses  will hold at current
levels  averaging  approximately  $5,000  per  month  as the  case  proceeds  to
resolution.

Six Months Ended June 30, 2003 and 2002

         For the six months ended June 30,  2003,  the company  generated  gross
revenues of  $147,549,  compared to $95,068 for the  comparable  period in 2002.
This  represents an aggregate  increase of 55%. Temp labor loan and related fees
decreased to $22,762  from  $57,303  (60%) in the six months ended June 30, 2003
compared to 2002, while interest and investment income increased to $87,137 from
$22,765,  an increase  of 382%.  The  reduction  of temp labor loan fees and the
increase in interest and  investment  income are  consistent  with the company's
current focus on real estate receivables contract business.

         Total operating  expenses  decreased slightly to $186,247 from $188,655
for the six month  period  ended June 30,  2003  compared  to 2002.  While total
operating  expenses  remained  relatively  static,  the mix of expenses changed.
Interest  expense,  relating  primarily to the Company's  line of credit from an
officer and director,  increased to $37,061from $16,756 for the six months ended



                                       14
<PAGE>

June 30,  2003  compared  to 2002.  The line of credit is used to fund a line of
credit that TFS provides to Genesis,  and to fund a portion of the  inventory of
contracts  held for  resale.  Interest  income  earned  by TFS from its' line of
credit is offset by the interest expense TFS pays to its officer  director,  and
there is no interest rate spread on this loan. The company's  investment  assets
have yields ranging from 12% to 15% or more and these  investment yield positive
interest spreads of 6% or more to TFS.

         Compensation  and related  expenses  decreased only slightly to $66,545
from $68,352 in the six months ended June 30, 2003 compared to 2002. The minimal
decrease in the six month  period does not reflect the current  cost cutting and
cost shifting efforts  described for the three month period ended June 30, 2003.
As the cost cutting measures are implemented,  we expect that additional  bottom
line impact will be reflected in coming periods.

         With the change in business focus and our continuing  efforts to reduce
costs, we expect that the mix and amount of expenses  incurred by the company in
coming  periods will  continue to change.  Results in future  periods may not be
comparable to historical results.

Liquidity and Capital Resources.

         At June 30, 2003, TFS held approximately $75,000 in cash and securities
available for sale, and had short term revolving  credit type loans  outstanding
of $1,836,000.  In addition, the Company had approximately $150,000 available on
its line of credit from an officer and director.  This represents a reduction in
the  liquidity of the company at June 30,  2003,  compared to December 31, 2002.
The erosion of the liquidity  position was  primarily  caused by the purchase of
$1,050,000 in real estate contracts  receivable during the period. The reduction
in  liquidity  will limit the new  business  that the Company is able to conduct
unless other  sources of capital are located at terms  acceptable to the company
and the lender.  The existing  revolving credit  facilities with Genesis and one
temporary labor business will see periodic fluctuations in outstanding balances,
and we expect that excess cash from  reductions in our revolving loan receivable
accounts  will be held in cash to be used  when  additional  loan  advances  are
requested.  We are  currently  reviewing  the  potential  for bank  financing to
supplement our liquidity,  and are also in discussions with an  officer/director
about additional  investment to provide  additional  flexibility as our business
grows.

         Our  investment  in  real  estate  contracts   receivable  consists  of
interests  in three real estate  loans.  We hold  interests in three real estate
receivable  contracts.  The first is a $50,000  partial  interest  in a contract
secured by a commercial building and land in North Idaho,  bearing interest only
payments  at 15% per annum and due in full on March 5,  2006.  The  second is an
$820,000  contract  secured  by a mobile  home park in  Moscow,  Idaho,  bearing
interest at 12% per annum with  principal  and  interest  payments of $8,636 per
month and the  remaining  principal due in thirty six months from March 21, 2003
unless extended for up to two one year periods. If extended,  the Moscow,  Idaho
loan calls for a 2% extension fee due on each extension.  The third contract for
$185,250  calls  for  interest  only  payments  of 14% per  annum  and the  full
principal  balance is due on June 20, 2004.  Each of these contracts are secured
by real estate  that TFS  management  believes is more than  adequate to protect
TFS'  interests.  In the  aggregate,  our  investment  in real estate  contracts
generates about $11,500 in monthly operating cash flow.

         We now have only one loan  outstanding to the temp labor  business.  At
June 30, 2003, the  outstanding  balance  amounted to $203,038.  This balance is
expected to fluctuate with larger borrowing  anticipated in the warm months when
temp



                                       15
<PAGE>

labor activity is at its peak,  and lower  borrowing in the winter when there is
less demand for temporary  workers.  Our sole remaining temp labor loan bears an
average interest rate of 20.0%,  payable weekly and secured by all assets of the
borrower (primarily accounts receivable). The loan is also personally guaranteed
up to $100,000 by an owner of the borrower.  We are currently  working with this
borrower to move the accounts  receivable funding to a more traditional  lender,
and we anticipate that this last temp labor borrower will find replacement funds
at more  attractive  rates  that we are  willing to offer  sometime  in the next
twelve  months.  Once our last temp labor borrower pays off our loan, we will be
out of the temp labor business  entirely,  and we do not anticipate that we will
do any more lending to the temp labor  industry.  If or when our temporary labor
borrower pays off our loan, we will use the funds to expand our lending capacity
in the real  estate  contract  receivable  business,  or will  use the  funds to
purchase additional real estate contracts.

         We believe that our existing  capital position will restrict our growth
in the coming year, and we are evaluating  steps to improve our capital position
through bank financing and/or additional equity offerings.  These plans have not
been  finalized and we cannot  determine if additional  bank financing or equity
capital  will  be  available  to us or if  available,  that  the  terms  will be
acceptable. Pending a determination on other capital resources, we will continue
to do business as we have and will  adjust our lending  rates where  possible to
limit the deal flow to a level that  matches our  available  resources.  We will
also continue to reduce overhead and operating costs while working toward a goal
of positive cash flow and earnings in 2004.

         The results of  operations  for the three and six month  periods  ended
June 30, 2003 are not necessarily indicative of the results that may be expected
for the entire year.


                                       16
<PAGE>




                                  FORM 10-QSB
                                     PART II

Part II, Item 1.  Legal proceedings. None, except as previously reported.

Part II, Item 2. Changes in securities. None

Part II, Item 3. Defaults upon senior securities.  None

Part II, Item 4. Submission of matters to a vote of security holders. None

Part II, Item 5. Other information.  None

Part II Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits.

         Exhibit No.    Description
         -----------    -----------
         99.1           Certification of PEO under ss.906 of Sarbanes-Oxley
         99.2           Certification of PFO under ss.906 of Sarbanes-Oxley

(b)      Reports on Form 8-K.  None

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.

         Pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002, each of the
undersigned  certifies  that  this  periodic  report  fully  complies  with  the
requirements  of Section 13(a) or 15(d) of the  Securities  Exchange Act of 1934
and that the information  contained in this periodic report fairly presents,  in
all material respects,  the financial condition and results of operations of the
Company.

TEMPORARY FINANCIAL SERVICES, INC.


<TABLE>
<S>                  <C>                                                 <C>
/s/John R. Coghlan   President, Principal Executive Officer              John R. Coghlan               July 16, 2003
-------------------------------------------------------------------------------------------------------------------
Signature                             Title                               Printed Name                     Date


/s/Brad E. Herr          Secretary, Principal Financial Officer           Brad E. Herr                 July 16, 2003
-------------------------------------------------------------------------------------------------------------------
Signature                             Title                               Printed Name                     Date
</TABLE>



                                       17
<PAGE>




                                 CERTIFICATIONS

I, John R. Coghlan, President and Principal Executive 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: July 16, 2003

/s/ John R. Coghlan
John R. Coghlan, President and Principal Executive Officer


                                       18
<PAGE>



                                 CERTIFICATIONS

I, Brad E. Herr, Principal 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: July 16, 2003

/s/ Brad E. Herr
Brad E. Herr, Principal Financial Officer




                                       19